HomeMy WebLinkAboutPSI Agenda - 2020-09-28
Planning & Strategic Initiatives Committee
Agenda
Monday, September 28, 2020
4:30 p.m. 5:30 p.m.
Office of the City Clerk
7:00 p.m. 7:30 p.m.
Kitchener City Hall
nd
200 King St. W. - 2 Floor
Electronic Meeting
Kitchener ON N2G 4G7
Page 1
Chair - Councillor S. Marsh Vice-Chair - Councillor P. Singh
Due to COVID-19 and recommendations by Waterloo Region Public Health to exercise physical
distancing, City Hall is open for select services. Members of public are invited to participate in this
meeting electronically by accessing the meeting live-stream video at kitchener.ca/watchnow.
While in-person delegation requests are not feasible at this time, members of the public are invited to
submit written comments or participate electronically in the meeting by contacting Sarah Goldrup,
Committee Administrator at sarah.goldrup@kitchener.ca. Delegates must register by 2:30 p.m. on
September 28, 2020, in order to participate electronically. Written comments will be circulated prior to
the meeting and will form part of the public record.
PART ONE - 4:30 p.m.
Delegations
Pursuant to s Procedural By-law, delegations are permitted to address the Committee for a maximum
of five (5) minutes.
None at this time.
Discussion Items
1. DSD-20-151 - District Energy Phase 2 Study (15 min)
(Staff will provide a 5-minute presentation on this matter.)
2. DSD-20-150 - Inclusionary Zoning for Affordable Housing (45 min)
(Staff will provide a 10-minute presentation on this matter.)
PART TWO - 7:00 p.m.
Delegations
Pursuant to s Procedural By-law, delegations are permitted to address the Committee for a maximum
of five (5) minutes.
None at this time.
Public Hearing Matters under the Planning Act (7:00 p.m. advertised start time)
This is a formal public meeting to consider applications under the Planning Act. If a person or public body that
would otherwise have an ability to appeal a decision of the City of Kitchener to the Local Planning Appeal
Tribunal, but the person or public body does not make oral submissions at the public meeting or make written
submissions to the City of Kitchener before the by-law is passed, the person or public body is not entitled to
appeal the decision.
** Accessible formats and communication supports are available upon request. If you require assistance to
take part in a city meeting or event, please call 519-741-2345 or TTY 1-866-969-9994 **
Planning &Strategic Initiatives
Committee Agenda Page 2 September 28, 2020
3. DSD-20-106 - ZBA/19/013/S/KA (30 min)
- 290 Sheldon Avenue
- Thresholds Homes and Supports
(Staff will provide a 5-minute presentation on this matter.)
Information Items
None
Sarah Goldrup
Committee Administrator
** Accessible formats and communication supports are available upon request. If you require assistance to
take part in a city meeting or event, please call 519-741-2345 or TTY 1-866-969-9994 **
REPORT TO:Planning & Strategic Initiatives Committee
DATE OF MEETING:September 28, 2020
SUBMITTED BY:Justin Readman,General Manager,Development Services
519-741-2200 ext. 7646
Denise McGoldrick, General Manager,Infrastructure
Services 519-741-2200 ext.4657
PREPARED BY:Tim Donegani, Senior Planner 519-741-2200 ext. 7067
WARD(S) INVOLVED:9 & 10
DATE OF REPORT:September 168,2020
REPORT NO.:DSD-20-151
SUBJECT:DowntownDistrict Energy Pre-FeasibilityStudy and
Business Case
RECOMMENDATION:
THAT staff be directed to develop a business case for a Downtown district energy system;
and further
THAT staff be directed to submit aGreen Municipal Fund Feasibility Study grant
applicationto helpfund the Downtown district energy business case development.
BACKGROUND:
In 2018, the Regionof Waterloo, area municipalities and local energy service providers
approved the Community Energy Investment Strategy (CEIS). Its goal isto improve the
targeted energy investments. It seeks to integrate economic and environmental thinking,
to transform the energy system of the region;and reduce energy use and greenhouse
gas emissions (GHGs)by 80% by 2050. The CEIS Governance Committee identified
district energy as one of three priority actions for the first three years.
Consideringthe impacts of climate change,andnational, regional and City commitments to
action,Council declared a Climate emergency in 2019 and directed continued support of
corporate and community climate initiatives to reduce greenhouse gas emission by 80% by
2050.
Further, in March 2019throughreport DSD-19-047, council resolved:
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
1 - 1
That the results of the FCM/GMF Feasibility Study: Municipal Tools for Catalyzing
Net-Zero Energy Development be used to conduct specific business cases, establish
targets and engage with landowners for one or more pilot projects for:
-Areas undergoing significant redevelopment, such as the King/Victoria
area
-The planning of new communities or neighbourhoods
District energy (DE) is aprovenandsimple technology. Heat and cold is generated at a
centralized plant and then circulated to customers through piped hot and cold water.
District Energy systems existinmany large to mid-size municipalities including Windsor,
London, Hamilton, Markham andToronto.While there are many economic
development, cost and energy security benefits. Itprovidesa flexible thermal energy
backbone that enablesgreen solutions that are not available to individual building-level
HVAC systems.
Ground source heat pumps, also called geothermal energy, use electricity (from the
-carbon electrical grid) and steady ground temperatures to efficiently
produce heating and cooling for buildings. When paired withaDEsystem, itproduces
far fewer GHGs than conventional HVAC systems.Geothermal systems are only
successful under certain underground conditions, including those found under
downtown Kitchener.
REPORT:
The CEIS governance committee and its administering organization, Waterloo Region
Community Energy,hired a consultant (FVB)to study the feasibility of a district energy
pilot projectcentred around the King/Victoria intersection.That Phase 1 Pre-feasibility
study is included as AppendixA.
Phase 1 Pre-feasibility Study Findings
2
The study found that 450,000 m(4.5millionsquarefeet)of forecasted new floor
space is sufficient to support a DE system.
Sixenergy centre concepts were evaluatedas shown in Table 1:
Table 1 Downtown District Energy Prefeasibility study highlights
hƦƷźƚƓ /ğƦźƷğƌ ЋЎΏǤĻğƩ bĻƷ tƩĻƭĻƓƷ DID ǝƭ
LƓǝĻƭƷƒĻƓƷ LƓƷĻƩƓğƌ ğƌǒĻ θЍі .ǒƭźƓĻƭƭ ğƭ
Λυ ƒźƌƌźƚƓƭΜ wğƷĻ ƚŅ ΛυƒźƌƌźƚƓƭΜ
ƭǒğƌ
wĻƷǒƩƓ ΛƷƚƓƓĻƭΉǤƩΜ
1 - Conventional Gas Fired Boilers/Electric 37.6 8.9% 20.7 692
Chillers
1A - Option 1 Plus Combined Heat and 39.4 8.9% 21.2 -195
Power
2 - 46.9 5.3% 5.8 5,115
2
1 - 2
2B - Option 2 Plus Combined Heat and 48.7 5.4% 6.4 4,228
Power
3 - 51.8 4.3% 1.5 5,115
3C - Option 3 Plus Combined Heat and 53.6 4.4% 2.0 4,228
Power
Staff recommend further study of Option 2-Adistrict energy system paired with an
open loop Ground Source Heat Pump (GSHP) that reduces GHGs by 53% (5,000
tonnes annually)andhas an internal rateof return of 5.3%.Construction of option 2
requires a $47mcapital investmentover time-$20m in the first phase.Financial
estimates are class D indicative (+/-50%) and need to be refined.
Load assumptions in this study are conservative;most forecasted load is on publicly
owned landthat is slated for future development.Additional customerscould be
connected including private development and retrofits of existing buildings (e.g. City
Hall). This would yield additional financial, economic development and environmental
returns.
The Opportunity
Environmental
The Study shows that GHGswould be half of business as usualemissions.As the
district energy system grows, it enables more renewables, thermal storageand waste
heat recovery to advance climate objectives.According to FVB president and CEO,
Richard Damecour,you cannot meet your climate targets without district energy.
Furthermore, district energy systemscan be used to meltsnow onnearby roads,
sidewalksand trails. This can reduce salt application,improvewater qualityandprovide
active transportation benefits.
Economic Development
District energy brings the potential for broad and important economic development benefits
including:
Local construction and operationaljobs
Keeps more energy dollars localThe CEIS found that $1.8B energy dollars leave
the region every year.
Tailored heating and coolingsolutions such as server cooling for tech firms or heating
for biotech sectorscan help attractthese firmsto collocate near DE systems
Less upfront HVAC cost and ongoing liability for building ownersand operators
Eliminating HVAC equipment can free up building space for other usessuch as
parking or rooftop patiosand allow for a flexible floor plate for incubators and
accelerators
A district energy system can help attract and catalyse green economy firms
3
1 - 3
Recent growth has put significant strain on the electricaldistribution system
Downtown.The efficiency and thermal energy storage possibilities of a DE system
canhelp delayor avoid therequired hydroelectric transmission investment.
Adaptation and Resilience
System uptime and avoided interruptions-District energy systems are extremely
reliableandcan continue to provide service during electrical orgas system outages.
District energy enables fuel switching (e.g. from natural gas to renewables)in
response to environmental of financial pressures.
Prepareforthe uncertainfutureof natural gas andcoming legislationaimed at
lowering the carbon emissions of industry.
It is important to move quickly on this opportunity because of the pace of Downtown
development. The more time that passes beforeimplementing a DE system can mean that
morepotential customers willbe missed and benefits foregone.
Phase 2 Business Case Study
Staff are seeking direction to pursue a phase 2 business case.This would:
Confirm phasing, customers, conceptual system design and cost estimates(+/-10%)
Determine how the systems will be financed.The positive rate of return,
environmental, resilience and economic development benefits make this project
interesting to potential investors including:
o Green Municipal Fund loan up to ~$10m (15% forgivable)
o Private investors including impact investors
o City, Kitchener Utilities, Kitchener-Wilmot Hydro, Waterloo Region and the
Province
Confirmthe owner/operator model and establish asuitable governancestructure
Set strategy,timing, pricing, marketingand contractconcepts. This will help articulate
the service offeringnecessaryto attract and secure customers
Include a cost/benefit analysis to quantify qualitative benefitswhere possible
Include further hydrogeologic assessment to support an open loop ground source
heat pump
Provide policy recommendations
Engage with stakeholders including city,regional,Kitchener-Wilmot Hydro staff and
developers
Analyse risk including lessons learned from other district energy systems including
Ontario examples
Outlinethe implications of a Downtown DE system for a city-scale DE strategy
Staff areseeking direction to apply for an FCM grant to assist with study costs.
Kitchener Utilities and City Role
The Cityand/or Kitchener Utilities is emerging as strong potential candidate to lead the
Phase 2 study and an eventual business.experience in building and operating a
4
1 - 4
piped infrastructure network, customer management and enterprise business model are
allbeneficial.Consistent medium-term leadership is needed to bring aproject to
construction. KU is a trusted consistent institution that stakeholdersexpect to continue
in the long term.
alow carbon economy. ADE
system could help KU transitionsuccessfully to a low-carbon energy future.In 2022,
KUwill need to address the Federal Clean Fuel Standard which is proposing offset
credits for natural gas distributors.DE mayposition KU to purchasefewer carbon
creditsand transition to a lower-carbon operation.
A DE system is aligned with the climate and economic development objectives.
and mission is 20+ years old and needs to be
updated. A 10-year business strategy for KU is underwayand should be completed in
early 2021. Staff expect a DE system to align with and inform this new strategy. Adding
a district energy system to Kitchener Utilitiesportfolio would provide a significant
opportunity to diversify the utility toward a more sustainable local energy provider.
Nevertheless,project leadership, business structure and appropriate governancewill be
consideredthrough the phase 2 study.Planning, Economic Development and Regional
staff all need to be involvedas well.
Next Steps
Oct 2020 Green Municipal Fund Grant Application
Jan-June2021 Phase 2 Business Case Development
June2021Kitchener Council business decisionto proceed
July-Sept 2021Secure customer commitment
Q3 2021-Q3 2022Detailed Design
Q3 2022-Q1 2024Construction and Implementation
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Strategic Plan Goal: Environmental Leadership-Achieve a healthy and livable community by
proactively mitigating and adapting to climatechange and by conserving natural resources.
Strategic Plan Action: This work supports the Community Climate Action Plan schedule for late
2020.
Vibrant Economy -Build a vibrant city by making strategic investments to
support job creation, economic prosperity, thriving arts and culture, and great places to live.
Strategic Plan Action This work will inform the Bramm Yards Master planand Comprehensive
Review of City-ownedproperties.
5
1 - 5
FINANCIAL IMPLICATIONS:
The Phase 2 study isanticipated to cost $150,000to $200,000. $50,000 has been
earmarked in 2021 toward the Phase 2 study in the DC funded planning studies account.
Staff propose to allocate $40,000 from the Kitchener Demand Side Management
capital budget.
Staff are seeking direction to apply for a 50% matching grant from FCM. Ifthe application
is successful, the above noted funding sources are sufficient to cover the study cost.
If the grant application is unsuccessful, an additional$60,000-$110,000 will be required
to fund the study.That source is currently undetermined.
COMMUNITY ENGAGEMENT:
INFORM This report has been pagenda in advance of the
council/city meeting
PREVIOUS CONSIDERATION OF THIS MATTER:
None
REVIEWED BY:Claire Bennett,CorporateSustainability Officer
Greg St. Louis,Director, Gas and Water Utilities
Michele Kamphuis, Business Development and Conservation Strategist
Ruth-Anne Goetz, Senior Financial Analyst
Jonathan Lautenbach, Director of Financial Services
Matthew Day, Community Energy Program Manager, Waterloo Region
Community Energy
ACKNOWLEDGED BY:
Justin Readman, General Manager, Development Services
Denise McGoldrick, General Manager, Infrastructure Services
APPENDICES:
AppendixA: Kitchener Innovation District Community Energy System Pre-FeasibilityStudy prepared by
FVB
6
1 - 6
KitchenerInnovationDistrict
CommunityEnergySystem
PreFeasibilityStudy
DRAFTΑDecember20,2019
FINALΑJanuary31,2020
Submittedto:
CommunityEnergyInvestmentStrategy
Submitte
dby:
1 - 7
Informationcontainedhereinisconfidentialandmaynotbereleasedtoanythirdparty.
1 - 8
Disclaimer
ThisreporthasbeenpreparedbyFVBEnergyInc.TheinformationanddatacontainedhereinrepresentC.ƭbestprofessional
judgmentinlightoftheknowledgeandinformationavailableatthetimeofpreparation.FVBdeniesanyliabilitywhatsoeverto
otherparties,whomayobtainaccesstothisreportforanyinjury,lossordamagesufferedbysuchpartiesarisingfromtheiruse
of,orrelianceupon,thisreportoranyofitscontentswithouttheexpresswrittenconsentofFVBEnergyInc.
Thecostestimatesandanyestimatesofratesofproductivityprovidedaspartofthestudyaresubjecttochangeandare
contingentuponfactorsoverwhichFVBEnergyInc.havenocontrol.FVBEnergyInc.doesnotguaranteetheaccuracyofsuch
estimatesandcannotbeheldliableforanydifferencesbetweensuchestimateandultimateresults.
