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Madison Project: A Bridge to Nowhere!

Photo by Taavi Tamtik (2017)Photo by Taavi Tamtik (2017) Recap... The "3 Org's", (Tartu College -TC, Estonian Credit Union - ECU, Estonian Foundation of Canada - EFC) asked the Board of Estonian House to get shareholders approval to sell the Estonian House (EH) property to finance the 3 Org's project at 9 & 11 Madison Ave., a project they couldn't responsibly confirm was a good investment and was viable for the Estonian Community, because, they simply did not know.
In April, at the Special Meeting for EH shareholder's approval, the Board expected an overwhelming affirmation of their mandate, but, only won by 10 votes. This was a strong indicator of the community's dissatisfaction with the Board's mandate to sell the Broadview Estonian House.

The final decision to sell the Estonian House will be made by the 3 Org's and the Board in November based on the Madison proposal's due diligence findings. The Board is not required to share their findings and how they determine a favourable or unfavourable outcome, respectively, to sell or not to sell the Estonian House. This should concern all of us.

The Board's focus and energies have been overwhelmingly exhausted on pursuing their mandate to build a "new" Estonian House on the misguided campaign of misinformation that, "the Broadview Estonian House is at the end of its life."



I have categorically maintained that to the best of my knowledge the Estonian House continues to be structurally sound, is viable and is not at the end of its life, despite years of deferred costs of maintaining and repairing it.

As the architect of the Broadview Estonian House's four storey new front addition, and many of its interior renovations, including the interior design of the ECU,**, at the request of Mr. Eckbaum, Founder of the ECU, I am in the unique position of having firsthand knowledge and experience with this building and can provide an architect's opinion of fact about it.

The original Estonian House was the historic 100+ year old Chester School which was built to commercial/ structural and material standards, in contrast, the 90+ year old 11 Madison building would have been constructed only to residential building standards.

The Chester school is actually sandwiched between the 1962 addition of the Great Hall, classrooms and cafe, and the 1975 four storey extension fronting Broadview Avenue. The 1975 extension added 7,000 sq. ft. of new retail and office tenant space. Architecturally it was designed to the Board's requirements and constructed and completed within 1 year to a budget price of $200,000. The building has a strong well proportioned, 3-D architectural character providing maximum space that suitably defines the Estonian Community in Toronto. The elevation is both friendly and inviting with a degree of authority reflecting the use and purpose of the building. The initial reason to build the 1975 addition was for the purpose of providing the Estonian Credit Union with new retail and office space. It provided the Board with an excellent return on their investment and was recommended by the Board. In 1996/97 an elevator was installed on the north side of the Estonian House. A new kitchen and renovated Crystal Hall were also completed.

From the perspective of the building's effective and actual age, the 1962, 1975 and 1996 major additions are still fairly new, were built for long term use and were constructed using quality materials according to the building code. When the 1975 addition was built, no hidden issues were found in the walls, this included no knob and tube electrical wiring. Soil tests demonstrated that there were no issues other than an expected accumulation of salt from winter parking lot maintenance. All analysis and reports required by the City for the 1975 addition demonstrated that the Estonian House was structurally sound.

The most important components of a community centre are: sufficient suitable rooms, space functionality that will meet the community multi-needs, convenient access by all means of transportation including walking, with sufficient parking on the site and within its vicinity.

The Estonian House on Broadview has all the existing components and ample functional space to meet the Estonian Community's needs now and in the future.

The Estonian House renovation, restoration, interior rebuilding and (deferred) major capital building repairs and replacements will require approx. $1-1.5 million. However, it is estimated the Madison project Phase 1 will cost $10-13 million and have a construction cash shortfall of an estimated $2-3 million***, if it receives $16 million* from the proceeds of the sale. The shortfall could be considerably greater if it is sold for less.

Phase 2 construction costs are estimated at $5-6 million and would require 100% bank financing and community fundraising. It is unlikely that it will ever be built due to lack of funds.

Phase 1- The promised new Estonian Community Centre will not be built at Madison site. Instead the old 11 Madison Ave 2 ½ storey 90+ years old heritage building with an addition at the back of the property and a narrow building along the length of north side of 9 Madison is proposed to be built at the estimated cost of $10-13 million. The total floor area will be approximately 13,500 s.f (costing $963.00/per s.f). However, the proposal also suggests that 5,000 s.f. of the total area would be used as rental space to provide an anticipated income of $200,000 as a "class A" building. There are two issues that need to be addressed, if 5,000 s.f. is designated for permanent rental tenants, this leaves only 8,500 s.f. for community use. To put this into perspective, the combination of the Great Hall and the Crystal Hall of Broadview Estonian Hall are approximately 8500 s.f. There simply is not enough room to meet the Estonian community's needs with 8,500 s.f. available space (Estonian House space is 33,540 s.f). The proposed use of "flex space" does not help, since the additional space required for storing furniture, a grand piano, sports equipment, washrooms, kitchen(s), serving areas, corridors, fire stairs, garbage storage, mechanical room, etc. would require at least double the additional area which simply is not available.

Phase 2 - The construction of Phase 2 is the proposed building along the east and south side of 9 Madison. The building would link Phase 1 to Phase 2 as a one storey 4,000 s.f. "bridge" over the public/private park area referred to as the proposed future flexible Great Hall.

The "bridge" must meet highway engineering and structural standards. Building directly above the subway tunnels would require completely separate and special encasing from the 4 subway tunnels. There will be a lot of structure borne sound and rattling felt in the building due to the subway. The extraordinary and prohibitive costs of studies, reports, guarantees, special structural engineering requirements and special encasing around the subway tunnel is the reason developers require maximum density to help absorb the elevated costs of constructing over subway tunnels.

