The chair of the Niagara Foundation says a town report about the foundation’s lease of the historic Foghorn House is “misleading,” “unfair” and “lacks historical context.”

The report, released by Town of Niagara-on-the-Lake staff last week, highlights financial losses incurred by the town on the property since 2022, totalling $20,223.04.

In the report, staff recommended not renewing the lease any further — something the Niagara Foundation hadn’t actually asked for, said chair Lyle Hall.

Hall is disappointed with the way town staff characterized what he calls a positive 38-year relationship between the two parties.

In 1986 the foundation signed the original lease to take over day-to-day operations of the house and brought it back from the brink of death with major renovations and upkeep.

The recent losses are the result of the town’s agreement in 2022 to waive property tax payments, largely due to losses due to the COVID pandemic.

But Hall says focusing on a revenue shortfall of $4,756.60 to municipal coffers for 2024 and a combined loss of $20,223.04 over the course of the lease’s most recent extension signed in 2022 doesn’t tell the whole story.

Not only has the foundation protected the historic home per its mandate, he said they’ve also given the town $271,645 ($91,580 in rental fees and $180,065 in property taxes).

“The most irksome thing is that after paying the town some $270,000 compared with the net $65,000 or so we earned (after expenses) — and handing them back a building valued at probably 10 times what it was worth when we took over — you’d think a basic thank you might be in order,” he told The Lake Report. 

The foundation, run by volunteers, was formed in 1962 with the goal of preserving the town’s history.

“Instead we are made out to look like bandits — not the way to deal with a group of resident volunteers,” he added.

The town purchased the dilapidated home for $20,000 in 1982.

After taking it over four years later, the foundation completely refurbished it and set it up as a residential rental unit.

The foundation’s lease was renewed in 2022 for three years with an extension clause allowing the foundation to extend for an additional year ending January 31, 2026.

The foundation, which has used the home as both long-term and short-term rentals since it took over the property, also pays the town 15 per cent of its revenues.

On top of the revenue generated for the town from the revenue share, Hall estimates the foundation has spent more than $200,000 on the restoration and upkeep of the property since 1986, though some of those numbers had to be estimated.

The municipality is responsible for all capital costs to maintain the building.

The total amount of taxes deferred from 2022 to 2024 is $20,806.50.

In a written recommendation to town council on Nov. 19 to not extend the lease beyond January 31, 2026, NOTL manager of parks and recreation Kevin Turcotte said it wasn’t cost effective to continue the relationship with the foundation.

“The revenue provided by the lease is insufficient to offset the town, regional and school board taxes,” he wrote.

“This shift in financial burden has resulted in an annual revenue shortfall for the town of approximately $4,500,” he added.

Hall doesn’t believe that characterization is fair when taking into account the work done to the house since 1986, the appreciation of the home over the course of that period and the cultural importance that has now been preserved for the community.

“Let me state that cherry-picking three years from 38 is more than unfair,” he said.

“(The Niagara Foundation has) undertaken preservation and restoration activities on a number of buildings and landscapes across NOTL, including the Foghorn House. The motivations for such actions have been consistent with our mandate to promote the history, traditions and culture of the Niagara area,” Hall said.

“We have neither sought nor realized a profit from any of these projects. To the extent a surplus has been achieved on any project, such surplus has been invested into subsequent projects,” he added.

“We believe we have added value to the streetscapes of NOTL with projects such as the Apothecary, Gollop House (OLIV and Budapest Bakeshop) and William Steward house.”

In a 2021 memo to the town, Hall described the work the foundation has completed since 1986.

He said in the first year of the lease, $10,000 was put towards shoreline improvements and between 1986 and 1990 that an additional $100,000 was spent to repair and renovate the building for habitation.

“In the early 2010’s an additional $90,000 was spent on furnishings and minor upgrades to use the building for the purpose of nightly rentals,” the memo continued.

In an interview with The Lake Report in October, Hall said the foundation also paid to connect the home to the town’s sewage system, had electrical and plumbing refits done, put on a new roof, added new partitions inside the structure, put in a new kitchen and updated the bathrooms.

With everything the foundation has done, he said the organization actually suffered a loss.

“Over the past five years, the foundation earned $36,377 from operation of the Foghorn House before depreciation,” he said.

“After depreciating our capital investment, the foundation’s loss stands at just over $15,000 for the period 2016 to 2020.”

“During this same period, the town received $29,933 in rental commissions (15 per cent of total revenue) and an additional $40,247 in property taxes,” the memo continues.

The lease stipulates that other costs related to the property are to be shared by the town and the foundation.

The amended lease says the town is responsible “for routine maintenance of the building” and “for any costs associated with maintenance of the shoreline protection of the property.”

It says the foundation will “pay all heat, light, and other utility costs for the property” as well as “any capital costs with respect to the maintenance of the building” and “shall maintain the grounds of the property in a clean and trimmed condition.”

Based on Turcotte’s recommendation, NOTL town council voted unanimously at its Nov. 19 committee of the whole to not extend the lease past January 31, 2026.

Hall was not looking for an extension past 2026, but he said being portrayed as a non-benificial partner, with no mention of the value the foundation’s efforts added to the town, is hard to swallow.

“We are disappointed with the staff report’s misleading conclusion and lack of historical context,” said Hall. 

“My fellow directors and I are proud of what the foundation has achieved, not only with the Foghorn but with several other properties in Niagara-on-the-Lake.”