Report to/Rapport au :

Planning and Environment Committee

Comité de l'urbanisme et de l'environnement

19 March 2010 / le 19 mars 2010

Submitted by/Soumis par : Nancy Schepers, Deputy City Manager/Directrice municipale adjointe, Infrastructure Services and Community Sustainability/Services d 'infrastructure et Viabilité des collectivités

Contact Person/Personne ressource : John L. Moser, General Manager / Directeur général

Planning and Growth Management/Urbanisme et Gestion de la croissance

(613) 580-2424 x 28869, john.moser@ottawa.ca

City Wide/à l'échelle de la Ville

Ref N°: ACS2010-ICS-PGM-0075

SUBJECT:	PLANNING INNOVATION: A POLICY SUMMIT - OUTCOMES AND ACTION PLAN
OBJET :	Innovation en matière d'aménagement : Sommet stratégique – résultats et plan d’action

REPORT RECOMMENDATION

That the Planning and Environment Committee receive this report for information.

RECOMMANDATION DU RAPPORT

Que le Comité de l'urbanisme et de l'environnement prenne connaissance du présent rapport.

BACKGROUND

On February 18, 2010 the Planning and Growth Management Department hosted "Planning Innovation: A Policy Summit." This half-day session focused on reviewing policy tools within the Planning Act that the City, the community, and the development industry could act upon to realize the goals of the Official Plan.

In particular, the Summit focussed on advancing a program that would allow for additional height and density in return for community benefits; a grant or financial program aimed at assisting in the preservation of heritage façades or designated heritage buildings; and a program aimed at redoubling efforts to develop Ottawa’s employment lands.

The purpose of this report is to provide a summary of the outcomes of the Summit and an action plan to implement the findings.

DISCUSSION

An "As It Was Heard" summary of the Summit's proceedings can be seen in Document 2; however, the key outcomes from the discussion of each issue have been summarized below.

Issue #1: Implementation of Height and Density Incentives/Conditional Zoning in Exchange for Community Benefits

Section 37 of the Planning Act provides municipalities with the authority to share in the increased value (economic uplift) that may result from the increased height and/or density of a development project. The legislation contemplates an exchange of height and/or density for community benefit in the context of good planning and under conditions set out in the Official Plan. Essentially, a developer receives something of value, and the intention is that the municipality receives something of value in return. The legislation however provides little guidance other than the requirement for a municipality to have a provision in its Official Plan relating to the authorization of increases in height and density of development for this purpose.

Discussion at the Summit focussed on the role that the City, the developer, and the community would play in implementing a Section 37 agreement, and in particular the definition of the community benefit, as well as what types of density or height for which development applications would require an agreement. The prevailing sentiment was that while such a program may have value, the City should first ensure that the Intensification Priority Areas, as identified in the Official Plan, have the appropriate zoning in place to permit the as-of-right height or density. To do this, a number of Community Design Plans and Secondary Plans must be re-assessed, along with the areas along the LRT corridors identified in the Transportation Master Plan.

Action to be undertaken:

The Department will review the zoning on Arterial Mainstreets, Mixed Use Centres, and Suburban Town Centres to develop zoning mechanisms to implement minimum density targets; revise performance standards to implement a more urban form of development; and revise parking standards to make them secondary to the achievement of minimum density targets. This work will be undertaken through to 2013, with full Ward Councillor and community consultation.

Issue #2: Implementation of Tax Incentives, Policies, or Grant Programs to Encourage the

Retention and Restoration of Built Heritage Resources as Part of New Development

There are a number of potential benefits to the City and property owners that could be generated by a Heritage Tax Rebate Program. Receiving a 40 per cent refund on the City and Educational portion of property taxes may encourage more property owners to agree to designate their properties and enter into Heritage Easement Agreements, thus ensuring that significant built heritage resources are conserved and protected in perpetuity. A Heritage Tax Rebate Program could serve as an effective and unique incentive to attract investor interest to some of the City's historic properties, which may also be targeted for restoration and adaptive re-use.

The program could leverage new interest in the revitalization of vacant or underutilized designated heritage properties.

