Instead of pressing forward with its plans to purchase 12 additional rental apartment units, the St. Albert Housing Society now wants to buy 64.
Board chair David McGreer announced to city council at a special meeting Monday night that the society would try to purchase even more units than it had originally planned.
As a result, city council did not go ahead with third reading of a bylaw that would have given the city authority to act as a guarantor on a revolving line of credit for the society worth $1.4 million. Instead council voted to postpone third reading.
“I always had been anxious about this anyways,” said Mayor Nolan Crouse, who has made no secret of his discomfort about the city providing a guarantee to the society for a line of credit. “I’d prefer the society build its asset base without any more city involvement.”
The issue of the guarantee had divided council. While some wanted to give the housing society this opportunity, others such as Crouse were hesitant to add the society’s loan to the city’s books.
The society owns 15 units at the Big Lake Pointe development, which was built to offer both affordable and market-rate units for rent in St. Albert. The society has been trying since December 2012 to arrange financing to purchase another 12 and has been asking for the city to guarantee any financing arrangement.
The society wanted a revolving line of credit so it could avoid penalties for paying any loan back early, and so it had a source of funds it could tap for future projects.
But after a meeting Monday with partner Big Point Developments Inc., the society learned it had a chance to buy all of the 79 units in one of the two buildings. Subtracting the 15 the society already owns leaves 64 units available for it to purchase.
“I think they had looked at what opportunities might present themselves for both of us and they put it on the table that they were willing to enter into negotiations,” said society executive director Doris Vandersteen.
Of that 79 total units, 78 would be rented at a below-market rate, Vandersteen said. One unit, which is a barrier-free unit for individuals with physical challenges, would be rented out at market cost.
“It’s just giving us more opportunities and options to provide flexible housing,” said Vandersteen.
Purchasing all of the units in one of the two Big Lake Pointe buildings also gives the housing society more options when it comes to financing, Vandersteen said. The Canadian Mortgage and Housing Corporation (CMHC) offers mortgage insurance only to multi-family buildings where only one partner or entity owns all of the suites within.
“There are other opportunities for financing as well so we need to look at what all of those opportunities are,” Vandersteen said. The society might not even need a revolving line of credit as a result, she added.
But time continues to be critical. Vandersteen said the offer was only made Monday and there is a July 29 deadline for the purchase.
“Our commitment to our partner is we’ll move with as much haste as possible,” Vandersteen said.
Crouse said this presented a good opportunity for the housing society.
“I feel really good and excited about that,” Crouse said. “I hope the society can become self-sufficient.”
