Hugh Mackenzie
Huntsville Doppler
The Town Should Not Be in the Real Estate Business
Sometimes when I sit down to write a column I surprise myself. Sometimes it doesn’t start out as I thought it would, and often it ends in a different way than I anticipated. Today may be one of those days!
I hadn’t intended to write on Town Council issues this week but then a story on Doppler caught my eye and my attention. Council, in General Committee, by a vote of eight to one, has decided to sell what was formerly the Brunel Community Hall to the Muskoka Montessori School, which has leased the building for a number of years. The sale price is $55,698.20. The purchase still has to be approved by Council in formal session later this month.
My immediate thought was that there will be a public outcry about this, as the current MPAC assessment on the building is $238,000. Indeed, in the past few days I have heard several comments about selling a Town asset at such an undervalued price. As much as I admire the Montessori School, I too thought this was not a good deal for the taxpayers of Huntsville. But then I began to ask myself what I would do if I were on council and what in fact we did do, when I was mayor a decade or so ago.
Firstly, I agree with the mayor, that a municipality should not be in the business of owning real estate that is not used for the direct benefit of the community such as the Summit Centre and River Mill Park. It should not be competing with the private sector and it should not be holding on to buildings it no longer needs.
When our council took office in 2000, we learned that the previous council, in its dying days, had purchased the old Ministry of Transportation building in the west end of town. The transaction had not yet closed and we tried to stop it, but were unable to do so and in fact under the terms agreed to by the former council, we could not sell it for a number of years either. This restriction expired during Mayor Doughty’s tenure and the property was sold. While it was sold for close to what it was purchased for, the municipality still had to swallow costs in relation to maintenance and upkeep. During our time, we were able to sell the Public Works property across from the cemetery which was no longer needed by the Town. In both cases the assessed or appraised value was very different than what the properties could actually be sold for, but it was in the best interest of taxpayers to get rid of unneeded liabilities.
The Brunel building in question, has not been active as a community hall for a number of years. It has been leased from the Town by the Muskoka Montessori School and they have spent a good deal of money making capital improvements to the property. It is not a property the Town has any foreseeable use for.
The same can be said, unfortunately, for the so-called Waterloo Building. However good the intentions were when it was built, it has not reached the potential for which it was intended and for which taxpayers invested millions of dollars. Even Mayor Doughty, whose dream it was to have a functioning university satellite in Huntsville, a vision which would have been a huge benefit to our community, has said that the building should now be sold. Huntsville Council is currently considering this and that is a good thing.
The reality is that if and when the Waterloo Building is sold the Town will not recover a good portion of the money that taxpayers have invested. However, they still have heavy maintenance and debenture costs from which they will be relieved and they will not be competing with the private sector in terms of renting out space.
While the circumstances surrounding the Brunel Hall building are somewhat different, the bottom line is the same. The Town should not be holding on to a property they do not need. As to value, the accrued value on the Town’s books for the Brunel Hall is probably nil or close to it. The building was inherited when Huntsville amalgamated with Brunel Township. The Town certainly has costs related to the property and these should be recovered and they are reflected in the sale price. The Town will lose no money on the sale of this property.
The Muskoka Montessori School is a non-profit educational facility that provides another element of excellent educational opportunity in Huntsville and another inducement to individuals and businesses who consider investments in our community. The chances of the municipality getting substantially more money for an old structure on an unserviced lot are not great. The advantages of having a Montessori school in our community are much greater.
I believe Huntsville councillors have agreed to the proper conditions for a sale of the old Brunel Hall to the Muskoka Montessori School. On balance, I think they made a wise decision. I hope they stick with it. And yes … I am a little surprised I said that!
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Rob, yes I think this school may be the best in the country but let me help you with the math your struggling with. If the town sells an asset for less than fair market value it is indirectly making a donation with our tax dollars to the new owner. The tender process is the only way to ensure the process is fair to everyone, especially Huntsville property owners. The proceeds from the sale will be reflected in our property taxes. If it is sold for less than MV then our taxes go up and all property owners have made a donation to the school.
The school can afford to pay much closer to the MPAC value and its monthly expenditures will not change. Everyone will be better off.
Mr. Withey, I did not intend my comments as a “slur” against anyone (please read my preface to them). I did mention, however, that I felt that you had slurred your successor. I am sorry that the principles of democracy, one being public meetings, are not to your liking. Nobody averred that any governance by public meetings was intended: Surely taking the temperature of the community before making a decision is not anathema to you.
I, too, am totally in agreement with Ms. Gamble’s comments. Her business background in New York has prepared her to elucidate the School’s position very succinctly. Having served on countless not-for-profit boards myself, she has brought up a very important point regarding distribution of assets upon dissolution. Not only do they have to be disseminated to another NFP (or NFP’s), but their mission statement (their raison d’etre) must be similar.
