12. MOTION TO DEFER THE
PAYMENT OF DEVELOPMENT CHARGES AND BUILDING PERMIT FEES, AND WAIVE THE ROAD
ENCROACHMENT FEES, FOR ALL PHASES OF THE RESIDENTIAL DEVELOPMENT PROPOSED BY
GROUPE LEPINE ON BLOCK 6 (PLAN 4M-1325)
MOTION VISANT À REPORTER LE PAIEMENT DES
REDEVANCES D’EXPLOITATION ET DES DROITS DE PERMIS DE CONSTRUIRE, ET À RENONCER
AUX DROITS D’EMPIÈTEMENT POUR TOUTES LES PHASES DU LOTISSEMENT RÉSIDENTIEL
PROJETÉ PAR LE GROUPE LÉPINE SUR L’ÎLOT 6 (PLAN 4M-1325)
COMMITTEE
RECOMMENDATION AS AMENDED
That
Council waive the road encroachment fees, for all Phases of the residential
development proposed by Groupe Lepine on Block 6 (Plan 4M-1325).
Recommandation MODIFIÉES DU
Comité
Que le Conseil renonce aux droits d’empiètement pour toutes les
phases de l’ensemble résidentiel projeté par le Groupe Lépine sur l’îlot 6
(Plan 4M-1325)
Documentation
1. Corporate Services and Economic Development Committee’s report
dated 26 March 2010 (ACS2010-CMR-CSE-0018).
2. Extract
of Draft Minute, 4 May 2010 to be distributed prior to Council.
Report to/Rapport au :
Corporate Services and Economic Development Committee
Comité
des services organisationnels et du développement économique
and
Council / et au Conseil
26 March 2010 / le 26 mars 2010
Submitted
by/Soumis par : Kanata North Ward/quartier Kanata-Nord Councillor/Conseillère Marianne Wilkinson
Contact Person/Personne ressource :Marianne Wilkinson,
Councillor,
Kanata North Ward / conseiller, quartier Kanata-Nord
(613)
580-2474, Marianne.Wilkinson@ottawa.ca
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Ref
N°: ACS2010-CMR-CSE-0018
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SUBJECT:
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MOTION
TO DEFER THE PAYMENT OF DEVELOPMENT CHARGES AND BUILDING PERMIT FEES, AND
WAIVE THE ROAD ENCROACHMENT FEES, FOR ALL PHASES OF THE RESIDENTIAL
DEVELOPMENT PROPOSED BY GROUPE LEPINE ON BLOCK 6 (PLAN 4M-1325)
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OBJET :
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MOTION
VISANT À REPORTER LE PAIEMENT DES REDEVANCES D’EXPLOITATION ET DES DROITS DE
PERMIS DE CONSTRUIRE, ET À RENONCER AUX DROITS D’EMPIÈTEMENT POUR TOUTES LES
PHASES DU LOTISSEMENT RÉSIDENTIEL PROJETÉ PAR LE GROUPE LÉPINE SUR L’ÎLOT 6
(PLAN 4M-1325)
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REPORT RECOMMENDATIONS
That the Corporate Services
and Economic Development Committee recommend that Council:
1.
Defer the payment of development charges and building permit fees
for a period of 24 months from the date of issuance of each building permit,
without interest or penalty,
2.
Waive the road encroachment fees, for all Phases of the
residential development proposed by Groupe Lepine on Block 6 (Plan 4M-1325).
RECOMMANDATIONS DU RAPPORT
Que le Comité
des services organisationnels et du développement organisationnel recommande au
Conseil :
1.
De reporter le paiement des redevances
d’exploitation et des droits de permis de construire pour une période de 24
mois à compter de la date de délivrance de chaque permis de construire, sans
intérêt ni pénalité;
2.
De renoncer aux droits d’empiètement pour
toutes les phases de l’ensemble résidentiel projeté par le Groupe Lépine sur
l’îlot 6 (Plan 4M-1325)
BACKGROUND
The rental housing market,
particularly in communities outside the Greenbelt, remains low, particularly
for affordable rates. In Kanata, where there are about 43,000 jobs, the rental
situation is particularly difficult with long waits associated with getting a
rental unit.
