Beyond the Ranks | Inside the $25 Million Veteran & First Responder Housing Project

Hi everyone, and welcome back to Love the North, another segment for Beyond the Ranks, our podcast looking into our proud local military heritage. Again, tonight with me is Mike Jensen. We're continuing our look into the Veterans and First Responders Housing Project that he is championing. If that is the correct term. So, tonight we are going to look at this. This is our third portion of the series. And by the way, if you do like what you're seeing, please subscribe. It really does help the channel grow. And this will help spread this very important word out to more and more people. So, please support if you can. Tonight we're gonna be looking at our third segment on this topic. And we're gonna get into the nuts and bolts of it. The actual planning of the building and financing and all those kind of fun details that nobody wants to stick around for. As soon as somebody asks for money, everybody runs. But fortunately, Mike has had enough experience through different levels of government that he knows where to look and where to poke and prod. So, hopefully that'll help ease things a little bit with all of your experience here working with the city. So,(...) tonight we are, like I said, we're gonna dive into some of the figures as to how this is all gonna be put together.(...) So, what kind of total investment does a project like this look to get? Monetary, it's upwards of $25 million.

(...)

Wow. What we'll talk about tonight is how does that,

(...)

what is $25 million buy you? Right. At the end of the day, we know it's a 60 unit apartment complex of a mix of three bedroom, two bedroom, one bedroom and studio apartments.

(...)

We know that a portion of that is going to be affordable

(...)

for those folks that are struggling to make ends meet.(...) Generally from the(...) veterans and first responder rule. Not to say that members of the public aren't allowed to apply, but there's a prioritized list of veterans and first responders. Just as a reminder, the veterans and first responders include current serving as well as retired or have left of service,(...) veterans.(...) I call it the group of seven. So there's veterans,(...) police, paramedics, fire. There's nurses, 911 and corrections staff. That's excellent. So anyone that's sort of been in a frontline role as a uniform, civilians as well. So our folks in 911, for example, they're handling all sorts of stressful calls all day long.(...) Very, can be very traumatic in some of what they,(...) not just direct trauma, but also something called vicarious trauma. So they're carrying a lot of trauma and it can be very detrimental to mental health. Absolutely. So our goal is to prioritize these folks. Not to say that,(...) for example, I didn't mention conservation officers, but conservation officers are a frontline staff that deal with some pretty nasty situations at times. And so it's not exclusive, but generally those are the, that's the group of seven that we're dealing with.

(...)

And as I mentioned, it could be a young reservist starting out. I'm hoping to get into the reserving here in town with the Irish. Nice. Of all of their members, a lot of them are students and they're in university and college, trying to find a place to rent in town, especially at the height of the school season, because we have some of these schools.(...) It can be hard to find an affordable place.

(...)

And what you do find sometimes, it's just a very small, you got to go outside to change your mind type thing. Absolutely.

(...)

These folks are eligible. We see young police officers, paramedics, nurses, they're all trying to make a goal. I've got a lot of school debt, a lot of, now same for them, try and find a place to rent. So what we're saying is whether you're retired or you're currently serving, you're eligible to live. The three groups we see is those younger folks. We see the second main group is life's changed, 30 to 40 years old, I find myself divorced, I've got alimony, I got kids, I got lots of payments. Where am I gonna find a place to live? So that's the second group of folks that we see. And then the last group is the retired folks. And so the retired folks are,(...) generally they're in a home, they've paid their mortgage, they're ready to downsize. Again, where do you move? You know, a lot of the decent places to live are in that part of the neighborhood. They're up 3,000, 3,500 dollars a month. They're plenty expensive. And that doesn't always include everything. Sometimes you gotta pay for your parking or other utilities.(...) The(...) other thing I mentioned, the mayor and others,(...) you and I talked a bit, Michael, about this. What this is gonna do is open up 25 or 30 residential homes, stand-alone homes right throughout the separate.(...) And this brings in new families and an opportunity to raise your family. So I've got a couple of examples where I've got, you know, a few seniors in their 80s, they raised three or four children in a four-bedroom home, too big now, it's hard to maintain, they gotta pay somebody to cut the lawn, pay somebody to shovel the snow, maintenance and upkeep on the house. So they're looking for somewhere to move and so the advantages, they're moving into places.

