Details regarding EVL

Details

Published on Friday, May 31, 2013

myWestman.ca

We've been getting a lot of question about the East View Lodge in Neepawa. So here's a detailed story that was written last year which gives a thorough analysis regarding what will happen with the building.

The following is a story, written by Kate Jackman-Atkinson, last May:

The re-development of Neepawa's vacant East View Lodge building will go ahead, but it will begin with the building's demolition.  That was the message put forward at a well attended public meeting held on May 2.

Since residents moved out of the building and into the newly built Country Meadows Personal Care Home in the spring of 2009, the Town of Neepawa has been trying to work with the provincial government, which owns the land and building, and private developers to retrofit the building as affordable housing. Despite this work, a deal couldn't be made that would result in an adequate return for a developer.

Building has deteriorated

The purpose of the meeting was to inform the public about the present state of the building, that retrofitting the building was unlikely to happen and that Neepawa council was considering accepting the province's offer to demolish the building to make way for redevelopment of the property.

Neepawa mayor Ken Waddell talked first about the history of East View. When it was officially opened in 1967 it had 75 rooms.  Having a care home in a rural community was uncommon and demand for units in the building grew quickly. In 1971, the building expanded and how had 120 rooms.

East View was operated by a community board until the 1990s when it was taken over by the regional health authority. Waddell said that first the Marquette RHA and then the Assiniboine RHA told the Town that once they were done with the building, they would sell the property to the Town for $1.

The decommissioning of East View as a personal care home coincided with an increased demand for housing in Neepawa, driven in large part by the expansion of HyLife Foods. Waddell explained that HyLife worked to find a developer and succeeded in finding one who was interested in redeveloping the building. The developer had a plan to spend $3 to 4 million to create 50 to 60 suites in the building.

They also made a $100,000 deposit with the Town. However, in 2009 when the time came for the province to transfer the property, they decided to put the building up for tender in an effort to obtain a better price.  No offers were received and in the meantime, the developer had invested elsewhere.

While other developers have looked at the property since then, renovation costs have climbed to between $5 million and $6 million.

Local MLA Stu Briese has been lobbying the government about East View and spoke about his involvement with the project.  He explained the Town of Neepawa's actions saying, “The Town did what it needed to do, it pursued a developer, it didn't take it over.” He added that had the Town taken over the building, they would have been faced with the $15,000 to $20,000 a month in costs the ARHA was paying in taxes and maintenance. They also would have had to shoulder the demolition costs. Briese also praised the ARHA's efforts in trying to get the building re-developed.

Briese said it was a “political decision” that kept East View from sold for re-development in 2009.

The presentation included a series of pictures showing the present state of the East View Lodge building. The building wasn't heated last winter which resulted in further damage. This spring, damaged areas of the building included the solarium, pipes, roof and ceiling. Waddell also noted that the building was infested with flies and numerous areas contained asbestos tiles.

Offer presented

At the meeting, Waddell read a letter that was sent jointly by the provincial ministers of Health and Housing and Community Development on January 19. The letter stated that Manitoba Health supported  the Town's desire to use the property for a non-commercial community-based project, such as housing, and was prepared to move forward with the demolition of the building. The demolition and clearing of the property for alternate use would be entirely at the province's cost.

Once demolished, the province would be willing to sell the property to the Town for $1 should there be a development proposal for a community-based development initiative. The Town will have two years to come forward with such a development proposal and if no proposal is forthcoming, the province will sell the property at its fair market value.

Including paying the outstanding mortgage balance on the building, demolition and forgoing the sale of the property, the letter indicates the province is estimating a contribution in excess of $1 million towards the project.

Carolyn Ryan, manager of New Project Delivery for Manitoba Housing, is involved in affordable housing projects, including new construction and retrofits. She has had meetings with Neepawa council about the re-development of East View and explained that she was sharing with the community what she had already shared with council. She said, “It’s my best advice based on experience.”

Ryan explained that when looking at renovation versus demolition, four factors have to be considered: design, risk, operating costs and capital costs. She explained that with a renovation, the developer is limited by existing design features of the building such as placement of load bearing walls, windows and plumbing stacks. 