As stated in the report on the
Holmstead Holdings Report attached as Attachment B, a healthy rental market is
needed to sustain a healthy local economy. Few local companies have taken the
risk of building rental units due to high land and construction costs. The
Lepine Group has found it marginal to build such units and has asked for the
same consideration as given to Holmstead in 2002. The Holmstead apartments are
full, despite high rental rates, indicating the need for more rental housing.
The Lepine development consists
of 4 high rise apartment buildings that will eventually contain approximately
750 units. The site is close to the location of a transitway station, part of
the east-west transitway that is scheduled to be built as part of the
Transportation Master Plan. The environmental assessment has been completed
and design of that portion of the transitway is presently underway. Hence this
development is being designed to encourage transit use and will have hundreds
of bicycle parking areas for tenants as well as one or more vrtucars.
The first phase of development is
for one building of 146 units, with 30% meeting the city’s affordability
criteria as shown in attachment A. The site is located in the Kanata Town
Centre area designated as Central Business District. This area is to have high
density housing and employment, to meet the objectives of the Official Plan.
It is in a new subdivision so the roads adjacent to the site have not yet been
fully completed and there is no local traffic on the road on which this
building is to be located. On the other side is a storm water pond. The road
has just been connected to Kanata Ave. That link will be used for construction
access but is not yet open for public use. Hence there is no obstruction to
the public for any short term use of the road allowance for construction
purposes as there would be in central Ottawa. Council has recently waived
encroachment fees for rental units being constructed in Ottawa Centre and this
would make sense for this project as well.
In 2002 staff recommended the
deferral of development charges and fees for the Holmstead project until each
building was constructed. They pointed out that it was to promote new
high-rise rental buildings where there is a shortage such as in the west-end of
the city. That shortage continues to exist and this deferral will help to keep
the number of affordable units at 30%. All required fees will be paid in full
at the end of the deferral period.
The Councillor submitted the
following motion for consideration at the Corporate Services and Economic
Development Committee meeting on 4 May 2010.
WHEREAS, the
applicant, Groupe Lepine, has submitted a Site Plan Control Application for the
property known municipally as 1001 Canadian Shield Avenue in order to permit
the development of a residential apartment complex; and
WHEREAS, Site
Plan Control approval has been issued for Phase 1 of the proposed development
on February 16, 2010 and the Site Plan Agreement is imminent; and
WHEREAS Phase 1
of the development includes 146 rental apartment units within a ten- (10)
storey building, as well as a club house for residents, and this complex will
be an important contribution to the local housing market as it will constitute
only the second rental development in the Kanata Town Centre; and
WHEREAS a
substantial portion of the units will meet the City’s housing affordability
criteria and, further, these units will contribute to meeting the housing
demand for rental units in Kanata and will increase the diversity of housing
supply in Kanata; and
WHEREAS this
development is within walking distance of the Transitway planned through
Kanata; and
WHEREAS a similar
request was obtained for Holmstead Holdings as a means of encouraging the
construction of rental units outside the Greenbelt; and
WHEREAS the roads
in the vicinity are new subdivision roads with no other development presently
using them so that any encroachment will not cause any disruption of traffic;
and
WHEREAS the
project will ultimately provide a total of 739 rental units in
Kanata Town
Centre at full build-out;
THEREFORE BE IT
RESOLVED that the Corporate Services and Economic Development Committee
recommend to Council deferral of the payment of development charges and
building permit fees, and waive the road encroachment fees, for all Phases of
the residential development proposed by Groupe Lepine on Block 6 (Plan 4M-1325)
for a period of 24 months from the date of issuance of each building permit,
without interest or penalty.
RURAL IMPLICATIONS
There are no rural implications.
CONSULTATION
This item will be advertised in
the local dailies as part of the Public Meeting Advertisement on Friday
preceding the Corporate Services and Economic Development Committee Meeting.
Planning and Growth Management Comments
The following information is provided:
The arrangements with Holmstead Holdings reflected the regulatory
landscape of 2001 and 2002 when deferrals of local development charges were not
contemplated in the then development charge by-laws. Unique circumstances
necessitated the arrangement as a means of permitting the project to proceed
despite additional financial hurdles presented by a front-end agreement. Thus,
in addition to arranging for the deferral of the development charges by way of
a report to Council, it was agreed to allow for the deferral of the building
permit fees as well.
