What is the deal with Apollo Developments and who is Andy Banack?
These are questions many Akinsdale residents have been asking since both names became relevant to St. Albert. Apollo Developments is the company behind a controversial affordable housing project proposed for 70 Arlington Dr. and Banack is the man behind Apollo.
Sitting in his office at Apollo Sunrooms, located in industrial south Edmonton, Banack speaks with calm reserve as he explains the history of his companies, his affiliation with Habitat For Humanity and his desire to continue building affordable housing in the Edmonton region.
"We don't need governments to take care of people. We need people to take care of people and that means getting personally involved," he said.
"This is my way of being involved. I've built a very successful business in 10 years because of the way I think and I can afford to do this."
Habitat involvement
Banack first got involved with Habitat for Humanity Edmonton more than 10 years ago as a building volunteer. He supervised crews then joined the volunteer board of directors in 2003. He was vice-chair for two years starting in 2004 then chair in 2006 and 2007. He remained on the board until resigning in 2009 to propose the partnership that's now under scrutiny in St. Albert.
"I liked Habitat from the moment I got involved in it. I like their philosophy of a hand up, not a hand out," Banack said.
In late 2008, while he was Habitat Edmonton's vice-chair, Banack heard Michel Labbé speak in Toronto. Labbé is the founder and CEO of Options For Homes, a well-established non-profit affordable housing organization.
In 1992 Labbé devised a plan to provide financing through a second non-profit organization to prospective homeowners in the form of second mortgages that don't require payback until a property is sold. This allows buyers to get a home for 20 per cent less than market value. The organization has since served nearly 4,000 families.
Banack returned to Edmonton excited about that program. He figured out how to alter it slightly to work in a partnership between a private company and a non-profit.
"Quite honestly, my first response was I didn't want to do it. It's too much work and I don't make any money," he said. "I changed my mind. And I sometimes think I'm crazy."
Akinsdale resident Gerry Kress has made an issue of Banack's previous involvement with Habitat and his shift from board member to business partner.
"It almost seems like an inside dealing there between Habitat and Andy Banack and Apollo Developments," Kress said. "There's a lot of money to be made on this."
Banack agreed that the situation can be viewed as shady but calmly asserted the reality is not. His perspective is that his involvement with Habitat hasn't ended, just shifted to being a philanthropic business partner rather than a board member.
"I think I can make a bigger contribution than I did before," he said.
Banack's idea, for which St. Albert is the first testing ground, is for Apollo and Habitat to split the housing units. Habitat will buy 15 of the 58 condos and fill them according to its existing application process. Apollo will market the rest with a second mortgage worth 20 per cent held by Habitat and payable only after the first owner sells the unit.
The project would cost between $10 million and $11.5 million, with the units selling for $200,000 to $250,000, Banack estimates.
He's lined up two investors to back the project and also has bank financing in place. The investors will earn from three to five per cent on their money — 15 to 25 per cent is the norm — but will donate these profits to Habitat for a tax deduction, Banack said. His own company will be paid a management fee of about $250,000 to cover its costs and will forego profits in the range of $1.3 million, he said.
"We are a for-profit company but the philosophy is non-profit," he said.
Apollo history
A Millwoods resident, the 50-year-old Banack is a civil engineer who also holds an MBA. After serving as vice-president in a number of companies, he started his own sunroom addition business in 1991. He incorporated the company as Apollo Sunrooms in 2000. Other companies followed: Apollo Homes in 2003, Apollo Piling Systems in 2005 and Apollo Developments in 2008.
Apollo Homes specializes in energy-efficient homes and builds between five to 12 a year, mostly on Edmonton's south side, Banack said.
He formed Apollo Developments because his home-building company was having trouble finding lots to build on in 2008. Apollo Developments has a 42-lot single-family development in Wetaskiwin, which is on hold until the housing market improves. The St. Albert affordable housing project is Apollo Developments' second as a developer.
"Do we have a completed track record? No. We haven't completed one [project] as Apollo Developments," Banack said, adding that he and his team have experience in many multi-million dollar projects.
"If I go back into my previous life, the short answer is yes. I've done lots of developments for other people, not any for myself," he said.
For the St. Albert project, Apollo Developments would be the developer, which means lining up financing and hiring engineers. Apollo Homes would be the builder.
Apollo Homes uses triple-pane windows and a structural panel system called Titan Wall, which sandwiches thick foam insulation between two layers of magnesium board, a material that's impervious to water and mould, Banack said.
The panels are quick to assemble and provide an R-value of 27, which is significantly higher than conventional framing, Banack said.
For its foundations, Apollo prefers to avoid traditional excavation and poured concrete in favour of helical screw pilings, which are large screws bored into the ground that support the structure.
This means no basements, a point of concern for some Akinsdale residents, who feel the resulting homes will lack storage space and be less-than-desirable.
Banack said his system is more cost-effective than traditional basements, which he feels are "very expensive closets" and not effective living spaces.
"I can put up a two-storey with no basement cheaper than I can do a bungalow with basement," he said.
Each unit will have a four-foot by eight-foot shed and more closet space than a typical apartment, he said.
Banack hasn't yet completed detailed designs that display the finished exteriors. These won't be done unless city council approves the project, which he said has already cost Habitat and Apollo $100,000.
The proposed development goes to public hearing March 15.