1 - 9
#®³¤³²
1.ExecutiveSummary...............................................................................................................................7
2.ReportGlossary.....................................................................................................................................8
3.Introduction........................................................................................................................................10
Background.................................................................................................................................10
CommunityEnergySystems........................................................................................................10
4.Technical:EnergyProfiles...................................................................................................................12
KitchenerInnovationDistrict+....................................................................................................12
PeakHeating/CoolingDemandandEnergyProfiles...........................................................16
5.Technical:DistrictEnergyConcept.....................................................................................................20
EnergyTransferStations.............................................................................................................20
DistributionPipingSystem..........................................................................................................21
EnergyCentres............................................................................................................................22
CentralEnergyCentre:Location&SpaceRequirements...................................................23
PhasingApproach...............................................................................................................23
CentralEnergyCentreConcept:Conventional...................................................................24
CentralEnergyCentreConcept:GroundSourceHeatPump(GSHP).................................25
CombinedHeatandPower.................................................................................................28
OtherConsiderations..................................................................................................................29
EnergyConstraints&Security.............................................................................................29
ThermalStorage..................................................................................................................29
6.Financial..............................................................................................................................................30
CapitalCostEstimate..................................................................................................................30
AnnualOperatingandMaintenanceEstimate............................................................................32
7.BusinessCase......................................................................................................................................32
Glossary.......................................................................................................................................32
KeyFinancialTerms.............................................................................................................32
BusinessAsUsual(BAU)Costs...................................................................................................32
Revenue......................................................................................................................................36
FinancialResults..........................................................................................................................37
SensitivityAnalysis......................................................................................................................38
FinancialModelExcelModelincludingSensitivity....................................................................40
1 - 10
8.EnvironmentalBenefit........................................................................................................................40
GreenhouseGasEmissionSavings..............................................................................................40
OtherEnvironmentalBenefits,Synergies,andConsiderations..................................................41
OwnershipModels......................................................................................................................42
Overview.............................................................................................................................42
100%PublicOwnership......................................................................................................44
100%PrivateOwnership.....................................................................................................44
Hybrid..................................................................................................................................44
9.NextSteps:DESImplementationStrategy..........................................................................................46
Task1DevelopDESBusinessConcept......................................................................................46
Task2ΑDESMarketing...............................................................................................................47
Task3RefinetheTechnicalConceptFurther..........................................................................48
Task4ProjectReview...............................................................................................................48
Task5DevelopProjectTechnicalDefinition.............................................................................48
Task6ObtainCustomerCommitment.....................................................................................49
Task7FinalizeProjectDefinition..............................................................................................49
Task8DistrictEnergyReadyInfrastructure..............................................................................49
ŷğƷƭinItforDevelopers?ŷğƷƭinItfortheCity/Region?..................................................50
ResiliencyandReliability.....................................................................................................50
EnvironmentalandEnergyEfficiency.................................................................................50
FlexibleBuildingDesign......................................................................................................50
ReducedCosts.....................................................................................................................50
LocalEconomyBoost..........................................................................................................50
ConsumerandPublicSafety...............................................................................................50
10.Evaluation/Recommendation.......................................................................................................52
11.AppendixA......................................................................................................................................54
1 - 11
ListofTables
Table1:CEISKitchenerDESPotentialCustomerBuildings........................................................................14
Table2:CEISKitchenerDESDevelopmentLoadandEnergyEstimates.....................................................17
Table3:CEISKitchenerDESEnergyCentrePhasing...................................................................................24
Table4:CEISKitchenerDESCapitalCosts(2019$).....................................................................................31
Table5:CEISKitchenerDESOperationandMaintenanceCosts................................................................32
Table6:TypicalHeatingSelfGenerationCosts..........................................................................................34
Table7:TypicalCoolingSelfGenerationCosts..........................................................................................35
Table8:DistrictEnergyRateSummaryΑHeatingandCoolingEnergy......................................................36
Table9:KitchenerDESFinancialResultSummaryofCapital,ExpensesandRevenue..............................38
Table10:KitchenerDESFitSummarywithCarbonCosts.....................................................38
nancialResul
Table11:RapidDevelopmentTimeline......................................................................................................39
Table12:KitchenerDESFinancialResultSummarywithDECapitalIncreasedby10%.............................39
Table13:KitchenerDESFinancialResultSummarywithDECapitalDecreasedby10%............................40
Table14:EvaluationGuideline...................................................................................................................52
ListofFigures
th
Figure1:DistrictEnergy4Generation......................................................................................................11
Figure2:WhatisDistrictEnergy?...............................................................................................................12
Figure3CityofKitchenerUrbanGrowthCentre(Downtown)................................................................13
Figure4:KitchenerInnovationDistrictEstimatedDESHeatingLoadDurationCurve...............................18
Figure5:KitchenerInnovationDistrictEstimatedDESHeatingLoadDurationCurve...............................18
Figure6:KitchenerInnovastimatedDESHeatingLoadDurationCurve...............................19
tionDistrictE
Figure7:TypicalEnergyTransferStationInstallation................................................................................20
Figure8:ExampleofaFourPipeDistributionPipingInstallation..............................................................22
Figure9:SelfGenerationCostsvs.DERateStructure................................................................................36
Figure10:AnnualGreenhouseGasEmissionSavings................................................................................40
Figure11:OwnershipModelsΑSWOTAnalysis.........................................................................................43
Figure12:PublicOwner/OperatorModels................................................................................................44
Figure13:PrivateOwner/OperatorModels...............................................................................................44
Figure14:HybridOwner/OperatorModels...............................................................................................45
Figure16:SummaryofBenefitstoKeyStakeholdersfromaDES..............................................................51
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
1.ExecutiveSummary
TheCEISidentifiedtheKitchenerInnovationDistrict+asapotentialsitetodevelopacommunityordistrict
energysystemtomeettheƩĻŭźƚƓƭenergyplanobjectiveofenhancinglocalenergygenerationand
security.
FVBperformedaprefeasibilityondevelopingaDistrictEnergySystem(DES)toservicetheKitchener
2
InnovationDistrict+indowntownKitchener.Theareahasanexistingbuildingstockof~450,000m
222
)withover400,000m(4,000,000ft)ofanticipatednewbuildingdevelopmentexpected
(~4,500,000ft
overthenext15years.
FVBdevelopedaDESconceptcenteredonsix(6)newdevelopmentsforecastedtobeconstructedwithin
thenext15years.Thebuildingsareestimatedtohaveatotalheatingandcoolingrequirementsasshown
inTableA.
TableA:KitchenerInnovationDistrictDESLoads&Energy
AnnualAnnual
KitchenerInnovationDistrictHeatingCoolingHeatingCoolingEnergy
DESLoads&EnergyGFA(ft2)GFA(m2)Load(kW)Load(Tons)Energy(MWh)(MWh)
Phase1+21,746,000162,3008,7002,60016,40011,500
Phase1+2+33,485,000323,90015,4004,20032,20021,450
Phase1+2+3+4(TOTAL)4,485,000416,80019,2005,10040,90027,500
DIVERSIFIEDTOTALLOAD(0.85Heating/0.9Cooling)16,3004,600
TheenergycentretoservetheDESisproposedtobelocatedorembeddedwithintheMultiModalHub
developmentduetoitssizeandthatitispubliclycontrolledland.Accordingtotheforecastedtimeline
thereisaninitialdevelopmentoftheMultiModalHubslatedfor2022whichisenteringthedesignphase
in2019andacombined1,000,000sq.ftofdevelopmentanticipatedinfuturephases.
Adistributionpipingnetworkwouldbeimplementedtoserveallidentifieddevelopments.The
constructionofthedistributionpipingnetworkposesthelargesttechnicalchallengetotheDES
developmentduetoexistingLRTinfrastructure,narrowroadways,andcongestedburiedutilities;thishas
beenthecaseinmanydowntowncoressuchasWindsor,Toronto,Hamilton,Sudburyetc.buthasnot
beeninsurmountable.Noothertechnicalissueswereidentifiedatthistime.
Three(3)scenarioswerereviewedinthestudy:
1.ConventionalDESΑwithgasfiredboilersandelectricalcentrifugalchillerstotaling20.5MWand
4,600tons.Plus,anoptionthatincludes550kWeofCHPcapacity.
2.OpenLoopGroundSourceHeatPumps+ConventionalDESΑwith1,000tonheatrecoverychiller
coupledwithanopenloopgroundsourceand16.5MWgasfiredboilersand4,100tonselectrical
centrifugalchillerscapacity.Plus,anoptionthatincludes550kWeofCHPcapacity.
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
3.ClosedLoopGroundSourceHeatPumps+ConventionalDESΑwith1,000tonheatrecoverychiller
coupledwithaclosedloopgroundsourceand16.5MWgasfiredboilersand4,100tonselectrical
centrifugalchillerscapacity.Plus,anoptionthatincludes550kWeofCHPcapacity.
Highlightsofthefinancialresultsoftheprefeasibilityaresummarized
inTableB.
TableB:KitchenerInnovationDistrictDESPrefeasibilityHighlights
DESPREFEASIBILITYHIGHLIGHTS($CDN2019)Financial(Unescalated)Financial(Escalated)
TotalReducedGHG
ExpensesRevenueIRR,25(4%)('000k
Investmentvs.BAU
('000k$)('000k$)Years(%)$)
ScenarioDescription
('000k$)(tonnes)
ConventionalGasFiredBoilers/Electric
$37,628$2,456$6,7418.9%20,730$692
1
ChillersDES
Scenario1:PlusCHP$39,438$2,120$6,7418.9%21,263$(195)
1A
GroundSourceHeatPump(GSHP)
5.3%5,876$5,115
$46,978$2,596$6,372
OpenLoop1,000tons
2
Scenario2:PlusCHP$48,788$2,261$6,3725.4%6,409$4,228
2B
GroundSourceHeatPump(GSHP)
$51,838$2,606$6,3724.3%1,546$5,115
ClosedLoop1,000tons
3
Scenario3:PlusCHP$53,648$2,271$6,3724.4%2,079$4,228
3C
ThedevelopmentoftheKitchenerDESwouldrequireacapitalinvestmentintherangeof$39M+(Class
D,indicative+/50%)withanestimated8.9%InternalRateofReturn(IRR)over25yearsforScenario1.
Thisiscomparabletoothercitiesandwouldbeconsideredagoodinvestmentwith100%equity.
TheresultsalsoshowthatalthoughCHPadditiontotheDESincreasessystemresilience,ithasanegligible
impactonthefinancialperformance,andreducestheGHGbenefitwithoutconsiderationtotimeofday
usage.
Scenarios2and3requiredalargercapitalinvestment,butgreaterGHGreductionbenefit.
DistrictEnergySystemsaregloballyrecognizedaspartofthesolutiontoreducinggreenhousegas
emissions.DESareknowntoincreaseenergyefficiencyforbuildingheatingandcooling,enabletheuptake
ofwasteandalternativeenergysourcesandprovideflexibilitywithrespecttotechnologyandfuel
sources.Thoughthebusinesscaseisfairlyneutral,FVBrecommendstheCEISproceedwithapproval
towardestablishingaDESunderScenario2tomovetheKitchenerInnovationDistricttowardsitsenergy
andsustainabilitygoals.Thebusinesscaseisstrengthenedonthefactthat4of6theforecasted
developmentsinthestudyarepubliclycontrolledcoupledwithfinancialfeasibility,GHGemissions
reduction,communitybenefitandenergyresilience,aDESfordowntownKitchenerisfeasible.
ThenextstepstoestablishingaDESfortheKitchenerInnovationDistrictareprimarilysocial,economic
andpoliticalinnature.CEISmustdevelopaDESBusinessPlanincludingdecisionsonownership,financing,
operationsandmanagementstrategy,stakeholderengagement,identifyingpolicydriversaswellas
solidifyingpotentialenergycentersites,identifyingsynergieswithothermunicipalprojectstoenablethe
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
developmentofaDES.Areasonabletimelineforthisworkisestimatedtobe~12monthsarriveatago
nogodecision.A12monthtimelinewouldbereservedfordetaildesignwithapprox.1218monthsfor
implementation.Temporarystrategiescanbeutilizedifneedtosatisfyinitialcustomersshouldth
eDES
developlagbehindthefirstcustomerconnection.
2.ReportGlossary
Belowaretypicaldistrictenergyacronymswhichmaybereferencedthroughoutthisreport.
BusinessasUsual
BAU
CESCommunityEnergySystemalsoreferredtoasaDistrictEnergySystem
CHPCombinedHeat&Poweristhegenerationofbothelectricityandusefulheatfromasingle
source.CHPisalsoknownasCogeneration.
COPCoefficientofperformanceistheratiooftherateofheatremovaltotherateofenergyinput,in
consistentunits,foracompleterefrigeratingsystemorsomespecificportionofthatsystem
underdesignatedoperatingconditions.
DistrictEnergySystem
DES
DistributionPipingSystem
DPS
EnergyCentre
EC
EnergyTransferStation
ETS
FVBEnergyInc.
FVB
GroundSourceHeatPump
GSHP
Gigajoule,isanenergymeasurementunit.
GJ
HEXHeatExchanger
KilowattElectrical,ameasureofinstantaneouselectricaldemand.
kWe
KilowattThermal,ameasureofinstantaneousthermaldemand.
kW
t
ALoadDurationCurve(LDC)isacurverepresentingthermalloadofasystemoverthenumber
LDC
ofhoursperyear.
LowerHeatingValue
LHV
MemorandaofUnderstanding
MOU
MegawattHourElectrical,isanenergymeasurementunit.
MWh
e
MegawattHourThermal,isanenergymeasurementunit.
MWh
t
MegawattThermal,ameasureofinstantaneousheatingdemand.
MW
t
OperationandMaintenance
O&M
OutdoorAirTemperature
OAT
Trenchmeters;ameasureoftrenchdistance(asopposedtopipedistance).Fordistribution
TM
piping,pipedistanceisdoubletrenchdistance.
TonnesofRefrigeration,ameasureofinstantaneouscoolingdemand.
TR
TemperatureDifferential(deltaT)
T
VariableFrequencyDrive
VFD
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
3.Introduction
ͻƚźƒƦƩƚǝĻğƓķƭǒƭƷğźƓğƷĻƩƌƚƚwĻŭźƚƓƭĻĭƚƓƚƒźĭĭƚƒƦĻƷźƷźǝĻƓĻƭƭğƓķƨǒğƌźƷǤƚŅ
ƌźŅĻƷŷƩƚǒŭŷƷŷĻĭƚƚƩķźƓğƷźƚƓƚŅƷğƩŭĻƷĻķĻƓĻƩŭǤźƓǝĻƭƷƒĻƓƷƭΑĻƓŷğƓĭźƓŭƌƚĭğƌ
ĻƓĻƩŭǤŭĻƓĻƩğƷźƚƓğƓķƭĻĭǒƩźƷǤ͵ͼ
Background
TheCEISidentifiedtheKitchenerInnovationDistrict+asapotentialsitetodevelopacommunityenergy
systemtomeettheƩĻŭźƚƓƭcommunityenergyplanobjectiveofenhancinglocalenergygenerationand
security.Secondaryprioritiesofthisstudyinclude:
1.ͻ
ƦķğƷźƓŭexistingprocessestobetterintegrateenergyconsiderationsintothereviewandapproval
processfordevelopmentğƦƦƌźĭğƷźƚƓƭͼͲand
Ћ͵ͻ5ĻǝĻƌƚƦanenergyliteracycampaignformunicipal,commercialandinstitutionaldecisionƒğƉĻƩƭ͵ͼ
Inaddition,thecommunityenergysystemstudyistofocusontheuseofconventionalboilerandchiller
planttechnologiesandthepotentialforintegrationofclosedoropenloopGroundSourceHeatPumps
(GSHP)duetothebedrockaquiferslocatedthroughouttheregion.CurrentlyinOntario,lessthan10%of
theelectricityisgeneratedbyfossilfuels,sotheuseofGHSPtechnologyinacommunityenergysystem
offersCO2reductionpotential.
CommunityEnergySystems
Theconceptbehindcommunityenergysystems,otherwiseknownasͻķźƭƷƩźĭƷͼenergyissimpleyet
powerful.DistrictEnergySystems(DES)connectmultiplethermalenergyusers(buildings)througha
pipingdistributionnetworktoacentralizedheatingandcoolingsource.
InDistrictEnergysystems,ratherthanhavingaboilerandchillerineachbuilding,acentralenergyfacility
providesheatingandcooling,andinsomecasesdomestichotwater,totheconnectedbuildings.Dueto
economiesofscaleandonsiteoperatingengineers,centralizedenergysystemscanimplementinnovative
lowcarbonalternativesandoperatemoreefficientlyresultinginareductionofGHGandrelianceonfossil
fuels.DESisrecognizedbytheUNEnvironmentProgramme(UNEP)asplayinganinstrumentalrolein
reducingGHGemissionsanduptakeofrenewableenergysourcesincommunities.
Theconceptofdistrictenergyisnotnew;historypointstotheRomansastheearliestusers.Thesepiped
heatingsystemswereusedtoheatdwellingsaswellasbaths.InCanada,thefirstdistrictenergysystem
wasestablishedin1880inLondon,Ontario,toservetheuniversity,hospitalandgovernmentbuilding.In
1911theUniversityofTorontolauncheditsowndistrictheatinginitiative,followedin1924bythefirst
commercialsystemestablishedintheCityofWinnipeg.
Traditionally,inNorthAmerica,themostcommonapplicationofdistrictheatingandcoolingisin
university,military,governmentandlargeindustrialcampuses;since1990,therehasbeenasignificant
growthincommerciallyutilityoperatedsystems,includingToronto,Montreal,Ottawa,Markhamand
Vancouver.
th
Therefore,thesystemismatureandwelldevelopedΑcurrentlyweareinthe4generationofdistrict
heatinginCanada:
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
st
1Generation:SteamBasedSystems(1880Α1930)
nd
2Generation:PressurizedSuperHeatedWaterabove100°C(1930Α1980)
rd
3Generation:PressurizedWaterattemperaturetypicallybelow100°C(1980Α2020)
th
4Generation:PressurizedWaterattemperaturestypicallybetween50Α70°C(2020+)
th
Figure1:DistrictEnergy4Generation
Districtenergysystemshavethreemaincomponents:
1.EnergyCentre(s)(EC)isthethermalenergysource.Theytypicallyinclude:
a.Baseloadcapacity(i.e.cogeneration,heatpumps,biomassboilers,condensingboilers)
thatofferkeyadvantagesandutilizeasecure,low(er)costfuelsource.Generallyhighest
efficiencyandhighercapitalcostequipment.
b.Peakingboilersthattypicallyutilizeamoreconventionalfuelsource.
c.Standbyboilersaretypicallyidenticaltothepeakingboilersbutareincludedtoprovidea
levelofredundancyandincreasedthermalenergyreliability.