It is noted that the statutory and regulatory parameters have since
changed, requiring a different approach should Council agree to provide the
relief being sought.
Development Charges
With respect to development charges, the City harmonized the
development charges by-laws in 2004. The Development Charges Act, s. 27
specifically permits a municipality by agreement to collect a development
charge at a time after a building permit is issued. In accordance with this
authority, the present Development Charges By-law 2009-216 provides for
the deferral of development charges. The standard practice is that interest at
the rate of 10 per cent is charged.
Building Permit Fees
The Building Code Act requires the payment of building permit
fees at the time of submission of the application. This requirement was
introduced July 1, 2005 as part of the many changes to the regulatory regime
through the enactment of the Building Code Statute Law Amendment Act
(Bill 124). In contrast to the Development Charges Act, the Building
Code Act, does not provide for payment at a time after the building permit
is issued. As a result, the building permit cannot be issued without full
payment of all applicable fees. The arrangement with Holmstead Holdings for
the deferral of both the development charges and the building permit fees was
made in 2001/2, prior to the new legislation.
It is noted that large projects such as the one proposed are usually
phased over a period of time with the phasing of permits and related fees and
this, if optioned, would have the effect of deferring payments over a period of
time, thus obtaining the relief being sought.
In addition, in October 2009, Council did approve a new program for
providing grant funding for reimbursing development related fees, including
building permit fees, for construction projects undertaken by certain
charitable and non-profit organizations. There is no program in place for
providing grant funding to offset waivers of fees for other projects, such as
this one, although Council can specifically approve a grant to offset
development related fees, including building permit fees, through the City-Wide
Capital Reserve Fund.
Encroachment Fees
The arrangement in 2001/2 with Holmstead Holdings did not include a
fee waiver of encroachment fees. Waiver of encroachment fees may be provided
only for registered charitable and non-profit organizations, such as the United
Way and the Santa Claus Parade.
Should the fees be waived, the estimated lost revenue loss would be
$43,000.
LEGAL/RISK MANAGEMENT IMPLICATIONS
As
discussed above, it is within the jurisdiction of Council to defer development
charges without interest and to waive the encroachment fees. In the opinion of
Legal Services, the fee for the building permit must be paid prior to building
permit issuance.
FINANCIAL IMPLICATIONS
There are no financial
implications associated with the deferral of payment of development charges;
fees owed would be subject to annual interest of 10%, in accordance with the
City’s standard practice.
As legislation does not permit
deferral of building permit fees, financial implications are not applicable.
Estimated lost revenues of
$43,000 are associated with the recommendation to waive road encroachment fees
for a 24-month period from the date of issuance of each building permit.
SUPPORTING
DOCUMENTATION
Document 1: Chart
of affordability of units
Document 2: Report to Council from
CSEDC on April 10, 2002 on Holmstead Holdings (ACS2002-DEV-POL-0011)
DISPOSITION
Staff to take appropriate action
as directed by the Committee and Council.
Document 2
Report to/Rapport
au :
Corporate Services and Economic Development Committee
Comité
des services organisationnels et du développement économique
and
Council/et au Conseil
21 March 2002 / le 21 mars 2002
Submitted by/Soumis par : Ned Lathrop, General Manager/Directeur
général
Development Services Department / Services d’aménagement
Contact/Personne-ressource
: Ned Lathrop, General Manager/Directeur général,
Development Services Department / Services d’aménagement
580-2424,ext.25659,
ned.lathrop@city.ottawa.on.ca
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Ref N°: ACS2002-DEV-POL-0011
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SUBJECT: DEFERRAL
OF FEES – HOLMSTEAD HOLDINGS –
CASTLEFRANK ROAD AT CAMPEAU DRIVE
OBJET: REPORT DE DROITS
– HOLMSTEAD HOLDINGS – CHEMIN CASTLEFRANK, À L’ANGLE DE LA PROMENADE CAMPEAU
REPORT RECOMMENDATION
That the Corporate Services
and Economic Development Committee recommend Council agree to defer the payment
of development charges and building permit fees for the rental housing project
owned by Holmstead Holdings on Castlefrank Road at Campeau Drive for a period
of 24 months from the date of issuance of each building permit, with no
interest penalty.
