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What's next for Cassellholme?

Mayne admits the cost will likely be contentious but 'the municipalities need to get on board and commit to the financing.'
2021 06 04 cassellholme-building-phases-8
The final phase of the Cassellholme redevelopment.

Now that the announcement of the nearly $122-million cost is out of the way, the Chair of the Board of Management for Cassellholme and North Bay City Councillor Chris Mayne is already looking ahead to a meeting with the partner municipalities.

See original story: It's a $121M+ price tag for Cassellholme project to move forward

"We're going to share some recommendations on the financing side," at that meeting next week Mayne tells BayToday. "Ultimately, the responsibility for the financing falls on the municipalities. Financing through Infrastructure Ontario," which manages lending for provincial infrastructure, "remains the least expensive option across the board."

He adds the next step "is getting everybody on board to agree on how we can best finance it."

The Cassellholme partnership is comprised of Bonfield, Calvin, Chisholm, East Ferris, Mattawa, Mattawan, North Bay, Papineau–Cameron, and South Algonquin. 

Ontario has committed up to $65 million in funding for the five-year construction project with financing options for the balance to be considered by the nine municipal partners. The financial burden is divided among the partners on a per capita basis and North Bay's financial share is just north of 80 per cent. 

Mayne says the board explored going with private and commercial lenders but "they won't touch Cassellholme because it's difficult to liquidate," meaning lenders cannot easily sell off parts of the facility to collect balances owing. "We went to 27 different lending institutions, none of them would extend financing."

Late in 2020, Infrastructure Ontario indicated they would require the consortium members to guarantee the full Cassellholme debt, in turn reducing the borrowing power of those municipalities. The provincial government approved the project but will only advance a portion of its total share.

Mayne advises Infrastructure Ontario "really is the most viable source of funding and the guarantee requirement," for the municipalities is unpopular "but they've been unequivocal that their terms of lending to the communities will require them to completely guarantee the cost of the project."

The City of North Bay could find itself in a precarious position. If the smaller partner communities do not qualify for financing, North Bay may have to take on more than its share of the debt for the project to move forward.

Board member and North Bay Deputy Mayor Tanya Vrebosch expressed disappointment in how the cost announcement is being relayed to those partners.

"We know that we have municipalities that have concerns," with financing the project and taking on debt, Vrebosch stated during Thursday evening's virtual meeting. "They're concerned because they are worried about their budgets and what their debt levels are going to be like and can they afford this? We haven't had the opportunity to discuss."

Some of the members have also expressed plans to leave the group and redirect funding to a facility closer to home, as in the case with the Mattawa-area municipalities and the Algonquin Nursing Home redevelopment. Those partners will have to gain approval from the province and other partner municipalities to exit and "make Cassellholme whole," financially as far as their commitments to this project, according to Cassellholme CEO Jamie Lowery.

Vrebosch said she suggested a meeting with all the municipalities before making the total cost of the project public but "the letter that is going out today shows that we are not looking to have a consensus with our stakeholders — that we are moving forward with or without them, without really hearing from them — about the challenges they may face with the cost of this build."

Vrebosch later added, "I wish we would have done this differently...so we don't have the challenges that are probably going to come forward in the near future in regards to how municipalities will finance this. I wish we would have taken a different approach."

East Ferris — responsible for the second-largest share — has already added Cassellholme to its council meeting next Tuesday. Earlier this year, the looming Cassellholme financial liability put a freeze on unrelated capital projects in East Ferris.

See also: East Ferris rejects tax burden for Cassellholme expansion

And: Foot the bill for Cassellholme NDP candidate tells Ford and Fedeli

Board vice-chair and North Bay City Councillor Mark King stated, "While we certainly recognize how important it is for this to happen, we know that ongoing delays over the years have created a tremendous increase in the overall cost and we have no choice at this point but to move forward."

As board members "we each try to make the best decisions for long-term care in our communities. We need more long-term care." Mayne admits the cost will likely be contentious but "the municipalities need to get on board and commit to the financing."

During the meeting, Lowery introduced TWG Communications, hired by Cassellholme to provide messaging and public relations services for the development. TWG unveiled a standalone website with additional information on the Cassellholme project, including timelines and phases.

The delayed project more than one decade in the planning — estimated to cost $60 million three years ago — had insiders correctly whispering late last year a price tag north of $100 million was possible. 

The board confirmed Thursday the long-awaited redevelopment of the facility's 240 existing beds plus a 24-bed expansion is ready to proceed at a total cost of $121,889,390. The project was approved in an in-camera session and the announced total cost covers building fees, construction materials and labour, fees for architects and engineers, legal fees, fixtures, and furnishings. 

The name of the proponent awarded the construction contract will not be announced until the provincial agreement is in place. It remains to be seen how many firms bid on the project through the RFP, as well as how the total cost soared well into nine figures.

The City's proposed community and recreation centre has been in a holding pattern for months pending the Cassellholme decision. It is estimated some 10 per cent of the nearly $122 million is in place already. Ontario's $65 million share will be spread over the five-year contract and the City of North Bay is responsible for approximately 80 per cent of the balance, while also guaranteeing at least its share of the project's debt load. 

The municipal partners, including the City of North Bay, made it clear through resolutions in 2017 it was preferable for Cassellholme to hold the debt so the project would not reduce their borrowing power for other capital projects. The Cassellhome board of directors upped its efforts to have the province assume the risk instead of insisting the municipalities take on the debt, to no avail.

Late last year, the City of North Bay questioned the Cassellholme board over its handling of the redevelopment project.

Mayne has detailed a frenetic year for the project. Besides the delay until October 2020 for its approval from the government —associated with the COVID-19 pandemic — the board sought a commercial loan up until last spring, and it was not until November 2020 the municipal letters of credit requirement from Infrastructure Ontario was revealed. 

King summed up the Cassellholme saga, saying all involved had "gone through the wringer, so to speak, as we tried to navigate what's a tremendous cost to all municipalities in the region." 


Stu Campaigne

About the Author: Stu Campaigne

Stu Campaigne is a full-time news reporter for BayToday.ca, focusing on local politics and sharing our community's compelling human interest stories.
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