July 2, 2019 11:35 am
Updated: July 2, 2019 2:38 pm

Fort McMurray condo owners say building’s problematic and ongoing rebuild could become even more costly

WATCH ABOVE: The condo board overseeing a rebuild of a Fort McMurray complex is heading to court this week to try and get approval for a financing plan that some condo owners say could decimate their finances.

A A

The condo board overseeing a rebuild of a Fort McMurray building destroyed in a 2016 wildfire is heading to court this week to try and get approval for a financing plan that some condo owners say could decimate their finances.

Story continues below

“[The board is] going to the court for approval of a $17.7-million loan,” Sheila Champion, who is living in Yellowknife while the condo building is being rebuilt, told Global News. “What I would like to remind people is that last March, we were hit with a $6.9-million loan which Red Cross paid a portion of. Some people paid out of pocket and other people still are in arrears for that amount.

“In October of 2018 we were hit with another $3.7-million dollar special assessment,” Champion added.

“I was appalled [to be told they are applying for this new loan].”

READ MORE: Despondent Fort McMurray condo owners face financial ruin over wildfire rebuild

Watch below: Aerial footage taken from above Fort McMurray, Alta. in May 2016 looks at the destruction in the Abasand and Beacon Hill neighbourhoods. The video was taken just days after more than 80,000 people were forced from their homes due to a raging wildfire.

In a letter to condo owners, dated June 3, the Hillview Park Condominium Corporation’s board of directors said it was “excited to announce that we have come up with a source of financing and a plan to complete the project and rebuild all of the homes.”

“Essentially, the LOI (letter of intent) contemplates Calmac (company working on the rebuild) deferring payment for all amounts currently owing for remediation work, but not yet paid, as well as all future amounts that will be incurred for remediation work until 60 days after substantial completion, at which time the condominium corporation can elect to convert the amounts owed to Calmac into a term loan,” the letter to condo owners reads. “Without any clear roadmap to completion or any access to financing to complete the remediation work, progress on the project was necessarily slowing down.

“However, since the condominium corporation entered into the LOI, staffing levels have increased to a regular 30-plus people on site, with more mobilizing in the next few weeks to 60 total people.”

View photos of the Hillview condo complex below.

Champion said she is concerned by the board’s latest attempt to borrow even more money when she claims the rebuild has already left many of the Hillview condo owners with significant financial burdens. She also said she is concerned by a clause in the loan agreement the board is seeking, which says if a condo unit is sold by a court in a foreclosure situation, “such units become registered in the condominium corporation’s name, [and] Calmac will be given a first ranking mortgage on these units.”

“If I don’t pay these condo fees, or these fees that they’re asking for, they’ll foreclose on me,” Champion said. “They can force my foreclosure, which will give Calmac the opportunity to buy my unit for pennies on the dollar.

“So I either have to foreclose or pay the condo fees.”

Champion explained that her original condo fees were $252 a month before being increased to $700 a month in October, “at which point we chose not to pay them anymore because they were too much.”

“We just couldn’t afford it,” she said, adding that she now fears the fees will go even higher if the latest loan request is approved.

Since there is no contact information for the condo board, Global News asked Champion to ask them to contact Global News via an app used to communicate between the board and condo owners. She provided proof of her attempt to contact them but Global News has not heard back from the condo board for comment on the developments.

Global News also reached out to the board’s lawyer but did not receive a response. When contacted, a colleague at the same law firm told Global News the firm does not wish to comment on the story.

“I honestly don’t know [why the board is doing this],” Champion said. “I can’t see any rationale behind this. There’s no reasonable, logical person that we’ve spoken to who can see the benefit in this — nobody.

“We don’t understand, if they are owners too, how they can see any benefit in this.”

Jody Smith works as a construction specialist with Syncrude and is one of the condo owners and indicated he was angry when he got the June 3 letter from the board. He said he believes it shows the board has “had no intent from the start to get us home.”

“It looks like they have a group of people up there doing odd jobs,” he said of the rebuild. “They’re not doing nothing productive up there.”

The rebuild was originally planned so that residents could return home by the end of 2017, Champion said, while the latest estimate from the condo board is for March 2020.

Smith said he is concerned by how much money is being paid to cover remediation.

“All they talk about is remediation work, fixing up mistakes,” Smith said.

The condo board and the company previously involved in the rebuild, which has since been fired, are currently embroiled in a legal dispute over their agreement.

“I stopped paying my mortgage last September — just money… I feel it’s going towards nothing,” Smith said, adding his insurance from the 2016 wildfire has run out so he moved into the house where his ex-girlfriend and daughter live.

“It was cheaper. We have opposite shifts so it works out,” he said.

Smith said he has received advice to continue not paying until various legal issues and the July 3 court date settle some issues to do with the rebuild.

Adding to his cynicism about how the rebuild is going, Smith said he has tried to go to the condo building to inspect the progress but been turned away.

Seven months ago, after Hillview condo owners banded together to sound the alarm over their situation, the Regional Municipality of Wood Buffalo Council voted to approve the earmarking of $2 million to help rebuilding homeowners “who continue to be impacted by rebuilding subsequent to the 2016 Horse River wildfire,” also known as “the Beast.”

READ MORE: Wood Buffalo councillors approve $2M to help Fort McMurray residents rebuild after wildfire but some are disappointed

Watch below: In May 2018, Fletcher Kent filed this report two years after a huge wildfire tore through Fort McMurray. Some say rebuilds of their homes have either stalled or not even begun.

“This amount matches an additional $2 million in funding provided by the Government of Alberta, along with the Canadian Red Cross earmarking $2 million within its current funding allocation for recovery for a total combined commitment of $6 million,” the RMWB said at the time.

The money came just days before owners of units in the Hillview Park condo complex — which is still under construction — faced a short-notice condo assessment fee of about $17,000 per owner.

“We’re feeling defeated now,” Smith said. “No one wants to help us and there’s nothing we can do.”

Champion said many condo owners have already filed for bankruptcies or consumer proposals but “everybody still wants justice.”

“[We are] calling for a forensic audit because there are so many red flags that come up with this rebuild,” she said. “We are trying to raise money to go to court again to try to stand in front of this.”

Champion added that many condo owners are also petitioning for a forensic audit of the rebuild process and where the money has gone.

The condo board told owners they are going to court on Wednesday to try and secure the new $17.7-million loan.

© 2019 Global News, a division of Corus Entertainment Inc.

Report an error

Comments

Want to discuss? Please read our Commenting Policy first.