UPDATE, March 15, 2017: BC Housing has responded to this story, confirming it issued a $39-million loan to developer Brenhill. The agency said the loan was used to construct the 162 new, below-market rental units at the social housing building on Richards Street. The loan was secured by a mortgage on the Helmcken site and was paid in full within six months. The mortgage had an interest rate of between 0.78 per cent to 1.02 per cent.
BC Housing says it has no further involvement in the project.
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The patch of land at 508 Helmcken Street is a muddy hole in the ground but it will soon be home to a luxury condo tower.
And for nearly seven months BC Housing financed the developer while condo presales were underway.
“I didn’t think this could possibly be happening,” said South Vancouver Park Society’s Glen Chernen, who discovered the mortgage documents.
“I don’t think that BC Housing should be financing condos.”
Here’s how it unfolded.
Brenhill, a developer, built the New Jubilee House, a social housing project that was supposed to cost $30.6 million.
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BC Housing financed its construction with a mortgage worth $36.2 million.
When construction was completed, the loan was replaced with a $39-million mortgage for the Helmcken Street property where Brenhill would build market condos on land it received from the city in a sole-source deal.
No other developers were offered the chance to make a proposal.
“BC Housing gave a $40-million loan to a private developer to finance the presale marketing of condos that start at $1.6 million each,” NDP housing critic David Eby said in the legislature on Monday.
Housing Minister Rich Coleman responded: “It actually turned out as we redeveloped the site between two property switches, we ended up with double the number of affordable rentals.”
The New Jubilee House offers 107 units of subsidized housing, 20 more than the original building. It also includes 55 units at the low end of market rentals.
Once the New Jubilee House units were built, Brenhill had to report on its condo sales at 508 Helmcken.
“In the minister’s own mortgage for this property, it says, ‘Give us updates on the presale condo progress. How well are you selling presale condos?’ So I’m not sure this minister has any idea what he’s talking about,” Eby said.
BC Housing issued a statement saying that, “contrary to allegations made earlier today in Question Period, BC Housing has never had any involvement in this development,” referring to the market condos to be built on Helmcken Street.
However, the mortgage was registered to 508 Helmcken Street and a provision stated that Brenhill must provide details of “pre-sale achievements for the contemplated market housing project.”
The loan was repaid. But Chernen nevertheless wants the auditor general to investigate.
“I would like to see open disclosure of any such deals,” he said.
– With files from Tanya Beja