On March 4, 2017, two months prior to the provincial election, Deputy Premier Rich Coleman wrote a $4.3 million dollar cheque approved by himself and BC Housing, to a charity co-founded by another senior BC Housing official, Michael Flanigan, who is currently listed as the Charity’s advisor and was listed as sponsorship co-chair at this fundraising event, underwritten in large part by lead event sponsor Brenhill Development.
Michael Flanigan had recently been in charge of valuing 508 helmcken in the recent land disposal by the City of Vancouver. Mr.Flanigan was also the author of the recent Brenhill Development loan recommendation report which was submitted to BC Housing Board by realtor and one time public official, Bob Rennie. Mr.Flanigan is joined on stage by other officials connected to the charity he co-founded. One of them is a City of Vancouver Councillor that voted in favour of the 508 Helmcken disposal plan to Brenhill Development.
Today: It has been over two months since this money was given but as of May 8th 2017, BC Land titles shows that the $4.3 million dollar payment from Deputy Premier Rich Coleman, has not yet resulted in the elimination of loans as intended.
What is the hold up for this very simple process? Is the BC Housing Minister in conflict to give funds to an organization that one of his top executives co-founded and still advises?
The Charity Co-founder and Gala Co-Sponsor Chair is a BC Housing Official
The March 4, 2017 event sponsorship Chair, Michael Flanigan previously dealt with Brenhill Development as the City official in charge of valuing the 508 Helmcken disposal for Brenhill, and the BC Housing official arranging their financing. Brenhill Development then became the primary $25,000 sponsor of this event.
Mortgages still appear as outstanding according to May 8, 2017 BC Land Titles search.
ABOUT THE $4.3 MILLION
On March 4, 2017 BC Housing Minister, Deputy Premier Rich Coleman gave a $4,330,000 cheque to a charity (Honour House) advised by co charity founder and senior BC Housing Executive, Michael Flanigan. This top government official was in charge of the most critical aspects of valuing the City 508 Helmcken land for City of Vancouver disposal purposes and for BC Housing financing. Michael Flanigan worked with Bob Rennie at BC Housing and relied on an internal $80 million dollars valuation which BC Housing says was provided by appraisers that were contracted. Meanwhile the City of Vancouver and the public were only advised that the land held a $15 million dollar value. The $80 million value does not even include the additional CAC payments that were to be calculated and paid on a sliding scale, and equivalent to 75% of value increase from rezoning the low value “DD” zoned low rise, to a 36 story “CD-1” zoned high rise condo.
Two other of the charity officials/advisors also happen to be City officials that provided approvals for Brenhill Development from the City. One is a City Councillor that supported this project in a March 2015 Council vote and the other was a member of the City’s Urban Design Panel. Details below.
The charity’s financial relationship with BC Housing began with a low interest $1.9 million loan taken out from BC Housing in 2010 for the Charity’s purchase of a house in New Westminster BC. Michael Flanigan happened to sign as the borrower signatory. Several years later he signed as the lender to extend the loan from 2015 to 2016.
Deputy Premier Coleman also suggested another $500,000 was given to the charity in 2010 but no records of this can be found.
The loans from BC Housing grew to about $4.1 million dollars in 2011 which was well over 150% of the assessed value. BC Housing CEO Shayne Ramsay and CFO Dan Maxwell signed the approval documents for this loan increase and time extension to 2014.
Around Aug/September 2013 Mr.Flanigan left the City where he had been working on the Brenhill acquisition of 508 Helmcken. He then began working on the Brenhill financing plan with Bob Rennie at BC Housing. While at BC Housing, Michael Flanigan approved loan extensions for this charity he founded.
Was the Mortgage in Technical default?
The loan was due for repayment in 2014 but was delayed to 2015 when the former board member and current charity advisor Michael Flanigan signed the loan extension as a BC Housing official.
It was extended once more in 2015 to March 2016. The loan was not repaid as required by the March 31, 2016 due date and still remained owning as of May 8, 2017.
