A social and affordable housing project near the metro station Frontenac, which has been awaited for years, will not see the light of day. The contractor originally slated to complete this project is suing the Société de transport de Montréal (STM) for more than $9 million for terminating its contract in “bad faith” while the financing for this real estate development — still in the cans — has failed , Le Devoir learned.
“This project is a real disaster; it is appalling,” says Éric Michaud, the coordinator of the Ville-Marie Housing Committee, bluntly. The latter notes that many residents of the Sainte-Marie neighborhood, which is in full gentrification, are upset by the huge delays in the realization of this real estate development. “It’s really disappointing. »
In 2018, the City of Montreal, the STM and the Société d’habitation et de développement de Montréal (SHDM) announced with great fanfare the launch of a project that has been awaited since 2010 by residents of the Sainte-Marie neighborhood, the des Complexe Real Estate Havre-Frontenac. According to the current version, the project should consist of 274 housing units, including 60 social housing and 99 affordable condominiums, which would be offered for sale below the average market price. The project also envisaged 115 private apartments.
A promoter, Cosoltec, then won the tender launched in March 2017 to carry out this development in a car park next to an STM transport center a stone’s throw from Frontenac metro station. Construction was scheduled to start in 2019 and end in 2021 on a transport company property.
“Unfairly Private”
However, in March 2019, the STM terminated the contract because the company would have liked to make “changes to the conditions of the public tender book related to the decontamination of the site,” the transport company said via email. In response, on November 10, 2020, Cosoltec first filed a notification via the STM and then on March 1, filed an originating motion in the Superior Court, which the company submitted to Le Devoir in response to our questions. .
In this lawsuit, Cosoltec is seeking just over $9 million from STM and its subsidiary Transimmobilier, or approximately $1 million, in “indemnity” to compensate for costs the company incurred on this project before exiting is withdrawn, and a sum of eight million “representing the loss of profit caused by this unjustified refusal” to be the prime contractor for this real estate development. The company claims that those funds were “unfairly deprived” because STM and its subsidiary “unfairly and in bad faith refused to proceed with the real estate project.”
“This refusal is unjustified as the offer has met all the conditions set out in the tender, including those related to soil remediation,” adds the lawsuit, which the STM, following the advice of its team, has not commented on.
Complex financing
At the same time, the change in certain financing programs has made the realization of this project more difficult. The city confirms that the AccèsLogis Québec program has initially reserved units to build the 60 public housing projects planned on this site east of downtown.
However, the lack of funds that the Legault government has reallocated to this program, compared to what the city expected, has forced it to sort through the projects that, according to our information, can benefit from the remaining amounts in the AccèsLogis coffers. Outcome: The CDH group, responsible for promoting the social component of this project, is trying, through various means, to find new sources of funding to make it a reality.
The Sainte-Marie neighborhood is also one of the sectors of Montreal with the highest percentage of tenants spending “a disproportionately high proportion of their income on housing,” notes Véronique Laflamme, spokeswoman for the Popular Action Front for Urban Redevelopment. Celebration.
“The rental price explosion is putting tenants under a lot of pressure, which is why cooperative and social housing projects are becoming indispensable in this context,” agrees Élizabeth Martin, who is responsible for the development of the CDH Group. She also finds it “a little annoying” that this project is taking so long to materialize, especially as the bill continues to climb in the meantime as construction costs soar by the province.
The affordable housing units planned in this project should initially benefit from the Accès Condos program managed by the SHDM. However, the latter confirms that this program is currently being revised. It is therefore also unclear how this part of the project is to be financed.
Many more years
Once the impasse in financing this project is resolved, STM will have to launch a tender process to determine the new contractor who will undertake the construction of this real estate complex. The transport company refuses to advance the estimated cost of the project so as not to influence the market.
“We estimate that the construction of the complex will take two years from the time the contractor is selected,” adds STM’s Philippe Déry. For its part, the city passed a resolution last February authorizing the construction of a building complex of no more than 12 floors on this site.
“The project is moving forward,” says SHDM communications consultant Julien Serra, but acknowledges that several steps still need to be completed before this real estate development becomes a reality. “We don’t have a set deadline,” he confirms.