Consultation Bayview to Baseline – 2009 - 2013

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Study design

The City of Ottawa is moving forward with the preparation of a Planning and Environmental Assessment (EA) Study for the expansion and improvement of its rapid transit network to accommodate existing and future demand. The intent of this expansion would be to support the objectives of the City’s Transportation Master Plan (TMP), and existing land uses and future development established in the City’s Official Plan (OP). The proposed Western Light Rail Transit Corridor (WLRTC) project is a primary component of the City’s overall plan for transportation service and infrastructure improvements required to support future growth.

This study will be conducted in two major phases: a Project Planning Phase and a Project Environmental Assessment Phase. The Planning Phase will rely and build upon previous planning work to determine a preferred route for an LRT facility between downtown Ottawa and Baseline Station that will maximize ridership and support the OP and TMP transit mode split and development targets in a cost-effective manner.

The Project Environmental Assessment (EA) Phase of the study will consist of a co-ordinated EA that meets the requirements of the new “Transit Project Assessment Process” (Ontario Regulation 231/98) under the Ontario Environmental Assessment Act (OEAA) and the requirements of the Canadian Environmental Assessment Act (CEAA). This EA will document the potential effects of the project on the environment, including any mitigation necessary to offset negative impacts.

The recommended TMP rapid transit network was approved by City Council in November 2008 and forms the basis for the need, justification and preferred solution for the proposed WLRTC project. However, as part of the approval for the scope of work for the WLRTC Planning and Environmental Assessment Study, Council directed that alternative corridors be further reviewed as part of the WLRTC Planning and Environmental Assessment Study to determine the most appropriate corridor for rapid transit between downtown Ottawa and Baseline Station.

Project Study Area

The study area for the WLRTC Project is generally from Bayview Transitway Station in the east to Baseline Transitway Station in the west/southwest. The study area highlights consideration of:

  • The role of Tunney’s Pasture Station as either a temporary or permanent terminus for LRT;
  • The potential role and function of Bayview Station as a transfer station between LRT, BRT and interprovincial rapid transit services;
  • The role and function of Lincoln Fields station as a transfer station between BRT and LRT;
  • The ability to accommodate BRT and LRT services in a single rapid transit corridor between Lincoln Fields and Baseline Stations; and
  • The long-term future of the Ottawa River Parkway, Richmond/Byron, Carling Avenue and other potential rapid transit corridors between Bayview and Baseline Stations.

Study Goals

The key goals for this study are to:

  • Undertake a review of the transit ridership forecasts and network assumptions contained in the 2008 TMP update to determine the appropriate rapid transit service for the study area;
  • Complete a planning study to determine the preferred alignment for an LRT facility that will support the urban development and land use objectives identified in the OP and Community Design Plans, and the TMP mode split targets, as well as relevant provincial, NCC and federal plans, strategies and policies;
  • Coordinate federal and provincial EA requirements and document the project’s impacts on the environment, including any mitigation necessary to offset any negative impacts, and;
  • Reach and proactively consult all stakeholders and the public during the planning and environmental assessment phases so they can effectively contribute to the decision-making process.

Consultation Groups

There will be three Consultation Groups involving community, business, and government agencies. These Consultation Groups will meet seven times and there will be a meeting in advance of each Public Open House. Consultation Groups will provide input, opinions and interactive dialogue with the Study Team. They will assist the City in advancing the study, but will not be the sole source for public and other stakeholder input.

Agency Consultation Group

  • An Agency Consultation Group (ACG) will be formed to address the full range of technical issues and to comment on all of the special studies required to fully assess the various alternatives and to ensure that the City is following the correct procedures, legislation and addressing appropriate policies. ACG members will include experts in their related fields from government agencies and approval bodies

Public Consultation Group

  • A Public Consultation Group (PCG) will be formed to enable community and special interest groups to provide direct input to the study and comment on both local and City wide issues and concerns. Information reports will be shared with the PCG to facilitate understanding and to enable the PCG to provide meaningful feedback.

Business Consultation Group

  • There are many business, commercial and institutional interests within or adjacent to the study area that may be affected by this undertaking. Accordingly, a BCG will be established to enable these groups to provide input to the study, and comment on issues of concern.

General Public

  • Every person or organization that has an interest in the Study will be given opportunities to learn about and participate in the study process through various means including Open Houses and through the use of the City’s project website.

The full Study Design and Schedule Document is available upon request from the Project Manager.

White Paper - Funding Potential from Carling Ave LRT

The purpose of this paper is to determine whether building the western extension of the rapid transit system on Carling Avenue would result in additional tax revenues and development charges (DCs) being raised from increased development along the corridor, or from the value uplift from properties along the corridor in sufficient value to pay for the City’s portion of the costs.