2.DistributionPipingSystem(DPS)istheinsulatedpipingnetworkthattransfersheatingand
coolingmediumfromtheenergysourcetothecustomers.
3.EnergyTransferStations(ETS)includeheatexchangerinterfacesbetweenthedistrictenergy
systemandcustomerĬǒźƌķźƓŭƭheatingandcoolingsystems.Havingcommunitysharedheating
andcoolingsourceseliminatestheneedforindividualboilers,chillersandcoolingtowersateach
building.
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
Figure2illustratestheconceptofdistrictenergy;athermalenergygridthatconnectsenergyproducers
andusers.
Figure2:WhatisDistrictEnergy?
4.Technical:EnergyProfiles
KitchenerInnovationDistrict+
TheCityofKitchenerInnovationDistrict+(KID)wasselectedasastudyareaforacommunityenergy
system.TheInnovationDistrict+isanareaofrapiddensification,attheheartofthecity,centeredatthe
intersectionofKingSt.NandVictoriaSt.S;seeFigure3.Inthenext15years,itisforecasttoseeupwards
22
of~450,000m(4,500,000ft)ofmixeduseresidentialandcommercialdevelopmentwithina600m
radius.
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13
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219309
Study
(Downtown)
Centre
Feasibility
Pre
Growth
DES
Urban
District
Kitchener
of
Innovation
City
3
Kitchener Figure
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
AsmanyoftheKitchenerInnovationDistrictopportunitiesmayhavepassed,duetodevelopmentsbeing
inthedesign/constructionprojectphase,thestudyareawasevolvedtoincludetheMidtownareaand
publiclyownedlandsintheCityCentreDistrict.Alistofpotentialnewandexistingcustomerbuildings
wasdevelopedbytheCEISandFVBteamandaresummarizedinTable1.Thebuildingsincludedseveral
developmentscurrentlyintheplanningorconstructionphases,sixforecastednewdowntown
developmentsandseveralexistingbuildingsincludingtheGrandRiverHospitalandCityHall.Thepotential
2)
customerstoaDESsysteminthedowntowncorerepresent~90,000m2(~9,000,000ftofbuilding
developmenteitherplannedorexistingbuildingstock.Locationsofpotentialcustomersareasshownon
drawingSK9309100attachedinAppendixA.
Table1:CEISKitchenerDESPotentialCustomerBuildings
BuildingPublic/PrivateDevelopmentEstimated
AddressDescriptionStatus
No.DevelopmentYearGFA
NewDevelopments(20232034)
A55BrammBrammWorksYardsPublicNew2029
E510KingStMultiModalHubPublicNew2029
F607KingSt.StationParkPrivateNew2023
L154WaterStSHallslaneparkinglotPrivateNew2024
L244GaukelSt44GaukelParkingLotPublicNew2029
N15CharlesStWGaukelStBusDepotPublicNew2025
SUBTOTAL1NEWDEVELOPMENTS4,544,656
ExistingPublicBuildings
O835KingStWGrandRiverHospitalPublicExisting662,538
P200KingStWCityHallPublicExisting225,000
SUBTOTAL2EXISTINGPUBLICDEVELOPMENTS887,538
FuturePotentialDevelopments(Built/Future)
BuiltDevelopments
G51Breithaupt"Google"/Breithauptphase1and2Completed2019
H28BreithauptBreithauptBlockphase3UnderConstruction
IPedestrianBridgePedestrianBridgeUnderConstruction
B1100VictoriaSt.SOneHundredUnderConstruction2019/2021
B2112VictoriaSt.SGarmentSt.CondosUnderConstruction2022
R120VictoriaSt.SGloveBoxUnderConstruction2022
FutureDevelopments
Q130VictoriaSt.SMacIntoshDryCleanersRedevelopmentPlanning
JMetrolinkPlatformMetroLinksPlatformPlanning
CActiveTransportationActiveTransportationPathNew
D10VictoriaSt.HealthSciencesCampusFuturePhaseNew
K70VictoriaSt.N"CakeBox"New
L354WaterStSManulifeParkingLotNew
S30WaterStNSanderson(duke+water)New
T417KingStWZiggy'sNew
UFrancis/WaterParkingLotNew
M77WellingtonSt.OSCSeedsCONFIDENTIAL
SUBTOTAL3FUTURENEW/EXISTINGDEVELOPMENTS3,626,400
TOTAL1+2+39,058,594
Theexistingbuildingstockwasdeemedincompatiblewithagroundsourcebasedsystemdueto
historicallyhigherhotwatertemperaturedesigns;traditionallyhotwaterheatingsystemweredesigned
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
tousean82.2°Csupplytemperatureand71.1°Creturntemperature(180°F/160°Fheatingwatersupply
andreturntemperature).Heatrecoverychillerorgroundsourceheatpumptechnologyislimitedtoa
maximum65°C(149°F)hotwatersupplytemperature.Correspondingdesignreturnwatertemperatures
wouldberequiredintherangeof30°C(86°F)whichisnotpossiblewithmostexistingbuildingHVAC
systemdesigns.However,existingsystemswouldbecompatiblewithaconventionalsystemorasystem
withpeakingboilers.Themarketpenetrationforexistingbuildingswouldbeconsideredlowfor
connectiontoaDESbecausetherearefewdriversforthebuildingtomoveawayfromtheirstatusquo.
ExistingbuildingswereconsideredasfuturepotentialcustomerstoanestablishedDESsystem,especially
buildingswithaginginfrastructureandinneedofrenewal.Existingbuildingsalsotendtobemorecostly
andchallengingtoconnect.
existingpublicbuildingsidentifiedwithinthestudyarea:theGrandRiverHospitaland
Thereweretwo
KitchenerCityHall.Theexistinghospitalhasrecentlycompletedseveralmajorrenovationstoitsheating
andcoolingsystem,whichincludedtheinstallationofnewcondensingboilers.Forthisreason,the
potentialforconnectiontoaDESwasdeemerandnotevaluatedfurtherasapotentialcandidate
dlowe
intheinitialstudy.Thehospitalshouldbeconsideredasafuturepotentialcustomerorenergysourceto
anestablishedDESsystem.TheKitchenerCityHallhasastrongpotentialforconnectiontoadistrictenergy
system;ithasahydronicheatingandcoplacementsoon.Aspublic
olingsystemandlikelydueforcapitalre
buildings,boththeGrandRiverHospitalandtheKitchenerCityHallwouldbeencouragedtoleadby
exampleinanefforttogrowenergysharingopportunitiesanddevelopmentofdistrictenergyinthe
region,ifnotattheinitialstartoftheDES,theyshouldbeconsideredforconnectioninfuturephases.
Buildingdevelopmentsidentifiedwithlittleinformationorlowconfidenceinprogressingandwere
excludedfromthestudy.
Sixnewdevelopmentsforecastedtobeconstructionbetween2023Α2034wereidentifiedasideal
buildingconnectionstosupportanewDESindowntownKitchenerduetoacombinationoffactors:
1.Timing:Thedevelopmentsareinearlydevelopment/planningstagesandcanbedesignedwith
connectiontoaDESinmind.
2.Newvs.Existing:Newbuildingdevelopmentsprovidegreateropportunityforusingalow
temperaturestrategyenablingimplementationofalternativeand/orwasteheatsourcessuchas
GSHP,heatrecoverychillers,etc.ExistingbuildingsaregenerallymorecostlytoconnecttoaDES
astheyinitiallyrequiresomeretrofitandmodification.
3.Ownership:Fourofthesix(6)developmentsarepubliclyowned:theMultiModalHub,Bramm
WorksYards,the44GaukelParkingLot,andtheGaukelStreetBusDepot.
4.HighDensity:Developmentsspreadoverasmallarea(withina600mradius).
2
5.Size:Theplannedbuildingdevelopmentsaregenerallyover300,000ft.
22
Thesixdevelopmentsrepresentover416,000m(4,485,000ft)ofnewbuildinggrossfloorarea
comprisedof~65%highdensitymultiunitresidentialspaceand~35%retail,office,andculturalspacein
thedowntowncoreofKitchener.
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
BuildingA:BrammWorkYards
BuildingE:TheMultiModalHub
BuildingF:StationPark
BuildingL1:HallsLaneParkingLotRedevelopment
BuildingL2:44GaukelStreet
BuildingN:GaukelStreetBusDepot
PeakHeating/CoolingDemandandEnergyProfiles
Ananalysiswascompletedtodeterminewhatfuturethermaldemand(orload)andannualenergythat
wouldbeservedbytheKitchenerInnovationDistrictDES.Thethermaldemandrepresentstheamountof
heatingandcoolingcapacityabuildingrequirestomaintainacomfortablebuildingenvironment.The
demanddeterminesthesizingofthebuźƌķźƓŭƭbusinessasusualstandaloneboilerorchillerplant
capacity,energycentreanddistributionpipingsystem.Theenergyistheusageorconsumptionovera
periodoftime;annualenergyistheamountofenergyusedoveraoneyearperiod.
EachĬǒźƌķźƓŭƭpeakloadandannualenergyrequirementswerederivedusingintensitiesfromactual
metereddataofoperationalDESswithsimilarbuildingarchetypes.Theenergyintensitiesusedassume
thattheproposedbuildingswillmeetenergyefficiencytargetsbetterthanthecurrentbuildstandards,
i.e.tolatestASHRAE90.1,OntarioBuildingCodeand/orTorontoGreenStandardsenergyefficiency
targets.
Thenewdevelopmentsrepresentapotentialconnectedundiversifiedpeakloadof19,230kWheating
t
and5,100tons(17,900kW)cooling.DiversifiedLoadisthemaximumexpectedloadatanygiventime.
Sincenotallbuildingswillrequirefulldemandatthesametime,thisenablestheenergycentrecapacity
tobelowerthanthesummationofallthebuildingloads,therebyloweringinfrastructurecosts.A
diversificationfactorof0.85hasbeenassumedforheatingand0.90forcooling.
ThebuildoutoftheDESwasphasedaccordinganticipateddevelopmenttimelines.Table2showsthe
estimatedpeakheatingandcoolingdemandandforecastedannualthermalenergyusagebyPhase.
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Table2:CEISKitchenerDESDevelopmentLoadandEnergyEstimates
HeatingCoolingAnnual
BuildingAnnualCooling
PhaseDescriptionGFA(ft2)GFA(m2)DemandDemandHeating
No.Energy(MWh)
(kW)(tons)Energy(MWh)
Phase1:2023
1 FStationsPark640,00059,4802,5005006,7003200
1 L1HallsLaneParkingLot81,7767,600300100800500
SubtotalPhase1721,77667,0802,8006007,5003700
Phase2:2025 kWTons
2 NGaukelSt.BusDepot1,024,35295,2005,9002,0008,9007800
SubtotalPhase21,024,35295,2005,9002,0008,9007800
Phase3:2029 kWTons
3 ABrammWorksYards500,00046,4681,9505504,1003300
3 EMultiModalHub500,00046,4681,8504204,6002750
3 FStationPark330,00030,6691,3002003,4001600
3 L1HallsLaneParkingLot81,7767,600300100800500
3 L244GaukelSt327,10430,4001,3003002,9001800
SubtotalPhase31,738,880161,6066,7001,57015,8009950
Phase4:2034 kWTons
4 ABrammWorksYards500,00046,4681,9505504,1003300
4 EMultiModalHub500,00046,4681,8504204,6002750
SubtotalPhase41,000,00092,9373,8009708,7006050
Phase1+21,746,128162,2808,7002,60016,40011500
Phase1+2+33,485,008323,88615,4004,17032,20021450
Phase1+2+3+4(TOTAL)4,485,008416,82219,2005,14040,90027500
DIVERSIFIEDTOTALLOAD(0.85Heating/0.9Cooling)16,3204,626
AbuildingloadprofilewasdevelopedforeachbuildingandcompiledintoapredictedDESfullbuildout
loaddurationcurve.Thepurposeoftheloaddurationcurvesistovisuallyrepresenttheheatingand
coolingdemandsandenergydeliveredthroughoutafullyearofoperation.Thesecurvesareutilizedin
equipmentsizingandconceptdevelopmentforboilers,chillersandcogenerationunits.Figure4and
Figure5illustratetheloaddurationcurvesfortheproposedDESforheatingandcooling.
Theseasonalheatingandcoolingloadprofileswerealsooverlaidtoidentifycoincidentheatingand
coolingloads;seeFigure5.
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Figure4:KitchenerInnovationDistrictEstimatedDESHeatingLoadDurationCurve
Figure5:KitchenerInnovationDistrictEstimatedDESHeatingLoadDurationCurve
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
Figure6:KitchenerInnovationDistrictEstimatedDESHeatingLoadDurationCurve
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
5.Technical:DistrictEnergyConcept
EnergyTransferStations
EachbuildingwillbeconnectedtothedistributionsystemindirectlythroughanEnergyTransferStation
(ETS).ThepurposeoftheETSistotransfertheenergytransportedfromtheEnergyCentrethroughthe
distributionpipingnetworktotheendcustomerviaheatexchangerstosatisfytheĬǒźƌķźƓŭƭheating
needs.
Anenergytransferstation(ETS)typicallyconsistsofaspaceheating,domestichotwaterandspacecooling
heatexchanger,isolationvalves,strainers,acontrolpackageincludingcontroller,controlvalve(s),
temperaturesensors,andenergymeteringpackage.
TheETSisphysicallylocatedineachbuildingandreplacestheuseofthermalenergygeneratingequipment
inthebuildingsuchasboilers,chillers,andheatpumps.TheETSwillbedesigned,installedandownedby
theDES.Itwillutilizebrazedplateheatexchangertechnologyaswellasgasketplateandframeunitsfor
DHWandcooling(doublewalledunits).AllcoststoconnectthebuildingwillbebornebytheDES;no
capitalcostsareincurredbythebuildingowner.ADESconnectiontoexistingbuildingsmayrequire
additionalcapitaltoretrofittheĬǒźƌķźƓŭƭsystems;thiscouldincludetheconstructionofriserstoconnect
totheexistingpenthousemechanicalrooms.
Figure7:TypicalEnergyTransferStationInstallation
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DistributionPipingSystem
Thedistributionpipingsystemisthephysicallinkbetweenenergysinks(customers)andsources(plants).
Theconceptisbasedonabelowgrounddirectburiedhotwaterandchilledwaterdistributionnetwork
withsupplyandreturnpipinginaclosedcircuit(4pipesystem).Boththeheatingandcoolingpipingwould
generallybeinstalledinthesametrenchinaparallelconfiguration.Stackedconfiguration(e.g.,hotwater
pipesonthetopofthecoolingpipes)wouldbeconsideredwherestreetspaceistoocongestedfora
parallelconfigurationΑthisoptionisnotpreferredasitiscostandtimeintensiveandaswellasmore
challengingtoaccessandmaintain.
Apreliminarydistributionpipingconceptwasdeveloped,includingroutingandsizingtoprovidedistrict
heatingandcoolingservicestothetargetedbuildingdevelopments.Thelayoutofthedistributionpiping
b.TheproposedDPSroute,
networkisbasedontheCentralEnergyCentrelocationattheMultiModalHu
CEC,andcustomerlocationsareshownonthepipelayoutdrawingSK9309101inAppendixA.
TheDPSconstructionisgenerallyimplementedinopentrenchconstructionandadvantageoustobe
performedinsynergywithotheranyburiedmunicipalorutilityserviceupgradesorroadway
ts.Itispossibletoutilizetrenchlessandorboringtechnologiesforareasthataresensitiveto
improvemen
opentrenchconstructionsuchashighways,railways,andtransitlinesetc.Trenchlessconstructionisvery
expensive,upwardsofdoubletheopentrenchconstructioncosts,andthereforeisgenerallybeenlimited
toͻĭƩƚƭƭźƓŭƭͼperpendiculartoroadwaysandnotconsideredforparallelroadconstruction.
Theproposedpiperoutinghasbeenselectedtominimizethelengthofdistributionpipingandminimize
conflictwiththeLRTrouteonCharlesStreet,KingStreet,andVictoriaStreet.TheMetrolinx/CNRrail
corridoralsopassesthroughdowntownKitchenerandpresentschallengesforburiedinfrastructurework.
