Building experts’ report on Estonian House shows major expenditures required Estonian Life
Kommentaarid on kirjutatud EWR lugejate poolt. Nende sisu ei pruugi ühtida EWR toimetuse seisukohtadega.
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Ingrid Tanner28 Jan 2018 07:39
Thank You for sharing.

First off, this report and your summary shows that the Board of the Estonian House did not hire competent managers over the years or they did not heed concerns expressed by Managers over the years. The report is really highlighting the board’s negligence in not understanding asset management or the lack of understanding that borrowing funds to maintain the asset (the Estonian house) is a valid expense.
And your comments "over the last decade" that discussion of how YOU (the Board) have been managing the asset is not sustainable should not have meant "sell" it should have meant borrow funds to fix the heating and the roof.
How many millions have you borrowed for "due diligence" for the Madison project… that could have been used to upgrade the systems and infrastructure?
Just putting in an energy efficient heating system with borrowed funds would have dramatically reduced your operating costs SIGNIFICANTLY! The payback of an efficient boiler could have been calculated. Not only that, over the years there has been incentive programs from all level of governments that would have even given you rebates. This just screams incompetence.
Thus forgive me if I look at this report as “fail” on the part of the board for lack of understanding asset management. Please ask the Credit Union if they would have lent you funds to upgrade the heating system. The answer should be YES… since at that time there was NO LIEN on the Estonian house. NOW though there is all the “due diligence” costs for figuring out how to sell and hiring how many experts to work on the new location’s design… you have spent way more funds in trying to rip the Estonian house away from us.
One final note, the rentable space of the Estonian house could be calculated… and with proper marketing it could generate a lot more money than the Madison proposal. The Estonian House has larger square footage to rent. The proposed, super expensive, good looking Madison project would have a smaller foot print to rent out… and thus could NEVER generate higher revenue than the current Estonian house.
You have never done a good job marking the spaces at the Estonian House.
Finally, now that you know that work needs to be done and the Madison project’s completion will be YEARS away… you will be forced to upgrade the Estonian house infrastructure in order to enable us to continue to have the continued use of the Estonian House while you continue your “due diligence” of the new project. That also is short sighted… and I say we vote to stay at the current Estonian House where our costs will be much less and our revenue could (if managed and marketed properly) would be much higher than it is now. And it is time to put competent people onto the board who truly understand asset management.
Ingrid Tanner28 Jan 2018 10:01
Just reviewed the summary report by PINCHIN

You RENTED a water heater? wow those are so expensive to rent and super difficult to buy out of the contract. Short sighted decision. Again a loan from the bank could have had less costs to purchase it.
The report points out that NO BUDGET for ongoing maintenance of major components of the building. That is like saying we will deal with issues when they fail. The report also mentions LED Lights have not even been considered (again... rebates were available and reduced operating costs after changing to LED lights are significant.)
Code violations... wow... no thought of having a person to inform the board of the city or provincial code changes. PINCHIN report says "the importance of an effective maintenance program cannot be over looked because it plays such an important role in the effectiveness of Site Building equipment.” Yeah!!!!
I believe the Board just proved their lack of understanding asset managment and lack of understanding Marketing… where one WORKS daily on Marketing to rent out every square foot every day at good rates. Especially since a building as an asset is valued by the revenue it generates. Higher revenue, Higher value.
What most competent asset managers do is look at ways to reduce costs. That typically means upgrading/replacing old heating systems to new energy efficient ones. Any Engineer that comes to give you suggestions would compute the payback period. Meaning the cost savings of spending funds. Just like low flow toilets will reduce costs. The board’s aversion to spend funds in upgrades only increases maintenance costs and does not allow for energy efficiency…. Which is super important.
If you are going to manage the proposed new Madison building with a much reduced rentable area than the current Estonian House…. You are NOT going to ever payback the mortgage that will be needed. The board has not proven their ability to manage an asset.
I believe this report makes a stronger case to KEEP the current Estonian House. Since the Madison building will take years before it can be usable. Thus, we need to update the current Estonian House so as to have a place for all our events. And if we are spending funds, we might as well keep it and focus on competent management.
Samalt IP numbrilt on siin varem kommenteerinud: Ingrid Tanner (07:39)
Väino V. Keelmann28 Jan 2018 11:18
This Pinchin report simply identifies the very modest sum required to update Eesti Maja. $1.4 million or even the inflated (paid consultants are needed?) $1.75 million over 10 years, in a Toronto where the average home sells for $1 million, to be generated from a 5-10,000 Estonian person community as well as an Eesti Maja run as a business is eminently doable. I personally would be delighted to take on the project.
Jaak Järve28 Jan 2018 12:15
The Peter Principle is an observation that the tendency in most organizational hierarchies, such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach the levels of their respective incompetence. The Peter Principle is based on the logical idea that competent employees will continue to be promoted, but at some point will be promoted into positions for which they are incompetent, and they will then remain in those positions because of the fact that they do not demonstrate any further competence that would get them recognized for additional promotion. According to the Peter Principle, every position in a given hierarchy will eventually be filled by employees who are incompetent to fulfill the job duties of their respective positions.