(...)

All utilities are covered. Right. You know, and if they're eligible, it could be in the neighborhood of 1,700 dollars a month. Any dollar figures that we talk about tonight are estimates. Yes. So as our consultants from TWC,

(...)

as they do the math and more information comes in, we'll tighten these numbers up.

(...)

But for argument's sake of two bedrooms, around 1,700 dollars per affordable, the two bedroom market rate(...) in the neighborhood of about 27 to 2,800.

(...)

So there is studio as well as one bedrooms. Of course, the rent's a little bit less than that. And the three bedrooms are gonna be a little more.

(...)

And so,(...) yeah, that's an overview of the whole sort of project. And ultimately, it is a business. So money in and money out have to kind of balance out. Even a registered charity, I think you had mentioned before that as CEO, you would not be eligible for any kind of income from that. However,(...) the building would not stay open very long if it wasn't at least paying its own bills, correct? So for that 25 million that you mentioned right off the hop,

(...)

that has to start with acquisition of land. That's right. If I'm thinking-- Yeah, there's a couple of steps that we're looking at right now. After the sort of bubble burst on the idea, now we gotta start getting our(...) affairs in order to figure out, you know, so(...) there wasn't a piece of land that we looked at. The current owner is considering selling it. So you wanna build a building, you need land. Absolutely. And so that's the first step is to acquire land. And so we're going through that right now with the current owner to try and figure out what works.

(...)

Our dollar figures and the consultants have, you know, what they're looking at is how much revenue is gonna come in versus how much has to go out either long, medium or short term. Right. So(...) mortgages and whatnot, the funding from the government, nothing's for free.(...) So we recently found out that we were eligible for a $10 million(...) loan from a financial institute at a(...) market sort of price for a mortgage as far as percentage concern.

(...)

And(...) it's over a 50 year(...) amortization. So 50 years, it's important to have an affordable builds that you have these longer amortizations because it allows you(...) to extend a little bit less rent over a longer period of time. So that's what makes it affordable. Yeah, yeah, that's good. You have that very long, you know, we're gonna be long gone after 50 years time. Absolutely.

(...)

(Laughing) At any rate. But that's a hell of a legacy to leave behind. By the way.

(...)

I'm not doing it for that. No. We're doing it because there's a need. Absolutely. Let's get some veterans house, let's get some first responders and everybody that's the hardworking folks that. Served us. Yeah, they signed their lives on the dotted line. And the least we could do is to figure this out.

(...)

So the land acquisition that we're looking at right now is somewhere in the magnitude of 1.5 to $2 million.

(...)

I'm getting the answer to your question, where does 25 or 27 million, what does it buy you these days?(...) So $10 million mortgage, that's our stake in the game. So the government won't loan money unless the corporation has a stake of its own in the game. So what we're proposing is $10 million. So that'll be a 50 year mortgage.

(...)

Then build Canada homes is what we're shooting for. Okay. This is the newest(...) product that the Liberal government has got out. So that's a federal organization? Yeah, federal.(...) So(...) the remainder of the funds, the majority of it will be from build Canada homes, but there's also some other smaller,

(...)

we're trying to secure some liquidity with others, the province, the municipality is, they already, they know what they'll do for affordable bills. So for example,(...) in town, and you hear it often, development charges. Development charges on a building like we're building in that part of town, that was some of my peer group when I was with the city per unit, that's a 60 unit, a per unit is somewhere in the magnitude of $30,000 to $40,000

(...)

or more per unit.

(...)

