"It is a praiseworthy initiative," Minister of Finance Toomas Tõniste (Pro Patria) said at a meeting late last month with Ellen Valter, chairperson of the International Estonian Centre Steering Committee. "The construction of such a centre would support the promotion of Estonian interests."

"The International Estonian Centre is a proactive step for our future, and it instills a sense of pride that Estonians' enterprising spirit is bringing this undertaking to fruition," added Secretary General of the Ministry of Finance Veiko Tali.

Valter met with the minister and secretary general in Tallinn to discuss Estonia's support of the new centre in Toronto. The goal of the new facility, as reflected in its new name, is to act as not just a centre for the local community, as its predecessor, the Estonian House in Toronto Ltd. (TEM), has done for nearly 60 years, but also as a bridge between the diaspora Estonian community and Estonia itself, and as a calling card for Estonia not just in the city of Toronto, but the rest of North America as well.

The construction of the new Estonian Centre at 9 and 11 Madison Avenue will close a gap of nearly 4.5km that currently exists between the Estonian House on Broadview and Tartu College, a building located on Bloor Street West at the corner of Madison Avenue which operates university residences providing housing primarily for University of Toronto students but also houses rooms and an event hall utilised by a variety of diaspora Estonian organisations.

New centre dependent on sale of old

After two unsuccessful efforts by TEM over many years to redevelop the existing building, a year and a half ago, in April 2017, shareholders of the TEM at a special shareholder meeting voted 67% in favour of the Madison Avenue project. The resolution presented to the shareholders involved a proposal by the boards of three major community organisations — the Estonian (Toronto) Credit Union (ECU), the Estonian Foundation of Canada (EFC) and Tartu College (TC) — to develop a new Estonian cultural centre adjacent to the existing Tartu College on Madison Avenue, thus providing a new, centralised home for the Estonian community in Toronto.

The resolution stressed, however, that the project would only be viable with the sale of the current Estonian House and adjacent properties on Broadview Avenue, owned by EFC, but before doing so, the Madison Avenue proposal had to be deemed economically viable, which was to be determined in an upcoming due diligence process. If due diligence proved the project viable, the TEM would be sold.

The due diligence process, which involved exploring all aspects of the centre's construction, funding, legal and tax structure, design and long-term operations, was completed this spring, and the report published in May.

"As a matter of process, each board of directors of all four Estonian organisations leading the project and providing financial support had to vote in favour of accepting and closing the due diligence phase and proceeding to the project phase," the Estonian Centre said in an 8 June press release. "The Estonian House Ltd., Estonian Credit Union, Estonian Foundation of Canada, and Tartu College Boards all voted to proceed with the project. All four organisations believe that the risks are acceptable, sustainable operations are possible, and funding is achievable. We have a project."

The steering committee, which includes representatives of all four aforementioned organisations, is responsible for reviewing design, tax and legal implications, handling the purchase of 9 Madison Avenue from the City of Toronto, the sale of 11 Madison Avenue from ECU to the project, and the sale of the properties on Broadview Avenue, providing oversight and funding, as well as hiring project managers, lawyers, an accountant and other consultants.

Commitment to one move

The bulk of the funding for the new centre will come from the conditional sale of the current Estonian House together with three adjacent properties owned by the Estonian Foundation of Canada to Revera, a major Canadian senior care provider and wholly owned subsidiary of the Public Sector Pension Investment Board that aims to build a senior care facility on site, which is considered a desirable use of the property on the provincial, city and community levels.

According to the planned schedule, the sales of 11 Madison Avenue and 958 Broadview Avenue and adjacent properties will all close in January 2020, at which point construction on the new Estonian Centre on Madison Avenue will begin, and the Estonian community will lease back the Broadview Avenue property for continued use until the new centre in the Annex is completed.

"The commitment to one move from the Estonian House to the new centre remains the goal — and is expected to be achievable — so as to provide the least disruption possible for our community," the steering committee said in a press release. Construction is expected to last some 15 months.

According to the due diligence report, in terms of sources, the sale of the Estonian House at 958 Broadview Avenue is expected to net $12 million, while the Estonian Foundation of Canada, the Estonian Credit Union and Tartu College are expected to contribute support in the total amount of $5 million. Another $8 million is expected to be raised in the form of donations, bringing the total to $25 million. In terms of uses, a total of $4 million is to be spent on purchasing the properties themselves located at 9 and 11 Madison Avenue, with $20 million to be spent on development and $1 million left in an operating reserve.