ItisalsonotedthattheroadwaysindowntownKitchenerareparticularlynarrowandcongestedwith
existingutilities;thiswillnecessitatecarefulplanningwithrespecttotrafficmanagement,investigation,
examination,andcoordinationwithlocalutilities.
DESplanningrequiresextensivecooperationwithlocalutilities,municipalworks,androadconstruction.
ThegroupsneedtobeawarethatthereisplanningaroundDEinfrastructureinthedowntowncoreinthe
next15years.ThismaynecessitateworktobedeferreduntiladecisionismadeonwhethertheDESwill
proceed.Forexample,GaukelStreet,betweenbusdepotandCityHall,ispotentiallybeingredeveloped
aspedestrianfriendlywalkway.Theconstructionofthepedestrianwalkwaymaytriggertheidealtimeto
connecttheKitchenerCityHalltotheDES,installingthedistributionpipingbeneaththewalkwayand
possiblyasnowmeltsystem.Asnowmeltsystemwouldincreaseaccessibilityinthewinterbetweenthe
busdepotandCityHallandreducesaltingandsnowclearingefforts.
ThedistrictheatingpipingsystemassumestheuseofpreinsulatedsteelinstalledinaccordancewithANSI
B31.1andCSAB51designedfor1,100kPa(160psig)atmaximum100°C(212°F)designtemperature.The
districtcoolingpipingassumesweldedsteelwithepoxycoating.
Thepipesizingfortheselectedroutewillbegovernedbythefollowingfourkeyfactors:
Supplyandreturntemperaturedifferentials,referredtoasT(deltaT);
Maximumallowablefluidvelocity;
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Distributionnetworkpressureatthedesignloadconditions;and
Differentialpressurerequirementstoservicethemostremotecustomer.
Figure8:ExampleofaFourPipeDistributionPipingInstallation
Distributionpipesizesarebasedonadifferentialtemperatureof30Cforheatingand8Cforcooling
withamaximumflowvelocityof2.0m/s.Thetemperatureofthedistrictsystemwillbedictatedbythe
customerbuildings;thedesignofeachĬǒźƌķźƓŭƭinternalheatingsystemwillneedtobecoordinatedin
ordertoachievethedistrictsidereturntemperatures.
Itisassumedthatthedistricthotwatersuppliedtoeachbuildingwouldbe70°Cwiththecapabilityof
delivering90°Cmaximuminthewinterandanassociateddistrictreturntemperatureof40°Cand60°C
respectively.Adistrictheatingsupplytemperatureresetschedulewouldbeemployed.
Itisassumedthatthedistrictsidechilledwatersuppliedtoeachbuildingwouldbe4°Cminimuminthe
summer,withanassociateddistrictreturntemperatureof12°C.Adistrictcoolingsupplytemperature
resetschedulewouldalsobeemployed.
Themainpipesareestimatedtobe300mmforheating,capableofdelivering19.6MWofheating,and
500mmforcooling,capableofdelivery5,500tonsofcooling.Thisallowsforapossibleexpansionofthe
DESby20%.Thetrenchwidthis~2500mmwide.Branchsizesrangeaccordingtoassumedbuilding
connectionloadfrom100mmto150mmontheheatingpipingand150mmto400mmonthecooling
piping.
EnergyCentres
Three(3)EnergyCentrescenarioswerereviewed:
4.ConventionalDESΑwithgasfiredboilersandelectricalcentrifugalchillerstotaling20.5MWand
4,600tons.Plus,anoptionthatincludes550kWeofCHPcapacity.
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5.OpenLoopGroundSourceHeatPumps+ConventionalDESΑwith1,000tonheatrecoverychiller
coupledwithanopenloopgroundsourceand16.5MWgasfiredboilersand4,100tonselectrical
centrifugalchillerscapacity.Plus,anoptionthatincludes550kWeofCHPcapacity.
6.ClosedLoopGroundSourceHeatPumps+ConventionalDESΑwith1,000tonheatrecoverychiller
coupledwithaclosedloopgroundsourceand16.5MWgasfiredboilersand4,100tonselectrical
centrifugalchillerscapacity.Plus,anoptionthatincludes550kWeofCHPcapacity.
CentralEnergyCentre:Location&SpaceRequirements
TheCentralEnergyCentre(CEC),toservetheKitchenerInnovationDistrictDES,willhousetheheating,
coolingandelectricitygenerationequipment.Thethermalenergygeneratedwillbesuppliedtocustomer
buildingsconnectedtothesystemforspaceheating,spacecoolinganddomestichotwaterheating.
ThisconceptproposeslocatingtheenergycentreintheMultiModalHubdevelopmentareaeitherasa
standalonebuildingorembeddedwithinathebasementofthebuilding.Rooftopspacewouldberequired
forwetcoolingtowers.
Itisestimatedthatatfullbuildoutthefollowingfootprintisrequired:
2
HotwaterboilersΑ~500m
2
ElectricchillersΑ~1000m
2
CoolingtowersΑ~400m(assumedrooftopinstallation)
2
CHPengines~75m
BoreholeFieldΑvariesbeneathMultiModalHub
PhasingApproach
Thephasedapproachedattemptstodefertheoutlayofcapitaluntilthereistheloadandcorresponding
revenuestreamtosupportthatcapital.Thechallengewiththephasingapproachistofindtheright
balancebetweentheeconomiesofscale,designandconstructioneffort,andtheinitialcapitalrequired
toprovidetheplantinfrastructuretosupportthefuturephases.
TheDESCECplantinfrastructurerequiredforthefullbuildoutwouldbeinstalledduringthefirstphase
withonlytheheatingandcoolingequipmentrequiredforthefirstphasedemandinstalledwithinthe
plant.Althoughitrequiresmorecapitaltobeexpendedatthebeginningoftheproject,thisisthemost
practicalmethodthatavoidsremovingandupsizingequipmentfromphasetophase.Overall,theplant
1
hasbeenphasedsothereisN+1heatingcapacityandNchillercapacityatfullbuildout.Theproposed
phasingoftheDESplantissummarizedinTable3fortheconventionalDESscenario.
Thegroundsourceconceptswillbephasedinasimilarfashiontotheconventionalconceptbutwithheat
recoverychillersandgeoexchangefieldcapacityinstalledduringthefirstphaseoftheDESdevelopment.
1
N+1Capacityrepresentsthetotalinstalledcapacityminusthelargestboiler.Thisisthemaximumloadthesystem
canmeetwithanyoneboilernonoperational.
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Table3:CEISKitchenerDESEnergyCentrePhasing
ConventionalDESPlant
SystemSummaryPhaseIPhaseIIPhaseIIIPhaseIVFullBuildOut
YearofConnection20232025202920342034
SystemConfiguration
Plant
Boilers22217
Chillers12115
DistributionSystem
HotWaterTrenchMetres6203303101260
ChilledWaterTrenchMetres6203303101260
Heating&CoolingPeakLoads
Heating(kW)Cumulative2,8008,70015,40019,20085%
DiversifiedLoad(0.85)7,40013,10016,300 16,320
Cooling(tons)Cumulative5402,5004,1005,10090%
DiversifiedLoad(0.90)2,3003,7004,600 4,590
PlantCapacity
Boiler(kW)(N+1)3,00010,00017,00020,50020,500
Chiller(tons)(N)6002,6003,6004,6004,600
yphase)
AnnualEnergy(b
Heating(MWh)7,40016,30032,10040,80040,800
Cooling(tonh)1,028,4003,246,2006,070,5007,790,7007,790,700
CentralEnergyCentreConcept:Conventional
Thehotwaterboilerplantinstallationiscomprisedoftwo(2)1,500kWtandfive(5)3,500kWtboilers.
2
redundancyinthe
ThisallowsforthebaseloadtobemetbysmallerboilersandfortheretobeN+1
overallboilercapacityatfullbuildout.
Naturalgasfiredhotwaterboilershavebeenassumedforthisconcept.Thelarger3,500kWtboilerswill
becommercialgrade,packagedwatertubeboilerswithlowNOxburners,upgradedburnercontroland
condensingeconomizers,whereapplicable.Thesmaller1,500kWtboilerswillbehighefficiency,low
emissionsgascondensingboilerwithstainlesssteelheatexchanger.Theseasonalboilerefficiencyis
assumedat85%fortheseboilers.
2
N+1describesalevelofredundancy,wherethereisduplicationofacomponentintheeventofafailure.Nwould
representthebasenumberofcomponentsorequipmentrequiredtosatisfythesystemandthe+#wouldindicate
thelevelofbackupintheeventofafailureintheNcomponent.Forexample,inaheatingsystemwhere3boilers,
eachat500kW,arerequiredtosatisfytheheatload,anN+1redundancydesignwouldhave4x500kWboilerssuch
thatintheeventofafailure,thelevelͻbͼcanstillbemaintained.Typically,theͻњϔͼwillrefertothelossofthe
largestsizeunit.
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
TheCECalsoincludescentralizedcoolingequipmentthatproduceschilledwater.One(1)600tonandfour
(4)1,000tonelectric,watercooledcentrifugalchillersareassumedforthisconcept.Thisallowsfor
turndowninlowloadscenarios.ACOPof5.0kWt/kWeisassumedforthecoolingplantsystem.These
chillersalsoproducealargeamountoflowgradewasteheatthatisrejectedthroughwetcoolingtowers.
Thesetowersrequirealargefootprintandaccesstolargevolumeofairinthecoolingprocessandare
generallylocatedontherooftopoftheenergycentre.
AschematicillustratingtheconventionalconceptcanbefoundinAppendixAinSK9309001.
CentralEnergyCentreConcept:GroundSourceHeatPump(GSHP)
5.3.4.1.General
Agroundsourceorgeoexchangesystemisanelectricallypoweredheatingandcoolingsystemthatutilizes
theearth(orseaorlake)forbothaheatsourceandaheatsink.Agroundsourceheatpumpsystemalso
knownasͻŭĻƚĻǣĭŷğƓŭĻͼsystemusestherelativelyconstanttemperatureoftheearthasaheatsource
inwinterandaheatsinkinsummer.Componentsofthissystemincludeheatpumps,hydronicpumps,a
groundheatexchanger(ubendedpipesinboreholes),andadistributionsubsystem.Mostgeoexchange
systemsutilizepolyethylenepipingintheearthfortheheatexchanger.Thegeoexchangeheatpump
rejectsheatintotheearthduringthecoolingmodeandtakesheatoutoftheearthwhileintheheating
mode.
GSHPsystemsarecategorizedintotwotypes:openloopandclosedloop.Openloopsystemspump
groundwaterfromthegroundtothesurface.Thegroundwaterispassedthroughaheattransfersystem,
beforebeingreturnedbyinjectionbackintotheground,atadifferenttemperaturethanbefore;warmer
whenthesystemisusedforcooling,orcolderwhenthesystemisusedforheating.
Closedloopsystemsdonotutilizegroundwater,butinsteadcirculateafluidthroughaloopofborehole
heatexchangepipesburiedintheground.Acirculatingfluid,typicallyglycol,passesthroughaheat
transfersystematthesurfacebeforebeingrecirculatedbackthroughtheburiedgroundlooptoexchange
heatwiththesurroundingsoilorrock.Thelengthofthegroundloopisdeterminedbythecapacity
requiredforheatingorcooling.Theborefieldcanbehorizontalorverticalinconfigurationdependingon
theavailablearea;verticalholesrequiremuchlesslandareabutrequiretheexpenseofdrillingboreholes.
Boreholespacingiscriticaltotheefficientoperationandcosteffectiveconstructionofthegeoexchange
system.Asboreholesareplacedclosertogethertherewillbeanincreaseinthermalinterference,
decreasingtheenergyloadcapacityofthegeoexchangesystem,andrequiringmoregeoexchangetobe
installedtoovercomethepenalty.Minimumrecommendedboreholespacingforaclosedloop
applicationis6.0m(20ft).Belowthisspacingthermalinterferencemaysignificantlyadverselyaffectthe
geoexchange.
Closedloopboreholesaretypicallydrilledtodepthsof120260m(400Α850ft).
Heatpu
mpperformanceCOP'sareusuallyprovidedassumingaconstantenteringwatertemperature
(EWT)of10°C.Ageoexchangesystemdesignedtoreturnwatertotheheatpumpsatthemeanground
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
temperaturewouldbemoreefficientbutwouldneedtobeextremelylongandisthereforenotpractical.
Inreality,theEWTwillvarythroughouttheyeardependingupontheweatherconditions,andtheextent
anddurationofthegeoexchangesystemusage,amongstothervariables.Whendesigningageoexchange
system,thedesignerwillsetminimumandmaximumEWTs.Theloopwillthenbesizedtomeetthese
limits.TheseEWTsarecommonlysettobe4°C(40°F)minimumforwinterheatingand32°C(90°F)
maximumforsummercooling.Insomecases,thesevaluescanbealteredtomeetannualefficiency
targets,howevermostcommonlyitisassumedthattheactualruntimesattheseEWTvaluesareminimal.
Geoexchangesystemsprovidenumerousadvantagescomparedtoconventionalheatingandcooling
systems,including:
Allcomponentsarelocatedbelowground(asopposedtocoolingtowersandboilers)
Reducedequipmentspacerequired(e.g.Αforcoolingtowers)
Reducedcoolingtowerenergyuse
Reducedlongtermmaintenancecosts
Reducedgreenhousegasemissions
Eliminationofwaterconsumptionforcooling
5.3.4.2.OpenLoopWellSystem
5.3.4.2.1.GeologicalSetting
TheoverburdenwithintheKitchenerInnovationDistrictconsistsofacomplexmixofglacialtillsand
outwashsandandgravel.Thetotaloverburdenthicknessintheareaisapproximately55m.Thesandand
graveldepositsrangefrom5to10minthicknessandareusuallyfoundnearthebottomoftheoverburden
sequence.
ThebedrockbeneaththeKitchenerInnovationDistrictconsistsofmultipleformationsofsedimentary
rock.Nobedrockwellsareknowntoexistwithinthedistrict,howeveropenloopgeothermalwellsare
locatedabout200mtothewest(seeBeattyFigure1inAppendixA).Thewellsaredrilledabout55minto
thebedrockandarestillinuseattheAirBossplant(formerlyUniroyalRubberplant).
BasedontheķƩźƌƌĻƩƭlogofthetwoAirBosswells,thesedimentaryformationsatthesiteinclude:
o SalinaFormationshale,
o GuelphFormationfractureddolostone,
o Vinemountshale,and
o GasportandGoatIslandFormationsdolostone
Aschematiccrosssectionthroughthetwowells(plusanoldRMOWobservationwell)isshownonBeatty
Figure2inAppendixA.
5.3.4.2.2.GroundwaterAquifers
Thesandandgraveldepositinthelowerpartoftheoverburdenispartofamajoraquiferwhichisfound
westoftheInnovationDistrict.TheRMOWoperatesfivehighcapacitywellsinthisaquifer,whicharepart
oftheStrangeStreetWellfield.
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
TwoofthebedrocksedimentaryformationsbeneaththeInnovationDistrictarealsoconsideredtobe
majoraquifersthroughoutKitchener,WaterlooandCambridge.TheyaretheGuelphandGasportaquifer
systems,asshownon.ĻğƷƷǤƭFigure2.TheRMOWhasneverpumpedwaterfromthebedrockinthe
vicinityofcentralKitchener,duetothebetterqualityoftheStrangeStreetsandandgravelaquifer.
ThetwoAirBosswellsweretestedat53to56L/s(840to900USgpm)whentheyweredrilledin1968
and1974.Thewellshavebeeninusefor46to51years.BasedonthecapacityoftheAirBosswells,and
.ĻğƷƷǤƭexperienceattheevolv1andHUBbuildings,itshouldbefeasibletoobtainupto30L/s(500US
gpm)frommultipleopenloopsupplywellsthroughouttheKitchenerInnovationDistrict.
Modernopenloopsystemssustaintheaquiferproductioncapacitybyreinjectingallthesupplyflowback
intotheaquifer.Asaresult,theavailableaquifersupplycanbesustainedforlongtermgeothermal
heatingandcoolingofbuildingsinthedistrict.
5.3.4.2.3.ConceptualOpenLoopSystemDesign
Ourconceptualopenloopsystemdesignconsistsofacluster3supplywellsand3injectionwells.Both
thesupplyandinjectionwellswithineachclusterarespaced60m(200ft)apart.Theclusterofsupply
wellsislocated150m(500ft)fromtheclusterofinjectionwells.Eachsupplywellisassumedtohavea
maximumcapacityof30L/s(500USgpm).
Basedontheconceptualtotalflowfromthe3supplywells,thesystemwoulddeliverapeakheatingand
coolingloadof3,500kW.Asummaryoftheconceptualsystemdesignandassumptionsareshownin
.ĻğƷƷǤƭTable1inAppendixA.Thistablealsoprovidesahighlevelconstructionbudgettoconstructthe
system.