We are seeing this "Peter Principle" in practice with our current Estonian House Board of Directors. The level of short-sightedness, incompetence and callous disregard for the health of the community is embarrassing to say the least.
Time to clean house and start anew. The shareholders should take back the house, fire the current board and elect a new more responsible board who will endeavour to preserve the Estonian House and breathe new life into this heritage site and home of the Estonian Toronto community.
Speaking of theories29 Jan 2018 07:14
Another theory is that of psychological projection. According to this theory, humans contend with feelings of vulnerability by projecting these traits unconsciously, and thereafter consciously, on to others. This coping mechanism works by directing the feelings of anger or betrayal toward the most proximate target, rather than acknowledging the underlying reasons for the existence of the emotions.

For example, rather than acknowledging that a building has been chronically under-supported both financially and in its usage for decades, this mechanism causes people to attribute the blame to the perceived guile or incompetence of a specific group of people, satisfying the psychological need for a villain. The identification of a villain is important because it allows the afflicted party to believe that removal of the villain is all that is necessary for the underlying conditions to be resolved.

Although psychological projection may manifest as aggressive behavior, it is rooted in defensiveness and serves as a coping mechanism for shifting blame unto others in reaction to perceived or actual slights. The behavior is ultimately counterproductive as it leads to conflict without addressing the underlying issues, and is closely related to the concept of hostile attribution bias, a cognitive bias manifesting as a tendency to attribute benign or ambiguous behavior to hostile intent even when there is none.
to psychologist29 Jan 2018 07:47
"underlying reasons...underlying conditions...underlying issues" - there's a difference. Amnesia may be necessary equipment for living. Issues get addressed publicly.
To Jaak Jarve02 Feb 2018 20:38
So I guess you are comfortable with the assessment that the Peter Principle applies to you too.
Ingrid Tanner28 Jan 2018 17:53
I have been reading the report on and off during the day.
Seems that Vaino and Jaak are on the right track.
The released report has a paragraph that states.
“Based on Pinchin’s review of the property, conducted on November 17, 2017, the site Building appears to be in satisfactory condition commensurate with its age and in comparable standing to other similar commercial properties in the area. Based on our visual assessment, the Site Building appears to have been constructed in general accordance with standard building practices in place at the times o construction.
Goes on to say (in my own words) that now is the time to get on with the work of upgrading the systems.
So yes Vaino... it is worth "taking it on" as you said. It will be at a much lower cost than the proposed new venue.
Samalt IP numbrilt on siin varem kommenteerinud: Ingrid Tanner (07:39), Ingrid Tanner (10:01)
lugeja30 Jan 2018 05:49
I'm shocked.

We've been told that staying on Broadview is not a viable option but it seems like if the board didn't blow all this money on consultants working the Madison project, we'd be just fine and there might be any shortfall at all. Yikes!

I also find it interesting that in the latest report from the board, it was mentioned that talks were ongoing with an unspecified donor to cover the shortfall of funds required for the Madison project which raises some questions:

Just how big is this shortfall (I'm guessing much bigger than 1.4 million, would be happy to be wrong)?

Did they look for donors to fix up the Esto House (my guess is no, would be happy to be wrong)?

How does it make sense to sell us the Madison project and tell us that the Esto House isn't viable if the funds required to stay are less than the funds required for the Madison project?

Why is the board filled with people who seem to hate the place and want to everything in their power to get rid of it. Where is their motivation coming from and where does this strong suicide instinct come from?

