The St. Paul Abilities Network (SPAN) has received an $18.3 million nod of approval from Alberta Community and Social Services to continue in its role as a service provider to people with disabilities in St. Paul and area.
The news brings welcomed relief to the local not for profit organization which has seen months of turmoil and community speculation following the abrupt departure of its executive director Tim Bear late last year. Bear had been at the helm of the organization since 1992. This was followed by SPAN’s board of directors announcing a complete financial and operational review of the organization was being undertaken.
Since that time, the board has remained quiet, saying little more than it planned to refocus the organization’s efforts on the delivery of services to persons with disabilities, while divesting itself of business ventures that do not support its core mission.
Hotel in receivership
LakelandTODAY.ca has learned SPAN’s most ambitious business venture, the Hampton Inn by Hilton, has been in receivership since April of this year.
Court appointed receiver BDO Canada Limited has been operating the hotel for five months and the property will be sold in an effort to recoup millions of dollars owed to the Business Development Bank of Canada (BDC).
“We are running it with a goal of selling it and we will be listing it with a realtor, likely in the near future,” Kevin Meyler, senior vice president of BDO Canada, said last week.
Meyler would not comment as to the value of the property, saying only that whatever is received for the hotel will be paid out in legal priority to creditors.
“We will try and sell it for as much as we can. The value is what the market says it is.”
The hotel is “more or less operationally the same,” he said, although it is in the “care and custody” of the receiver. Meyler added the intention is to keep it open until it sells.
“That is our goal and that is why we are doing a sales process shortly.”
According to court documents, BDC entered into a loan agreement in September 2015 with Charity Developments Ltd. in the amount of $6 million. Then, in May of 2018, which is when the hotel opened its doors, the principal amount of the agreement was increased to $6.9 million. Today, the amount owing sits at $6,966,488.
Charity Developments Ltd., which is no longer operational, was established by SPAN as a for profit fund-raising avenue focused on developing social enterprise. Its shares were held by SPAN. The intent being that these businesses would move SPAN towards self-sufficiency, providing employment opportunities for people with disabilities and funding to support SPAN programs, while reducing the organization’s dependence on government funding.
On its opening day, Bear described the hotel as a “daring and out of the box” solution for SPAN as it explored the path to greater independence from government funding.
A step too far
However, the hotel was seen by many in the community as being a step too far.
According to an affidavit sworn in Court of Queen’s Bench in early April by the plaintiff, BDC, in March of 2020 the borrower, Charity Developments Ltd., made it known that it “was insolvent and intended to cease operations for the hotel on or before April 30, 2020.”
SPAN board chair Amelia Harmse said Friday the hotel being forced into receivership was disappointing, but the move has “relieved a lot of financial pressure” on SPAN, especially given the current economic conditions, made even worse by the pandemic.
“Of course, we are disappointed that this didn’t work out but in reality . . . with the whole economic situation that we are in, and the hotel didn’t get off the ground the way we expected it to. The financial pressure was just too much. It’s sad for us to see it go, but it’s better for the hotel and for SPAN.”
Asked if SPAN could be liable for any of the debt incurred by Charity Development Ltd., Harmse said, “No, because it was a separate entity, we didn’t have it as part of SPAN. Charity Developments was separate from SPAN.”
While the final construction cost of the hotel was never publicized, court records do indicate “SPAN invested some $6-7 million in the development of the hotel, in addition to the proceeds of the loan,” which would put the total cost between $13-14 million.
Michelle Myers, manager of Corporate Communications for Hilton, refused comment on the status of the hotel since it is independently owned and operated. She referred all questions to BDO Canada.
Harmse confirmed that other businesses once operated through Charity Developments Ltd., including Citadel Homes, Citadel Plumbing and Heating and Wingspan Transport, are no longer operational.
“We had to, unfortunately, let go the people of the construction business as we are not constructing anything anymore. We are also in the final stages of closing down the laundry business because, at this time, we still have an agreement with the hotel to help them out with the laundry and that’s ending soon.”
At one time, the laundry business was seen to be thriving in the community with contracts in place for a number of companies, particularly in the resource sector.
SPAN continues to operate its Next to New Store, DAC Catering and property management division, which oversees Maurice Manner and White Pebbles apartments.
While there have been some job losses as a result of SPAN’s move to refocus on service delivery, Harmse said many people have moved into other frontline roles with SPAN.
Looking to the future
The renewal of a contract with the Province to continue services and programs for people with disabilities living in St. Paul and area is “the greatest news” the SPAN board has received in some time, according to Harmse.
“It was absolutely good news, because we are sure that the reason why we were able to be successful with that is because of our good track record in terms of the services we do deliver. And, that we have proven to be more stable in the last few months.”
Community and Social Services conducted its own review of the organization this year, the results of which have never been made public. However, a spokesperson for the ministry said the Province is satisfied.
“The review is complete and we are confident the agency is able to deliver the services outlined within the financial amount awarded,” press secretary Jerry Bellikka said. “The amount of the contract is $18.3 million and the term is from October 1, 2020 to March 31, 2023. I would direct you to the agency for any questions regarding leadership changes at the organization.”
Harmse said SPAN is looking to fill the position of executive director as soon as possible and expressed her appreciation to the community as the SPAN board navigated through the last year.
“I know there is lots of people in the community that were concerned and maybe are still concerned, but we are moving forward and being positive about everything. There were some shared times of hardship and difficulties and sleepless nights, but we are on a good ship now and moving forward,” she said. “For everyone who has supported SPAN even during this difficult time, and the process, and the changes – we appreciate that and we trust and believe that we could continue to rely on the support of the community.”
SPAN has provided supports to people with disabilities in the area since 1964.