  • The cost of building a rapid transit system on Carling Avenue is estimated to be between $2.1 billion and $2.4 billion in current dollars.  Assuming two-thirds funding from the other two levels of government this would require between $700 million to $800 million to be funded by the City.  As the City funds would be required during construction, debt would need to be issued for the City portion and repaid over a 30 year period.  At an interest rate of 4.5 per cent the yearly debt repayments required would be from $43 million to $49 million per year.  Therefore the future stream of revenues would need to be sufficient to cover this amount of yearly debt servicing. 
  • The Long Range Financial Plan for Transit[i], which assessed overall affordability up to 2048, identified $7 billion for all growth related transit capital works by 2031.  This included $4 billion for LRT projects, including the $2.1 billion Confederation Line, leaving approximately $2 billion for all other LRT projects.  The estimated cost of rapid transit on Carling would therefore mean that no other LRT works would be able to be advanced during the time period or Bus Rapid Transit projects planned during that time period would need to be cancelled.
  • The analysis in this paper has ignored the mismatch in timing between the receipt of the revenue streams and when the yearly debt repayments would start.  This mismatch would be significant as debt would start to be repaid in the year after issue, whereas development would happen over a very long time horizon.  The analysis does not consider using the revenue streams from the taxes and DCs as mechanism by which to issue a bond as the City currently has no authority to issue this type of bond.  In addition the work done by KPMG[ii] for the City of Toronto estimated that issuing a bond based on the forecasted streams of revenue would result in significant discounting given the amount of risk associated with those revenue streams.
  • The development of a rapid transit system does not increase the City’s population or the amount of employment and therefore does not increase the overall taxes or DCs that can be collected.  The impact of a rapid transit system is to change where that population or employment growth will take place in the City.  In other words, the same amount of DCs and taxation from new development will still be collected, but now they may be collected from areas around the light rail corridor instead of from new suburbs.
  • In terms of development potential around Carling Avenue, the Economics division of the Planning and Growth Management Department identified vacant or underused parcels of land within 600 meters of the Carling Avenue line that would likely be redeveloped over a 20 year timeframe and to final build-out. The potential development was then quantified and an assessment value determined and tax revenue calculated.  In addition the increase in the number of households and gross floor area of industrial, commercial or institutional that would result from this development was also calculated.  
  • Carling Avenue, from the start of the line at Preston Street to the South West Transitway, is already fairly well developed.  A review of the existing development shows significant commercial development including shopping centres and office towers.  There are also a large number of multi-residential buildings along the corridor and large institutional properties such as the hospitals.  In addition the federal government owns significant land, such as the Experimental Farm which fronts onto Carling Avenue. 
  • The analysis identified 125 properties in the corridor that have development potential.  These have been categorized according to size and ownership and the development potential determined based on Official Plan policy.  In many cases Official Plan policy contemplates zoning greater than current zoning.
  • Overall potential new development could raise approximately $3.4 million (Appendix 1) of new tax revenue per year by the 20 year time period.  As new developments require services, paid for by property taxes, these new tax revenues are not all available to fund the rapid transit debt servicing.  Based on the work conducted by Hemson Consulting[iii] to quantify the fiscal impact of growth in various areas of the City, the taxes raised from development within the greenbelt would exceed the cost of services by approximately $280 /capita.  Using the population increase forecast by the Planning Branch for the area around Carling Avenue, the revenues generated from residential development above the cost of services result in additional yearly tax revenue of $819,000.  Adding in the same pro-rated share of tax revenue for the new commercial and retail properties increases this value to $1.3 million.  Hemson Consulting also noted that as the City does not re-invest in its existing infrastructure at an appropriate level, any additional taxation revenues should be directed to deal with the existing infrastructure deficit.
  • In order to fund the debt servicing of $43 million to $49 million from the $280 /capita of taxes on new residential development alone would require more new residents to move into the Carling Avenue zone than is forecasted over the next 10 years for all of Ottawa.
  • With respect to DCs the developable lands identified above were used to generate the portion of the DCs that would be raised for transit growth projects.  As stated before these are not incremental development charges as the growth is not incremental and would have been included in the Development Charges Background study that establishes the charge.  In total $4.5 million of development charges for transit purposes could be raised over the 20 year period.  This equates to an average of $225,000 per year.
  • The amount of DCs raised to support transit projects is not particularly large as a result of limitations with the Development Charges Act with respect to Transit.  The current legislation limits the value of transit growth projects that DCs can be raised for, to the 10 year historical investment.  This does not allow changes in service delivery, which are typically higher than the historical average, to be funded from DCs.  Moving from the lower capital investment of buses on roads to the higher capital costs required to implement light rail cannot be fully included under the current Development Charges Act.   In addition the legislation requires a mandatory 10 per cent of transit capital costs to be funded from the municipality.  The result is that the only roughly one-third of the one-third municipal portion of light rail projects can be funded from DCs. In contrast the legislation allows 95 per cent of roads to be funded from DCs.  The Province would need to amend the legislation to allow more DCs to be generated for Transit.  The limited value of DCs in Ottawa is consistent with the revenue tools analysis recently completed by KPMG[iv] for Metrolinx.
  • The last issue was to determine the potential increase, or uplift, in the value of the properties along Carling Avenue as a result of LRT.  Various studies[v] have shown that properties along a rapid transit line have lower vacancy rates, higher rents, and higher property sale prices which increase property values and maintain them during recessions.  Based on the work done in 2011 by CPCS Transcom[vi] Ltd for the City, the medium estimated uplift would be 19.6 per cent more than properties located elsewhere in the City.  These uplift percentages were estimated by Metrolinx for properties 600 meters around the stations of a grade separated rapid transit system.    This estimated uplift is significantly higher than the 4 per cent assumed uplift in the recent studies undertaken for Hamilton[vii] and Toronto[viii].
  • Under the current tax legislation municipalities are required to reduce the tax rate by the average change in assessment values as a result of reassessment making the increase in property values revenue neutral to the City.
  • If there was a mechanism to allow the City to capture this uplift, and not lose it through the setting of property tax rates, the increased commercial property values in the 600 metre zone along Carling Avenue would generate $2.7 million in additional yearly taxation revenue while the residential properties would generate $5.7 million.  This would result in the residential properties in the zone paying an additional $787 per year in property taxes to support this capital investment.  Another mechanism that could be used, but also requires Provincial approval, is the use of Tax Increment Financing (TIF) zones.   KPMG[ix] in their evaluation of revenue tools for Metrolinx rated the revenue potential as below average (2 out of 5) and described the process as complicated required significant administrative and legislative input. 
  • In summary, the three potential revenue streams do not provide the City with sufficient revenue to service the debt that would need to be issued to undertake a rapid transit system along Carling Avenue.  At most these revenue tools could provide 20 per cent to 23  per cent of the funds needed provided that the Province gave the ability to capture the value uplift.
  • Summary Table
Yearly Debt Servicing Requirements of $700M to $800 M Yearly Tax Revenue from New Development above cost of services Average Transit Development Charges raised/yr Yearly Tax Revenue from Value Uplift on existing properties
$43 M - $49 M $1,300,000 $225,000 $8,400,000
Appendix 1 - Development and Revenue Projections for Carling LRT
Development 10 yrs 20 yrs Build-out*
Households 700 1,950 6,500
Jobs 600 1,650 6,000
ICI Gross Floor Area (80 per cent office) 144,000 396,000 1,440,000
Population @ 1.5 persons/hhld 1,050 2,925 9,750
Tax revenue/year by category      
per apartment $1,135.00 $1,135.00 $1,135.00
per office sq. ft. $2.75 $2.75 $2.75
per retail sq. ft. $4.40 $4.40 $4.40
DC rates (transit portion)      
per apartment $1,600.67 $1,600.67 $1,600.67
per office sq. ft. $3.30 $3.30 $3.30
per retail sq. ft. $4.07 $4.07 $4.07
Carling LRT - Taxes 10 yrs 20 yrs Build-out
Apartments $794,500 $2,213,250 $7,377,500
Office $316,800 $871,200 $3,168,000
Retail $126,720 $348,480 $1,267,200
Total tax revenue, annual $1,238,020 $3,432,930 $11,812,700
Carling LRT - Dev Charges 10 yrs 20 yrs Build-out
Apartments $1,120,467 $3,121,300 $10,404,333
Office/retail $ 497,376 $1,367,784 $4,973,760
Total DC revenue $1,617,843 $4,489,084 $15,378,093
*Note: “Build-out” could be in the range of 80 to 100 years.