Finally, everybody (including Ms. Lambe) might be surprised at the actual market value of this property; as market value represents what a willing buyer will pay a willing seller for it. In its present uni-functional condition, any windfall approaching MPAC’s $238,000 is pie in the sky indeed.
I happily accept the adjective “opinionated” and would never consider it to be a slur. I am truly sorry if you feel that I have made this “a personal issue between us”. Mr. Mackenzie, Ms. Peacock, and several others with whom I’ve had the temerity to disagree have always been quite gracious. Perhaps we will meet in person some day. I look forward to it.
Mr. Millman, we have never actually met but this isn’t the first time in this forum that you have taken to commenting on my ‘motives’ for speaking up on what I believe to be a very important issue. I can assure you that none of my comments were confidential in nature. You may have noticed that I didn’t include any actual figures in my piece but as someone who was intimately involved in this area I felt that a deeper understanding of how it worked would be valuable information not only to the public, but as well to some councillors. I agree wholeheartedly with Lela’s comment above ( too much information Rob? confidential? ). I certainly don’t blame the school for taking advantage of this generous offer as she points out. This school is an important part of the fabric of our community, my daughter was a student there in the past.
To blindly state there were “several excellent grounds” states to me that you have made up your mind that this is the right decision, then when someone offers up another point of view you don’t agree with, or more information on the topic, you turn it into a slur about the author!
Also, In my humble opinion, if you’ll allow me to have one, I don’t believe in governing by public meetings. There are many things going on in our daily lives which sometimes makes it impossible to attend these meetings, but you apparently believe that by not attending I am somehow unqualified or disqualified to share my opinion.
I feel strongly that you are allowed to have your opinion published, I would hope you would allow me to have mine without turning it into a personal attack on me or my supposed “motives”. I am currently a private citizen and business person who volunteers in a community I am passionate about. I have no idea at this point about my future aspirations but I’ll keep you posted.
I am truly sorry if my opinion “discouraged” you. I am, however, disappointed that you would deem to make this into a personal issue you apparently have with me.
All of these statements are made completely without prejudice. Verbose as I am, I have been excoriated in these comments more than once and have thicker skin to show for it. I hope that my comments will be taken in the way in which they are intended.
O.K., be it resolved that General Committee, on several excellent grounds, made the right decision. The question becomes “where were all the current nay-sayers when the public meeting was held on this very subject?” I believe that some 29 were present; 25 of them likely being parents of Montessori students.
Now we have a former mayor, whose opinion still carries significant weight in this community, behaving in a somewhat impolitic manner by voting in absentia before Council votes; and taking a completely unnecessary swipe at another former mayor/council.
Mr. Wright chimes in his agreement; and with what one can only hope is sarcasm, suggests the candidacy of the U. of W. building as accessible housing or a retirement home. Both of these alternatives are completely cost-prohibitive, given the building’s design; although affordable housing could be possible by combining two or three residence rooms in order to allow for stoves, refrigerators and individual washrooms.
Mr. Stevens, after praising the experience of his children at the Montessori School, seems either to suggest selling the building elsewhere or bankrupting the school.
Which brings me finally to Mr. Withey. Who needs a Freedom of Information Act when Mr. Withey quite freely disseminates information which was probably confidential, at the time, if not still. Unlike Mr. Mackenzie, he seems to be more interested in slurring his successor rather than his predecessor. One can only assume that he is not finished with politics as yet: This is certainly an unusual way to assert his worth in that arena.
I am generally an optimistic individual, but I was truly discouraged by this article and its aftermath.
As one of the founders of the Muskoka Montessori School and its Principal for its first 13 years, I would like to set the record straight in terms of this transaction.
1) The Town approached the school about buying the building for $2.00 earlier this year. In these discussions, Town staff said the Town would have the right to take back the building if the school closed or moved. The rationale given was the fact that the Town no longer wanted to be a landlord and no longer wanted to be in the business of looking after capital assets. I was surprised by the offer, since we had often been referred to as “the goose that laid the golden egg” – i.e. we were a good tenant, our rent could go to a reserve fund to take care of any repairs the building required over the years, and any monies left over could go to other Town projects. (See Tim Withey’s comments above.)