RECOMMANDATION DU RAPPORT
Que le Comité
des services organisationnels et du développement économique recommande au
Conseil municipal d’accepter de reporter le paiement des redevances
d’exploitation et des droits de permis de construction, imputables au projet
d’habitations à loyer appartenant à Holmstead Holdings, sur le chemin
Castlefrank, à l’angle de la promenade Campeau, pendant une période de 24 mois
à compter de la date d’émission de chaque permis de construction, sans pénalité
d’intérêt.
BACKGROUND
Holmstead Holdings is in the
process of developing a major rental housing complex at the intersection of
Castlefrank Road and Campeau Drive in the former City of Kanata. The project
consists of three buildings, each fifteen stories in height, which will contain
a total of 360 units when completed. The property is located in the Central
Business District of the Kanata Town Centre. The developer has approached the
City to defer the development charges and building fees associated with the
project for a period of two years. This would not include payment of the Terry
Fox/Campeau Drive storm sewer levy or education development charges.
The reason for the request
relates to the financial hardships associated with high-rise rental housing
development in a climate of high construction costs.
DISCUSSION
Strong employment-driven
population growth over the last five years, particularly in the west-end of the
city, combined with a steady decline in new rental housing starts, has
significantly reduced the availability of rental housing in Ottawa. This is
reflected in the current rental vacancy rate of 0.8% in October, 2001 for
Ottawa, well below the 3% level indicative of a healthy rental market, and one
of the lowest rates in the country.
A healthy rental market is needed
to sustain a healthy local economy. However, the private sector has been
reluctant to undertake new rental projects as it involves relatively high risk
compared to other forms of housing, and based on current building costs, new
rental housing is not deemed to be profitable. High-rise non-combustible
construction, as in the case of the Holmstead project, requires the use of concrete
which is considerably more expensive than wood frame construction. Any
assistance the city provides would help defray the up front cost of
construction until the buildings are completed and occupancy permits are
issued. Twenty-four months from the time of issuance of the building permit is
considered adequate time for this to occur.
The three new towers will be a
welcome addition to the streetscape of the Kanata Town Centre. The official
plan of the former City of Kanata states that the Central Business District of
the Kanata Town Centre “ is to become an urban place that provides the primary
employment, civic and cultural focus for Kanata, complemented by higher density
residential uses”. The new rental project is in keeping with the high density
land use designation and is conveniently located in close proximity to the
transitway. The new residential units will support the housing needs of the
local high technology work force. It is important for existing and potential
employees to have access to a range of housing types and tenures and this has
been lacking in the west end. This will be the first high-rise rental housing
in the area and hopefully will encourage other builders to consider doing
similar projects. The deferral of the various charges cited in the
recommendation is considered an experiment to promote new high-rise rental
housing in areas where there is a shortage such as in the west-end of the
city. Staff recommend approval of the request for the deferral of development
charges and fees for the subject property.
CONSULTATION
As this is an administrative
matter, public consultation is not required.
FINANCIAL IMPLICATIONS
The following development charges
and building permit fees associated with Tower A only (Towers B and C have yet
to progress to building permit application stage) will be deferred for
twenty-four months. Based on these figures it is expected that similar amounts
for Towers B and C will be deferred.
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Fee/Charge
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# of units
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Rate
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Subtotal
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Total
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RMOC DC
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2 (1BR)
118 (2BR)
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3453/unit
5428/unit
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6,906
640,504
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$647,410
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Kanata
DC
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2
118
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2452/unit
3855/unit
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4,904
454,890
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$459,794
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Kanata Town Centre
Sanitary Sewer Levy
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2
118
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211/unit
332/unit
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422
39,176
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$39,598
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Building permit Fee
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$10.50/$1000 based
on
$8,343,315
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87,604.81
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$87,604.81
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$1,234,406.80
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The proposed deferral of fees for Tower A amount to $1.2
million. See the table above. The lost interest income on this revenue
amounts to approximately $95,000 over the 24 months of deferral.
ATTACHMENTS
Document 1- Location Plan
DISPOSITION
Legal Services shall prepare and register against title an
agreement to recognize the deferral and provide for the ultimate payment.
Document 1
Location Plan