So how can you do an affordable, you're coming out of the gate and you're already in(...) debt. Multiple millions. Multiple millions of dollars. So how does it work? You can't do affordable. Now are those, is that like permits and? It includes a few things that we'll talk about as we get through. So there's different sort of buckets of money, right? I kind of grouped them all together. The spreadsheet that the consultant did for us is quite lengthy and involved. And what I did was sort of lean over and say, okay, that belongs in this bucket. This was over here in this bucket. I like your line of thinking. Yeah, so just to keep it easy for me. So, you know, $1.5 to $2 million, that's our go-to.

(...)

That's what we sort of have allowance for. If it's more than that, we might have to seek some private funding.

(...)

What I like about the property we're looking at right now, it needs a permit update, but it's pretty much ready to go. So the current owner went through all of the site plan application and it's what they call shovel ready. Nice. That's a term that Build Canada Homes is leaning on. They want shovel ready projects. So one can imagine we can get,

(...)

I did talk to a few people, there's some property out there for 800,000, another one for 1.2. You know, that really helps us as far as when you're doing the math on the mortgage. Some of the properties are a little bigger so you can build more space, which means there's more coming in, you know, at the end, we're gonna talk about how we're gonna pay for all this.(...) So the problem is that's gonna set us back at least two years.(...) So Sudbury, you gotta do a lot of drilling and blasting. You gotta do a lot of land clearing and leveling. You gotta get the services in there.(...) This land that we're currently looking at might cost us a little more than what's available, but it's ready to go.(...) And so most of the experts I've talked to said, you can pay 800,000 for land, but in the end of the day, once all the work is done, you're gonna be in the two to $3 million range. So are we money ahead to go that route? And it's gonna delay the project. Yeah, yeah. So right now we've got all our(...) eggs in this one piece parcel of the land. We're hopeful that it'll work out. So we're currently negotiation stage with the current owner trying to come to an agreeable purchase price we can both be happy with. Nice. So that's the first part.

(...)

Soft costs. So there's(...) sort of two larger buckets are soft costs and hard costs. The soft costs are in the amount of $2.3 million.

(...)

That means legal fees, site application updates, building permits, consultants, architects,(...) insurances, taxes, and contingency money. So every project has contingency.

(...)

That's in case you forgot something. So if you forgot something, you've got a little bit of money. You're not gonna make the project go belly up because you didn't have a little bit of contingency. So they work that in the model as well. It's usually a percentage of the total amount. So it's at around $2.3 million.

(...)

The next one is construction costs. And so that's the cost per square foot. So anybody in the construction business, they know almost community to community. What's the cost of construction of an apartment building in Toronto versus Sudbury versus North Bay versus the Sioux. So they all have unique sort of price points on how you can build. A lot of it has to do with pressure on how many constructors are in town. So if there's not as many constructors, price goes up because now you're paying a higher value. If there's lots of constructors and not a lot of work, well then the square footage price goes down. So it all depends on the market. So there's a lot of factors in there.(...) Hydro works, probably gonna need a transformer and some other, you know, get hooked up to hydro and that sort of thing. And then again, contingency. Those costs are in the magnitude of $24 million.

(...)

Wow. Yeah, so there's,(...) you know, anywhere between sort of 20 and so there's,(...) there's a little bit of give and take there. We get some rebates from the city that looks favorable for us. We get a little bit of forgiveness on the land price. That's favorable. You know, the soft costs, maybe someone's covered. So(...) that's what we're looking for. These are sort of what we hope is worst case scenarios. Yes.(...) At the end of the day, now that's all construction and soft costs to get the thing built,(...) but somebody has to operate the thing. So operations and maintenance on an annual basis is somewhere in the magnitude of $1.2 million.

(...)

