M.D. approves first steps of debenture for TDHF
It’s been a long road to get to this point for the Cherry and Main affordable housing project in Taber, but it looks its starting to pick up momentum.
After Taber and District Housing Foundation (TDHF) presented to Town of Taber council on
March 14, town council had carried a motion to direct administration to work together with the M.D. and TDHF on a suitable cost-sharing solution for the affordable apartment funding concerning a debenture.
M.D. council discussed the TDHF debenture during their March 22 meeting with TDHF CAO Tim Janzen present to answer any questions.
Council was presented with two different options in terms of debenture. Option one was for high efficiency with a total of $10.1 million and a $2.05 debenture while option two is net-zero with a total cost of $11.2 million and a $1.46 million debenture.
“From the Town, if the M.D. was to split it, they would split it. Is that correct?” asked Reeve Merrill
Harris.
“Yeah, but I do have to qualify that those were discussions on an administrative level. I can’t speak for the will of either council,” responded CAO Arlos Crofts.
Deputy Reeve Tamara Miyanaga, who also sits on the TDHF board of directors as the M.D. representative, explained to the rest of council why this project will bring plenty of benefits to the area.
“Not only will this enhance our community with affordable housing and some opportunities for commercial, when you put forward a building like this, it not only secures some first basic needs of
housing, but it also is an economic driver for a community. Not only in the build, but in the operation and what those community members who may live there bring to it and those who work there will bring to our community. At this time, we are at the point where we have to find a way that we’re going to fund it.”
“A debenture is the only way at this time that we can demonstrate that we are able to support it,” added Miyanaga.
She further explained why a debenture is the best way forward. She also further delved into details about why Cherry and Main will not only be beneficial to the town but also to the M.D.
“I would not think we’re ready to hand over $1 million, but they will be funding the debenture from Taber and District Housing. I do sit on that board and there has been extensive research on ensuring this model can be supported and the debenture payment can be met, and that the viability of a housing opportunity for our community will make our M.D. and our surrounding areas a better place. I am in favour of moving forward,” added Miyanaga, who also stated her preference to move forward with option one at this point. “If we can do a net-zero, then that would be on the table. But if we can’t, and we have to come back to council, it will delay the process. So, I would prefer we look at option one.”
A motion to move forward with option one was put forward. While that motion was made, administration explained that doesn’t mean the process is finished.
“If this is something council deems a priority and something they want to move forward with, this motion does not necessarily approve a debenture. Debentures are approved through bylaws, so our loans to non-profit organizations, those are approved through bylaws. This is a motion of support, if carried,” explained Crofts.
With no firm guarantee the town would provide the other half, council asked what would happen if they backed out from providing a debenture.
“I guess we just have to lob it over to their court and see what happens. And then we might have to have subsequent motions should there not be success,” added Coun. John Turcato.
“Based on the commentary from administration’s meeting, when I saw their proposal, I felt that was adequate at this time. We’ll look at revisiting if there is a change,” replied Miyanaga.
Another concern was the fact the project would be built in the Town of Taber, but the M.D. would be providing half of the debenture.
“Yes it does help create better housing opportunities in the Town of Taber, but I’m wondering how it benefits the Municipal District of Taber,” stated Harris.
As residents from the M.D. commute across the municipality, it was explained the more housing in the area, the better.
“Many of our farms and our manufacturing plants have residents who live in town and they commute up to the farm. We know that during the campaign at the sugar factory, during potato harvest, and at other times, we need an influx of labour. They don’t all live here — they come and stay in our short term housing, but many of them stay on with our businesses and become long-term employees,” said
Miyanaga. “To get into a housing unit in Taber, you are looking at a high rate of rent. I appreciate all of the landlords in our community, but having Cherry and Main does give a place for people to live that will be safe, but they are also going to be fair market rentals. Our community is, I’m going to say 18,000 to 20,000 at best, for the M.D. of Taber. We are not so big to say that people who live in the town don’t work in the M.D. and vice-versa. There is value in putting forward a new housing development.”
As talks continue around trying to bring bigger agri-food facilities to the area, housing is a key component of that, Miyanaga explained.
“When we talk to our potential manufacturers, they want water and Internet, but the biggest problem is they don’t have enough labour. If we don’t have enough housing, they are going to go to a larger centre. To me, this is part of our economic driver, even if it has a social capacity, I think it frees up rental space or land space that other community members can taken advantage of.”
A question was posed to administration around if there were any potential risks to residents if the M.D. did approve the debenture.
“This is a risk in any context of lending money is that it’s not paid. That’s a risk when you make any sort of loan,” responded Crofts.
“In the past, we had done a similar type of financing arrangement —I believe it was part of the expansion of the Clearview Lodge,” added Bryan Badura, director of Corporate Services. “I believe it was a debenture taken out by both the M.D. of Taber and the Town of Taber at that time
with the same arrangements of a bylaw to loan the money to the Taber and District
Housing Foundation with repayment based on the debenture repayments with the borrowed funds. We have done something very similar, almost the exact same thing with regard to another item.”
A question around a further debenture to TDHF for the Clearview Lodge expansions was also asked. It was explained those were two separate projects and it doesn’t necessarily both will be completed at the same time.
“They are two distinct projects and they address two different issues in the community. We had started in 2018 on the needs assessment and design work for Cherry and Main,” explained Janzen.
“During COVID, we found there were a lot of operational things we had to do for
Clearview Lodge, but also it showed it was time and we made good traction designing
the facility. As it’s turned out, they are coming to a point of applying for funding around the same time.”
“This allows us to move forward with the application process. It means we can present to CMHC (Canada Mortgage and Housing Corporation), we can present to FCM, and we can present to the government of Alberta —we do not know how they will respond. We hope they will approve
but there are no guarantees,” continued Janzen. “We know CMHC would be receptive to the way we’ve structured this deal, provided we can secure the debenture financing. Indeed at Clearview Lodge, we have the capacity to requisition for capital, but I can’t imagine we would ever say ‘OK, we’re doing a capital project, we’d like that money in one year.’ I suspect something more would be some sort of financing.”
TDHF is also waiting for further clarity on provincial government changes to borrowing money. At the moment, TDHF can’t borrow money under their own name, but that could change. “They could end up being done 10 years apart,” added Janzen. The motion was carried unanimously.