Habitat sale of fourth floor finalized

TIM SMITH/BRANDON SUN Enlarge Image

The Manitoba Housing and Renewal Corp. purchase of Habitat for Humanity’s 14 units on the fourth floor of Massey Manor at the corner of Pacific Avenue and Seventh Street was officially approved on Wednesday.

The ink is still drying on a deal that has Manitoba Housing and Renewal Corp. (MHRC) taking ownership of the fourth floor of Massey Manor.

Habitat for Humanity Canada project manager David Morris said the deal was officially approved Wednesday afternoon and will see MHRC pay $1.5 million for the 14 condominium units.

"I think we arrived at the best outcome for what has been unquestionably an unhappy situation," Morris said.

The former Massey Harris building originally set out to offer 58 units of affordable housing in Brandon — 39 rental units, 14 condominium units for homeownership and five units used as a emergency shelter for the homeless.

The project, which was funded by all three levels of government, was undertaken by three local organizations — the Canadian Mental Health Association, Brandon Friendship Centre and Habitat for Humanity Brandon.

The CMHA owns 25 units on the first and second floors, as well as five units on the first floor used for emergency shelter for the homeless — all of which are currently being used.

The BFC owns 14 units on the third floor that are rented to low- to moderate-income aboriginal households — all of which are also being used.

And Habitat for Humanity Brandon was originally set to own the top floor, 14 condominium units that were set to be sold to moderate-income families that qualified for a mortgage to purchase the units.

Wednesday’s sale of the top floor ends a dispute between the CMHA and Habitat Brandon. The relationship between the two organizations was amicable until Habitat Canada disaffiliated the Habitat Brandon chapter and sent Morris to Brandon to "wind down" the organization.

"We made the decision that in the best interest of the community and in the best interest of the units that we would pay the amounts demanded (by CMHA)," Morris said.

"We don’t agree with the amounts that were demanded, but we felt the only way to move forward was to pay them and get on with it."

Habitat Brandon paid about $75,000 to CMHA, Morris said, for projects that CMHA management said last month were meant to be cost-shared by the three organizations. No formal agreement between the three organizations was ever put on paper, something Morris said is unacceptable when undertaking a multimillion-dollar project.

"Three organizations went into the project without formalizing how they were going to do it, how they were going to manage the project. That’s a risky approach to a project."

Furthermore, according to Morris, some of the work billed to Habitat Brandon was approved without the organization ever being consulted.

"They entered into agreements with contractors that Habitat was not aware of and had not been given notice of and had not agreed to," Morris said. "The discussion wasn’t around whether work was or wasn’t done, we were looking for substantiation of the amounts that were being billed back to Habitat."

In June, Habitat Brandon lost its affiliation with Habitat Canada for what Morris called "failure to meet basic operations standards."

A search on the Canada Revenue Agency’s online registry of charitable organizations shows Brandon Habitat hasn’t filed a T3010 Registered Charity Information Return since 2010 —a basic operation standard for Habitat Canada.

Morris also determined that the fourth floor, orignally set out for homeownership, was beyond what anyone would call "affordable."

Habitat Canada sent Morris to wind down the operations of Habitat Brandon. One of his main duties was resolving the conflict with CMHA and facilitating the sale of the 14 units at Massey Manor.

In November, Habitat Brandon accepted an offer from MHRC for the sale of the units, but property law required CMHA and BFC to sign off on the deal.

Until Wednesday, the sale was blocked by CMHA, which demanded Brandon Habitat pay for the outstanding contracting costs.

"The key roadblock with Massey Manor was how the project was approached," Morris said.

"When a project runs into difficulty like that, that’s when you really need the project-management structure in place to deal with those issues and it wasn’t there."

A second search on the CRA site for the CMHA Westman Region lists Arnold Grambo, former chair of Habitat Brandon, as the secretary of the CMHA from 2003 to 2010 and Gail Cullen, executive director for Brandon Friendship Centre, as a board member of CMHA since 2006.

Morris said it’s healthy for community leaders to sit and serve multiple boards as the cross-pollination creates a "tight-knit community."

But he also said that Grambo and Cullen had a duty to the organizations they chair to establish a partnership in writing as to how Massey Manor would be managed.

"The agreement was between three people that sat on one board," Morris said. "At the point you decide to take on a major project such as Massey Manor then people have a responsibility to go back to whatever board they represent and do the due diligence on behalf of that one organization.

"The board of Habitat Brandon had a duty to steward and look out for the resources of its own organization. The other partners have that same obligation."

All three organizations are to blame for not creating that framework, according to Morris, and unfortunately 14 units that could have addressed low-income housing in the city were the casualty, sitting empty for months.

"If I have any disappointment it would be that there aren’t lessons learned from this project," Morris said. "Hopefully for the benefit of the community there are lessons learned, I wish I could say I have seen evidence of that, but I have not yet."

Morris said he will continue to "wind down" the closure of Habitat Brandon and he expects a chapter of Habitat Manitoba to be established in the city in the near future.

"The issues we identified laid at the feet of the leadership and not at the feet of the volunteers," Morris said.

"We have an amazing group of volunteers that did the completion work on Massey Manor, the only reason it was completed was because of their commitment."

"We’re now in a position where we can move forward and get back to doing what we do well."

» ctweed@brandonsun.com

Republished from the Brandon Sun print edition March 8, 2013