So that's no removal. Repair the drywall, you know, dry clean the carpets, whatever, whatever comes along, I need a new air conditioner.(...) Whatever happens in a building, that has to be considered as an annual, it has to be factored into the rent.(...) So we're estimating one to $1.2 million there. There will be paid staff. So you need somebody to run the outfit, you know, some sort of worker bees and that sort of thing. So they'll be, if not full-time, they'll be on a part-time basis. So those are paid positions through, you mentioned that like the board of directors, myself and my vice president and(...) the director at large, we're not eligible for funding. So we're doing it here because it's the right thing to do, not because we want to make money.(...) Right. Essentially you have to pay an expert the accountant. You've got to have, you know, the-- Property manager. The manager, all that stuff has to be handled. So it's not for free. No. So about $1.2 million there. And then there's the interest buyback as well. So all of these loans and everything that I'm talking about, there's interest on that. So they have to factor in that interest amount, not just the mortgage that you're paying, but also the, you know, one half is the mortgage, the other half is the interest.

(...)

Sources for funding so far, we're looking at build Canada homes. So that's the newest tool that the Carnegie levels have brought out in order to, and they're promoting affordable bills. So there's a lot of money available. It's usually renewed in the new year. I don't know exactly where we're sitting right now with regards to how much money is left in the fund for this year.(...) We're hopeful that it's, you know, it's going to move into next fiscal year as well. If we don't get our loans secured in this fiscal year. Right.(...) We're hopeful for this year. And if not, plan B on fiscal year will be into 2027.

(...)

Municipal grants and rebates. So a lot of money back in that sort of thing, development charges, for example, these are in the tens of thousands of dollars per unit. And the affordable bills to the municipality has a process. They've got a couple of funds, healthy initiatives campaign a few other community, healthy community initiative plan. That's good to hear. A few other things that they get money from both the

(...)

provincial government as well as the federal government I believe. And so they, the other levels of government give them this money and they say allocate it where it needs to go in order to meet the demands of your city. So a lot of these things are not necessarily free. They've just got,

(...)

and so taxpayers and water rate payers can take(...) note that it's not coming out of your pocket, this portion. It's being paid. It's still being paid. It's just not being paid by you. As a taxpayer or water rate payer. It's being paid by other levels of government that have, that are sponsoring these projects. So they have to meet a certain criteria. Has to be a certain number of affordable living, you know, the sort of steps you have to get through to get there.

(...)

And then the institutional mortgage, that's somewhere all adding up in the magnitude of 25 to $27 million. Wow. Yeah.

(...)

And what kind of timeframe?

(...)

Well,(...) and we haven't given up on this yet. We're hopeful to have people moving in by Christmas in 2027. Wow, that's. So it's still pretty ambitious. Yeah. All the professionals I've worked with so far tell me it's still achievable.

(...)

That's what we're shooting for.

(...)

Outside, you know, we're into 2028. So we're shooting for end of 2027. We'll see how that goes. It all hinges on acquisition of property, acquisition of the loans, the funding from the government. You know, there's a lot of things that have to happen in order. Everything has to follow the place. Yeah, exactly. So we'll continue to march towards that. And if we need to extend the date,

(...)

like they say it is what it is. If we don't get money until 2027, then maybe that, you know.(...) So we haven't really set a hard target as far as the date's concerned. That'll become a little more clear, you know, sort of rubbing the crystal ball. It'll become a little more clear when we start getting the things I talked about, all the steps we have to get through.(...) Just the fact that you're doing it is a better timetable than anybody else has. That is for damn sure. Yeah, and I say that sometimes, you know. Some folks are just critical, good, bad and ugly.(...) But I always say, well, what have you done to help with, you know, homelessness and experiencing homelessness in the better community? Helping out our, you know, our first responders that are maybe not on your greatest pension. You know, they're--

(...)

Not in a good place. It usually stops the conversation pretty quick. Absolutely. And then it's usually followed by, hey, how'd you like to help, right? So, you part of the solution? Solution, absolutely, absolutely. Anyways, we have varying levels of partnerships with members of the community and veterans and that sort of thing. But looking at the game plan, if you will,(...) the project, once it's up and running, will be self-sustaining? Yeah, so the rents now, so that's all money out,

(...)

short-term and long-term.

(...)