5.3.4.3.ConceptualClosedLoopSystemDesign
BasedonthegeologicsettingdescribedinSection5.3.4.2.1,itisexpectedthatclosedloopborehole
drillingwouldbefeasible,providingtheboreholescanbedrilledeconomicallyinthefracturedbedrockat
thesite.
Ourconceptualclosedloopsystemdesignconsistsof250geothermalboreholes,eachdrilledtoadepth
of200m(650ft).Theboreholeswouldbelaidoutina6mby6mgrid,andwouldbeconnectedbya
networkofsupplyandreturnheaderpiping.
Basedonthegeologicsettingandthe250boreholegeothermalfield,thesystemwoulddeliverapeak
heatingandpeakcoolingcapacityof3,500kW.Asummaryoftheconceptualsystemdesignand
assumptionsareshowninTable2inAppendixA.Thistablealsoprovidesahighlevelconstructionbudget
toconstructthesystem.
5.3.4.4.GSHPSystemCapacityandTemperatures
Forboththeopenandclosedloopdesigns,thedistricthotwatersuppliedtoeachbuildingwouldbe65°C
maximuminthewinter,withanassociateddistrictreturntemperatureof35°C.Thedistrictchilledwater
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
suppliedtoeachbuildingwouldbe4°Cmaximuminthesummer,withanassociateddistrictreturn
temperatureof12°C.
Thesizeoftheopenloopsystemislimitedbythespacerequiredbetweentheextractionandinjection
wells.Itisrecommendedthattheextractionandinjectionwellsbespacedapproximately120210m
apart.Additionally,theextractionandinjectionwellsshouldbeclusterednocloserthanapproximately
60mtoeachother.SincetheDESistobeinstalledinadenseurbansetting,itiscostprohibitivetoinstall
morethanthreepairsofwells,astheywillneedtobepipedtogetherandroutedtotheEnergyCentre.
Threepairsofwellswillprovideapproximately1,000tonsofcoolingcapacity.Theremainingloadwillbe
managedbyelectricchillerswithheatrejectiontocoolingtowers.
Tocomparethetwogeoexchangeoptions,theclosedloopwillbedesignedwiththesameborefield
capacityastheopenloop.Foraclosedloopdesign,aborefieldcontaining250boreholeswillrequire
2
approximately7,500mofareafootprint.Athermalenergybalanceiscriticalintheborefield;therefore,
theheatrecoverychillerswillbeoperatedtomaintainthisbalance.Theadditionalcoolingloadwillbe
managedbyelectricchillerswithheatrejectiontocoolingtowers.
Similartotheopenloopconcept,therequiredareafortheclosedloopconceptisalsoveryclosetothe
areaavailableattheMultiModalHubsite.Ifadditionalclosedloopborefieldcapacityweretobeadded
tothesystem,itwouldneedtobelocatedatanothersiteandpipedtoandfromtheEnergyCentre.This
optionwasnotevaluatedinthisstudy.
Inbothcases,naturalgasfiredboilerswillberequiredtomeetthepeakheatingdemand.
ConceptualschematicsfortheopenandclosedloopscanfoundinAppendixAasSK9309002andSK
9309003,respectively.
SizeofGSHPinfrastructureandcostscanbereducedoroptimizedbybalancingsimultaneous,coincident
heatingandcoolingdemand.Thisrequiresfurtherinvestigationduringthetechnicaldevelopment
includinghourlymodellingofheatingandcoolingdemandandreviewingopportunitiestoutilize
mechanicalcoolinginlieuofambientcooling.
CombinedHeatandPower
CombinedHeatandPower(CHP),otherwiseknownasͻĭƚŭĻƓĻƩğƷźƚƓͼͲisthesimultaneousproductionof
electricityandthermalenergyfromonesource.Someexamplesofacogenerationsourcearea
reciprocatingengine,gasturbineorsteamturbine.Thecombinedheatandpower(CHP)efficiencyfora
properlysizedcogenerationsystemusinggasfiredreciprocatingenginescanachieve90%.
ThekeytoachievingthislevelofefficiencyistheaggregationofbuildingspaceheatingandDomesticHot
Water(DHW)loadstoalevelwheremostoftheheatgeneratedfromcogenerationcanbeutilized.This
goalmustbebalancedwiththeeconomicbenefitofinstallingthelargestgeneratorsorCHPunitsas
possibletoachieveeconomiesofscale.
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
ADESisagoodcandidateforacombinedheatandpower(CHP)plantbecauseofasteadybasethermal
heatingload.ACHPplantcouldbeinstalledwithintheEnergyCentretosupplyelectricalloadtotheplant
withtheaddedbenefitofheatrecoveryfromtheCHPtobeinje
ctedintothedistrictheatingsystem.
ACHPplantfortheKitchenerDESwouldbegasfiredgeneratorsthatproducehotwater.Foreveryunit
ofgasconsumedapproximately0.4unitsofelectricityand0.4unitsofthermalenergyareproduced.Even
thoughthereissomeoffsettingofnaturalgasconsumptionbythethermalenergyproducedintheCHP,
similartotheCESboilers,therewouldbeanetincreaseofnaturalgasflowtothearea,butitwillbeallto
oneaddress,attheCEC.However,therewillalsobeanetreductioninelectricityconsumptiontothe
areaandthecapabilityofsupplyinghotwaterorchilledwaterintheeventofapoweroutage.Thisisa
significantadvantagetothebuildingsservedbytheDES.
FeedbackfromKitchenerUtilitieswasobtainedandnaturalgasisavailable.However,thecapacity
needstobedeterminedbasedontheselectedscenarioandtheprojectedsizeofthesystem.
Asingle275kWeenginewillbeinstalledatPhase2andanadditional275kWeenginewillbeinstalled
atPhase3.Theywillbeoperatedprimarilytooffsetthebaseelectricalloadwithintheplant.Any
additionalheatrecoveryabovewhichisrecoveredbytheCHPengineswillbeprovidedbytheheat
recoverychillers.
OtherConsiderations
EnergyConstraints&Security
ThekeyenergysourcesthatareimpactedbytheDESarenaturalgasandelectricity.Thesesameenergy
sourcesareneededforthedevelopmentofnewbuildingsinthearea.Thenaturalgasconsumedbythe
CESboilerswillbeoffsetbyareductioninnaturalgasconsumptioninthebuildingsservedbytheCES.
Thesameistruewithelectricityloadgeneratedbythecoolingplantsinthedistrictenergycentres.The
electricityconsumedbytheelectricchillersisoffsetbythereductioninelectricalloadinthebuildings
servedbytheCES.Therewillbeanetreductioninelectricitybecausethechillersinthedistrictenergy
plantaremoreefficientthanthebuildingcoolingequipment.
Electricallosses,andfailurerates,inthedistributionsystemarereducedduetolesspeakpowerflowto
mostofthebuildings(exceptonecontainingthechillerplant)duringthehottestsummerdays.Thisis
trueevenaftersubtractingtheadditionalpowerrequiredtopumpchilledwatertothevariousbuildings.
Insummary,therewillbeanetreductioningasandelectricityconsumptionduetotheCESboilerand
chillerplantswhichwillimprovetheenergyreliabilityandsecurityforthearea.
ThermalStorage
Athermalenergystorage(TES)systemcouldbeinstalledforeitherthehotwaterorchilledwatersystems.
ATESisintendedtobeusedtoprovidepeakingcapacityforthedistrictheatingandcoolingsystems.The
conceptisthatthestoragesystemwouldbefilledduringtimeperiodswheretheenergyrequiredto
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
providethehotorchilledwaterisatalowcostandwhenthesystemdemandislow.TheTESsystem
wouldbedesignedforspecificdischargeperiod.
Thebenefitsfromhotwaterthermalstoragecouldbethefollowing:
MaximizethegenerationofhotwaterfromtheCHPunits.
Provideadditionalcapacitytosupplypeakheating
Improvehotwaterheatingsystemreliabilitybyhavingahotwaterreserveavailableincaseof
emergencies.
Theadvantagesofthechilledwaterthermalstoragearethefollowing:
ReduceonpeakelectricalloadsbygeneratingchilledwaterduringoffpeaktochargeTE
Sand
dischargeduringonpeakperiods.
Provideadditionalcapacitytosupplypeakcoolingloads.
Improvechilledwatersystemreliabilityhavingachilledwaterreserveavailableincaseof
emergencies.
6.Financial
Thekeyinputstothefinancialmodelare:
1.Projectphasing,loadandcapitalestimates,whichvaryfromprojecttoprojectandfordifferent
phaseswithinprojects,i.e.contractedcapacity(inkWtortons)andcapital(in$millions).
2.CapacitychargesthathavebeendeterminedthroughaBAUcostanalysistobecompetitivefor
thesubjectscenario(i.e.$percontracttonpermonthor$percontractkWtpermonth).
3.Operatingassumptionsusingtypicaldefaultvaluesandratiosforoperatingcostsperunitof
energyorunitofinstalledcapacity,whicharelargelythesamebetweenallprojects,being
adjustedfromtimetotimeasenergypriceschangeorexperienceleadstotherecommendation
ofdifferentratios.
CapitalCostEstimate
Thepreliminarycapitalcostestimatesforeachphaseoftheproposeddistrictenergysystemdevelopment
hasbeenestimatedbasedonC.ƭcostingtemplatesandestablishedunitcosts,vendorandcontractor
estimates.ClassestimatesareconsideredClassD,indicative+/30%.hǞƓĻƩƭcontingency,softcosts,and
legalandeasementfeesarenotincluded.
AsummaryofthecapitalcostsforeachproposedDEScanbefoundinTable4below.
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31
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Page
219309
Study
(2019$)
Feasibility
Pre
Costs
DES
Capital
DES
District
Kitchener
Innovation
CEIS
4:
Kitchener Table
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
AnnualOperatingandMaintenanceEstimate
Theannualcosttooperatethedistrictenergysystemsandmaintaintheequipmentplaysasignificantrole
intheviabilityofadistrictenergyproject.Thefollowingtablesummarizestheestimatedannualcostsfor
eachproposedDESatfullbuildout.
Table5:CEISKitchenerDESOperationandMaintenanceCosts
7.BusinessCase
Glossary
KeyFinancialTerms
NPV(NetPresentValue)isthedifferencebetweenthepresentvalueofthebenefitsofa
projectanditscosts.
IRR(InternalRateofReturn)isdefinedastheinterestratethatsetstheNPVofthecashflows
ofaprojecttozero.
WACC(WeightedAverageCostofCapital)istheaveragecostofcapitalanentitymustpayto
allitsinvestors,bothdebtandequityholders.
TVM(TimeValueofMoney)istheconceptthatthevalueofcashtodaywillbeworthmore
.
thaninthefutureduetotheearningpotentialofpresentdaycash
BusinessAsUsual(BAU)Costs
CustomerĬǒźƌķźƓŭƭBAUcosts,otherwisereferredtoasstandaloneorselfgenerationcosts,includethe
totalcostsofowning,operatingandmaintainingheatingand/orcoolinginbuildingsystemsifitwerenot
connectedtotheDES.
TheBAUcostcanbeconceptualizedasbeingcomprisedoftwocomponents:
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
1.AnnualOperatingandMaintenance(O&M)Costs.Thisincludesfuel,electricity,other
consumables,onsitestafftimeandmaintenance.
2.CapitalCosts Fornewbuildingstherearetwocomponents:
Theupfrontcapitalcostavoidedinhavingtobuildthespaceandinitialcosttoinstallthe
heatingandcoolingequipment;and
Theavoidedfuturereplacement/sinkingfundforequipmentreplacement.
nd
Forexistingbuildingsthereisonlythe2portionoftheavoidedcapital(future
replacement/sinkingfundforequipmentreplacement).
TheBAUcostswereestimatedforthepotentialcustomerbuildings.Basedonthestandalonecosts,
otherwisereferredtoasselfgenerationcosts,marketbaseddistrictenergyratesaredevelopedtobe
costcompetitivewithabusinessasusualscenario.
1 - 39
34
|
Page
219309
Study
Feasibility
Costs
Pre
DES
Generation
Self
District
Heating
Innovation
Typical
6:
Kitchener Table
1 - 40
35
|
Page
219309
Study
Feasibility
Costs
Pre
DES
Generation
Self
District
Cooling
Innovation
Typical
7:
Kitchener Table
1 - 41
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
Revenue
DistrictenergyratesarethechargesthecustomerĬǒźƌķźƓŭƭpayfortheDESservice.Theyaredeveloped
basedonavirtualplantmodelasifthebuildingwerenotconnectedtothedistrictenergysystem.It
analysesthecapitalcostsandoperationandmaintenancecostforastandalonebuildingsystemto
generatethebuildinŭƭspaceheating,spacecoolingand/ordomestichotwater(DHW)needs.
Thedistrictenergyratesarecomprisedoftwocomponents:
1.theEnergyChargeTheannualenergychargesarebasedontheannualenergyconsumption,current
utilityratesandtheequipmentefficiencyexpectedtobeachievedintheselfgenerationscenario.
2.theCapacityChargeTheCapacityChargesarebasedonthestandardratesapplicableto
theloadforheatingandcooling.
ThefollowingfigureshowstherelationshipbetweentheSelfGenerationanddistrictenergyrate
structures.DistrictEnergyRateStructure1involvesanenergychargeandcapacitycharge.District
EnergyRateStructure2involvesaonetimeconnectionfeetocovercapitalcosts,reducingongoing
rates.
Figure9:SelfGenerationCostsvs.DERateStructure
Theratestructureisassumedtoutilizeafixedcapacitychargeandavariableenergychargestructure
(RateStructure1showninFigure9above).Theratesassumedinthecalculationoftherevenueinthe
financialmodelarebasedontheweightedaverageoftheproposedratesdeterminedfromtheBAU
costs.TheyaresummarizedinTable8.
Table8:DistrictEnergyRateSummaryΑHeatingandCoolingEnergy
DESRates
HeatingCooling
CAD/MWh
Energy31.72$$0.12CAD/tonh
t
CAD/kW
Capacity53.15$$620.29CAD/ton
t
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
Thecapacitychargeratesaresettobecompetitiveagainsttheannualizedfixedcostofconventional
heatingand/orcooling.Acapacitychargeof$53.15kW/yearforheatingand$620.29perton/yearfor
t
coolingisassumedandshouldbeadjustedtobecompetitiveforKitchenerDESandbusinessessuchthat
buildingownerscanexpecttheirannualizedfixedcoststobeequalorlowerwhenconnectingtoaDES
comparedtoconventionalselfgeneration.
FinancialResults
InC.ƭexperiencewiththedistrictenergybusinesscasedevelopmentinCanada,a65%/35%debtto
equityratioisaconservativefinancialleverageforamunicipallyowneddistrictenergysystem.The
InfrastructureOntariolendingrateforͻaǒƓźĭźƦğƌCorporationsΑDistrictEnergyhƦĻƩğƷƚƩƭͼis~4.0%for
25years.ByexaminingtheWeightedAverageCostofCapital(WACC)assumingaborrowingrateof4%
andequityvalueof10%,theWACC=0.65x4%+0.35x10%=6.1%.Therefore,anInternalRateofReturn
(IRR),basedon100%equityassumedinthefinancialanalysis,aboveWACCwouldbeconsidereda
financiallyviableproject.Forexample,theROIforScenario2is7.9%andisabovetheWACCandtherefore
agoodproject.
ThefinancialresultsincludingprojectIRRandNPVforeachscenarioaresummarizedinTable9.
ghestIRRof
Scenario1a,theconventionalgasfiredboilers/electricchillersscenariowithCHPhasthehi
8.9%andNPVof$21.4million.However,theGHGemissionsreductionfromtheBAUcaseistheworst.In
fact,theemissionsincreasecomparedtotheBAU.EvenforScenario1,withoutCHP,theGHGreduction
isonly7%.
Scenario2,thegroundsourceheatpump(GSHP)ΑOpenLoophasanIRRof5.3%andNPVof$5.9million.
TheGHGemissionsreductionis53%comparedtotheBAUcase.Scenario2a,withCHP,hasaslightly
betterfinancialcase(i.e.IRRandNPV)buttheGHGreductionreducesto44%fromtheBAU.
Scenario3,theGSHPΑClosedLoophasthehighestestimatedfullbuildoutcapitalof$51.8million,the
lowestIRRof4.3%aswellastheanegativeNPVof$1.6million.TheGHGemissionsreductionfiguresare
similartotheOpenLoopscenario.
MostoftheriskassociatedwiththedevelopmentofDESiswiththebuildoutandconnectionoffuture
development.Thewaytomitigateriskthatfuturebuildingsgetbuiltlaterthanplannedistoaggressively
phasethecapitaloftheprojectandspendcapitalasbuildingsareconfirmed.ForScenarios2&3,they
faceaveryhighupfrontcapitalcost,buttheircorrespondingrevenuedoesnotcomeonlinefullyuntil
2034underthecurrentplan.Thishasadramaticnegativeimpactontheirfinancialviability.
