Centre 110, currently used as transitional housing for men, will be able to shelter homeless families. (CBC)

A day after the Alberta government refused to give Inn from the Cold a funding grant, a philanthropist has stepped in with a $2.5-million loan to help the Calgary group buy a shelter for homeless families and children.

Gary Nissen, owner of Dome Britannia Properties, confirmed on Tuesday that he will provide Inn From the Cold a loan of $2.5 million. The money will come from his personal line of credit and the group will be charged interest over 18 months, as they try to pay it off through donations and fundraising.

Nissen told CBC News that after seeing years of provincial inaction as families were shuffled from one church basement to another, he decided to write a cheque.

He described himself as a long-time supporter of Inn from the Cold.

The group, which buses homeless families to different churches, synagogues and community facilities every night, had applied to the province for a $2-million grant to buy Centre 110, currently used as transitional housing for men, from the Calgary Drop-In Centre.

Inn from the Cold had already raised two-thirds of the $6-million purchase price.

The facility would be able to house 60 to 90 people in one place instead of giving them beds in a different location every night.

But Lindsay Blackett, Alberta's minister of culture and community spirit, turned down the request on Monday, saying the high-crime location at 1st Street and 11th Avenue S.E. was not suitable.

Group plans to take possession in August

"That's bogus," Diana Segboer, executive director of Inn from the Cold, said Tuesday. "This is condo central right now. There's developers going crazy around here. The area is being cleaned up."

The Calgary Homeless Foundation also didn't support the plan, saying there weren't enough play areas or washroom facilities.

'I think it's a lot less stress for the children involved. They're the innocent victims in all of this.'—Lucinda Fiegehan

"They've turned their back on homeless families. They keep talking about how they're working toward stopping homelessness in this province, and this is a classic example of them not doing that," said Segboer.

Nissen's loan means Inn from the Cold can get a commercial mortgage and move ahead with taking possession of the facility in August, giving families a place to stay soon after.

"I think it's a lot less stress for the children involved. They're the innocent victims in all of this," Lucinda Fiegehan said as she waited in the group's office on Tuesday. She, her husband and three children used the agency more than five years ago.

The couple and one son recently moved back to Calgary from Moose Jaw, Sask., to look for work, and have returned to use Inn from the Cold, gathering all their belongings every morning after sleeping in a church basement.

Fiegehan said she has no issues with the location of Centre 110.

On Tuesday, the city's biannual count revealed that 197 families were homeless in 2008, an increase of 36 per cent over 2006. All but seven of the families included one or more child, said the city.

With files from Bryan Labby