FOR the second time in five years, the Philippine-Canadian Centre of Manitoba has racked up a small mountain of debt with the City of Winnipeg.
The Keewatin Avenue ethno-cultural centre, which operates on city land, is at least $150,000 behind on the payments it's supposed to make to the city in lieu of paying municipal property taxes.
The centre opened in 2004 on 1.17 hectares of city land donated under a plan that also saw the province and Ottawa contribute $900,000 of seed money. Since the city owns the land, the centre cannot pay property taxes but is supposed to pay approximately $43,000 a year in lieu of those taxes under the terms of a lease agreement.
After failing to make those payments for several years, the centre wound up $209,000 in arrears by the end of 2007. A fundraising effort to whittle down the debt did not have lasting results, said Lou Fernandez, an adviser for the centre who's devising a plan to dig the facility out of its new financial hole.
"If we don't liquidate the debt, there will be further problems with the City of Winnipeg," Fernandez said.
Prior to 2008, the centre's management believed it was under no obligation to make any payments in lieu of property taxes. The current management has made intermittent payments to the city, deputy assessor Mel Chambers said.
Centre president Lito Taruc inherited the debt issue when he was elected head of the board in 2011, said Fernandez, attributing the facility's "multitude of problems" to a combination of unrecoverable bad debts, poor financial reporting and an unsustainable business plan that originally relied on financial support from a library and seniors housing, neither of which was built.
Point Douglas Coun. Mike Pagtakhan, who also sits on the centre's board, said it must raise the rent it charges to commercial tenants that include a travel agency, dental centre and hair salon.
"The tenants in the commercial units are not being charged on par with commercial rates. That needs to be addressed pretty quickly," he said. "Nobody's saying kick out the tenants, just bring them up to a competitive level."
The City of Winnipeg charges the Philippine-Canadian Centre of Manitoba a loonie every year in rent. But such arrangements with non-profit ethno-cultural organizations have led to occasional misunderstandings about associated payments.
In 2005, Centro Caboto on Wilkes Avenue racked up a $669,000 tab for unpaid roadwork and surfacing fees relating from its original lease agreement with the city, signed in 1997.
The debt was retired by 2006.