Binding arrangements representing $3 million have been executed with the project's lead donor, to whom building naming rights will be granted, the report noted.

Two new legal entities

The four organisations belonging to the committee agreed that the Estonian House would be the owner and operator of the new centre by means of two new wholly owned legal entities created to maximise tax efficiency and permit tax receipts to be provided for capital campaign donations, according to the committee's June press release. An expert tax and charities lawyer was retained to advise on the corporate structure to hold and operate the new Estonian Centre assets with a view to reducing taxes triggered on the sale of the Broadview property, and on the development and operation of the new centre.

Mihkel Holmberg, member of the Estonian Centre project's steering and legal committees, explained that the corporate plan calls for the donation of the Broadview property to a new charity which will sell the property to the developer, and receive the cash proceeds which will be used to build the new Estonian Centre.

"Operational efficiencies will be maximized by the charity creating a trust arrangement between the charity and the corporation that will receive moneys from the charity, and build and operate the new Estonian Centre as a trustee for the benefit of the charity," the committee explained. "To that end, two companies have been incorporated; one is a business corporation that will serve as the trustee of the trust, and the other is a [nonprofit], which will be registered as a charity. Estonian House in Toronto Limited will initially be the sole member of the charity and will thereby appoint its directors. In addition, Estonian House in Toronto Limited will initially be the sole member of the business corporation as well, thereby appointing its directors."

The new Estonian Centre is planned to operate with sufficient income from commercial leases, an event business as well as endowments, while still prioritising making space available to Estonian community organisations; the goal with the former is to be able to ensure Estonian organisations the low-cost or even free use of space at the centre without continuing to rely on other Estonian organisations and charities for rental subsidies. For example, part of the space in the centre is to house a business accelerator, or incubator, that helps startups grow, attracting local, national as well as even international attention as a result; this is a commercial lease that will not be operated by the centre itself.

Award-winning design

Earlier this week, the design of the new Estonian Centre earned its architect, Canadian-Estonian Alar Kongats, the Award of Merit as part of the Canadian Architect Awards of Excellence. While a building under heritage protection will remain at 11 Madison, it will be integrated into the new, main portion of the centre, to be built on the property located at 9 Madison.

The new, U-shaped building will feature a modern design utilising a mixture of glass, metal and wood and be centred around a privately-owned but publicly-accessible square at street level. The square will include a through-block connection parallel to Bloor Street for pedestrian access to connecting properties.

The new building will have a gross floor area (GFA) of 2,769 sq m, increasing the total GFA of the centre, including that of the protected building, to 3,225 sq m. According to current plans, the street level courtyard is projected to be anchored by the Estonian Credit Union as well as a café. The building will include improved accessibility as well, with a lift to be added to the existing building and access to the core of the new building to be provided via a ramp.

The remaining storeys of the building will be occupied by mixed-use spaces, including an office, meeting rooms, studio space, rooms that can be used as smaller classrooms, and a two-storey grand hall that seats 330. The roof level will include a green roof and private-use terrace. Community consultations have already taken place with the architect and the project team to discuss space and needs, with input provided by over 40 user groups ranging from Estonian School teachers to guide and scout leaders, choirs and folk dancers.

According to the due diligence report, it will take a few years for the new Estonian Centre to achieve economic sustainability, ie for revenues to cover costs, which is why the centre will retain a $1 million operating reserve, large enough to cover nearly three years' worth of operating expenses, ensuring liquidity.

Part of community not on board

Not everyone is thrilled by the planned new centre, however. Väino Keelmann, president of the nonprofit Friends of Estonian House as well as Tulge Külla-Koju, explained why his two organisations are proponents of a Plan B for revitalising the existing Estonian House on Broadview Avenue, working within a six-storey zoning restriction on the property.

"Estonian families need a readily accessible venue with ample free parking, providing multiple rooms for the activities of a kindergarten, the Estonian  School, scouts, choirs, clubs, etc., as well as a Grand Hall for folk dancing, lunches, festivities, etc., at a reasonable cost to participants," Keelmann told ERR News. "As it stands, the current Estonian House provides this."

He claimed that the decision to sell the current Estonian House was made based on a majority of votes, not a majority of shareholders, which was dominated by organisations with the promise of a new, revitalised Estonian House and not an "international centre."