Money in is the rents, right? So the folks that are living in the building,(...) that's into the magnitude of about 1.4, $1.5 million.

(...)

That pays for the operations and maintenance costs, it pays for, you know, all the things that we need to do in order to get the mortgage paid and that kind of thing. So the(...) on completion, what we're hoping for is about a 40, 60 or a 50, 50 split between the market rent and the affordable. Nice.

(...)

And so the two sums of rents that are coming in are when you do the balance sheet, it has to equal out and hopefully a little more on our side. As a not-for-profit or as a charity, generally it's $0. It's a zero sum game for these folks, there's no money being made. Right.

(...)

There is some allowance, I've talked to some NFP and charity folks before and there is some allowance for(...) contingency. So if something breaks down, you're allowed to have a bit of a, and it might be a requirement under Bill Cannon Homes to have a certain percentage every year. Right. So the stove breaks, the air conditioner breaks, the, you know, whatever, you've got money,(...) you don't have to come back to the table looking for more money. Right. So that's part of the model. And then some of that, as well as the equity in the building, is gonna allow us to move to another building. So we haven't got there yet, but(...) sort of looking forward, saying, this is a very ambitious plan, I get it.(...) But this is the beta test, I call it. Right. Once this one's up and running, we're gonna move. Yeah, now you've got the game plans. Yes, and we've got a footprint, we understand the rules, we know the(...) end sum game.

(...)

Maybe here in Sudbury, if there's a high demand,

(...)

but we're thinking North Bay, possibly Timmins, other parts of the province. There are some other veteran type organizations out there that have tiny homes. And they, I talked to Brad Fields from Homes for Heroes, for example. When these folks are, they go through a rehab process and they're ready to move out in the community, they can't find anywhere to live. So what I said to Brad is, maybe that should be our spot for our next building. So that when these folks are ready to move out on their own, they can move into an affordable space built for veterans and first responders. So there's gonna be some synergy there, I think, between various,

(...)

these groups are already well established. Right. We're fledgling, kind of, everybody sees the goslings out there, kind of floating around and trying to figure it all out. We're at that stage. Right. We're definitely not up in the flock there. But there's a lot of folks that went through this growing pains that we're going through now. They made it. So there's some synergies to be made there. Yeah. For sure. Yeah, anyways, that's our plan. That's fantastic. That is one hell of a torch to bear. And I hope you all the success in the world. I had mentioned earlier, I definitely wanna stay on top of this. I wanna have you back anytime there's any kind of significant milestone just to let the public know what's going on. I think this is the greatest cause that I can think of, at least happening in this town. I appreciate it. And we appreciate all of your efforts. I'm sure the veterans do as well. And-- I get a lot of phone calls and emails. How's it going? Where are we at? And then we move it in.(...) I've got a list of about 30 or 35 already out of the 60 units. That is fantastic. That's pretty much spoken for. That's awesome. Right?

(...)

Direct appeal to members of the public that might be listening. Donations are greatly appreciated. And there's a website to go to for the donations. Veteransandfirstresponders.ca.

(...)

.ca. And there's a donate now button. There's also a survey there. If you contact on the survey, you can fill out the forms. It'll have, it sends an email directly to me when you hit(...) complete.

(...)

And then I can add your name to the distribution list for regular updates. That's for people that are seeking housing? Seeking housing. Okay, perfect. So some of the questions are now, medium term, long term.

(...)

About 25 or 30 are now. So people are interested in, they'd like to move. That's fantastic. So you can donate directly there. You hit donate now, it goes directly into our bank account. And any amount is appreciated because like I say, there's some costs that we're gonna have to bear somehow through donations and fundraisers. Right. Because we're not gonna get everything.(...) 100%. So at any rate, we would appreciate any donation at all. Any time that there's any kind of fundraiser or anything like that going up, please don't hesitate. Call us, I wanna get the word out there as soon as we can. And just, I'm so excited about this project. I think it's such a wonderful thing and we can't thank you enough.