Fort McMurray condo owners to take out $17M loan for embattled wildfire rebuild
Beleaguered Fort McMurray condo owners whose homes were destroyed in the 2016 wildfire will sink $17 million into the latest attempt to rebuild the troubled project.
On Friday, Court of Queen's Bench Justice Robert Graesser signed an order to approve a proposed loan between Hillview Park condos and Calmac Developments.
Calmac will both lend Hillview the money and finish the work to rebuild the 214 townhouse-style units. As per the loan proposal, Calmac will take possession of any unit that is foreclosed on.
For condo owners who oppose the deal, Graesser's decision was a blow.
"I'm just feeling very defeated as are most of the owners right now," said owner Sheila Champion on Friday.
Court heard a vote by owners about whether or not to take the deal with Calmac was contentious: 58 people voted yes, and 29 voted no. Other owners either abstained or weren't allowed to vote because they are behind on their condo fees.
'Something has gone very wrong here'
Before delivering his decision, Graesser read out 11 letters from owners who were opposed to the Calmac proposal, pleading with him to reject it and to instead order an inquiry or remove the condo board.
The letter writers said the extra debt they would accrue from their share of the $17 million would further devastate them.
"Please say no to this loan and give us time to explore other lenders, other options for this build, and determine whether it makes sense to throw good money after bad," wrote Jason and Rebekah Benoit. "Don't give these people the power to continue ruining our lives."
Some unit owners say they've already filed for bankruptcy or are in dire financial straits. Owners are still on the hook for fees, mortgage payments, and two special assessments that amount to up to $56,000 each. The assessments were for repairs and work that was never completed because the contract with their first builder, Viceroy Construction, was terminated. Viceroy and the condo board remain tangled in litigation.
A number of the owners have shared concerns with CBC, questioning the competency and lack of communication from the condo board. Those issues loomed large in the letters to Graesser.
"This board has not ever taken into consideration what is actually happening to owners and continues to stack the debt on us," wrote Kevin Whelan. "I want this to be over. Just take everything from me and let me move on."
Graesser also heard from two owners who attended the hearing in the Edmonton courtroom, as well as from a handful of people who participated via teleconference.
'A very difficult, very unique situation'
Graesser said that though it was obvious the loan was a "hotly contested proposal," it would be irresponsible for him to reject it. The judge said it may be that Calmac is no "white knight," but their proposal is the only one the table.
"In my opinion, it is the only option that has anybody salvaging anything out of this situation," he said.
He said removing board members is beyond his powers and the condo owners would have to follow their bylaws to do it themselves.
Moreover, Graesser said, the condo already owes Calmac more than $6 million for work already completed. He said if he didn't sign the order, he expects work would cease immediately, and that Calmac would put a lien on the project, which would end all hope of getting the condos rebuilt as currently planned.
Graesser also ordered the condo board to provide a written update on the state of the project in three months time. The board will also be required to appear in person before Graesser unless they unanimously agree that they don't need to —a requirement meant to encourage the board members to co-operate with one another.