Under normal circumstances, building a community centre might be approximately $400 - 600 per square foot. However, there are many restrictions on this site; we are looking at costs that are many times more expensive. Any building construction efforts on 9 Madison are impractical; the site is simply unsuitable to build on. It is an incredibly inefficient use of monies and is a terrible return on investment without any benefits.

Further, the proposed Madison buildings are not "class A" facilities, potentially providing for higher rental rate revenues. Classification of building rating was established by BOMA (Building Owners & Managers Association). It refers mainly to high rise office buildings in major urban centres to establish market rents. Class A buildings are with high quality standard finishes, state of art systems, exceptional accessibility and available on-site parking. The proposed centre on Madison would not meet the standards of a Class A building and therefore would not garner top rental rates. Additionally, with the many new proposed high rise buildings to be constructed around the small Madison building, the rental rates may be considerably affected because of the increased space availability and competition.

Madison has many other deficiencies and concerns that make this property unsuitable for the Estonian Community's needs, such as:

• There is no parking available on the site or along the road.
• There is no road on the site for delivery, garbage removal or garbage holding area.
• Madison Avenue is a narrow, single lane, one way traffic, local service road with difficult access and exit.
• 9 Madison proposed site of 12,000 s.f. has significant site limitations including maximum useable space of 6,000 s.f. In comparison, the Broadview Estonian House site area is 43,560 s.f.
• The city mandating a private/public park space of 6,000 s.f. to be maintained by the new Estonian Centre including the liabilities associated with maintaining a public space.
• 11 Madison house is designated as a heritage building, therefore, the City imposes a number of building restrictions.
• The Madison site, potentially, would not be as safe of a community as is Broadview. This is evidenced by the recent early morning shooting on the 9 Madison parking lot site, as reported recently by CP24.
• The Annex Residents association have themselves said that Madison Ave., the home of the majority of Fraternities and Sororities in Toronto Downtown, is also the source of "many difficulties with the Fraternities over the years." Their grievances including disrupting residences, desecrating surrounding properties, hundreds of calls to police per year to break up fights and dispersing of crowds.
• Three new high-rise buildings will be constructed on Madison Ave., including a new 29 storey apartment building at the south-east corner of Madison and Bloor. These building will draw increased traffic, noise and population density onto the narrow one-way Madison Ave., service road.
• Additionally, the new tall buildings on opposite corners of Madison will potentially create serious wind tunnel effects at grade level and shade issues.
• The Madison Ave. 9 & 11 building costs will ensure significant debt, due to expected construction cost shortfalls making this project unsustainable and unattainable.
• The Madison project has not shown any business modeling, viability or sustainability reports that would demonstrate that the Madison project once built would meet the needs of the community, would be affordable and financially self-sustaining. The shortfall in anticipated monies required for Phase 1 and 2 on Madison could be upwards of $8 million. Where is this money going to come from and more importantly how are we going to service this debt?
• The Madison project will not provide sufficient suitable rooms, space functionality that will meet the community multi-needs, convenient access by all means of transportation including walking, with sufficient parking on the site and within its vicinity. The community is unlikely to use the building on this site.

Phased-in renovations, modernization and repairs of the Estonian House with the long term objective of building an additional 6 storey permanent rental and restaurant space could add an additional 36,000 s.f. and a new stream of revenue. The 1975 four storey addition now provides over half of the Estonian House's revenue. With proper management, it could provide considerable year round income to keep the Estonian House dynamic, meeting the needs of the community for the next 50 years and as surpluses grow, allocating those funds to fully support all Estonian community activities.

The Estonian House has 26,500 s.f. of generous space for our community group's needs and 7,000 s.f. of long term tenant occupancy. The Estonian House has a coveted shooting range, 7 multi-use classrooms, restaurant facility, retail shop facing Broadview, 4 kitchens, a main multi stall separate women's and men's washrooms plus additional washrooms on the 2nd and 3rd floors, as well as a large 500 seat main hall with a full stage that boasts exceptional acoustics, two additional smaller banquet halls and elevator accessibility. Not to mention, the sizable amount of storage, administrative spaces, generous entrance/welcoming areas and a 60 spot parking lot.

We have the equity in the full value of the debt free land which is increasing our borrowing power every year. The Board's studies and reports on the Estonian House would confirm what I have been asserting for many years, the Estonian House is structurally sound, there are no major deficiencies that can't be easily dealt with, and any environmental, engineering or other survey's would support this.

Broadview Estonian House is and must remain the Estonian Community Centre in Toronto!

It is in the best interest of the Board to revisit, review and reassess their initial reports and position, which over the last 10 years have led them over many bridges to nowhere, and now have left us dangling with a $240,000 accumulated debt. The Madison proposal is literally another bridge to nowhere, which will once again leave us with an even greater and potentially unrecoverable debt.

Let's not repeat the history of the last 10 years with the Madison Project: a bridge to nowhere!


Guido Laikve, Architect (Ret).

 

 


 

* $16 million was the proposed offer by two developers Tribute and Alterra
** Estorada Apartments, Calvary Manor, Eesti Kodu Co-op Housing, Ehatare Seniors Home, Ehatare Nursing Home, Emmanuel Lutheran Manor, Kaleva Condominiums, Upper Beaches Condo and 70+ other projects.
*** 16M - .750M (Due Diligence) - .250 (loan) – 3M (est. Purchase 11 Madison) – 1.5M (est. Purchase 9 Madison) - .400M (other) = 10.1 M

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