InC.ƭopinion,Scenario1ahasapositivebusinesscaseandrepresentsthebestopportunitytodevelop
abasedistrictenergysystemforKitchener.However,thisispurelyonafinancialbasis.WhenGHG
emissionsandotherfactorssuchasenergysecurityareconsidered,thenScenario2representsasolid
businesscasewithsignificantreductionofGHGemissions.
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
Scenario2/2aand3/3awouldbenefitgreatlyfromamorerapidbuildoutandconnectionofplanned
customers,andtheimplementationofacarboncost,whetheritbesolelyforthepurposesofmodeling
orimplemented.
Table9:KitchenerDESFinancialResultSummaryofCapital,ExpensesandRevenue
SensitivityAnalysis
Theresultsofthisanalysisareimpactedinanotablemannerbyamultitudeofsensitivitiesthatare
accessibleintheprovidedfinancialmodel.Foremostamongthesesensitivitiesisthepresenceofacost
ofcarbon,developmenttimingandcapitalcosts.
TheFederalGovernmenthaslaidaframeworkthatdelineatesa$20/tonnecostofcarbonstartingin
2019andrisingto$50/tonnein2022.Ifthecostofcarbonisincludedinthefinancialmodeling,andthe
savingsinreducedcarboncostsareincorporatedasreducedexpensestothedistrictenergyscenarios,
thisincreasesthefinancialvalueofdistrictenergy.Thisanalysisanditsresultsca
nbeseeninTable10.
Table10:KitchenerDESFinancialResultSummarywithCarbonCosts
BusinessCaseFinancial(Escalated)
ProjectedIRR,2525YearNPV(4%)('000k
Years(%)$)
ScenarioDescription
Conventional Gas Fired Boilers/Electric Chillers
9.2%21,763$
1
DES
Scenario 1: Plus CHP9.1%22,038$
1a
Ground-Source Heat Pump (GSHP) - Open
6.1%9,507$
2Loop - 1,000 tons
Scenario 2: Plus CHP6.1%9,782$
2a
Ground-Source Heat Pump (GSHP) - Closed
5.1%5,177$
3
Loop - 1,000 tons
Scenario 3: Plus CHP5.1%5,452$
3a
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
TheextensivetimelineofthebuildoutoftheDESindicatesthatagreatdealofcapitalwillneedtobespent
upfront,withcustomersandtheirassociatedrevenuecomingonlinelater.Fortheoreticalpurposes,
Table11belowdemonstratestheeffectofimmediateconstructionandacquisitionofcustomers
(constructionrevenuecommencingin2
019).
Table11:RapidDevelopmentTimeline
BusinessCaseFinancial(Escalated)
ProjectedIRR,2525YearNPV(4%)('000k
Years(%)$)
ScenarioDescription
Conventional Gas Fired Boilers/Electric Chillers
14.5%51,946$
1DES
Scenario 1: Plus CHP14.7%54,689$
1a
Ground-Source Heat Pump (GSHP) - Open
9.5%31,876$
2Loop - 1,000 tons
Scenario 2: Plus CHP9.8%$ 34,618
2a
Ground-Source Heat Pump (GSHP) - Closed
8.3%$ 26,854
3Loop - 1,000 tons
Scenario 3: Plus CHP8.6%$ 29,597
3a
Capitalcostsalsohaveasubstantialinfluenceonthefinancialresults,andifcapitalcostsforthedistrict
energyscenariosincreaseordecreaseby10%alikelihoodwhichisfarfromimprobableΑthefollowing
resultsareshowninTables12andTable13.
Table12:KitchenerDESFinancialResultSummarywithDECapitalIncreasedby10%
BusinessCaseFinancialFinancial(Unescalated)(Escalated)
TotalInvestment
ExpensesRevenueProjectedIRR,25YearNPV
('000k$in2019
('000k$)('000k$)25Years(%)(4%)('000k$)
ScenarioDescription
Dollars)
Conventional Gas Fired Boilers/Electric
$ 2,45641,391$ 6,741$ 7.9%17,238$
1Chillers DES
Scenario 1: Plus CHP43,382$ 2,120$ 6,741$ 7.8%17,608$
1a
Ground-Source Heat Pump (GSHP) - Open
$ 2,59651,676$ 6,372$ 4.3%1,544$
2Loop - 1,000 tons
Scenario 2: Plus CHP53,667$ 2,261$ 6,372$ 4.4%1,915$
2a
Ground-Source Heat Pump (GSHP) -
$ 2,60657,022$ 6,372$ 3.4%$ (3,219)
3Closed Loop - 1,000 tons
Scenario 3: Plus CHP59,013$ 2,271$ 6,372$ 3.4%$ (2,848)
3a
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
Table13:KitchenerDESFinancialResultSummarywithDECapitalDecreasedby10%
BusinessCaseFinancialFinancial(Unescalated)(Escalated)
TotalInvestment
ExpensesRevenueProjectedIRR,25YearNPV
('000k$in2019
('000k$)('000k$)25Years(%)(4%)('000k$)
ScenarioDescription
Dollars)
Conventional Gas Fired Boilers/Electric
$ 2,45633,865$ 6,741$ 10.1%24,222$
1Chillers DES
Scenario 1: Plus CHP35,494$ 2,120$ 6,741$ 10.1%24,917$
1a
Ground-Source Heat Pump (GSHP) - Open
$ 2,59642,280$ 6,372$ 6.4%10,208$
2Loop - 1,000 tons
Scenario 2: Plus CHP43,909$ 2,261$ 6,372$ 6.5%10,903$
2a
Ground-Source Heat Pump (GSHP) -
$ 2,60646,654$ 6,372$ 5.4%6,311$
3Closed Loop - 1,000 tons
Scenario 3: Plus CHP48,283$ 2,271$ 6,372$ 5.6%7,006$
3a
FinancialModelExcelModelincludingSensitivity
Providedasaseparateattachment.
8.EnvironmentalBenefit
GreenhouseGasEmissionSavings
Akeyconsiderationtothissystemisthegreenhousegasemissionsascomparedtobuildingasusual,as
summarizedinthefollowingtable:
Figure10:AnnualGreenhouseGasEmissionSavings
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
GreenhouseGasReductionFullBuildout
BuildingasUsual
TotalBAUEquivalentElectricityConsumption ЏААЋaŷ
Ļ
TotalBAUNaturalGasConsumption 183,800GJ
AnnualBuildingasUsualGHGEmissions9,662tonnes
DistrictEnergySystem
Scenario1ΑAnnualDistrictEnergySystemGHGEmissions8,971tonnes
Scenario1aΑAnnualDistrictEnergySystemGHGEmissions9,858tonnes
Scenario2&3ΑAnnualDistrictEnergySystemGHGEmissions4,547tonnes
Scenario2a&3aΑAnnualDistrictEnergySystemGHGEmissions5,434tonnes
NetAnnualGHGReduction,%ReductionoverBuildingasUsual
Scenario1692tonnes,7%
Scenario1a(195)tonnes,2%
Scenario2&35,115tonnes,53%
Scenario2a&3a4,228tonnes,44%
Thedistrictenergysystemisexpectedtohavealowerelectricityconsumptionandnaturalgas
consumptionovertheBuildingasUsualscenariowhenCHPisnotconsidered.Notably,duetolowcarbon
emissionsoftheelectricitysuppliedtoKitchener,theconstructionofCHPcapacityandtheresulting
increaseinnaturalgascoisestheGHGemissionsofScenario1.Duetotheincorporationof
nsumptionra
GSHPsinScenarios2&3,theGHGemissionsofthesescenariosremainlowerevenwiththeadditionof
CHPcapacity.
Thisassumesthefollowingemissionfactors:
OntarioblendedElectricityGeneratingemissionintensity:31.0kgCO/MWhfromGuidelinefor
2ee
Quantification,Reporting&VerificationofGreenhouseGasEmissionsApril2019(Note:thisfigure
representsanaveragevalueandwouldbedifferentiftimeofdayfiguresareused,whichwould
beconductedduringamoredetailedstudy.)
Naturalgasemissionintensity(combustiononly):49.3kgCO/GJfromAClearerViewon
2e
hƓƷğƩźƚƭEmissionsJune2019
OtherEnvironmentalBenefits,Synergies,andConsiderations
1.Opportunitiesandheatavailableforsnowmeltoperations:sidewalks,parkinglots,busdepotand
transportationhubscanbenefitfromreductioninsaltingandsnowclearingefforts,improved
accessibilityandpublicsafety.
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
2.Roofspaceformostbuildingswouldbemorecongenialwithoutstacksandcoolingtowers.The
roofmighttherebybeusedascommonareasfortheenjoymentofbuildingoccupants,greenroof,
implementation,solarPV/solarthermal,rainwaterharvesting.
3.Provideopportunitiestoutilizewasteheatproducers.
4.Increaseenergyliteracystartingwithdemandsidereductionsandimprovingsupplyside
efficiency.
5.Supportssmalllocalpowergeneration/cogenerationandmicrogridstrategiesforbackuppower.
OwnershipModels
Overview
Variantsofthreeownershipmodelshavebeenusedby59{ƭworldwideandinNorthAmerica:
1.PublicΑtheCitymaintainsownership
2.PrivateΑconcessionsoroutrightownershipbyprivateentity
3.HybridΑincludingjointventure(JV)orsplitownership,acombinationoftheabovemodels
InCanada,approximatebreakdownofDESbyownershipmodelisroughly:
30%Institutions
20%PubliclyOwned
20%PrivatelyOwned
30%OtherΑCrown/FirstNations/Cooperative/Hybrid
Determinationofthepreferred,viableOwner/Operatormodelandgovernanceisaprerequisiteto
developingaDES.Theremustbeanentitywithaclearlydefinedstructurethatwillberesponsibleforthe
project,raisefinancingandenterserviceagreementswithcustomers,whetheritistheCity/Regionitself,
anagencyorcorporationoftheCity/Region,aJointVenture(JV)oratotallyprivatecompany.
AnidentifiedandcredibleDESOwnerisessentialforeffectivemarketing.Prospectivecustomerswillwant
toknowtheDEShǞƓĻƩƭpreciseplanforownershipandoperatingstructure,oratleastthemostlikely
option,ifitisnotfirmlyestablishedatthetimemarketingactivitycommences.Thisisbecausecustomers
areexpectedtosignlongtermserviceagreementsnaturallyneedtounderstandexactlywhotheir
counterpartywouldbeandwhotheycanrelyontodeliverthisessentialservice.
Thesuitabilityofeachofthethreeownershipmodelsdependsonthefollowingfactors:
ManagementcapacityandDEexperienceistheCitywillingtoallocateinternalmanagement
staffandisitinterestedinenteringtheDEutilitybusiness?
Risk/Reward(degreeofcomfortwithriskorriskaversion)
AccesstocapitalorCostofcapitalistherewillingnesstoraisealloranypartofthenecessary
capital?Involvementofprivatecapitaltendstobemorecostly.Publicownershipmayhave
accesstogovernmentgrantsandincentivesthathelptoimprovethebusinesscaseandreturn
oninvestment
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
StrengthsandweaknessesoftheotheroptionsarehighlightedbyaSWOTanalysisinFigure10.
Figure11:OwnershipModelsΑSWOTAnalysis
100%PublicHybrid100%Private
ΘAccesstolowcostfinancing.ΘCombinesprivateDEexperienceΘPrivatesectorassumesallrisk,is
Strengths
ΘLongtermagreement,stable&capitalwithCityadvantages,mostmotivated,minimizes
partner.suchasaccesstoseniorgovernmentinterference
ΘAccesstoGovernmentGrants.governmentgrants
ΘAlignmentwithotherCity
Departmentsandlevelsof
government
ΘAvailablecapitalforlargeΘJVcomplexitywithresultantΘCESprojectsmaynotmeetprivate
Weaknesses
infrastructureproject.demandsonmanagementtime.return/riskcurvewithout
Managementcapacity(internalΘSplitownershipfoundtoinhibitgovernmentassistance
resources)andgrowthinWindsorexample
ΘNoDESexperience
ΘMeetsothergoalsandΘMonetizeCityadvantages;selloutΘCreateenvironmentfortheCESto
Opportunities
objectivesinadditiontowhenCESestablished,usingcashsucceed
businesscasesuchastoseedanotherCESproject,ΘRealizesocioeconomicand
sustainability,economicmaximizingsocioeconomicandenvironmentalvalueswithoutusing
development,resilience.environmentalvalues/źƷǤƭownlimitedfinancial
ΘLeadershipΘLeverageindustryexperienceresources
Synergywithothermunicipal
projectsandobjectives
ΘRisks:costoverruns,ΘDisputesduetodifferentgoalsΘConcessionsinhibitmotivationto
Threats
performanceissuesassociatedΘRelationshipandRFPprocessexpandorspendmaintenance
withconstruction,scrutinizedforfairnessdollars
commissioningandO&Mcosts.
ΘMarketpenetration
ΘNuisancecomplaints
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
100%PublicOwnership
ManysuccessfulDESsystemstartupshavebegunwith100%PublicOwnership.
Figure12:PublicOwner/OperatorModels
ModelDescriptionExamples
Θ100%municipalownershipandoperationdirectlyΘSoutheastFalseCreek(SEFC)NEU;
1
(throughtheengineeringservicesdepartment)ΘStrathconaCounty
ΘCityofSurrey
ΘPrinceGeorge
ΘCityofNorthVancouver
Θ100%municipalownershipandoperation,throughΘMarkhamDistrictEnergy;
2
asubsidiarycorporationorexistingpublicutilityΘHamiltonCommunityEnergy;
ΘCity/ğƌŭğƩǤƭEnmax;
ΘCityofRichmondAlexandraDEU;
ΘLonsdaleEnergyCorp.
ΘLuluIslandEnergyCompany
Θ100%municipalownershipwithprivatesectorΘRevelstokeCommunityEnergy
3
operationΘRegentParkEnergyInc.
100%PrivateOwnership
3
PrivateDEsystemshavebeenproventoworkinCanadawiththelargestdistrictenergyutilitiesbeing
entirelyprivatelyowned.Someofthe59{ƭmayhavebegunaspubliclyownedorjointventureowned
systemsandtransitionedtoprivateownership.
Figure13:PrivateOwner/OperatorModels
ModelDescriptionExamples
Θ100%privateownershipandoperationΑΘEnwave(Toronto,London,Charlottetown,Windsor,
4
commercialutilitymodelChicago,LosAngeles,Houston,NewOrleans,Seattle,Las
Vegas,Portland)
ΘCreativeEnergy(FormerlyCentralHeat)
ΘCorix(University,Dockside)
ΘSudburyDistrictEnergy(Toromont)
ΘCornwallDistrictEnergy
ΘEnergirUrbanHeatingandCooling(VeoliaNorthAmerica
ΑMontreal)
ΘRiverDistrictEnergy
Θ100%privateownershipΑcampussystemsbyrealΘMirvishVillage,TorontoΑWestBank+CreativeEnergyin
5
estatedevelopersToronto
ΘDrakeLandingSolarCommunity,Okotoks
ΘLaCiteVerte,QuebecCityΑSSQ+
Hybrid
Thereareseveralexamplesofhybridmodelsthathaveworkedbecausetheysuitedspecificlocal
requirementsatthetime.Thisisapatternthatmightfitthe/źƷǤƭsituationwheretheCitymaybe
interestedinapartownershippositioninordertoinitiatetheprojectandthenholdthatinterestforas
3
ThequalifierͻǒƷźƌźƷǤͻistodistinguishthisbusinessmodelfromcampussystemsownedbyuniversities,industries,
themilitaryorothergovernmentorganizations.
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
longasitprovesusefultoensureexpansiontomeetCitygoalsforlocaleconomicdevelopmentandGHG
reduction.ManyoftheWƭhavemoved,oraremoving,toasingleownerposition;thesplitownership
modelistheleastfavorableoption.
Figure14:HybridOwner/OperatorModels
ModelDescriptionExamples
JVbetweenamunicipalityandaprivatesectorΘTorontoCommunityHousing/Corix(now100%public)
6
company(theprivatesectorcompanymayprovideΘCityofSubury/Toromont(now100%private)
operatingexpertise)ΘOvalVillageRichmondΑLIEC/Corix
Splitownershipandoperation,themunicipalityΘWindsorDistrictEnergy/Enwave
7
owningandoperatingthedistributionsystemswith
privatesectorowningandoperatingEnergyCentre
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
9.NextSteps:DESImplementationStrategy
Task1DevelopDESBusinessConcept
ThefirsttaskistoconfirmtheOwner/Operatormodelandestablishsuitablegovernanceforacommercial
DESsystemorutility(e.g.relationshipwithshareholdersandfunders).Keyquestionstoconsiderinclude:
Whowillowntheplantanddistributionsystem?
