Food for Thought : The Unfinished Business of the Hellenic Senior Citizens Residence

ONE SINGLE CLAUSE on the last page of a contract for the lease of office space signed back in 1985 between the Foyer Hellénique pour Personnes Agées (as landlord) and the Hellenic Community of Montreal (as tenant) appears, prima facie, to be the basis and foundation for one of the most important financial transactions to have ever been negotiated in the history of the now renamed Hellenic Community of Greater Montreal.

The clause numbered 79 out of a total 80 clauses in the Contract of Lease presumably gives the tenant (Hellenic Community of Montreal) the right to purchase and acquire the whole land and building located at 5775 and 5777 Wilderton Avenue at the end of the 35-year term of the lease for what appears to be a nominal sum.

By all accounts, the not-for-profit corporation Foyer Hellénique pour Personnes Agées has used the building which has 80 apartments (plus office spaces heretofore rented to the Hellenic Community of Greater Montreal) primarily in order to provide government-subsidized low-rent housing to the elderly and low-income families and individuals that meet certain eligibility criteria.  Organizations that own such apartment buildings destined for social housing (and that receive government subsidies in order to cover their operating deficits) typically provide a valuable public service and operate on a not-for-profit basis.

In this unique case, the Hellenic Community of Greater Montreal appears to have the unfettered right to purchase and use the apartment building in any way that it wants and in its own best interests after the expiry of the lease. Moreover, the 35-year term of the lease ended on June 30, 2020 and the 60 day delay for the signature of the deed of sale has come and gone without the expected sale and transfer of the apartment building to the Hellenic Community of Greater Montreal …

As such, members of the Hellenic Community of Greater Montreal and local community media have expressed concerns that the contractual and legal rights of the Hellenic Community of Greater Montreal to purchase and acquire the building which has a municipal evaluation of $15,614,800 may now be in play and in legal jeopardy in the absence of a clear understanding and a new agreement between the two co-contracting parties to extend the 60 day delay for an additional 120 days or more.

And what if a simple majority of the 27-member volunteer board of directors of the Hellenic Community of Greater Montreal determines (a) that the Hellenic Community of Greater Montreal does not qualify for social housing subsidies, (b) that no transfer of title ought to take place, and (c) that the Foyer Hellénique pour Personnes Agées ought to continue to own and operate the seniors’ residence as a separate legal entity in more or less the same way that each branch of the Ladies Philoptochos, the Hellenic Social Services of Québec, and the Hellenic Community of the South-Shore (until its dissolution in 2016), has in each case operated as a separate legal entity with a distinct constitution, board of directors and membership … in some cases, with very loose ties to the Hellenic Community of Greater Montreal and in other cases – like the HSSQ – under the guise of a “division” or “department” of the Hellenic Community of Greater Montreal ?

Notably, at a special meeting of members held on Wednesday, June 17, 2015 in order to approve the demolition of the «Panagitsa» church in Parc Extension (following a ravaging fire and total loss on Orthodox Easter Monday, April 13, 2015), the then president of the Hellenic Community of Greater Montreal Nicholas Pagonis rejected the notion of the HCGM operating any seniors’ residence, as more fully appears from an extract of the minutes reproduced herein below :

« Η πρόταση να οικοδομηθεί στέγη ηλικιωμένων δεν είναι εφικτή διότι πέραν του οικοδομήματος, δεν διαθέτει η ΕΚΜΜ τα μέσα να διατηρήσει ένα τόσο πολύπλοκο στην διαχείριση ίδρυμα. »

Νικόλαος Παγώνης

And in a recent commentary in the Greek Canadian Tribune weekly newspaper about the regular monthly meeting of the board of directors held on October 13, 2020, it was reported that the current president Andreas Crilis is second-guessing the merit and advisability of transferring a seniors’ residence to the Hellenic Community of Greater Montreal :

« Σχετικά με την «Στέγη Ηλικιωμένων της ΕΚΜΜ» και την μεταφορά του τίτλου ιδιοκτησίας της στην Κοινότητα, ο κ. Κριλής είπε ότι γίνονται ό,τι χρειάζεται γι’ αυτό , αλλά επιδιώκουμε να συνεχιστεί η επιχορήγηση των διαμερισμάτων των ενοίκων που έχουν χαμηλά εισοδήματα .

Αυτό μπορεί να επιτευχθεί ευκολότερα αν η «Στέγη» δεν ανήκει σε Κοινότητα .

