Costs double for 101 McNaughton

Instead of having modular housing at 101 McNaughton Ave. W. in Chatham, it appears what is there is currently little more than a jumble of building blocks.

Expensive building blocks.

The 27-unit project resurfaced at council on Sept. 8, and little of what was said was positive, if anything.

In chasing federal housing cash, the municipality opted to use modular construction concepts to erect an affordable housing building at the location.

BECC Modular won the contract with a proposal of $9.98 million. That was in December of 2021, with nearly $5 million in funding support from the Canada Mortgage and Housing Corporation (CMHC), and with an expected completion date of spring of last year.

Problems surfaced and Jayden Construction was brought in last November to finish the job. That was to cost an additional $6 million.

The municipality opted to sue BECC to recover costs, but that firm has gone into receivership.

Meanwhile, Jayden personnel began work and learned there were problems on site, according to a municipal report. They included water damage to modular units, as well as structural steel deficiencies.

According to the report, “the extent of these damages was not known at the time of procurement by the surety as much of the building envelope was not yet accessible due to incomplete construction by BECC Modular, safety concerns due to modules not being fully secured, and incomplete hallways on the second and third floors including no stairwell access,” it stated.

Repair work would be extensive. And costly.

At the Sept. 8 meeting, council opted to approve the spending of another $4.4 million to Jayden to complete the repairs. In total, the project will now cost more than $19 million – more than double what was initially expected.

Municipal officials will continue to work with the surety company that bonded the project and attempt to recoup as much as possible from BECC.

A surety for a municipal project is the insurance company that provides a bond that guarantees that a contractor will fulfill its end of the contract. It’s intended to protect a municipality from financial loss if a contractor falls short in its efforts.

The new anticipated completion deadline is spring of next year.

Councillors and staff said the modular concept was initially pursued due to availability of federal dollars to assist.

“It had to be modular in nature based on the funding,” Ray Harper, director of municipal housing and property development said.

“We are looking for funding from upper levels of government all the time,” South Kent Coun. Anthony Ceccacci said. “This type of build…a lot of people had questions about that type of build.”

Chatham Coun. Alysson Storey expressed frustration with the federal government over this one.

“IF other levels of government are going to encourage municipalities to participate in such projects, some due diligence on their part would seem appropriate,” she said.

Modular construction can be “challenging to work with,” Municipal CAO Michael Duben said, adding it can be an intellectual property issue.

Harper stressed the effort is underway to recover some of the extra costs through the surety.