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Whistler Council Approves Employee Housing Loan

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Whistler’s mayor and council gave their assent to a $ 14 million loan deal between the Whistler 2020 Development Corp (WDC) and the Royal Bank of Canada at the October 19 council meeting, paving the way for continued work on employee housing at Cheakamus Crossing — but the deal is not without risk.

The Resort Municipality of Whistler (RMOW) itself does not borrow the money, CFO Carlee Price noted in a presentation to council, but RBC is demanding collateral for the loan.

“This security is the land that encompasses Lots 1 and 4 (in phase 2) of Cheakamus Crossing,” Price said. “RMOW holds title to these lands in trust for WDC. This means that the RMOW is necessarily involved in both the verification of documents and their signature.

The $ 14 million alone will not cover the total expenses of Phase 2 of Cheakamus Crossing (approximately $ 43 million), but will allow work to continue through the winter, while still giving the WDC time to sell. the 23 lots in the market on lot 4 (known as Riverrun – sales are expected to start later this year).

“Profits from these sales directly support the ongoing development and construction of new employee housing opportunities at Cheakamus Crossing,” Mayor Jack Crompton said at the meeting.

“Providing more housing for employees has been a real priority for this board from day one, and this process is part of how we make that direction a reality. ”

One of the objectives of RMOW through the lending process was to ensure that no additional municipal resources would be available to RBC, limiting the extent of the loan to Lots 1 and 4 (worth approximately 33 million for loan purposes), and excluding RMOW’s financial resources, Price said.

Much work has been undertaken to ensure that the risk assumed by RMOW is acceptable, she added, noting in a report to the council that WDC and RMOW agree that “under no circumstances should the taxpayers of this community should not be held financially responsible for actions taken. by subsidiary bodies in search of employee housing.

With that in mind, “the loan documents have been structured to minimize the risk to the RMOW, but they cannot eliminate it completely,” Price said, and wording has been added to the loan documents to protect against them. negative results.

WDC’s ability to repay the loan relies entirely on the sale of the 23 market lots on Lot 4 and the 100 units currently under construction on Lot 1 – and while a default scenario is unlikely, it is not. not impossible, Price noted.

“This specific result could be the result of higher costs; it could also be the result of falling asset prices, ”she said. “We have of course the added benefit today of selling these lots in an extremely hot real estate market, but that does not guarantee that this will be the case in the future. “

As such, the language in the loan documents specifically limits any potential claim by RBC to the two lots in question, and the bank will receive 100% of the net proceeds from the sale of the lots (which the WDC expects to be worth d ‘approximately $ 56 million) until the loan is repaid.

If the worst were to happen, there is also a potential risk (albeit small) that RBC will end up owning the non-market land and buildings restricted to employees, Price said in its report.

“It is therefore essential that the intended use of these buildings survive such a transfer, to ensure that the bank could not, for example, transform them into market condos,” she said.

This possibility is avoided by a housing agreement registered on the title of Lot 1, which takes precedence over the RBC mortgage and maintains the intended use of the employee housing.

The loan documents can be found in the municipal council agenda for October 19 from page 42: www.whistler.ca/municipal-gov/council/meeting-agendas-and-minutes.


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