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HomeNewsCouncil rejects Cassellholme board’s financing strategy

Council rejects Cassellholme board’s financing strategy

The City of North Bay has formally rejected the financing strategy for Cassellholme Home for the Aged’s expansion. 

The proposed financing strategy, which wasn’t brought forward until late November, would have seen North Bay and the other municipalities supporting the Cassellholme renovation put down the full cost of the loan upfront in order to get necessary financing support from Infrastructure Ontario. 

Cassellholme had originally planned on seeking loan options as its own entity in the private sector, with no lenders wanting to take a risk on financing a nursing home. That left Infrastructure Ontario as the only means of getting a capital loan.

In late November, Infrastructure Ontario told the Cassellholme board it will only help finance the renovations if the member municipalities are able to put down the entire cost of the project upfront. 

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The estimated cost of the Cassellholme renovation is sitting at $90 million. 

A motion was passed by council Tuesday evening formally rejecting Cassellholme’s financing strategy, adding the board should negotiate with Infrastructure Ontario to allow municipalities to only put down their portion of the project. 

Councillor Bill Vrebosch said the proposed financing strategy by the Cassellholme board would have a negative impact on municipalities. 

“This project has a potential to handcuff municipalities and their capital plans,” he said during the meeting. “Cassellholme has done a disservice as far as I’m concerned to municipalities by waiting until the last minute to determine financing strategies.”

Councillor Dave Mendicino likened the notion of municipalities putting down the full cost of the loan upfront to a young couple purchasing their first home with the help of their parents. 

“It’s imperative that the lender tell the parents: ‘you’re going have to include these payments and they’re going to impact your future borrowing capacity’,” he explained. “If we guarantee our portion of the entire project, it devastates our ten-year capital plan.”

Councillor Mark King was the lone vote against the motion, saying he’s doubtful the Cassellholme board will be able to renegotiate the terms with Infrastructure Ontario. 

“To suggest that somehow the board of Cassellholme can control the requirements of Infrastructure Ontario with respect to the lending requirements is not even possible. It’s just not something the board at Cassellholme can do,” King noted. 

Councillor Chris Mayne, who also serves as the chair of the Cassellholme board, says the board has made progress in early negotiations with Infrastructure Ontario. 

“I think it’s safe to say we have moved away from the originally intended 100 percent municipal guarantee,” Mayne said following the meeting.  “I hope we have more good news to report in the next few weeks.”

Every councillor who spoke on the issue highlighted the fact they still want the Cassellholme renovation to move forward, but simply take issue with what is being asked of municipalities by Infrastructure Ontario. 

“This will be one of the most significant redevelopment projects in our community in a number of years,” commented Mayne. “At the end of the day, we’re still trying to bring it forward under the best terms and conditions, at the best price we can and that benefits both the residents and taxpayers in the community.”

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