Is Town-owned space better utilized for health care or active living programs? It was a question the Town’s General Committee was asked to consider last week (March 30) with a request by the Algonquin Family Health Team (AFHT) to move to the second floor of the Active Living Centre coming one step closer to reality.
A report was presented to Committee in October outlining AFHT’s reasons for the move. When their lease expired on April 30, 2015, the group expressed interest in a new location as their current space is “too small and not adequate for their current operation.” At the time, it was agreed that their lease would be extended month-to-month while both parties looked for a solution.
That solution – renovating meeting space on the Active Living Centre’s second floor – would allow the AFHT to remain in the Canada Summit Centre building. It comes with a price tag for the Town, however: with the lowest of two responses to a Town RFQ coming in at $107,000 and with AFHT contributing $30,000 toward the cost, the Town would be left to pay the remaining $77,000, an amount staff say will be recouped over the next six years thanks to increased rental fees.
The AFHT’s rental fees would increase from $9759.25 per year to $15,759.25 per year. Motivations Fitness has expressed interest in taking over the space vacated by the AFHT, which would increase their rental fees from $61,320.00 per year to $73,777.73 per year. When the estimated $5,206 in lost rental fees in the Active Living Centre is taken into account, the Town will realize $13,251.73 per year in additional revenue from the move.
The proposed location for the new AFHT space on the second floor of the Active Living Centre. The existing kitchen and a slightly smaller multi-purpose room would remain available for Town programming and community rentals.
The proposed new location is actually smaller than what the AFHT occupies now – 1194 square feet versus 1219 square feet – so size is less the issue than the current layout of their offices.
“It’s a narrow corridor and it’s not ideal for what they are trying to do,” explained Scott Ovell, Community Development Officer for the Town. “The new location will be smaller but it’s a better use and design of space, more flexible.”
When asked by Doppler if renovating the AFHT’s existing space had been investigated, he said, “We could have looked at it. It was something that they as an organization weren’t keen on. They felt they had exhausted all of their options. It would have been a stop gap measure and this is a far more permanent solution. It also allows Motivations to expand and we’ll see a net increase in rent.”
The AFHT will see their rent increase from $8 to $13.95 per square foot; Motivations will pay their existing rate of $10.23 per square foot for the additional space. Ovell said that while talks with Motivations are not complete, the company would take on the costs of any leasehold improvements in the expanded space.
The other concern noted in the staff report is that the move would impact the Town’s programming, including some of its adult and 55+ leisure programs, as well as summer camps.
That concern was echoed by Councillor Karin Terziano.
I’m concerned about the displacement of the programs that we kind of built the Active Living Centre for. What are we going to do with that? Are we going to be turning people away?
Councillor Karin Terziano
In reply, Kari Lambe, the Town’s Director of Community Services, said, “Both the Algonquin Family Health Team and programming provide a great benefit in the facility and to our community, so I’m very torn. I can tell you that the programming would absolutely see a change in the level of service. We would be decreasing our number of kids in summer camps and we would need to revisit our day-to-day programming as it relates to our 55+ and our adult programming just based on reduced space. Our rentals come in and we program around these rentals. If we don’t have space for these programs to go to, we can’t offer them.”
The possible use of the Waterloo Summit Centre for the Environment was up in the air, she added, with negotiations ongoing to fill that space. (See Doppler’s earlier story about the departure of the Muskoka Animation Studio from the building here.)
Mayor Scott Aitchison disagreed that programming would need to be cut.
In response to the comments about the displacement of programming, you pointed out that you program around rentals as they come up now. I would think with all the various assets and buildings and properties we own all over this town, we could program around this as well and it won’t be a huge negative impact on the programs. We keep talking about trying to fill up buildings and fill up community hall space, and I realize they all aren’t centrally located, but I think there’s a way to accommodate both and make this happen.
Mayor Scott Aitchison
Councillor Bob Stone wondered how long the group would remain in the space and whether the Town would be left with their leasehold improvements in the future.
Ovell explained that the group’s funding works in five-year cycles and that the AFHT would likely remain in the space longer than that. He added that the Ministry of Health and Long-Term Care are likely to invest even more in community health hubs in the future. He said that the leasehold improvements would leave it as a more attractive commercial space, but conceded that if it were return to programming use then the renovated space may need to be changed again.
“I’m very excited about this,” said Aitchison. “The Algonquin Family Health Team is an important part of the health care infrastructure in our community and this is very much the direction the Ministry of Health would like to see health care go. This falls very much in line with my personal beliefs that we shouldn’t spend money if we can help it unless there is some kind of payback. This clearly does have that payback.”
Town staff were directed to determine where the funding for the renovations would come from and prepare all necessary documents for the financial agreement between the Town and AFHT before the next Council meeting. The report was passed by Committee unanimously.
Not so! It sold for more than the price for which it was purchased, but the annual operating losses were catastrophic, and the subsidized rents did not come close to covering them. Check it out: I did. Moreover, the whole Blackbird Boat fiasco and its cost to the town, including the legal fees in-advisedly paid year after year to perpetuate a lost cause, derived from and is wholly attributable to the sheer folly of the Town buying that building without any, yes, any professional in-house commercial real-estate management skills whatsoever. The proof is in the pudding. Municipalities should ask their citizens what their priorities are in the way of services, and then deliver, in priority, those that its citizens can afford. The Town should go back to its “core business”….being the sole purpose for which it (and all municipalities) were created in the first instance.
To set the record straight the Town made money on the MTO property. Whether the decision was right or wrong to purchase.
One would have thought that the Town would have learned from past mistakes (buying, and then renting at bargain-basement rates, the old MTO building and the former MNR building, for instance) that it should not be in the commercial property ownership and rental business, period. Both were financial disasters for the Town then, as is the Waterloo building now, and as are the operating costs for the over-built Summit Centre. The costs to the taxpayers from these ill-conceived adventures have been huge. However, consider for a moment the taxpayers who own commercial rental properties in the town. It is grossly unfair to them to have the Town compete with them for tenants….in any circumstances, and particularly given the extent of commercial (office/retail) vacancies in town lately and currently. What’s more, it is incomprehensible that the Town competes with them by renting its properties at discounted below-market rental rates which (in part) are made possible by the fact that the Town does not have to pay taxes to itself. Result: the commercial property owners (with the highest tax rates in town) are subsidizing their competition….the Town. Now, that’s perverse logic of the first order: but, then, that’s our local government hard at work for y’all.
Rental fees are only as good as the lease agreements that govern them. Tenants need to abide by agreements paying in a timely fashion or the Town puts them out before unpaid lease payments accumulate resulting in “deals” and large losses to the Taxpayer. Too much has been lost from failure to enforce agreements. Notice given after one missed payment and evict after two unpaid obligations. Taxpayer money should not be supporting for-profit businesses regardless of who they are!