The City of North Vancouver is having to bail out the first phase of the North Shore Neighbourhood House rebuild as costs have been rapidly escalating.
Council voted unanimously – if begrudgingly – Monday night, to reallocate almost $1.3 million from various reserves and other projects to finish site preparation work before a below-market housing project and seniors respite centre can start construction on West Second Street.
Council agreed to rezone the land in 2021 to include affordable housing and in 2022, they inked a deal with non-profit Catalyst Community Developments to provide 89 below-market rentals and Care BC to build a seniors respite on the ground floor.
According to a city staff report, the municipality budgeted $2.1 million to relocate utilities, $755,000 to relocate North Shore Neighbourhood House’s outdoor childcare space and $829,000 to relocate the Lower Lonsdale Community Garden to Alder Street.
The latest Class A estimate – including all soft costs, demolition, construction of civil works, community garden, interior and exterior childcare space renovations and contingencies – came to $4.9 million, the report states, a gap of $1.259 million.
“This project as currently planned cannot proceed to construction and completion until additional funding is secured to address rising inflation and market conditions encountered in the tendering stage of this project,” the staff report submitted to council states.
The report flags supply chain issues, a shortage of skilled labour, the rising costs of materials like fuel, concrete and steel, and a general inflation rate at a 40-year high as the major factors in pushing the project over budget.
City staff also flagged one North Shore-specific cost pressure: the high cost of housing in North Vancouver making it harder to find local workers, meaning the city must rely on ones who have to commute greater distances and deal with North Shore parking and traffic.
“There were many factors that we had come across and one of them was actually our location,” Robert Skene, deputy director of strategic and corporate services, told council.
Council members appeared dejected confronting the shortfall, but remained committed to the project.
“It’s really unfortunate,” said Coun. Don Bell. “To add $1.3 million to a $3.6 million project is pretty shocking, but just a reality of our times and the project is important to go ahead.… And I don’t think we’re going to see it get any better, so the sooner that we act, [the better].”
A month earlier, Housing Minister Ravi Kahlon announced $11 million in new funding for the first phase of project after the Catalyst found the cost estimates in their business case no longer penciled out.
