Collecting subsidies, paying out dividends: ‘disgusting’

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This article was published 15/12/2023 (680 days ago), so information in it may no longer be current.

Profits from the Winnipeg assets of the Alberta real estate firm that bought the Lions Place apartment building downtown — which receives taxpayers’ money in the form of rental subsidies — have soared by more than 260 per cent.

The Winnipeg profits have helped make Mainstreet Equity Corp. so profitable overall that it will begin paying a dividend for the first time. It will pay 11 cents per share starting next year.

Mainstreet will receive $1.2 million in subsidies from the Manitoba government for the next two years to top up rent paid by seniors who lived in the building before the firm purchased it and converted it from a non-profit seniors housing complex to the for-profit Residences of Portage Commons.

The numbers are contained in information sent to shareholders of Mainstreet.

“It is disgusting,” said Tom Simms, whose 94-year-old mother still lives in the building at 610 Portage Ave. “These numbers are powerful — I can feel my heart rate is going up.

“That’s why we have non-profit housing, to make sure profits and dividends don’t go to investors, but for the benefit of the seniors. (Private companies) have to satisfy their shareholders — it’s very disturbing,” he said.

The building was constructed by Lions Housing Centres in the 1980s, with the help of financing from Canada Mortgage and Housing Corp., to provide affordable housing to seniors.

Lions Housing Corp. paid off the $13.5-million mortgage, but its funding agreement with the province wasn’t renewed in 2018, and it made the decision to sell the complex.

Despite the protests of residents, the 291-unit building was sold to Mainstreet for a reported $24 million earlier this year.

Simms, who said his mom continues to pay about $650 per month in rent thanks to the government subsidy, noted many seniors have moved out because they know the subsidized rent will end in little more than a year from now.

He said the drop in the number of residents who are seniors jeopardizes the viability of the cafeteria and a small grocery store in the building.

“The students and younger tenants don’t use them,” he said. “The seniors use them because they don’t want to go out of the building. They depend on them.

“This building was built with a vision of helping seniors. It is really sad to see. People are dying or they move. We are seeing a slow death of a 55-plus building.

“It is just becoming a much more lonelier place.”

Shauna Mackinnon, of the Right for Housing Coalition, said the sale of the non-profit is an example of what not to do, and it’s pushing the new NDP government adopt measures to prevent such sales.

“We weren’t able to save Lions Place, but hopefully we can save some others in the future.”

She said the sense of community is disappearing as seniors move out.

“We need stronger regulation so this doesn’t happen again. We should learn a really important lesson for what happened to Lions Place because it will happen again if things don’t change.

Gerry Brown, who chaired the Lions Place residents’ seniors action committee — which fought the sale— pointed out they had predicted this outcome.

“I know many people have moved out of the building,” Brown said. “A good proportion of seniors have moved out. We are no longer a seniors building. The Lions changed that. It also makes a significant difference in the attitude of Mainstreet.

“We’re just in a normal apartment block now.”

Brown said all of the vacant suites have new tenants and the building has a waiting list of people who want to move in. He said while the new younger tenants don’t eat in the cafeteria, use the grocery, greenhouse or library, they do use the fitness room.

“We want to keep the story of what happened to us and our building out there to let other non-profits know they shouldn’t sell,” Brown said.

Housing Minister Bernadette Smith said in a statement “the former government did nothing to prevent the sale of Lions Place Manor to a private, for-profit company.

“They were forced to issue a subsidy agreement after seniors and advocates spoke out in order to prevent homelessness. Our government is committed to keeping housing affordable for all people, especially seniors.”

Jesse Greenwell, a Mainstreet spokesman, said the firm “is deeply committed to fostering a caring and inclusive community” in the building.

“Our focus extends beyond property management to ensuring a supportive environment for all residents, with a special emphasis on the well-being of our senior community.”

Greenwell said Mainstreet has invested hundreds of thousands of dollars into the building to improve living conditions and quality of life for residents.

He said while Mainstreet has received only 25 per cent of the province’s grant in 2023, it pumped all of it back into building improvements.

In its report to shareholders, Mainstreet says it has reduced the building’s vacancy rate to 1.4 per cent from 23.4 per cent. Its three Winnipeg properties — the former Lions Place being the largest by far — it receives almost $3 million in rental and other revenue.

Profits from the Winnipeg buildings jumped to more than $1.5 million after the building was purchased from $438,000 beforehand. The other properties are the 27-unit Moxam Court, at 280 River Ave., and the apartment block at 314 Broadway that has more than three dozen units.

The Mainstreet website lists rent for a single-bedroom suite in the Portage Avenue building from $844 to $899 per month, while two bedrooms are from $1,064 to $1,190.

Seniors who lived there when it was a Lions building have not had a rent increase because of the government subsidies.

Greenwell said programs operated by the Lions Club stopped when the building changed hands. But he said while Mainstreet has no control over the cafeteria, which is privately operated, the grocery store “continues to serve a diverse range of customers and remains a valuable amenity for the building’s residents.”

kevin.rollason@freepress.mb.ca