[i] Transit LRFP July 2011 per cent20LRFP per cent20Transit

[ii] KPMG , Sheppard Subway Extensions – Analysis of Funding Options for Toronto Transit Infrastructure Limited and the City of Toronto, Nov 7, 2011

[iii] Hemson Consulting Ltd., Update to Comparative Municipal Fiscal Impact Analysis, March 14, 2013

[iv] KPMG, Metrolinx Big Move Implementation Economics Revenue Tool Profiles 

[v]CPCS Transcom Limited, Ottawa Light Rail Transit (LRT) Economic Impact Study, August 25, 2011 per cent20LRT per cent20Economic per cent20Uplift.pdf

The Centre for Neighbourhood Technology for APTA and the National Association of Realtors, The New Real Estate Mantra- Location Near Public Transportation, March 2013.

[vi] CPCS Transcom Limited, Ottawa Light Rail Transit (LRT) Economic Impact Study, August 25, 2011 per cent20LRT per cent20Economic per cent20Uplift.pdf

[vii] Canadian Urban Institute, Hamilton B-line Value Uplift and Capture Study, June 2010 

[viii] Report of the Expert Advisory Panel Regarding Transit on Sheppard Avenue East, march 15, 2012

[ix] KPMG, Metrolinx Big Move Implementation Economics Revenue Tool Profiles (See iv)

Study area

The study area is limited by the Ottawa River on the north side, Carling Avenue on the south side, O-Train on the east side, and the South-West Transitway on the west side. The study area includes three potential corridors, the Ottawa River Parkway, the Richmond/Byron and the Carling Avenue corridors.

Some tasks will require examination of a broader area beyond these limits in order to address environmental impacts; operational issues; to coordinate with relevant on-going studies and projects; and to study possible future network connections. Therefore, the study area will be confirmed early in the process.