Whowilloperatethesystemmosteffectivelytobenefitthecommunity?
Whohasaccesstopotentialsourcesofprivatefinancingorgovernmentgrants?
Cancapitalcostsandfinancingresponsibilitiestobeshared?
FromC.ƭexperience,itisunderstoodthatbuildingowners/developerswantaclearunderstandingof:
ΘWhattheDESservicebeingprovidedis.
ΘWhotheyaredealingwith?
ΘThattheserviceisfairandtheprocesstransparent.
ΘThattheDESservicewillmeettheirprojecttimeline.
ΘThattheserviceiscostcompetitive.
ΘWhatarethebenefitsandwheredogoalalign?
IdentifyDESengagementstrategy:
City/RegionalRole EffectiveDESimplementationrequiresaproactiverolebytheCity/Region.Staffwill
needtoarticulatetherationaleandroleoftheCity/Regionandrequirementsoftheserolestoall
departments,theCityChiefAdministrativeOfficer(CAO)andultimatelyCity/RegionalCouncil.The
City/Regionalstaffateverylevelmustunderstandthattheyareinstrumentaltotheultimatesuccessof
theDESimplementation.
AseniorstaffpersonshouldbeassignedtoplaytheleadroleintheestablishmentoftheDESbusiness
structure,aswellasnegotiatingthetermsofahybridmodelifthatistheƚǞƓƭpreferredoption.This
individualwouldalsoberequiredtomakethecasetointernalapprovalauthoritiesforanyspecific
monetaryorinkindcontribution.
AuthoritytoexecutetheCity/RegionalrolesshouldbesoughtfromCouncil.Havingestablisheda
responsibleentitytotakecarriageoftheproject,theassignedrepresentativeswouldbedulyauthorized
toexecutethebalanceoftheimplementationplanasoutlinedbelow.
Priortothecommencementofmarketing,aninitialbusinessplanshouldbedevelopedwithaproject
schedule,costs/revenueprojection,anddraftsampleMemorandaofUnderstandingΛah
ƭΜand
ThermalEnergyServiceAgreementsΛ9{!ƭΜforcustomers.
KeyStakeholders ΑIdentifyandinvolvekeystakeholderswhomaybenefitfromtheestablishmentofa
DESinKitchener.Toursofsuccessfuldistrictenergysystems,workshops,andsharedexperienceswith
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
otherbuildingownersandoperatorsareaneffectivewaytoinvolvecommunitystakeholdersand
familiarizethemwithdistrictenergy.
ΘCityCouncilorsRegional/ProvincialGovernmentOfficials
ΘDevelopers/Landowners
ΘLocalResidentsandResidentialOrganizations
ΘBusinessGroups
ΘEnergyManagers,OrganizationsandEnvironmentalGroups
ΘGeneralPublic
DESDevelopers
InternalCity/RegionalGroupssuchasWater,MunicipalInfrastructure,Roads,Building
Operators,Planning/Policy
AcademiaΑUniversityofWaterloo,ConestogaCollege,WilfridLaurierUniversity
Others:Enbridge,IESO,KitchenerWilmotHydro,GrandRiverHospital,Metrolinx
KeyCommunityMembers
BenefitstotheCommunity Itisimportanttocommunicateaconciseclearmessagebasedon:
1.AddingValuetotheCity/Region
2.Strengtheningthelocaleconomy
3.Improvingenergyefficiencyandenergysecurity
4.Offeringacleanermeansofmeeting(thermal)energydemands
5.Providingenergyflexibilityandresilience.
UnderstandBarrierstoDESImplementation:
ΘLowenergyprices.
ΘLackofcapital:communityenergysystemsarecapitalintensive.
ΘEconomics:requirementforshorttermpaybacksonenergyinvestments.
ΘLackoftechnicalandDESbusinessknowledgebycompanies,policymakers.
ΘNeedforeffectivepolicyincentivestostimulateinvestmentinenergy.
ΘLackofbuyinfromͻğƌƌͼstakeholdersincludingmultiplelevelsofgovernment,developers,local
utilities,buildingowners.
ΘUnderstandingofthetruecostofenergyproductionΑcapital&operatingandmaintenance.
ΘLittlebenchmarkingandmeasurementintheHVACindustrytounderstandefficienciesand
performance.
Task2ΑDESMarketing
DESMarketingistheprocessofteachingconsumerswhytheyshouldchooseaconnectiontoadistrict
energyproviderovercontinuingwithastandaloneheating/coolingsystemfortheirbuilding.Marketingis
aformofpersuasivecommunicationwhichincludescreatingtheproductorserviceconcept,identifying
whowillbeDEScustomerbuildings,promotingit,andmovingitthroughtoaconnectionagreement.The
DESmarketingphaseinvolvesincreasingawarenessanddemonstratingviability.
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
Themostimportantbuildingowners/developerstoapproachwouldbetheCity,Region,andProvince.
Staffanddecisionmakersresponsibleforheatingandcoolingofallpubliclyownedbuildingsidentifiedas
potentialconnectionsshouldbeengagedinpreliminarydiscussionsaimedatintroducingthepossibility
connectiontoDES.
ThepotentialvaluetotheCity/Regionshouldbestressedandtheplannedprocessforestablishingthe
DESbusinessexplained,includingtheexpectedschedule.Animportantoutcomeofthisactivitywouldbe
togainthecooperationandparticipationofeachbuildingowner/operatorintheestablishmentofthe
DESalongwithcommitmentstocoordinatetheirplanningactivitieswiththeDESactivity.
DESmarketing,learning,andincreasingknowhowwillcontinuetobeanongoingeffort.
Task3RefinetheTechnicalConceptFurther
TheDEStechnicalconceptshouldbedetailedfurtherbasedontheresultsofdiscussionswiththebuilding
owners/developers.Includedinthiseffortwouldmoreindepthinvestigation:
Commitmentofthesiteidentifiedfortheenergycentre,coordinatewitharchitecturaland
developmentteamifenergycentrewillbeembeddedinabuilding.
Technicalplanningandcoordinationwilloccurwiththeoverallsiteplanning.
Identifycoordinationrequiredandpotentialsynergieswithotherongoinginfrastructure
developmentworkinthetargeteddevelopmentareas.
Analysisoftestboreholesandconfirmsuitabilityofgroundsource,ifapplicable.
Reviewbuildingenergymodelsandidentifysimultaneousheatingandcoolingopportunitiesto
increaseeffectivenessofGSHP.
Investigateutilityservicingrequiredforenergycentreincludingnaturalgasservice,electrical
connection,water,etc.
PreliminaryreviewofEnvironmentalComplianceApprovalrequirementsrelatedtoairemissions,
noiseassessment,useofgroundwater,effectongroundtemperature,anduseofcoolingtowers.
Refinetechnicalconceptdesignandimprovecostestimateclass.
Task4ProjectReview
StockwouldbetakenoftheprospectsandsuggestedcharacteroftheDESasinformedbyongoingand
previousefforts.Anespeciallyimportantstepwouldbetosolicitcommentsonthecurrenteffortfrom
buildingsowners/developers,asthesewillformthebasisofah
ƭthattheywillbeaskedtosign.The
listofprospectivecustomerpeakloadsandenergyuse,andconsequentlythecost/revenuemaybe
revisedasaresultofthiswork.
Task5DevelopProjectTechnicalDefinition
Basedonaprimaryreviewoflikelycustomers,theProjectTechnicalDefinition(PTD)shouldbedeveloped.
(ThisissometimescontainedinaDesignBasisDocument).ThePTDwillincludeinitialsizingofequipment,
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
schematicsandlayouts,includingpiperouteandsamplepipedetails.Morerefinedcapitalcostestimates
wouldbedevelopedfromthePTD.
BasedontheprojectedĭǒƭƷƚƒĻƩƭavoidablecostsanddiscussionswiththelandowners/developers,a
pricingstructurewillbedeveloped.Thepricingstructureandcapitalcostestimateswillbeusedtodevelop
theprojectbusinesscaseandreviewofrisks.
Task6ObtainCustomerCommitment
Withasolidbusinessplan(includingpricing)inhand,presentationswillbemadeto
landowners/developersaimedatsecuringsignoffofah
ƭ͵Explanationswillbegivendescribingwhat
itmeansforabuildingtobeconnectedtodistrictenergyfrombothatechnicalandbusinessperspective.
Thekeypricingmessagewillbetheconceptthatdistrictenergywillcostnomorethanthebusinessas
usualalternativebutwillprovidebettervalueformoneythroughriskmitigationandservicereliability.In
astandalonesituation,thebuildingowner/operatorassumesallriskoffaultyequipmentandoperator
error.ByconnectingtoaDES,buildingownerstransferthisrisktotheCESowner.
Thelandowners/developerswillbeaskedtosignoffonah
ƭͲinacknowledgementofdraft9{!ƭthat
willalsobepresentedtothem.
Experiencehasbeenthatexecutionof9{!ƭcanbeatimeconsumingprocess.ah
ƭprovidetheDES
developerwithsomeassuranceofcustomercommitmenttosupportapplicationforcapitalapprovalsand
constructionfinancing,evenwhilefinalcustomerreviewandexecutionof9{!ƭareinprocess.
Task7FinalizeProjectDefinition
TheProjectTechnicalDefinitionandbusinessplanwillbereconfiguredasnecessaryinaccordancewith
theah
ƭ͵Thismayincludesomerefinementtothepricingandconsequentlyrevenueprojections.
Thefinalbusinessplanshouldincludeconfirmationofbusinessandfinancingstructure,governance,
pricing,cost/revenueprojection,projectschedule,riskmanagementplan,environmentalandsocial
performanceandsamplesofMOUandESA.
AtthisstageagoornogodecisionfordevelopmentofaDESmaybemade,andifpositivewouldmove
intoadetaileddesignandimplementationphase.
Task8DistrictEnergyReadyInfrastructure
OneofthemostcommonconcernsofprospectiveDEinvestorsistheextenttowhichenoughcustomers
arecommittedtosubscribetotheservice.Therefore,thebestthingtheCitycoulddotofacilitate
realizationofthebenefitsofDESistoencouragebuildingstoconnecttotheDES.
TheCityiswellpositionedtobeeffectiveinthisrolethroughitsrelationshipwithrealestatedevelopers.
RepresentativesoftheCitycanengagedevelopersindiscussionaboutthemutualbenefitsofDES.In
areaswhereDEserviceis,ormay,becomeavailable,thedevelopmentapprovalprocessmightbeusedto
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
requirelarge,newbuildingstobeconstructedinawaythatareatleastͻ59ƩĻğķǤͼ͵Newdevelopments
andsubdivisionplanscanincludespacereservedinrightofwaysforDEinfrastructureoritcanbe
installedaspartofthemunicipalservicing.Theseinitiativescanbedevelopedthroughplanningandpolicy.
ŷğƷƭinItforDevelopers?ŷğƷƭinItfortheCity/Region?
ResiliencyandReliability
Centralenergysystemsareveryreliable,andtheburiedinfrastructurereducessusceptibilitytoextreme
weathereventssuchastornadoesandicestorms.Theuseoflocalandwasteenergysourcesaswellas
CHPopportunityincreasesenergysecurityandresilience.
EnvironmentalandEnergyEfficiency
TheeconomiesofscaleandcentralizednatureofDESenablesahighlyflexibleandadaptablefueland
technologymixtobeused;increasesopportunitytouselocalwasteenergystreams,implementlow
carbonenergysourcesandcombinedheatandpower.Inaddition,purposebuiltandoperatedcentral
energyfacilitiestogetherwithcombinedthermalloadsallowsprimaryfuelsourcestobeusedmore
efficiencytherebyreducingGHGemissions.Buildingsconnectingtodistrictenergysystemsdemonstrates
environmentalandenergyleadershipandacommitmenttocombattingclimatechange.
FlexibleBuildingDesign
Reducesmechanicalandelectricalserviceandrooftopspacethatwouldhavehousedboilerandchillers,
coolingtowerandboilerstacks/chimneys.Spacecanbeusedforamenityandcommunityspace,green
roofs,rainwaterharvesting,solarPV/thermalinitiatives.Reductioninnoise,vibration,andonsitebuilding
emissions.
ReducedCosts
Buildingownerscandefercapitaldollars;upfront/replacementscostsforpurchasingboilersandchillers.
Alsolowersriskduetocapitalandoperatingcostsfromboilers,chillers,heatpumps,radiatorsandcooling
towers.Eliminatesonsitefuelandreducesbuildingelectricalload.
LocalEconomyBoost
DESareinfrastructureprojectsthatcancreateandenhancealocalenergymarketandindustry;creating
jobsduringconstructionandrequiringoperatorsandservices.
ConsumerandPublicSafety
DistrictEnergySystemssignificantlyreducetheriskofLegionellabacteriabyeliminatingtheneedfor
coolingtowers.Italsoeliminatestheriskofcarbonmonoxidepoisoningfromboilers.Furthermore,
connectingtoDESallowsforpublicspacessuchascommunitycentres,schools,andlibrariestohavethe
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capabilityofbeingutilizedasemergencycentresinthecaseofenvironmentaldisastersandother
incidentsoflocalcrisis.
Figure15:SummaryofBenefitstoKeyStakeholdersfromaDES
ToRealEstateDevelopers,BuildingOwnersTotheCity/Region
andResidents
ROI,localeconomicdevelopment
BusinessSense
Costsavings,deferredcapitalcosts
Jobcreation,riskmitigation
&Economic
Energysavings,stabilizedenergycosts
Infrastructureasset
Development
Alternativeincomestream,wastefuel
Increaseurbandensificationandplanning
sources
Increasespotentialforuptakeofwaste
Energy
Energyreliabilityandflexibility
heatandrenewableenergysources
Security
Increasedefficiencyandconservation
Increasedenergysecurityandresilience
Reduceimpactfromlossofheatingand
withlocalenergyproductionandfuture
coolingthatcanaffectproductivity
proofing
Fuelflexibility
Potentialtodeveloplocalfuelsources
Lowerdemandonexistinggas/electricity
infrastructure
Reducedelectricalpeakdemand
Environmentalbenefitfromefficiency,
Environmental
Greenimage/marketing,environmental
CO2eGHGreduction
andOther
stewardship/leadership
HelpstomeetGHGreductiontargetsand
Architecturalopportunities:rooffreefor
fuelconservationmethods
amenityspace,greenroof,
Canreducewaterusageincoolingsystems
Renewableopportunities:rooffreefor
Promoteenergyawareness
solarthermal/PV
Synergywithpotentialstormwater
Increasecomfortfromhydronicheating
reductionstrategy
andpossiblyradiantfloorheating
Improvedairquality+healthbenefits
Potentialtoprovidegreenroofspace
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KitchenerInnovationDistrictDESPreFeasibilityStudy219309
10.Evaluation/Recommendation
BasedontheproposeddevelopmenttimelinesanddensitiesprojectedfordowntownKitchener,itis
concludedthatthereispotentialtoestablishaDESwithapositivebusinesscase.TheDESconcept
proposedfordowntownKitchenerwouldserveapproximately416,000m2(4,485,000ft2)ofnew
developmentinfourphasesbetween2023Α2029.
Scenario1,aDESusingconventionaltechnologies,hasthelowestbuildoutcostof$37.6Mandhighest
IRRat8.9%.ItalsohasthelowestGHGbenefitcomparedtoBAUat~700tonnesCO2reduction.
Scenario2,aDESusingbaseloadedopensourcegroundsourceheatpumps/heatrecoverychillerswith
conventionaltechnologiesusedforpeakingandbackup,hasthenexthighestbuildoutcostof$47Mand
IRRof5.3%over25years.TheGHGreductionisestimatedat~5,100tonnesofCO2reduction.
ItisrecommendedthattheCEISproceedwithdevelopingaDESfortheCityofKitchenerbasedon
Scenario2Op
enLoopGSHP.TheDESisestimatedtotalbuildoutcostis$47M(classDindicativeestimate
+/50%)withanestimated$20MrequiredtoestablishPhase1.ThebusinesscaseforScenario2hasa
lowerIRR,5.3%,thanScenario1usingconventionaltechnologies,IRR=8.9%,buthasagreaterGHG
reductionpotentialof~5,000tonnesvs.~700tonnesandisthereforeamoreattractiveopportunityto
meetthewĻŭźƚƓƭinterestsininnovation,effectiveness,security,andresilienceinenergy.Thecreation
oftheDESinKitchenerwouldestablishathermalenergygridthatincreasesenergysharingopportunities
andflexibilitytoadoptalternateandwasteenergysourcesand/ortechnologies.