In its most recent annual financial statements, this federally registered Charity disclosed $12,373 in interest payments and $10,750 in occupancy expenses. Both are low amounts compared to the required $153,000 in mortgage payments which leads us to wonder if those were accounted for in their financial statements? It appears that their revenues were not making it to the charity’s large mortgage liability despite the fact that they were regularly generating significant revenues of around $500,000. Did BC Housing enforce the terms of the loan? The charity generated $414,000 in 2013, $525,000 in 2014, $609,000 in 2015, and show a significant drop to $266,000 in 2016.
Contrary to the loan agreements registered on title which demanded that the loan be repaid, a $4.3 million cheque was unexpectedly granted by the housing minister Rich Coleman so they could pay off the loan. Why was this done and how was it requested and approved?
As of May 8, 2017 and two months after the cheque was given by Deputy Premier Coleman, BC land title registry still shows no pending documents have been filed regarding any mortgage payment. Why is this?
Apparent $341,000 Shortfall in 2014 requires more public disclosure
Their 2014 charity financials filed with the Canada Revenue Agency appear to indicate either a possible shortfall in 2014 or perhaps an incorrect expense filing with the Canada revenue Agency. Analysis of their last three financial reports indicate an approximate $216,000 net income surplus, yet their total “net assets”, a.k.a, “owners equity” shows a $341,000 overall reduction which appears to stem from 2014. The 2014 financials don’t appear to balance properly and in light of the millions of dollars that the Deputy Premier is handing out, it might be worth some outside resources assisting this charity. PDF links to these financials are provided further in this document. The possible shortfall is observed by comparing the year over year net asset changes. We took our discovery to a retired auditor who confirmed our findings and suggested more information was required to make a definite conclusion.
In the past three years this charity has:
- Declared an average of 35% in fundraising expenses to generate revenue.
Quite acceptable in the private sector, the charity CFO has at times contracted to his own accounting firm from several of the penny stocks he has represented as CFO. Grant T Smith has been or is still the CFO of the following publicly traded penny stocks: Premium Exploration – PEM, Northern Iron Corp – LEP, Emgold – EMR, Firesteel Resources – FTR, Latin American Minerals-LAT, Aurora Solar-ACU, Red Star Gold-RGC. It might be worth knowing whether this charity has been contracting to any members of its own management team?
Event Photos - March 4, 2017
- City Manager Sadhu Johnson. Sadhu incorrectly suggested to the media that the City had no idea the value of 508 Helmcken was far higher than $15million dollars. Sadhu also incorrectly said the City did not contract any appraisers on this transaction when it turns out that the City actually did. 2.) Councillor DeGenova onstage with Brenhill Development’s executive Max Kerr who was the lucky acquirer of the $80+million 508 Helmcken from the City of Vancouver at virtually no cost to his company. Brenhill was also the lead financial sponsor of this event and apparently paid $25,000 for the lead branding at the event. The management team of this charity event included the sponsor co-chair who was in charge of valuing and financing the Brenhill acquisition of 508 Helmcken.
3. & 4. Attorney General and Deputy Premier.
5.) Michael Flanigan: Former City Director of Real Estate, Current BC Housing official, Charity founding director, advisor, and event sponsorship chair. 6)Max Kerr – Brenhill Development executive. 7.) Canada Defence Minister Sarjit Hajjan and Deputy Premier Rich Coleman.
This charity has repeatedly claimed that they were responsibly self funded and did not require government funds, yet BC Housing consistently increased loans to them, and then unexpectedly announced $4.33 million from BC Housing to eliminate $4.143 million in registered loans on title. The loans are approximately 150% of the BC Assessment value. Honour house has disclosed in the past that significant renovation costs were donated by members of the community.
- Why did this charity need so much assistance when they appear to be very successful at generating donations?
- How did this charity arrange to have their loan forgiven?
- How did this Deputy Premier Coleman get around the apparent conflict of cutting a BC Housing cheque to a charity that was being assisted by a BC Housing senior official who was also a co-founder?