I remember one board member wrote an article supporting the move saying that the Madison project should be like a "kirss tordil". From all I've heard so far, it seems like instead of a "tort", we unfortunately have a steaming pile of something much less appealing.
Guido Laikve31 Jan 2018 10:10
Directors of EH commissioned the Pinchini Ltd. report without shareholders approval. The report was unnecessary since 3 professionals (Maimets, Saar & Laikve ) had already provided the info. It was an irresponsible decision when according to your own info a qualified purchaser had already been found a while ago. Obviously this sum can not be regarded as being part of the "due diligence" activity, since it was directly commissioned by the Board without shareholders approval.
Did I sleep through something?31 Jan 2018 22:41
I saw that these three retired professionals provided an interview saying that the house is sound, but I don’t recall them ever producing a report in any detail like the Pinchin report. I also don’t recall them calculating the costs of preservation, and don’t recall them saying that their interview is their professional opinion (although maybe that’s moot if they’re no longer practicing and not putting their license on the line). It’s great that they offered their help but these seem like night and day differences... and what concerns me is not that G. Laikve is expressing his opinion, but that he doesn’t seem to see the difference here between what Pinchin did and what he did.
Observer31 Jan 2018 14:32
Hr Laikve appears to be confused. Shareholders elect directors. Shareholder approval is not necessary for the EH to engage consultants to review the state of the building. Shareholders do not manage the operations. This is so fundamental to corporate governance. Hr Laikve also professes to be a retired architect. Thus, I am not sure whether the professional standards of his previous profession allow him to any longer provide professional opinions. Perhaps another architect could provide insight here.
Kabi Lokk31 Jan 2018 14:56
Guido Laikve, you are not a professional. You have surrendered your License and Certificate of Practice and are now an Architect (Retired). Please do not mislead our community. I quote from the Ontario Association of Architects Guidelines for Surrendering a License: “A former architect who has been appointed by the Registrar to hold Retired Member status may use the title “Architect (Retired)” provided its use does not in any way mislead a member of the public into believing he/she is a holder of a License and Certificate of Practice and entitled to provide architectural services.” Only Registered Architects can call themselves professionals.
..shameful....kabi lokk..31 Jan 2018 19:29
An unneccessarily nasty and nit- picking comment aimed at Hr. Laikvee.
to Käbi Lokk31 Jan 2018 21:07
Your use of the term is imperious, not professional.

8 types of professional membership in the Ontario Association of Architects include Architect and Retired Architect. Go figure!
Samalt IP numbrilt on siin varem kommenteerinud: to psychologist (07:47)
To Kabi Lokk01 Feb 2018 07:31
In every article that has been submitted by Hr. Laikve, he has clearly indicated Laikve, Architect (RET).
There has been nothing misleading.
Samalt IP numbrilt on siin varem kommenteerinud: Guido Laikve (10:10)
Observer31 Jan 2018 16:02
Thank you for the clarification.
Samalt IP numbrilt on siin varem kommenteerinud: Observer (14:32)
to Kabi what!31 Jan 2018 19:12
The benefit to all of us was that Hr. Laikve and the other educated, extremely competent, knowledgeable and highly skilled individuals in their area of expertise, gave us their opinions, based on their many years of professional experience..all for nothing, where as, "professional opinion" that cost us another bundle of money, came back with the same conclusion.... the Estonian House is sound.
Again, sleeping31 Jan 2018 22:50
I think you missed the part where the Pinchin report provided detail and costs and the three retired professionals provided their opinions based on their experience with the house from decades ago. How can you possibly say that they had the same results? Are you being serious?
Samalt IP numbrilt on siin varem kommenteerinud: Did I sleep through something? (22:41)
An Observer31 Jan 2018 21:37
I was at this evening's Esto House information session. My take was that the majority of the attendees left feeling that there had been a fulsome disclosure. Yes, the due diligence is costly, but this is what professional advice costs. Not doing the appropriate due diligence is even more costly. It was evident that the team engaged on the initiative had done the appropriate due diligence and had outside professional advisors had been retained, where appropriate. A walk-through of the EH hardly counts as "due diligence". I am a proud Estonian, and want future generations to be so as well. We want the new Estonian Center to be a welcoming place. There are so few of us (1.1 million on the planet), so let's pause ... and really recognize that in a near decade of seeking a solution, this is the closest we have been to a solution. I was truly impressed by the evening's presentation and wish that all community members had been in attendance.
Samalt IP numbrilt on siin varem kommenteerinud: Observer (14:32), Observer (16:02)
to observer and 4orgs01 Feb 2018 08:17
Though not a perfect solution, I too am put more at ease by the presentation last night.

What saddens and frustrates me is that more transparency and more information of substance could have been offered prior to yesterday and on a consistent basis. I do not buy the need for the Fort-Knox-level-of-secrecy argument. We would have seen less harsh comments and people would have been less "up in arms" to protect their community.

For the sake of the community, please provide more information of substance along the way in the future! You are asking for trouble and creating undue stress for all concerned if you do not.
About the reports01 Feb 2018 01:27
Please read the detailed itemized report by the professionals who did an onsite inspection in September 2017:

The Pinchin report two months later is an Entry-Level or Baseline Property Condition Assessment (PCA) and Report (PCR): “The assessment is based, in part, on information provided by others. Unless specifically noted, Pinchin has assumed that this information was correct and has relied on it in developing the conclusions.... Pinchin was accompanied at the site visit by the Estonian House’s Financial Manager, Tõnu Orav, and a member of the Estonian House Board of Directors, Rein Kuris. They interviewed these individuals."