"The 'International Centre' viz. Madison site is not suitable for a family-oriented Estonian House because it is difficult to access by car and there is only very limited paid parking available, none free," Keelmann said, adding that while Tartu College has access to 30 underground spaces, these would not belong to the Estonian House. He admitted, however, that both the Broadview and Madison locations are within close proximity to subway access.

He cited other concerns as well, including the Toronto Estonian community not having the funds to purchase the property at 9 Madison, convert it into a park "and then donate that property back to the City of Toronto as a 'privately owned public space' for public access." Toronto Estonian community member Marcus Kolga*, he noted, had already published an article "complaining of mooted funding cutbacks by [the Estonian Foundation of Canada] to the Estonian School and other children's activities due to lack of cash."

Keelmann likewise highlighted that the board of the Estonian House intends to purchase the house located at 11 Madison, currently owned by the Estonian Credit Union, for integration into the new centre despite it being the same age as the current TEM building on Broadview, the latter of which was a central issue to a number of disadvantages cited by proponents of the new centre. "This house is designated as 'historical' under City of Toronto rules, and subject to tough zoning restrictions on use," he noted.

"Members of Friends of Estonian House and Tulge Külla-Koju believe that 958 Broadview is an ideal location for the young through the old to focus on Estonian language retention, which requires repetition through frequent class attendance, as well as cultural and recreational activities," Keelmann explained. "The current structure can be renovated according to consultants commissioned by the Estonian House board for $1.75 million, which has not been pursued except for roofing repairs initiated by Friends of Estonian House to obtain partial City of Toronto funding. Accepting that a new building could be desired on the Broadview site, renowned Estonian architect Lembit Tork, who was brought up in Toronto, has created a magnificent project to be constructed of Estonian wood — 'Puit.'"

According to the nonprofit president, Tork's plan would restore the historic edifice of the original Chester School on the site, address needs for meeting rooms, a kitchen, and the existing shooting range and Great Hall, as well as offer ample parking, which, he noted, is also available on neighbouring streets. The design is modular and thus can be utilised in stages, he said, adding that it also provides for revenue generation by outside key tenants in order to subsidise the Estonian community.

"My personal fear is that we end up like New York Estonians, with a lovely, too-small venue in Manhattan, where few can afford to live or access, with the Estonian School pushed out to two-week intervals," Keelmann said in conclusion. While his own two grown children, who have lived and even conducted research in Estonia, speak the language with ease, he recalled, "When Prime Minister Jüri Ratas visited Toronto earlier this year, members of his party commented that none of our children could speak Estonian, so the cracks are showing."

Estonian House president challenges opposition's claims

According to Veiko Parming, president of the Board of the Estonian House, a number of Keelmann's statements were misleading in nature.

For example, Parming challenged his assertion that the decision to sell was made based on a majority of votes, not a majority of shareholders, which was dominated by organisations. "The shares of the Estonian House are owned by both individual and organisational shareholders," Parming explained to ERR News. "The vote breakdown among both individuals and groups was virtually identical; both were around two-thirds in favour of this project." He added that the narrative that the results of the vote were somehow biased or unrepresentative is an unsubstantiated myth being leveraged by some minority shareholders as a rhetorical tool to advance their agenda despite evidence to the contrary.

Regarding the parking situation at the new site, which has attracted criticism from a number of opponents to the move, Parming also stated that Keelmann's claims were misleading. "Tartu College is providing access to some of their parking as part of their involvement in the project," he explained. "This has been announced and reported previously. It is correct that the new site itself will not have parking, but that ignores paid and free parking available in the vicinity of the new centre. One issue with the [current] Estonian House is that after the parking lot fills up, the only backup is street parking; there are no other available parking lots within many blocks. This would not be the case with the Estonian Centre."

Keelmann's claims regarding the purchase of the property at 9 Madison were declared "completely false" by the president of the Estonian House. "The Estonian community does have the funds to purchase 9 Madison, and it is not going to be donating the property to the City of Toronto," he clarified.

Regarding the general challenge that the Toronto Estonian community is facing when it comes to the financing of various Estonian activities, Parming explained that the community is facing a decline in regular donations and bequests.

"That is a big reason why the four organisations are looking to do a 'big push' to build a consolidated community centre that will be self-sustaining in a way that the Estonian House is not," he explained. "The Estonian House has been successful in balancing operational costs with rental and leasing income, but for a long time has lacked a capital reserve to fund capital projects without utilising debt. Furthermore, the many Estonian organisations that use the Estonian House rely on the Estonian Foundation of Canada to support their rental payments. Money that the EFC pays to support rent is money that is foregone for programming."

