By John Swartz
It’s fair to say there was a certain amount of drama in the air Monday afternoon at Orillia council’s special meeting concerning the Building Hope project.
The reason for the meeting was to end once and for all the impasse between council and the project committee over how to deal with a request to waive the security developers pay guaranteeing various aspects of construction are done to the City’s satisfaction. It’s a performance bond staff previously said comes into play with about 30% of development projects.
Councillor Ted Emond was the primary objector to waiving the $633,000 deposit and there was no clue how he would respond to staff’s new conclusion, after re-examining all the fine points of the process, the project would only require a security of $200,000. Like a kid with a needle in a room of balloons, Emond pierced the heavy air with his opening statement.
“I’d like to begin by offering a personal thanks to Glenn Wagner and Charlene Taylor for having spent a couple hours with me and the mayor, councillor Cipolla and our CAO on Friday last,” Emond said. “I felt it was exceptionally healthy and useful in depth conversation we had, although it didn’t resolve for me my concerns about the process that we have been going through the last while, nor some of the issues with respect to the substance of the project. It did bring me to appoint in time where I have come to realize further public debate and delay on this particular matter of the securities would not only cause harm for the Building Hope organization and its efforts, I don’t think (it) would look positively on members of council, but I also think in the longer term would have a negative impact on the very issues we are all trying to resolve, and that is the resolution of what is a blight on our community in the form of homelesseness.”
He wasn’t finished, but the sense the struggle was over was real.
“I understood from our Building Hope friends this is a tolerable solution to moving forward and I’m pleased to move this motion and look forward to its passage today so they as an organization can get on with their immediate need and phases of bringing this project to fruition,” said Emond.
No doubt Emond’s offer to move the motion was symbolic. The rest of the 8-minute-long meeting would be formality – and a chance for other councillors to fill the air with anticlimactic words.
The deal boils down to the committee will post a $200,000 bond (cash, likely, or letter of credit) and instead of having portions returned as construction steps are signed off as being up to standard, the full amount will remain with the City until the project is complete. The re-examination staff did concluded $120,000 would be the minimum required for initial phases of construction (water and sewer connections for example) and rather than return that portion of the bond it would be held as guarantees against next steps of construction.
Staff also concluded the step that comes last, landscaping, was a different animal than other projects because Building Hope was confident a significant part of it would be realized as in-kind donations. Staff also said the landscaping planned was beyond the minimum the City would normally demand of a developer and comparatively if the City had to step in to do the landscaping it would be in the order of $70,000 rather than the over $300,000 on-paper value used to grant permits.
Additionally, once a contractor is selected to do the building, that company would have to post a performance bond with Building Hope in the order of $5 million. Based on all those factors staff reported they were comfortable with $200,000.
After the vote, Building Hope co-chair, Glenn Wagner spoke with the press.
“We’re thrilled obviously. This enables us to have some more flexibility with cash flow,” said Wagner.
This was the key issue from Building Hope’s perspective. While they have a good amount of cash on hand, and $11 million of the $14 million project value committed with grants, they were concerned using more than $600,000 for the security would eat operating capital for early stages of construction and be unavailable to make payments to a contractor based on work performed to date. In short it’s not good enough to be able to say the money’s coming, you have to have it to pay on time for materials and labour as they are accrued.
Wagner and Mike Unwin, chair of the design committee and the person most knowledgeable about construction details, then spoke about when we will be able to see construction activity at the Queen Street site.
“The site plan application can now be finalized legally, now that we have an understanding of what we need to do, what kind of cheque we have to hand over for that process to be finalized. Then we can get the tender package out to the contractors fairly soon,” said Wagner. He expects to be able to go to tender by the end of June.
Recently they had to do more soil testing in one area of the property to find greater detail of the soil conditions. You may recall the recreation center being built across West Street from the Building Hope site was delayed when an unexpected patch of peat caused the City to redo part of the foundation. Knowing that, Building Hope does not want to have the same problem. Those tests have been completed and the architect is determining what adjustments, if any, have to be made to foundation plans.
Unwin said that work will be completed soon and “within 30 days we can get out,” to tender. When all the contracts are signed construction will start in early September.
What tipped the scale in Building Hope’s favour was undoubtedly the meeting Emond referred to. Previously Wagner expressed frustration with the delay reaching a decision on the security waiver, telling the press no one had asked him about any of the details being questioned
“Talking is always wise,” Wagner said. “I think, somewhat, throughout this process the system to make things happen is a little flawed. It’s learning as well, the kind of political system in place we’re a little green with.”
“There’s still, as councillor Emond suggested, some issues in his mind I think we can clear up with more discussion.”
As previously pointed out in SUNonline/Orillia, with 4 parties (Building Hope, CMHC, council and staff) involved in dialogue, rather than group discussion, much gets lost in translation, which can create impasse. Anyone dealing with bureaucracy needs to recognize they have a disadvantage because they don’t deal with this kind of thing every day. The meeting with most sides of the dispute present obviously found the middle ground. Wagner recognizes they passed a significant rocky road, though there may be others they won’t be as challenging as this round.
“We’ve developed that kind of partnership with the City. There’s some compromise taken place. I would say, not to say the final hurdle of the project, but certainly in the partnership with the City we’re feeling very comfortable.”