The Estonian Centre Due Diligence Report yielded many insights into the financial and funding picture of the project. As proposed, the sale of Estonian House is projected to provide significant funding, whether the sale can represent a majority (over 50%) of the project budget has yet to be determined. The report states that: “The Broadview land assembly sale price is on a sliding scale that ranges from $11M to $15M”. (p.3) If the project budget remains at $25 Million and the sliding valuation scale enables Revera to purchase the Broadview property for $11 Million, then there will be a greater reliance on donation funding and debt financing. Currently it is forecasted that Tartu College, Estonian Credit Union, and Estonian Foundation of Canada will come together to provide $5 Million in debt financing. The remaining $8-9 Million will come from donor funding.
During the summer, a lead donor was identified. However, the sizeable and generous pledge had conditions that had failed to be satisfied by the time the due diligence report went to print. The report notes: “Non-binding arrangements representing $3 million have been executed with the lead Donor. Building naming rights will be granted to this Donor. Of this donation, $2 million is dependent on matching funds from other donors of which $1 million is near committed.” (p. 12) If the lead donor’s conditions are met, then Madison will have benefitted from $5 Million in charitable donations. That would still leave another $3-4 Million in donations to be raised if there are no more budget increases. However, the longer those donation commitments remain unfulfilled, there could be greater exposure to cost increases.
The amount of capital current and new shareholders may be willing to invest, how much government grant funding can be generated, how much may be donated and how much can be financed based on the diverse revenue models the House can support will determine the building’s scale. Tulge’s proposed design and programming is intended to enable access to government grants, financing and favourable tax credits. True to Estonian “talguliste” spirit, Tulge’s capital campaign will not be focused exclusively on cash donations. Our community has the benefit of architects, engineers, builders, project managers and other professionals that can contribute valuable in-kind services, materials and labour to the cause. We are also encouraging Estonian firms to provide expertise and products to ensure that our new House reflects and promotes the best and most valued parts of our heritage. Estonians otherwise excluded from contributing will be able to participate in whatever fashion best maximizes benefits to our Estonian-Canadian community and organizations.
Purchasing the Madison site is a prudent investment for the 3 Orgs even if the sale to Revera is not finalized since it compliments existing Estonian enterprises. Should Revera walk away and Tulge can generate investment interest, government grant funding, tax credits as well as other outside debt and in-kind financing, our community could realize untapped economic benefits at the Broadview site that have yet to be realized.
The Tulge Külla Steering Committee
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