Keelmann's criticisms regarding the house under historical protection at 11 Madison to be integrated into the new centre were denounced by Parming as a red herring argument. "The sites are completely different, and heritage rules are only one part of the picture," he said. "The bottom line is that there is no feasible plan to redevelop 958 Broadview, and there is to develop the Estonian Centre project."

He likewise criticised the sum of $1.75 million being cited as the amount of money needed to renovate the current Estonian House as "highly misleading," noting that this sum would address only some of the issues that the current structure faces.

According to the results of a Property Condition Assessment of 958 Broadview commissioned in November 2017, which were reported on in the Canadian-Estonian paper Eesti Elu (link in Engish), "...the study only identifies repairs needed to maintain the building's core systems and not improvements targeted at improving the revenue-generating potential of the house. The report also does not evaluate the costs or risks of disruption of activities due to unexpected or planned repair work."

Parming noted that Keelmann's reference to "roofing repairs initiated by Friends of Estonian House to obtain partial City of Toronto funding" was also worded in a misleading way.

"The roof project he is referring to was undertaken by the Estonian House Board with support from a City of Toronto grant," he explained. "The grant was prepared by a member of the Estonian House Board (we understand with support from Friends of Estonian House) and submitted by the board to the city. To date, Friends of Estonian House has contributed approximately $7,000 to support the project, the total value of which is approximately $140,000. Aside from the grant and these donations, the remainder of the roof costs are being funded through debt. Funding capital repairs through debt is not a long-term strategy for maintaining the viability of the Estonian House, as the board recognised ten years ago when it began its strategic 'Future of the Estonian House' project."

According to Parming, the recently formed Tulge Külla-Koju represents the interests of certain minority shareholders who have held for years that rebuilding on the current site of the Estonian House at 958 Broadview is feasible, despite the board of the Estonian House having concluded and announced years ago that it is not.

"For unexplained reasons, this group has chosen to wait until the decision to sell the Estonian House has already been made to come forward with their concept," he said, referring to Keelmann's cited alternative project designed by Tork. "The fact is that the board, within the last ten years, considered options to redevelop among a comprehensive analysis of all alternatives, and found these options to have numerous significant issues including related to funding, logistics, and concurrent operation of an active community centre during construction. Nothing in the Tulge Külla proposal is new or different, other than that an architect has produced some simple drawings."

If supporters of redevelopment disagreed with the Estonian House Board's conclusions regarding the feasibility of developing on-site, he noted, they had years to conceive and advance their own proposals.

"A group of minority shareholders has no authority, legal or otherwise, to advance projects on behalf of the Estonian House," Parming stressed. "Their positioning of this 'Plan B' as a viable alternative to the Estonian Centre project is misleading and has the potential to do real harm by sowing confusion and conflict. The Estonian House Board considers the Tulge Külla initiative to be an unfortunate strategy which is likely to divide our community at a time that we should be coming together."

Presidential honorary chair

In addition to the support of the majority of the community, the project's fans include a fair share of prominent figures as well, and not just at Estonia's Ministry of Finance. On 19 October, it was announced that former two-term Estonian President Toomas Hendrik Ilves, himself born and raised as a member of Estonian diaspora with close ties to the Southern Ontario Estonian community, would serve as honorary chair for the capital campaign project for the Estonian Centre Project.

"The new International Estonian Centre will inspire and be a source of pride for Estonia's largest diaspora community, and a home away from home for those with Estonian roots across North America and beyond," Ilves said in a press release at the time. "This is the biggest project that our Estonian diaspora has undertaken in over 50 years."

The centre envisions a flagship building that showcases Estonians' culture and heritage as well as facilitates entrepreneurial and business opportunities with Estonia while still providing space for the vibrant local community's events, the former president highlighted.

"I am proud to be part of this exciting initiative, and encourage Estonians from far and wide to support the International Estonian Centre," Ilves said. "I look forward to the opening of the centre, and the prominence it will bring to Estonia and Estonians."

-

*A previous version of the article quoted Väino Keelmann citing Marcus Kolga as president of the Estonian Central Council in Canada (EKN), however the article referenced by Keelmann was written and published by Kolga as a member of the community, not within an official capacity.

Download the ERR News app for Android and iOS now and never miss an update!