ABOYNE – A preliminary business plan for a “Continuum of Care” on Wellington Place lands here pegs the price of building a supportive seniors community for about 300 residents at around $88 million.
Ed Starr of SHS consulting presented the plan at the March 13 meeting of the County of Wellington’s Information, Heritage and Seniors Committee.
Despite the initial capital costs, “we do believe it can be financially self-sustaining,” Starr told the committee.
“With a little bit of support you’d be able to house a wide range of seniors,” he stated.
The county included $1 million for exploratory work on the project in the 2019 budget. Starr explained the plan was developed recognizing that a decision to proceed has not been made.
“We did a very broad, rudimentary concept just to start us thinking,” he said. “We didn’t want to hire any architects.”
Starr outlined the background rationale for considering the project.
“There has been a significant increase in the number of older adults in Wellington County and all forecasts indicate this will continue to escalate,” Starr stated.
The 2016 Census showed a county population of 16,380 seniors over the age of 65, a figure forecast to more than double, to around 35,000, over the next 25 years.
While the need for more housing options suitable for seniors continues to grow, the availability of such options has failed to keep pace, the study states.
“The development of a Continuum of Care community is a proven solution for a wide range of seniors experiencing isolation and loneliness, paying excessive housing costs and living in inappropriate accommodation,” the report notes.
“By developing a community offering a range of housing options, services and supports, Wellington County can use its resources and proven expertise in seniors housing and supports to create a unique and highly positive living environment for these seniors and give them much more fulfilling and productive lives than they are currently experiencing.”
Starr said about 15 acres of the 209-acre Wellington Place campus could be utilized for a Continuum of Care project, in close proximity to Wellington Terrace, the existing county-owned and operated long-term care home.
“The development should be well integrated with the wider community by locating it adjacent to Wellington Terrace,” the report states.
“The location of Wellington Place provides close proximity to a host of community amenities and services and is ideally situated to meet the social, recreational, medical and other day-to-day living needs of area seniors. A direct link by means of a covered walkway between Wellington Terrace and the Continuum of Care community would be an important feature.”
Starr said the project should adhere to the Wellington Place concept adopted by the county in 2011 and offer a range of price levels, from market rate to more affordable rental units.
Starr noted the 206-unit development for 300 residents represents less than 2% of the total seniors housing market projected for Wellington County over the next 25 years, leaving ample opportunity for private sector involvement in addressing market needs.
The study suggest two possible options for governance of the project. The report notes a comparable project, Georgian Village in Simcoe County, is directly-owned and operated by the county, utilizing county staff and some community partners, with services outsourced to provide the necessary functions. In that model, county council is the final decision maker on all key aspects of the development.
“Full ownership has provided a number of advantages to the County of Simcoe,” the report states, noting the county has a high degree of control over day-to-day operations within the community, which allows direct influence over the quality of care and living.
“As a division of the county, staff can also rely on the capacity of the county to provide a number of services such as IT infrastructure, finance, maintenance, and so on.”
A second option outlined in the report is ownership by the Wellington Housing Corporation (WHC) which, as a separate corporation, “insulates the county from any potential liabilities which may arise” through direct county ownership.
The report recommends a mix of “life lease,” market rental and affordable rental and retirement living apartment units within the project. The life lease option would accommodate seniors who have sold their homes and prefer to take an equity position in their new accommodations. The report also recommends including a recreation/community centre “community hub” and some outdoor recreational space.
Service supports would be easier to provide given the proximity to Wellington Terrace, the report notes. Supports to be provided to seniors living in continuum of care communities would differ base on the selected housing option.
“Usually, those living in retirement units have meals provided and receive light levels of support, while those living in the rental and life lease units live more independently.”
Total capital costs for the concept are estimated at $88,041,732. This includes the development’s soft costs, land cost and hard costs (construction costs), as well as HST. Professional fees for building consultants make up the largest portion of soft costs, estimated at just under $11 million.
Hard costs including construction, site servicing, hydro, appliances, furniture and equipment total nearly $62 million.
Capital contributions, including a projected $27 million in revenue from life lease units, over $3 million in funding through various Canada Mortgage and Housing Corporation programs, and a county contribution of the land estimated at almost $6.2 million, leave just under $44 million to be raised through debentures, mortgage financing and additional capital contributions.
The study projects the development would operate at a profit of about $243,000 for the first full year of operation. That’s based on about $3.5 million in operating revenues, including just over $3.1 million in rental income and $108,000 for parking. Operating expenses are estimated at about $3,308,800.
“So if that all worked out I feel it would be sustainable,” said Starr.
Councillor Campbell Cork said at $500 per square foot, the proposed life lease units would sell for between $500,000 and $600,000.
“In my neck of the woods that’s a ton of money,” said the Ward 3 councillor. “And when I hear those kind of dollars I sure don’t hear affordable.”
Starr replied, “Well it would be affordable for somebody who’s got a larger home and would want to invest their equity, but this is certainly not getting at the low income end of the scale.”
Cork asked what the “threshold income” would be “for the most affordable” units.
Starr explained CMHC funding would come with a requirement for a number of units to be available at 80 per cent of market rent, which he estimated would result in rents of about $700 or $800 a month.
At 30% of income spent on rent, a common housing affordablity benchmark, Starr estimated the continuum would include “affordable” units for residents with as little as $25,000 to $30,000 in annual income.
“It could be lower. The county does have access to rent supplement programs that could subsidize an individual,” he pointed out.
Councillor Jeff Duncan noted there is “a large discrepancy” in equity available to homeowners across the county.
“In the Town of Erin, 1970s bungalows are selling in one week for about $600,000. So if you’re a retired senior and you actually have a nice home or a country property, literally you’re talking about a million dollars if you’re selling your place,” said Duncan.
He added the issue is “not necessarily about affordability, but housing choice.
“So those people may sell those (homes), but they have to move out of the county to be able to find a unit similar to this, where it’s life lease accommodation,” Duncan explained.
“People that have the equity, they’re leaving this community because there isn’t the style of unit or the flexibly that this concept is giving.”
Duncan asked about the possibility of a private sector partner for the venture, in the form of a company that has built and operated developments of this nature.
“I think we all agree the concept needs probably to go ahead, but it’s (a question of) how to get there,” Duncan said.
CAO Scott Wilson said, “No, we haven’t contemplated it. It’s certainly up to county council if they want to take in any number of partners for any number of services on this campus here, but that hasn’t been the approach that staff has been guided by so far.”
Wilson added, “If we take in partners then we take in the obligation to involve them in areas that we may not want them involved in. If we were only looking for a source of money, then I don’t think that’s a good enough reason to get a partner.
“The county has a very fine reputation in every service area that we have and I wouldn’t want to get in bed with anybody that might potentially detract from that reputation.”
Committee chair councillor Mary Lloyd said, “It’s premature for us to consider bringing on a partner if we haven’t even decided if we want to move forward on this plan.”
Councillor Earl Campbell questioned the viability of the 50-year timeline for repayment of a portion of the debt on the project.
“I don’t know if the county’s ever gone down a 50-year amortization road … I’m just thinking part of the decision process is going to be seeing that number switched up to a 25- or 30-year amortization,” said Campbell.
Wilson said, “Fifty years is a little longer than we ordinarily go out, but this is an extraordinary project.”
He added he would ask treasurer Ken DeHart “to come armed with an opinion” on amortization when the committee report is presented to county council later this month.
The committee accepted the consultant’s report as information.