Εχουμε κάνει τις σχετικές αιτήσεις και περιμένουμε το αποτέλεσμα. »

All of this is transpiring in the midst of a surreal context; on the one hand, an unprecedented health crisis caused by a novel coronavirus and worldwide pandemic has restricted access to places of worship since March 13, 2020, has led to dire financial consequences and employee furloughs within the Hellenic Community of Greater Montreal, and has become a pretext to postpone indefinitely the legal obligation to call a spring meeting of members to approve an annual budget as well as a fall meeting of members to review financial statements and appoint an auditor; on the other hand, a dissident group of members led by former provincial minister Christos Sirros has begun campaigning two years in advance of the next community elections due to be held in June 2022 and is advocating a renewed effort to “modernize” and “secularize” the religious organization and a thinly veiled effort to “defund” its churches and religious authority.

As if the above was not enough, Konstantinos “Gus” Milonopoulos, current vice-president of La Résidence Pour Personnes Agées de la Communauté Grecque Orthodoxe de Laval Inc. and past president of «La Communauté Grecque Orthodoxe de Laval / The Greek Orthodox Community of Laval» (the latter which merged with the Hellenic Community of Montreal on June 10, 2010), wrote an open letter on October 26, 2020 as a direct response to questions raised by Louis Hondronicolas – the sole independent member of the board of directors of the Hellenic Community of Greater Montreal – questions about the status of the two seniors’ residences in Montreal and Laval that were founded by Greek Orthodox community organizations more than 35 years ago.

The open letter signed by Mr Milonopoulos suggests (a) that the GOCL spearheaded and incorporated another not-for-profit corporation La Résidence Pour Personnes Agées de la Communauté Grecque Orthodoxe de Laval Inc. that began construction of an 80-unit seniors’ residence on Saint-Martin and Favreau Streets in Laval in 1983 (b) that the GOCL was supposed to control the seniors’ residence in Laval and to nominate up to 8 of its 9 directors, and (c) that the seniors’ residence in Laval retains the corporate name La Résidence Pour Personnes Agées de la Communauté Grecque Orthodoxe de Laval Inc. but somehow mysteriously and inexplicably has severed its ties as from 1985 with «La Communauté Grecque Orthodoxe de Laval / The Greek Orthodox Community of Laval» and by extension with the latter’s successor corporation Hellenic Community of Greater Montreal.

« κτίστηκε … από πρόγραμμα του CMHC, και να διοικείται από την ΕΟΚΛ την οποία δυστυχώς δεν έπραξαν σωστά, και έχασαν την Διοίκηση της Στέγης το 1985.

… ευτυχώς διοικείται από Ελληνες Επιχειρηματίες που εμείς έχουμε επιδίωξη και βάλαμε τα τελευταία 35 χρόνια »

Κωνσταντίνος Μυλωνόπουλος, τέως πρόεδρος της ΕΟΚΛ

That having been said, a number of questions remain unanswered before the closing of any sale transaction between the Foyer Hellénique pour Personnes Agées and the Hellenic Community of Greater Montreal, if and when it takes place. Here are a few.

1. The HCGM is a registered charity with the Canada Revenue Agency and the objects of the community are religion, education, culture.  Does the HCGM have the power to acquire and operate a housing complex for profit or not-for-profit without running afoul of its charter or tax laws ?

2. The “promise to purchase” clause agreed upon in 1985 is ambiguous and refers to “the price of $1 and other good and valuable consideration which the Lessee agrees to pay to the Lessor at the signature of the deed of sale”. 

After 35 years, who knows and determines what is the “other good and valuable consideration which the Lessee (HCGM) agrees to pay to the Lessor (Foyer) at the signature of the deed of sale” ?

3. The promise to purchase clause also refers to two different delays for completion of the sale.  If the ultimate delay is the earlier of (a) the full payment and discharge of the mortgage or (b) sixty days after termination of 35-year lease on June 30, 2020, what happens if the sale is not completed within 60 days, that is, prior to August 29, 2020?

4. The charter of the Foyer provides it may hold immovable property with an aggregate upper limit of $5,000,000.  The municipal evaluation is $15,614,800. 

If the market value of building exceeds the restriction in the charter, does the Foyer have the power to execute a sale ?

5. The supplementary charter of Foyer requires that 1/3 of directors be elected by and amongst the 80 tenants.  What if the current board is composed of 8 directors and only two or 1/4 are tenants ?

6. On or about June 10, 2020, the vice-president of the Foyer was removed as an officer and director of the Foyer.  He was neither given notice of a general assembly of members nor given notice of a meeting of directors.  If his removal was unlawful, are the actions of the board thereafter valid ? 

And who are the “voting members” of the Foyer ?

7. The charter of the HCGM provides it may hold immovable property with an upper limit of $75,000,000.  If its real property is now worth and insured for more than the aforementioned limit, does the HCGM have the power to acquire another immovable that exceeds its mandate ? Does the HCGM need to call a Special General Assembly of Members in order to increase the upper limit of $75,000,000 before any sale or transfer of property to the HCGM ?