With new construction she said, “The limits are budget and imagination”. She explained the risks involved with renovations are “significantly different… a lot of developers are not willing to take the risk.” Until the developer gets behind the walls, they don’t really know what condition the building and its systems are actually in. Ryan explained that it can be hard to make an older building as energy efficient as a new one, meaning that a renovated building can have higher operating costs.

The final factor is the capital cost to get to the end result, units of housing. Ryan said that contrary to what many people expect, “Renovation costs can be equal to, or more than [the costs] to renovate.”
While these factors may lean a project one way or another, Ryan added “It doesn’t contemplate [a community’s] attachment to a building.”

Norm Blackie, Manitoba Health’s executive director of Capital Projects spoke at the meeting. He was involved in the decision to replace East View with a new facility and offered some comments about the history of the East View building. He explained that the push for a new personal care home for Neepawa was due to “functional challenges with East View”.

Rick Schale, president and CEO of FWS Group, was supposed to speak but was unable to attend. FWS was one of the most serious developers to look at the project post-2009. They spent a year and a half and over $250,000 looking at the project and trying to come up with a viable plan for re-development before determining they couldn’t get the return they needed on the project.

In Schale's place, Town of Neepawa Economic Development office Rick Donaldson spoke and explained, “I’ve worked full time on this project since June of 2009.”

Donaldson worked with all of the developers who expressed an interest in the building and offered insight into why a developer won’t take on the renovation project, the reason comes down to money. Donaldson worked with one company on financial modelling for the project and in nine different cases, the best return on investment was 1.5 per cent. He added that this was a large firm with in-house engineers and architects.

Beyond FWS, Donaldson said he worked with 38 other developers interested in the project. He explains, “They all made attempts but none could get close to return on investment that [they could] suggest to shareholders to proceed.” Donaldson said that after doing the due diligence, “I don’t think we failed… [after the due diligence] I wouldn’t recommend anything but demolition.”

While the CEC was filled with 100 people, many seemed to accept the building’s fate with Homer Gill summing it up, “It makes me very, very sad. But we have to face the facts that this [demolition] is what's going to happen.”

It's clear the Neepawa is facing a housing crunch of some kind and much of the increased demand for housing can be traced to expansion of the HyLife Foods plant. While HyLife has at times been criticized for not creating housing for their employees, such as moving in ATCO trailers, Waddell praised their decision. He said, “They [the new workers] are mixing very well in the community, thank God we didn't create a ghetto.”

What in its place

The question on everyone’s mind seemed to be, what kind of housing would replace East View? The question came up early in the evening and both Donaldson and Don Dufort, a member of Neepawa's Housing committee, singled out a need for units of assisted living. Dufort said, “75 to 100 units [of assisted living] would go a long way towards solving our housing problems... It would be an accelerant and a catalyst to move a whole bunch of homes.”

Waddell mentioned two findings from a recently completed housing survey that stood out to him and supported the need for more assisted living units. The first is the fact that about 500 of Neepawa's 4,000 residents are over 75 years of age.  The second is that immigrants aren't buying newly constructed houses, preferring to buy existing homes.

Waddell noted that both during his election campaign and once taking over office, he has talked to numerous older citizens who are living in their own homes but would like to move into some form of assisted living. The creation of assisted living suites would open up housing that could be purchased by families.

The creation of assisted living units at the East View site has a nice tie in with the past. Waddell noted that in East View's early days, many residents still owned their own cars and drove them out the farm our to shop.  “It evolved into a high level care facility,” he said.

Speaking about the redevelopment of the site, Lyle Watson noted, “I wonder about the pioneer spirit?” He noted that today, government gets blamed and developers come in and thousands of dollars leave the community. “Let's get the pioneer spirit back... [and find] a solution within the community,” he said.

Construction could begin relatively quickly once the existing building is demolished. Donaldson said seven developers who expressed interest in renovating East View have expressed interest in new construction on the site.

Following the meeting, council plans to move forward to accept the Ministers' offer to demolish the building and are planning to pass a resolution to that effect May 15. The Town is hoping to have the building demolished within the year. Waddell said, “We're better off to tear it down than let it stand and deteriorate.”