For details of earlier inspections, with relevant cross-references to the updates, read also:
Samalt IP numbrilt on siin varem kommenteerinud: to psychologist (07:47), to Käbi Lokk (21:07)
Possible01 Feb 2018 06:19
That “itemized report” simply says that a lot of thins are possible. Fine. It’s also “possible “ for the Estonian community to buy the Air Canada Centre and move skaudid and gaidid there. Possible does not mean feasible, or viable. This seems to be the source of a lot of confusion. Ideas are not the same as a plan. Also what you are describing as an “itemized report” is not that.
Segane01 Feb 2018 12:07
It's great Ingrid that you know what's wrong, but we have an expression in Estonian, "Kus
leiad viga laita, tule ise aita.".
Ingrid Tanner02 Feb 2018 06:43
I am helping.... With my comments

Cheaper to stay

Yes, upgrades are needed.... But the cost is way less than Madison proposal where the lovely designed concept is years away... and we now know that at least 2 towers will morph the glass structure.

We have been promised that a purchaser will allow us to continue to use the estonian house while we develop the new site... will this happen? Especially if there are needed upgrades. Will a purchaser agree to that? The board can answer that... since it appears they have a purchaser.

This is super important question since the estonian house is packed on Saturdays.

Our current site has the potential to have good revenue. It has more rentable space than the madison option.
raccoon102 Feb 2018 10:15
David Kalm's numbers show that in fact Eesti Maja has less rentable space than the new proposal. Where did you get your numbers from? Also as a property manager you should know that the rental rate per square foot is much higher on Bloor Street than on Broadview, so the total rental income at Madison will be higher. Also I doubt that you can ask your tenants to pay more rent just because now the roof doesn't leak anymore. Please Ingrid put together a business case for staying at Eesti Maja. Reach out to someone from Majandus Klubi to complement your real estate knowledge. Currently David Kalm's numbers look very convincing but I have nothing to compare them with.
Samalt IP numbrilt on siin varem kommenteerinud: Kabi Lokk (14:56)
To Ingrid and Racoon102 Feb 2018 13:31
I agree with Racoon1. For heaven's sake, get a business plan together! Like R1 says, we have nothing to compare with. I would love to see a detailed plan to revitalize EM -- one to rival the Madison one, but so far it's just been talk. Ingrid, Väino1, Väino2, Allan Meiusi, and whoever else is on board with genuine current expertise in this area, give it a real go! Then you can say that you really did all that you could. Otherwise you will be remembered as "trouble makers" only. If you don't, I like others, will reluctantly side with Madison.
to raccoon104 Feb 2018 11:07
The Madison Avenue project will not be on Bloor St. West, it will off Bloor St. W. by 60 meters.
What will they be renting, to whom, and for how much???
to lugeja02 Feb 2018 00:34
valid questions. sad answers. motivation? money, greed, ego, desire to be the biggest fish in a shrinking, already small pond with no regard for the Estonian community whatsoever
ANGRY AT NUMBERS!!!02 Feb 2018 16:42
"The report does not make recommendations on longer-term issues or costs beyond the 10-year time horizon. The scope of work also does not include any evaluation of the functionality of the current building nor does it address any aesthetic or decorative shortcomings. In other words, 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."

Unfortunately this "modest" $1.4 million option is merely a short-term Band-Aid and not a solution in itself. This money will not make the current Eesti Maja self-sustaining. This money would not cover the cost of making the kohvik, or estore desirable rental properties. This money would not cover capital costs beyond 10 years. What then- hold our hands out for another $1.4 million? No responsible bank would offer a loan to the Eesti Maja for capital upgrades let alone these repairs under its current business model (essentially a charity case). This $1.4 million, and subsequent $1.4 millions will have to be raised through fundraising and charity. A good cause- yes, but this goodwill would be better spent on actual community activity by supporting the organizations and programming directly. Between EM, the VEMU project, three camp properties etc our goodwill is spread too thin.

Lashing out at our community’s successful institutions that have propped up the Eesti Maja for this long through significant rents and charity is counterproductive. Blaming the current board of directors for the financial state which has been brewing and ignored by boards and shareholders for the past 20-30 years isn’t going to help. Self-victimization through petty and petulant cartoons is just sad. Blaming voting blocks for a vote passing 60% (or 59%, heh) to 40% is ignorant. If the pank earned voting shares from Eesti Maja for capital expenditures or services rendered then they are entitled to vote those shares.

Demographics are destiny. Our community is shrinking. It's an unpleasant reality. Our organizations know this and have had to adapt and/or consolidate to survive. We have to accept that concessions must be made with regards to our community home. No realistic option will satisfy everyone or match up against the golden era of the Eesti Maja. Whether the Madison Project will be sustainable is yet to be seen, but people have to stop wasting their energy being angry at numbers. Accept that unpleasant change is coming and that whatever happens we’re going to need to suck it up and work through it together.