The District of Muskoka will be borrowing $30 million from the province for the second round of the Fairvern redevelopment.
According to a report presented by Suzanne Olimer, the District’s commissioner of finance and corporate services, during a special council meeting on July 6, the loan will help finance the nearly $135.1-million Fairvern redevelopment project.
The project aims to build a new 160-bed long-term care home on a 7.32-acre site on the east side of Centre Street North, between West Road and Hanes Road in Huntsville, replacing the existing aging facility at 14 Mill Street.
The report states that district staff are looking to finance the total cost of the project through a combination of internal reserve fund contributions, grants, and external financing.
Staff said the loan is within the District’s borrowing limit of $39.5 million and will be repaid through 10 annual principal payments of varying amounts between July 9, 2027, and July 9, 2036.
Jeff Lehman said the special council meeting was scheduled two weeks earlier than planned because loan interest rates are lower than anticipated. He added that securing the loan earlier could potentially save District residents hundreds of thousands of dollars.
“Timing was advised during the rate committee meeting by our advisors from National Bank who said, you’re probably at a bit of a low right now compared to where rates will go,” he said.
The report states that when the District prepared its financing strategy for the redevelopment of Fairvern, staff estimated borrowing costs through a 10-year serial debenture would be 4.24 per cent. However, the actual cost of borrowing for the second tranche of debenture financing came in lower at 4.01 per cent, including commissions.
By the end of the loan term, staff said the District will have completed 62 per cent of the project’s financing strategy, with total interest costs of approximately $16.7 million between 2026 and 2036. They added that this represents 57 per cent of the originally estimated interest payable, reflecting lower-than-expected current market interest rates.
According to District officials, the project is expected to be completed this year. Crews are currently finishing interior work, including painting and installing flooring in resident rooms and shared spaces, as well as installing key building systems on the main floor, including heating, electrical, and the main kitchen.
For more information about the project, click here.