8. The HCGM has failed to call and hold a special general assembly prior to June 15, 2020 by way of technological means in accordance with its charter and government guidelines published on May 29, 2020. 

As such, it has not approved a new 2020-2021 annual budget … and the board of directors does not have the authority to incur or pay any extraordinary expenses (By-law 6.4). 

How will they proceed with the acquisition of Foyer and pay the welcome tax (and extraordinary legal fees) ?

9. Two organizations may have different mandates, interests and agendas.  The HCGM and its members may have an interest to acquire, renovate and rent or sell the apartments for a profit.  The Foyer and its low-income tenants may have an interest to preserve the status quo and provide low-income housing to the poor without profit.  Both agendas are noble but they are different agendas nonetheless.  If both organizations are now effectively controlled by the same group of directors, will they prefer the interests of the HCGM or the interests of the Foyer ? And can they amend the original agreement ?

10. It is surprising that the original mortgage of $4 million had not yet been paid in full as at June 30, 2020 after 35 years of amortization.  If the gross rents are more than $800,000 per year, it begs the question what happened to any surplus funds over the years ? And can the mortgage creditor object or veto the sale of the hypothecated property ?

11. If the HCGM has failed to pay its rent to the Foyer Hellénique pour Personnes Agées, then does the board of directors of the Foyer have grounds to terminate the contract of lease including the purchase clause 79 ?

12. On the other hand, why do HCGM annual financial statements as at June 30, 2019 report an “account receivable” of $277,000 on a declining-balance basis which is owed by the Foyer Hellénique pour Personnes Agées to the Hellenic Community of Greater Montreal ?

$319,909 Gross account receivable [ See Note 5 ]

($42,909) Less : Allowance for doubtful accounts (our estimate)

= $277,000 Net account receivable [ See Statement of Financial Position, As at June 30, 2019 ]

13. Plan A: If the Hellenic Community of Greater Montreal purchases and acquires the property … and assuming it continues to provide government-subsidized low-rent housing to the elderly and low-income families and individuals, then what is the ultimate benefit of owning and managing such a building with 80 apartments, if any ? Is the perpetual occupation of the office spaces in the building the ultimate objective and sole benefit of ownership ? If the HCGM does not qualify for government subsidies for social housing, how will the HCGM be able to cover and pay the current operating deficits of the seniors residence ? What are the annual operating deficits ? Will the Foyer Hellénique pour Personnes Agées ever make its by-laws and financial statements public from 1985 to date ? Alternatively, will the HCGM make public the by-laws and financial statements of the Foyer from 1985 to date ?

14. Plan B: If the Hellenic Community of Greater Montreal purchases and acquires the property, then can the HCGM change the destination of the property and convert the property from a government-subsidized low-rent social housing project to a non-subsidized for-profit income-generating investment property ? If so, how will the HCGM be able to cover and pay the current operating deficits of the property until it becomes profitable ?

15. Plan C: If the Hellenic Community of Greater Montreal purchases and acquires the property, then is the immediate resale of the property at «fair market value» in the best interests of the HCGM ? If the HCGM so sells the property at «fair market value», where will the HCGM relocate its offices and at what cost ?

16. Plan D: Can the current board of directors of the Foyer Hellénique pour Personnes Agées refinance and mortgage the property before the closing of any sale or transfer to the Hellenic Community of Greater Montreal ? If the current board of directors of the Foyer so refinances and mortgages the property before the closing of any sale/transfer to the HCGM, what can the Foyer do with the proceeds of any such loan and refinancing ? If both organizations are now effectively controlled by the same group of directors, can they so refinance and mortgage the property without calling a Special General Assembly of Members of the Hellenic Community of Greater Montreal ?

17. Seeing as the Hellenic Community of Greater Montreal has more than $17 million in ongoing liabilities (including $7 million due to the Greek State), ought the members of its board of directors to call a Special General Assembly of Members to commission a special committee to carry out a public consultation and issue a special report and recommendations before deciding the fate and future mission and future use of the Foyer building – be it as not-for-profit social housing – or – as a for-profit investment property – or – whether to sell the building at «fair market value» ?

 

Truth be told, in spite of all the valuable time and resources dedicated by the Hellenic Community of Greater Montreal – and its Public Relations and Marketing Department – toward communications with its members (i.e. monthly Q & A with local media, bi-weekly print newsletter, bi-weekly email campaigns, weekly press releases in two local newspapers, daily facebook page posts, regular radio interviews, website posts, etc), it is disconcerting that we do not know more about this historic agreement and milestone with the «Foyer Hellénique pour Personnes Agées» and what will be the ultimate fate of its immovable property with 80 apartments and a municipal evaluation of $15,614,800 after the expiry of the office lease on June 30, 2020 …