- Is Rich Coleman or BC Housing ever going to restate their financials so that they reflect reality?
- How did this charity obtain 150% financing?
- Why is it taking so long for this “gift” to clear their mortgages registerd on land titles?
- Are the charity’s CRA financial disclosures correct? or Where are their mortgage payments listed?
- How do these officials explain their association with Brenhill Development who was a rezoning and loan applicant that three of their charity officials/advisors were involved in approving?
- Finally, how does a charity that supplies temporary shelter, that pays no property taxes, receives huge volunteer support, receives significant annual donations, and pay virtually no loan charges…. how does its mortgage continue to expand beyond the assessed value of the property and why did they require a $4.3 million dollar gift?
Government Officials involved with Approving 508 Helmcken & also involved with this Charity
Urban Design Panel Vote on 508 Helmcken
One of many Council Votes on 508 Helmcken
Rich Coleman Appoints His Fundraising Chair, Who Eventually Earned Millions from Government Loan Decision
Deputy Premier Rich Coleman appointed his Liberal party fundraising chair Bob Rennie to be a public official and essentially a BC Housing loan officer. Rich Coleman’s Liberal party fundraising chair generated hundreds of millions in sales revenue at his own real estate brokerage after BC Housing approve two separate loans to Brenhill development. Bob Rennie recommended BC Housing approve these loans. Apparently Deputy Premier Coleman sees no problem with this?
City Intentionally Losing Money
The City of Vancouver secretly funded an (83%) / $50 million dollar assessment reduction of 508 Helmcken down to $9 million and continues to hide their funding trail to subcontractors. The City continues to ignore that they were involved in adjusting the value records of the property that they were disposing. Apparently Mr.Coleman does not care how all Vancouver residents have been mistreated by the City of Vancouver?
Mr.Coleman is either in denial or just thinks that it is fine for his BC Housing to finance condos which is absolutely what they did from May 2016 to February 2017. Rennie Marketing Systems began selling the condo pre sales around May 2016 and pre sales were quickly advertised at 85% sold by Rennie Marketing Systems. Three months later (Aug2016), BC Housing issued a new 6 month mortgage. By the end of August, all tenants had been relocated leaving the only purpose of the new loan to finance condo sales.
Massive Accounting irregularities admitted at BC Housing - What is going on at BC Housing?
Unauthorized $15.2 Million Payment Error at BC Housing Admitted
In March of this year our Society identified a questionable $15.2 million bill payment record to Brenhill Development from BC Housing. On March 28, 2017 the BC Housing CFO said it was a mistake. This single error alone equals a 15% error rate in their supplier payments. What really happened?
$10 Million More in Errors – Error Rate Hits 25%
Another $10 million BC Housing supplier payments error was soon detected by our Society yet BC Housing has not voluntarily disclosed this to the public or suggested restating their financials? These errors are only associated with mortgage fund borrowers at BC Housing. Section of transcripts regarding “error”.
Reporter: “In your thing – a reported cost to suppliers, or the [unintelligible 00:37:23] suppliers, which is $15.2(million) something, so”
BC Housing CFO: “Yeah, so, uh, yeah. Mea – mea culpa. That’s fine, let’s see, uh, every year we publish, um, something called a the financial [unintelligible 00:37:35] and included in that is a description of [unintelligible 00:37:38] suppliers. Uh, so it’s my mistake. We included Brenhill on that list of payments because suppliers – it’s about $15 million. Um, and so that’s the report for the 20 uh, 15/16 fiscal year.
So up until March 31st, we had advanced construction advances to Brenhill on the 127 Society project and told them about that $15 million. So the mistake I made was by putting that amount on that report, it’s not a payment to a supplier; that was a construction advance. It’s improperly on that report so” Dan Maxwell.
Charity Financial Statements and CA4356216 Mortgage
Most recently registered Mortgage of the charity
Financial statements filed with the Canada Revenue Agency – Indicates only $12,000 in payments were made in the last fiscal year, but the mortgage appears to indicate it required over $150,000 in payments.
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