The cost to build Sienna Senior Living's new long-term care facility in North Bay known as Northern Heights Care Community has climbed to $80 million from the announced initial development cost of approximately $55 million in July 2021 — a rise of 31 per cent — the company confirms to BayToday.
The hike in project costs is being attributed to inflation, higher costs of construction materials, and continuing supply chain issues.
See related: Work resumes at Northern Heights long-term care facility
Although it's not an apples-to-apples comparison, community members who have taken a keen interest in the final cost of the proposed community centre and twin-pad arena in North Bay will likely take notice of the Northern Heights increase.
See: City seeks builder for new community centre with twin pad arena
The bid closing date for the request for tender for construction of the arena at the south end of Lakeshore Drive is June 14, with a council decision on whether or not to proceed with the project to come soon after.
Less than two years ago, Premier Doug Ford visited North Bay to announce the construction of the new private long-term care facility, to be built on the former St. Joseph's Hospital–McLaren site overlooking Lake Nipissing. At the time, the residents of Sienna's Waters Edge were expected to relocate to their new home in 2023.
"We are going to build the nicest long-term care home this town has ever seen," said Ford then.
Although the original target date for completion is no longer within reach due to a year-long pause in construction, Sienna Senior Living says it remains "fully committed" to seeing its new 160-bed North Bay long-term care facility ready to accept residents from the existing Waters Edge Care Community in 2025.
In 2021, Sienna committed to investing approximately $55 million or 100 per cent of the initial costs into the redevelopment of the former hospital lands into Northern Heights and the Ministry of Long-Term Care confirmed the company was eligible for up to $54.2 million in funding.
"The project will be eligible for a Construction Funding Subsidy of up to $31 million, a Development Grant of $4 million, and the remaining amount for operational and other project-related costs, e.g., training, orientation and ongoing operating costs. Costs have not been finalized as the project is in the planning stages. Once project costs have been finalized by the operator, the ministry will be better able to provide funding amounts that are reflective of the actual costs," said an MLTC spokesperson then.
That agreement remains in place. The MLTC will provide construction subsidies to Sienna, both at the time the building is substantially complete, as well as over an extended period following occupancy of the building.
Sienna also has an opportunity to address rising interest rates and construction costs, according to Jake Roseman, a spokesperson for the Minister of Long-Term Care. "In November 2022, our government introduced a time-limited increase to the Construction Funding Subsidy of up to $35 per bed per day for 25 years. In order to qualify, eligible applicants must submit a Statement of Readiness and be ready to begin construction by August 31, 2023."
This is the same funding envelope that has been denied to the redevelopment project at Cassellholme because its construction work began just in advance of Ontario's date of eligibility for the subsidy.
See: Without provincial funding Cassellholme project faces $35M hit
Sienna will up its investment to $80 million to push the project toward the finish line. Its financial plan for the project had always included financing through a major financial institution and using the company's available cash flows.
Even at the height of the COVID-19 pandemic, Sienna Sienna Living consistently paid out millions of dollars in dividends to its shareholders, all while hundreds died in the for-profit company's care.