At the Summit it was argued that a grant program, even if financially viable for the City, would provide little or no direct financial benefit to the developer. Instead, it was concluded that the City would be more effective in achieving its goals by entering into Section 37 agreements with the development industry that would go beyond the preservation of building façades to ensure that buildings in their entirety are incorporated into new development in return for height or density benefits.

Action to be undertaken:

The Department will investigate the creation of a heritage conservation program using Section 37 agreements and report back to Planning and Environment Committee in Q2 2010. City staff will be meeting with City of Toronto planning staff to learn more about Toronto’s successful use of Section 37 in heritage planning.

Issue #3: The City of Ottawa’s role in the development of Employment Lands

A key to realizing the economic development potential of a municipality is the analysis of employment lands, that is, those lands designated in an Official Plan to accommodate activities including manufacturing, warehousing, offices and associated retail or services. Ottawa has a strong history of major office development in business parks considering its history as a destination for high technology companies. However, there is a disturbing trend as employment land consumption is declining despite what is deemed to be an adequate 25-year supply of employment lands. Ottawa has a history of converting employment lands to non-employment uses (residential and retail) and has lost 35 per cent of its vacant employment land supply since 2001.

Discussion at the Summit focussed primarily on the role that Federal government office accommodation has in Ottawa. In particular it was noted that Public Works and Government Services Canada (PWGSC) does not have a history as a community partner, and therefore has not been fully engaged with the City or the community in pursuing mixed-use redevelopment of its underutilized properties (e.g. Tunney’s Pasture, Confederation Heights, Booth Street complex). It was argued that with a very limited supply of employment lands within the Greenbelt that the City should be undertaking a leadership role in working with the Federal government to redevelop its properties.

Action to be undertaken:

Staff of the Planning and Growth Management and Community Sustainability departments will join with Members of Council in meeting with PWGSC officials and Ottawa-area Members of Parliament with the aim of pursuing joint planning exercises on selected Federal lands within the Greenbelt.

RURAL IMPLICATIONS

There are no rural implications related to this report.

CONSULTATION

The Planning Innovation Policy Summit was attended by 45 individuals, including representatives from community organizations, Ottawa's development industry, and Members of Council.

COMMENTS BY THE WARD COUNCILLOR(S)

N/A

LEGAL/RISK MANAGEMENT IMPLICATIONS

There are no legal/risk management implications associated with this report.

CITY STRATEGIC PLAN

Planning and Growth Management Priority: Encourage the development of existing employment lands to promote job creation and minimize infrastructure costs.

Planning and Growth Management Priority: Manage growth and create sustainable communities.

TECHNICAL IMPLICATIONS

N/A

FINANCIAL IMPLICATIONS

N/A

SUPPORTING DOCUMENTATION

Document 1 Planning Innovation: A Policy Summit - Backgrounders

Document 2 Planning Innovation: A Policy Summit - Outcomes "As It Was Heard"

DISPOSITION

Staff will implement the outcomes of the Summit in accordance with the actions outlined in this report.

PLANNING INNOVATION: A POLICY SUMMIT - BACKGROUNDERS DOCUMENT 1

PLANNING INNOVATION: A POLICY SUMMIT – OUTCOMES

"AS IT WAS HEARD" DOCUMENT 2

Planning Innovation: A Policy Summit – “As It Was Heard”

Issue #1:

Implementation of Height and Density Incentives /

Conditional Zoning in Exchange for Community Benefits

• The current environment is one of regulation and persuasion. Section 37 can be implemented today - examples from Toronto and New York were noted where cultural benefits were provided in exchange for increased height and/or density.
• The City needs to identify what social benefits are needed, and the incentive needs to be good enough to be worth the trade-off.
• Discussions must occur upfront with the community (either by the City or by the developer) to agree on what benefits would be desirable to avoid arguments and each community must define their own list of benefits.
• It is a partnership between City and developer. It is important to have certainty in the outcome (as a right) and that a list of desired benefits be developed and provided which can be used. Developers do not want to negotiate with community groups for benefits. The role of the City is to represent a balanced approach.
• Discussions cannot slow the development approvals process.
• The height in the Downtown is very important as a National Capital to protect key views of the Peace Tower and was the reason for the original height limits which were developed in the old City of Ottawa Official Plan and retained in subsequent Official Plans. The NCC will continue in its role to maintain existing height limits to protect key views of the Peace Tower and will work to sustain these principles in the City’s Official Plan.
• Requires political will and leadership as this will be a major change to the way that planning is done in Ottawa.
• There is a concern that City is promoting more height and density but now requiring developer to “pay more”
• Benefits to the development industry must be shown. Otherwise why not proceed directly to the Ontario Municipal Board to get the height or density rather than proceed with a Section 37 agreement.
• The Zoning By-law must be updated to reflect the new density targets of the newly-approved Official Plan.
• This concept should be pursued to see how this instrument can assist applications that exceed the Zoning By-law.
• Ottawa lacks a civic presence (cohesive identity). Ottawa keeps dealing with firefights, but has no central vision.

Issue #2:

Implementation of Tax Incentives, Policies, or Grant Programs to Encourage the Retention and Restoration of Built Heritage Resources as Part of New Development

• The City can’t spend money on everything so has to be more creative as to where it does spend. To preserve buildings or facades in their entirety, tradeoffs could be given to the developer that will allow them to maximize the return on their properties through the use of density bonusing through s. 37 or allowing them to sell density bonus credits to other developers.
• There is a need for significant bonusing to ensure retention of heritage resources – a 40 per cent tax rebate is insignificant given the property tax amounts.
• If the developer and property owner are not the same person, how would any benefit be passed along to the developer through a grant program, especially if the taxes are paid by the tenant?
• City should consider low-interest loans to retain heritage buildings in their totality.
• Discussion should not be about preserving facades, should be about preserving buildings in their entirety.
• Rather than offer a grant program, City should consider allowing offices on ground floor in Centretown and Lowertown as an offset to preserving heritage buildings.
• The community will get further behind heritage preservation if beautiful heritage buildings in Ottawa are opened to the public – e.g. old Ottawa Train Station.

Issue #3:

The City of Ottawa’s role in the development of Employment Lands

• Ottawa has less than five years of undeveloped land left in the downtown core for Employment lands and 12 – 15 sites within the Greenbelt. Gatineau doesn’t have much employment land left either. The future is with vacant federal land and on underutilized sites in the downtown core that are ripe for redevelopment.
• Federal government is good at administration, the City is good at urban planning, transit, and transportation, and developers are good at building, therefore we should combine our efforts and make federal lands developable.
• The City should have a senior staff position or lobbyist to represent City’s interest with federal agencies. Dealing with federal officials is complex and difficult.
• Public Works and Government Services Canada (PWGSC) does not have a history as a community partner and therefore has not been fully engaged with the City or community in pursuing mixed use redevelopment of their underutilized properties (e.g. Tunney’s Pasture, Confederation Heights, Booth Street complex). This is in part due to their administrative culture and Departmental mandate.
• City should offer its design expertise to assist with the redevelopment of key vacant land parcels in concert with the private sector such as Tunney’s Pasture/Confederation Heights as the Federal government is not in this business.
• Experience with PWGSC is that they are not able to lead where departments and agencies are to go – very much dictated by the geographic needs of clients.
• The private sector has a short term vision therefore vacant employment lands that have limited opportunity or interest for development are always going to be under pressure for conversion to a more marketable use (e.g. residential).
• Air-rights over the Transitway should also be examined as an opportunity for development however there are barriers to doing so due to the width of the Transitway that does not provide room for supporting columns and therefore requiring more expensive building techniques.
• Private sector will not develop employments lands until there is significant public investment to that area (roads, transit) Most of the available employment lands are in the wrong location and are not serviced or provided with readily available transportation solutions.
• The development industry does not want to be in the east; only the government can kick-start it.
• The City should not be pursuing the purchase of employment lands for resale and marketing as business parks lands. The City is not an expert in the employment land market and the market in Ottawa is very small therefore this is not a good use of City resources and investment.