The development company behind the Citadel Mews West and East seniors complexes in St. Albert says the fire-damaged western building will be rebuilt as an “active adult luxury rental" complex, but no timeline has been confirmed.
Greg Christenson, the president of Christenson Developments, said the company has a $25 million rebuilding plan in the works that, besides no longer catering to seniors with supportive living needs, also involves tearing down the southern part of the building where the 2021 fire did the most damage.
“Our intent is to rebuild because it's such an excellent location and a popular building,” Christenson said. He added the plan also involves renaming the western building Terra Court North at Citadel Village.
The project's cost will go toward “retaining the parkade and the structure of the north half of the building and everything else being demolished,” he said.
“The south half was clearly destroyed by fire and probably should have come down by now, if I could do it over again.”
Citadel Mews East, which was untouched by the fire over two years ago, will remain a designated supportive living site that caters to seniors, and won't be renamed, Christenson said.
“We're anxious to get going and we're very close,” he said. “We didn't think it would take this long, obviously.”
Once rebuilt, the building will be open to adults over the age of 18; however, Christenson said the intended market is 55 and older.
Christenson also said the company won't be offering life leases in the new building, unlike the system in place for former residents of Citadel Mews West.
A life lease involves a prospective tenant paying a mortage-like sum of money to a landlord or building owner in return for reduced rental rates over a long period of time.
“Right now, life leases have, not a stigma to it, (but) it's almost like a dirty word,” he said. “It was a very popular program because it reduced the monthly costs for seniors, but right now it's just not a viable opportunity.”
“We definitely want to move away from the seniors health care stigma because we believe that the future in Alberta, particularly with the UCP government, is going to lean more to aging in place and home care, and away from the very expensive institutional care.“
Christenson said the company is expecting the rebuild to take at least 18 months, but a start date for construction has yet to be determined because of unfavourably high interest rates for the company.
“It would take roughly a $25 million mortgage to rebuild, which is very, very achievable for 112 units in the modern economy because the property would be approaching $40 million in value when rebuilt,” he said. “Only last week ... the Bank of Canada took a pause (on raising interest rates) which was very positive for developers building rental housing, because while it doesn't guarantee there won't be further increases, it looks like willpower to raise interest rates is declining.”
“We're now in a position which is virtually impossible to, in my opinion, take the risk of building in a rising interest rate environment.”
Christenson said there wasn't necessarily an interest rate determined by the Bank of Canada that would trigger the company to move forward with the project, but said once interest rates begin to trend downward the company would take notice.
“Right now, you're not going to see builders rushing to build,” he said. “I put more strength in the trend line, and from all my readings, 2024 should stabilize and rates might be a tiny bit lower at the end of 2024.”
When asked what he thought about Coun. Sheena Hughes' recent information request about the possible benefits and risks of the city imposing an uninhabitable buildings tax or penalty, which Hughes said was prompted by Citadel Mews West sitting in disrepair for more than two years, Christenson said such a program would likely impede the company's progress.
“Adding a tax won't give us an incentive to go faster; actually a tax would make it go slower,” he said.
“I do agree that it's an issue in most municipalities ... (but) I don't think a pure tax would accomplish anything, and it would actually be detrimental to the objective.”