2) While surprised by the Town’s offer to us, we held a Board meeting on the subject and decided to agree to it. Why not? However, when the matter came up before Council, the resolution presented to Council stated that the SCHOOL had approached the TOWN and offered to buy the building for $2.00. ( I was appalled by this statement. ) Town staff pointed out at that time that there was a $55,000 deficit associated with the building due to significant work done a few years earlier and that the school should pay $55,000 if they were to buy the building. This annoyed me for two reasons: 1) I felt we had been brought in under one scenario ($2.00) and were then presented with a totally different one ($55,000) and 2) I had urged the Brunel Community Board from the beginning of our lease to set up a reserve fund for work that would eventually have to be done on the building. That fund was not set up, and when the building needed significant repairs, the Town had to go into deficit to deal with it, and now it appeared it was up to us to pay for that oversight.
3) All of that being said, the Board of the school agreed that, if the Town were serious about getting rid of assets, we would like to stay in this building, and if we could do so for $55,000, we would do our best to find that money. If the property were sold out from under us for fair market value, it would mean the end of the Muskoka Montessori School.
4) The final resolution on this matter that was approved by the majority of Council (and which still needs to go back to Council for a final approval) said that the property would be sold to the school for $55,000, but if the school closed or moved, the Town would have the opportunity to buy the property back for $55,000 plus the cost of any capital improvements made to the building by the school. In this manner, the Town gets rid of the asset and its management, gets rid of the deficit associated with the building, allows the Muskoka Montessori School to continue to provide an educational alternative in Huntsville, and still retains the right to the property, which could THEN be sold for fair market value or to the highest bidder should the school close or move.
5) The Muskoka Montessori School is a charitable, non-profit organization. Should the school close, its assets (or their sale value) would have to be distributed to another non-profit organization. There is no owner of the school, and no one stands to profit from this transaction.
Even at the price of $238,000 it would make a large and inexpensive home, given rezoning, unless it already has a preferred customer at the give away price of $55,000 for other purposes. I think that Britt Stevens and Tim Withey ask the right questions
I couldn’t disagree more Hugh.
When I was fortunate enough to get elected as the representative of Brunel Ward I immediately inherited the role as Chair of the Brunel Hall Board. I assembled our little group of volunteers to deal with the issues as stewards of the monthly rent and issues involving upkeep and improvements to the Hall.
There were 2 bank accounts associated with this and both had very sizable amounts of money in them. It was explained to me that as compensation to the residents of the Ward for giving up their community hall that they would benefit from some of the income realized from the lease.
One of the accounts was the Locks Beautification fund. The other fund went to pay for improvements in the Ward.Public Docks, the building at Conroy Park and the very popular annual free Canada Day BBQ at the Locks were some of the benefits paid for with this fund. Some, but not all, of the maintenance costs came out of the general town coffers and we would work with the Montessori folks on other improvements the school wanted to make. This had all been set up by my predecessor Mike Greaves and in my opinion worked very well.
This property was always in the black and benefits the community as a whole. Yes, there were a couple of recent large projects at the Hall that cost the town but they are complete now and in a few short years of collecting rent the deficit will be eliminated and we will begin again accumulating money.
When I hear the same old political line “The town should not be in the business of _________”(fill in the blank), it diminishes the debate to a catch phrase and it drives me crazy. A business decision should be made here with all of the facts and figures front and centre.
When Dan Armour was elected Brunel Ward Councillor in 2014 I passed on the file and information assuming he would be picking up the torch of Brunel Hall Chair. Much to my surprise the committee was immediately disbanded after the election along with the Canada Day celebration and any chance for other improvements around the Ward. No explanation was given.
There are lots of things you could argue that the town should not be in the business of (Greenbug Energy comes to mind!) but each scenario deserves to be analyzed on it’s own merit with all the facts and figures. To me this is a big mistake to give away one of the true generators of positive income the town has. Mike Greaves and I didn’t agree on a lot of things, but on this one we were in lock step all the way.
Both my kids went to this school. It was a great experience for them and I can’t say enough good things about the staff…they were terrific.
But… I am still confused about the sale price? I don’t think the accrued value, book value, debenture costs, maintenance cost, past improvements, have anything to do with the current market value? If a property has an MPAC value of $238,000 why do we sell it for $55,698?(monthly mortgage payment is $300 amortized over 20 years). I think if it was listed for 2 or 3 or 4 times that number it would sell right away and that is a significant difference.
Help me understand?
My sentiments exactly, Hugh! The Town should not be in the landlord game. I agree with the sale price of the hall..its book value cannot be much, and, as you say, Montessori provides a valuable service.
The same holds true for the Waterloo building…a white elephant that the ratepayers are getting tired of riding…Sell, sell, sell…Location, location, location and…since there is no realtor of record, put all the names of the local brokers in a hat and have one of the delightful ladies at On the Docks Pub draw a name of the listing broker. Who knows, it just might become accessible or affordable housing for Huntsville, or a retirement facility…a better fit for our G-Whiz legacy.