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CMHA, Habitat battle over bills

The bottom three floors of Massey Manor at the corner of Seventh Street and Pacific Avenue have been filled, but the top floor sits idle.

TIM SMITH/BRANDON SUN Enlarge Image

The bottom three floors of Massey Manor at the corner of Seventh Street and Pacific Avenue have been filled, but the top floor sits idle.

A battle between two not-for-profit organizations is keeping 14 condominiums from the people in Brandon who need them the most.

While the bottom three floors of the Massey Manor have been filled with deserving candidates, the top floor sits idle — finished, ready for someone to move in, but empty.

The reason, according to Glen Kruck, manager of the Canadian Mental Health Association’s Westman Region, is Habitat for Humanity Canada’s reluctance to pay its share of the building costs.

"Habitat Canada have not paid one cent on their bill," Kruck said about an invoice the CMHA sent in June 2012.

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 — CMHA, Brandon Friendship Centre and Habitat for Humanity Brandon.

The CMHA owns 25 units on the first and second floor, 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 second floor that are rented to low-to-moderate income aboriginal households — all of which are being used.

And Habitat for Humanity Brandon was orignally 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.

The three organizations, according to Kruck, were responsible for the renovations and restoration projects needed to complete its portion of the building.

However, some projects, according to Kruck, were meant to be cost-shared by the three organizations. While the CMHA contracted the work, projects that were to be used by all three organizations — the playground area, parking lot, building roof — were to be shared on the basis that the CMHA would pay 50 per cent, due to its larger share in the building, while the other two organizations would split the remaining 50 per cent —25 per cent apiece.

Kruck said in other instances, when one of the other two organizations didn’t have the skill set to complete a job, that the CMHA would contract the work and the organization would be billed 100 per cent of the cost. In other situations, such as the balconies on the south side of the building, which each group owns the same amount, the repair work would be shared one-third each.

Kruck said the flexibility and common-sense approach to the agreement worked great, until Habitat for Humanity Brandon was shut down and the project was taken over by Habitat for Humanity Canada.

In total, Kruck said Habitat owes CMHA more than $70,000 for shared projects, while another four contractors have yet to be paid for work they did for Habitat Canada.

"Until they pay what is owed to everyone, CMHA will not sign off on the sale," Kruck said. "We can’t. We cannot subsidize Habitat Canada. We cannot afford to do that."

Kruck is worried that if the bills aren’t paid prior to a prospective sale to Manitoba Housing that would see the government organization take control of the top floor of the building, legal action would be taken against the groups remaining in the building.

"All we want is for them to pay for the actual costs up to the date of sale and pay off all the other contractors, because if they don’t pay off the other contractors, they are going to put a lien against the building and Habitat (Canada) is going to walk," he said.

Kruck said the CMHA supports the sale of the top floor to Manitoba Housing, but wants assurances that the CMHA and the contractors will be paid.

"(Habitat Canada) wants to proceed with the sale and settle up afterward. If they have that in writing in the sale document that they will pay CMHA all money owed to us up until the point of the sale and you have cleared off all other contractor bills, we’ll sign on that dotted line tomorrow," Kruck said.

There were no issues with payment prior to the local chapter of Habitat being closed after the national chapter found minimum operating standards were not being met, he added.

"The local group paid their bills," Kruck said. "Habitat Canada has come in and tried to weasel out of every deal and agreement. They won’t accept any verbal agreement we had with the local Habitat people."

He’s also disappointed in how Habitat Canada has conducted itself since the takeover, and its decision to revoke agreements with potential homeowners after the mortgage costs were believed to be unaffordable.

"One of those Habitat families was able to afford to purchase our first STEPP home, at a cost greater than they would have been paying for that Habitat condo," he said.

And the relationship has devolved to the point where Kruck said it’s difficult to trust Habitat Canada.

"They don’t want to pay the full cost," he said.

"They want to get away with as much profit as they can."

For his part, Habitat for Humanity project manger David Morris said Habitat Canada accepted an offer from Manitoba Housing to purchase the units in November.

"Regrettably, the Massey Manor project was undertaken by three organizations without a partnership agreement being put in place, even though such an agreement was a basic condition for public funding of the project," Morris said.

"At no point were professional construction and/or business management engaged to lead the project, a responsibility the three organizations must equally bear."

Morris said Habitat Canada sees little proof to substantiate the bills that the CMHA says it is on the hook for.

"(CMHA) has lived up to its promise to block the sale of the fourth floor units until Habitat Brandon pays in full whatever dollar amount CMHA claims it’s owed on the Massey project," he said.

Habitat Canada, according to Morris, has offered to place in trust the full amount of the CMHA’s claim or pay it from the proceeds of the sale, but both offers were rejected.

"The second rejection was couched in a long list of unrelated demands that appeared aimed at publicly embarrassing Habitat," Morris said.

"After appealing unsuccessfully for intervention by the board chair of CMHA-Westman Region (Kruck), Habitat has now appealed to the provincial and national levels of the CMHA organization for assistance in arriving — in a professional manner — at a resolution to the business matter at hand. We do so with the hope that the 14 hostaged Massey units will soon be freed for occupancy."

Brandon Friendship Centre, the third partner in the original agreement, declined to speak about the matter.

"We are not involved in this issue at all. We are staying right out of this and that is what our board has decided we need to do," BFC executive director Gail Cullen said.

» ctweed@brandonsun.com

Republished from the Brandon Sun print edition February 16, 2013

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A battle between two not-for-profit organizations is keeping 14 condominiums from the people in Brandon who need them the most.

While the bottom three floors of the Massey Manor have been filled with deserving candidates, the top floor sits idle — finished, ready for someone to move in, but empty.

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A battle between two not-for-profit organizations is keeping 14 condominiums from the people in Brandon who need them the most.

While the bottom three floors of the Massey Manor have been filled with deserving candidates, the top floor sits idle — finished, ready for someone to move in, but empty.

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