ThenextstepstoestablishingaDESfortheKitchenerInnovationDistrictareprimarilysocial,economic
andpoliticalinnature.CEISmustdevelopaDESBusinessPlanincludingdecisionsonownership,financing,
operationsandmanagementstrategy,stakeholderengagement,identifyingpolicydriversaswellas
solidifyingpotentialenergycentersites,identifyingsynergieswithothermunicipalprojectstoenablethe
developmentofaDES.Areasonabletimelineforthisworkisestimatedtobe~12monthsarriveatago
nogodecision.A12monthtimelinewouldbereservedfordetaildesignwithapprox.1218monthsfor
implementation.TemporarystrategiescanbeutilizedifneedtosatisfyinitialcustomersshouldtheDES
developlagbehindthefirstcustomerconnection.
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Page|53
KitchenerInnovationDistrictDESPreFeasibilityStudy219309
Table14:EvaluationGuideline
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Page|54
KitchenerInnovationDistrictDESPreFeasibilityStudy219309
11.AppendixA
1)SK9309100ΑKitchenerDESOverviewMap
2)SK9309101ΑKitchenerDESDPS
3)SK9309200ΑDPSTypicalTrenchDetail
4)SK9309001ΑConventionalPlantConceptualSchematic
5)SK9309002ΑOpenLoopGeoExchangeConceptualSchematic
6)SK9309003ClosedLoopGeoExchangeConceptualSchematic
7)BeattyFigure1ΑWaterWellandCrossSectionLocations
8)BeattyFigure2ΑCrossSectionAA
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L
A
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T
P
E
C
N
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L
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WaterWellMECPWellRecordNo.CrossSectionLocation
2870
7980
870
948
6502
6504
175
6504
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CALE
S
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Beatty Geothermal Consulting
A Division of Beatty Geothermal Inc.
___________________________________________________________________
Table 1 - Kitchener Project
Open Loop Well System Assumptions Summary (3,500 kW option)
ParameterAssumption/Estimate
No. of Wells Required6 (3 supply and 3 injection)
Well Flow Available, L/s (gpm)95 (1,500)
Cooling capacity kW (tons)3,500 (1,000)
Heating Capacity kW (tons)3,500 (1,000)
oo
6 (43)
Min, Heat Pump EWT - Peak Heating,C (F)
oo
15.5 (60)
Max. Heat Pump EWT - Peak Cooling,C (F)
Maximum/Minimum Groundwater Injection
20/4 (68/40)
oo
Temperature,C (F)
Budget Estimate ($)1,000,000
NOTES:
- all estimates are high-level, based on rules of thumb and previous experience.
- assumes supply well separation of 60 m (200 ft), and supply/injection well separation of
150 m (500 ft)
oo
- assumes ambient groundwater temperature is 10C (50F)
- well flow assumes three supply wells, each with a capacity of ~31.5 L/s (500 gpm)
- EWT = heat pump Entering Water Temperature
oo
- cooling capacity based on a heat pump EWT of 15.5C (60F) and EER of 22
oo
- heating capacity based on a heat pump EWT of 6C (43F) and COP of 3.5
oo
- assumed 1.1C (2F) heat exchanger approach temperature
- budget estimate includes: 3 supply wells, 3 injection wells, stainless steel casing, drop pipe,
3 submersible pumps. etc. (does not include distribution piping)
- all values are approximate
Beatty Geothermal Consulting -A Division of Beatty Geothermal Inc.
British Columbia - 1965 West 4th Avenue, Suite 202 | Vancouver, BC | V6J 1M8
Ontario - 2175 King Road | King City, Ontario | L7B 1G3
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Beatty Geothermal Consulting
A Division of Beatty Geothermal Inc.
___________________________________________________________________
Table 2 - Kitchener Project
Closed Loop System Assumptions Summary (3,500 kW option)
ParameterAssumption/Estimate
Number of Boreholes250
Depth of Boreholes, m (ft)200 (650)
Cooling capacity kW (tons)3,500 (1,000)
Heating Capacity kW (tons)3,500 (1,000)
oo
4.5 (40)
Heat Pump EWT - Peak Heating,C (F)
oo
32 (90)
Heat Pump EWT - Peak Cooling,C (F)
Budget Estimate, $3,750,000
NOTES:
-all estimates are high-level, based on rules of thumb and previous experience.
-total annual heat rejection/extraction to/from the boreholes has not been considered in
the above estimates
-budget estimate includes: boreholes, u-loop, grout, horizontal header piping and
trenching, antifreeze, etc. (does not inlcud main distribution piping).
-all values are approximate
Beatty Geothermal Consulting -A Division of Beatty Geothermal Inc.
British Columbia - 1965 West 4th Avenue, Suite 202 | Vancouver, BC | V6J 1M8
Ontario - 2175 King Road | King City, Ontario | L7B 1G3
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REPORT TO:Planning & Strategic Initiatives Committee
DATE OF MEETING:September 28, 2020
SUBMITTED BY:Justin Readman,General Managerof Development Services 519-
741-2200 ext. 7646
PREPARED BY:Tim Donegani, Senior Planner 519-741-2200 ext. 7067
WARD(S) INVOLVED:3, 9, 10
DATE OF REPORT:September 14,2020
REPORT NO.:DSD-20-150
SUBJECT:Inclusionary Zoningfor Affordable Housing: Background and
Fiscal Impact Analysis
RECOMMENDATION:
THATCouncil Report DSD-20-150(Inclusionary Zoning for Affordable Housing:
Background and Fiscal Impact Analysis)be received.
BACKGROUND:
TheHousing Needs Assessment prepared as part of Phase 2 of the Affordable Housing
Strategydemonstratedunserved needs for affordable housing across the housing continuum for low,
moderate and middle incomehouseholds. Municipalities have a range of planning and financial tools
to supportand enablethe creation of affordable housing. Inclusionary Zoning (IZ) is a new tool that
allows municipalities to require residential developments to include affordable housing units.When
used alongside federal, provincial, regional and local initiatives, IZcanbe effective inincreasingthe
supply of affordable housing.Inclusionary zoning is one of the actions included in the draft Affordable
Housing Strategy that was received by Council in August.
The provincial requirements for developing and adopting an IZprogram are summarized in Appendix
A.IZ can only apply to multi-residential developments with 10 or more unitswithin Major Transit Station
Areas (generally within 500-800 metres of ION stops).Prior to approving an inclusionary zoning by-
law, municipalities must first prepare a housing assessment report to understandlocal demographics
andhousing supply and demand.Kitchenerhas largely addressed this requirement through the
completion ofits Housing Needs Assessmentpresented to Council in January 2020.Municipalities
must alsoconduct a financial impact study to evaluate the viability of development under an
inclusionary zoning framework. The City, in partnership with City of Waterloo, City of Cambridge and
Regionof Waterloocontracted consulting firm N. Barry Lyon Consultants Limited to carry out a
financial impact studyincluded asAppendix B.This work isbeing undertaken through the Kitchener-
Waterloo Joint Services Initiative. Staffatall four municipalities continue tocollaborate on data
sharing, analysis, stakeholder engagement,policy developmentand action planning towards common
affordable housing objectives.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
2 - 1
Inclusionary Zoning has been used extensively in the United States and some Canadian cities. While
several other Ontario municipalities are working to advance inclusionary zoning, no IZ policies have
been adopted yet.
How Does Inclusionary Zoning Work?
Inclusionary zoning works by leveraging increases indensity and value achieved through development
approvals, investment in LRT and increasing demand for centrally-located housing to provide affordable
housing. In this way inclusionary zoning programs canbe designed to work withoutgovernment subsidies.
Because inclusionary zoning programs result in lower revenues for developers through lower rents or
sales prices than would otherwise be the case, the provincial legislation requires thatIZ programs be
designed to ensure that residential development continues to be financially viable for private market
housing providers. Key considerationsthat affect the achievement of affordable housing objectives and
influence development feasibility include:
The
the duration of affordability, range of household incomes addressed by the affordable units,
and
the tenure of affordable units (rental vs. ownership).
Where the economics of site development cannot support inclusionary zoning on its own, programs can
include measures to offsetthe financial impact so thatthe development projectsbecome financially viable.
They can also be usedto deepen the degree of affordability to serve a broader range of household
incomes.Measures could include the phasing in of the program, increased height or density permissions,
or financial incentives.
REPORT:
Financial Impact Analysis Approach and Key Findings
financial impact study uses an approach called residual land value (RLV)analysisto testif
prototypical residential projectsin 10 Major Transit Station Areas across the Region are financially viable
under four scenarios:
1.No IZ policy
1
2.10% of units are required to bepriced at the affordable benchmark
3.5% of units are required to be priced at 60% of the affordable benchmark
4.Determine the maximumviable set aside rate that could be supportedat the affordable benchmark
Fiscal Impact Analysis Highlights
The costs of inclusionaryzoning cannot be passed onto the market rate units in abuildingthrough
higher prices/rents because developers are already pricing units as high as the market will bear.
Developer profits are not reduced under IZ. Without the prospectforsufficient profit,developers
will not be motivated to build.
Instead, an inclusionary zoning policy will put downward pressure on land value.
If an inclusionary zoning policyistoo onerous, land valuewill be reduced by toomuch,so a
residential redevelopment project cannot displacethe existing land use andwill not be viable.
1
Affordable Rental Benchmark: Bachelor $810/mo; 1 Bedroom $1,045/mo; 2 Bedroom $1,231/mo; 3 Bedroom
$1,300/mo
Affordable Ownership Benchmark: $350/square foot
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Amodest and carefully designed inclusionary zoning policy is financially viable in the near term
insome Major Transit Station Areaswiththestrongestresidential market conditions.
Major Transit Station Areasarenot all equally capable of delivering new units through IZ as
illustrated in Figure1, and in more detail on pg 54-59of Appendix B.Currently, IZ policy is viable
in a few MTSAs but not others.Ageographically uniform approachto IZ is not recommended.
Instead,the initialfocus of Inclusionary Zoning should be on MTSAswith strong residential
markets.
The analysis does not include any new municipal incentives. NBL
quantify how incentives could help achieve more affordable units, deeper levels of affordability,
or longer duration than policy alone.
In weaker submarkets, the policy framework should be set up now, with very low affordability
requirements in the near term. These requirements can increase gradually as weak submarkets
improve. IZ candeliver a modest but meaningful number of affordable units in the near term.
There is significant value however in setting up an IZ framework toprepare for a more ambitious
policy asdevelopment economics improve in the future.Frequent monitoring and adjustment of
an IZ policy is critical.
Cities should provide an early signal to residential developers and MTSA landowners that an
inclusionary zoning policy is coming. When coupled with transition policies, this approach
providestime for the market to adjustto aninclusionary zoning policyand minimize land market
disruption.
This analysis is limited to a point in time. Residential development economics are dynamic due to
changing constructioncosts, changes in the real estate marketdue to COVID-19, the introduction
of Bill 108, Bill 197and its impacts on Development Charges, Community Benefit Charges,
Density Bonusing and Parkland dedication.
3
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Figure 1 -Financial Viability of Inclusionary ZoningCondominium with 10% of units as
permanently affordable rental units -100% of Average Market Rent
Viable
Marginal
Challenge
Peer Review
Per provincial regulations, the Citiesretainedthe consulting firmurbanMetricsto provide a peer review
review, included asAppendix E,confirms thatmeets the statutory
requirements,confirms the appropriatenessof themethodology,key assumptions, findings, their
interpretation andrecommendations.suggestions surroundingthe complexity of
monitoringandmaintainingaffordability in perpetuity will require consideration in the next phase of
thisproject.
WhatWeHeard
Engagement to date has focused on key stakeholders from the development and affordable housing
advocacy communities.These conversations are further detailed in Appendix B.Highlights include:
In person meetings with key MTSA residential developersto introduce the project and learn
about their concerns
Zoom meeting with 49key development industry and affordability advocate stakeholders
regarding preliminary study findings
One-on-one follow up meetings with key developers to verify study proformas with real world
examples
Project webpage https://www.engagewr.ca/inclusionary-zoninglaunched on April 1
Presentation to Affordable Housing Strategy Advisory Committee
Council Strategy Session
Meetings with Yes inMy Backyard Waterloo Region (affordability advocates)
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Conclusions and Next Steps
Inclusionary Zoning policy has potentialto deliver a modest but meaningful number of affordable units
within market developments.The study shows that under ,IZis fiscally
viable in Downtown and Midtown. Usingmanagement assumptionthat half
of the total number of units currently allowed in zoning will be constructed,there is potential for up to
1,500affordable rental unitsin the long term.If residential development economicsimprove,the IZ policy
could be expanded to other MTSAsto deliver moreaffordable units.
IZ is one tool that can be used alongside policy and investment by Local, Regional,Provincial and Federal
governments together with the to
achieve affordabilityobjectives. Staff recommend that Inclusionary Zoning warrants further research,
policy and program development and broader community consultation. Staff recommend that these
principlesguide this next step.
1.Affordability -Secure affordable housing that is not otherwise being provided by the market.
2.Partner with development communityTo achieve housing targets the Cityneedsdevelopers
to build new affordable units under IZ. Residential development projects must continue to be
viable.
3.Minimize landmarket disruption Provide early signals and transition time for the land market
to adjust to IZ
4.Longterm sustainabilityIZpolicy should be viable without financial incentives. Incentives may
beusedto achieve affordability objective beyond what is supported by land economics
Appendix C is an initial list of policy and program questions to be considered in the next phase. Staff plan
to continue to collaborate with the Cities and Region. The integrated nature of our residential real estate
markets would makeit challenging for any one municipality to implement this kind of policy in isolation.
Furthermore, collaborationprovides more staff resources,opportunitiesto cost share,economies of scale
in program delivery,and ultimately better policy.Staff at the municipalities intend to continue to work
together on policy and program development and report back to Council.
Key milestones
Council
Financial Key
Background Work
Housing Needs direction to
Impact Stakeholder
Assessmentcontinue
Jan-Sept 2020
AssessmentMeetings
working on IZ
Explore Community
Policy
set aside, price
Ownership and and
Development
point, duration,
operation stakeholder
tenure etc.
Q4 2020-2021
modelsengagement
Finalize
ROP amended Adopt OPA and
Policy Finalization
ownership and
to delineate Zoning By-law
operation
2021/2022+
MTSAsamendment
models
New affordable
Policy IZ applies to monitoring
Implementation
units
Approved by new reports and
constructed
2022/2023+
Regionapplicationsadjustment
and occupied
5
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ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
2019-2022 Strategic Plan Caring Community Theme
Strategic Plan Action: Create an Affordable Housing Strategy for Kitchener by 2020 in collaboration with
Waterloo Region, community groups and the development industry.
FINANCIAL IMPLICATIONS:
Most of the work in developing an IZ policy, regulations and programwillbe completed by staff, and are
includedin departmental work plans.However, the report and peer review both recommend
frequent monitoring and adjustment of an IZ policy to ensure its success. An update or addendum to the
fiscal impact model report is likely required, prior to implementation to account for COVID-related
changes to developmenteconomics,market conditionsand changesin legislation that affect soft cost.
This required update will likely have resource implications that are currently unbudgeted. Staff are
exploring opportunities to build capacityto undertake monitoring andfinancial modelingin-house,
potentially in collaboration with the partner municipalities.
Staff are proposing to develop an inclusionary zoning framework that is sustainablewithout municipal
financial contributionor subsidies towards providing affordable units. Should Councilwish toachieve
additional affordability objectives above what is supported by land economics, financial incentives may
be required. The cost of implementing an IZ policy and program will be considered in a subsequent report.
Staff have identified a potential for the non-profit housing sector (e.g. Kitchener Housing) to provide
mutually beneficial assistance with ownership and operation of affordable units long-term.
COMMUNITY ENGAGEMENT:
Given the technical nature of thisstage of the project,community engagement was primarily addressed
to key stakeholders, informing them about this tool and the fiscal impact study and receiving feedback.
In person meetings with key MTSA residential developers to introduce the project and learn
about their concerns
Zoom meeting with 49 key development industry and affordability advocate stakeholders
regarding preliminary study findings
One-on-one follow up meetings with key developers to verify study pro formas with real world
examples
Project webpage https://www.engagewr.ca/inclusionary-zoninglaunched on April 1
Presentation to Affordable Housing Strategy Advisory Committee
Council Strategy Session
Meetings with Yes in My Backyard Waterloo Region (affordability advocates)
The next phase of the project will include broad based community engagement, including but not
limited to the questions included in Appendix C.
PREVIOUS CONSIDERATION OF THIS MATTER:
DSD-19-134Affordable Housing Strategy Work Program Overview
DSD-20-006-Affordable Housing Strategy Phase 2: Housing Needs Assessment
DSD-20-034-Council Strategy Session Affordable Housing Issues and Options
DSD-20-108Draft Housing Strategy
REVIEWED BY:Karen Cooper, Manager, Strategic and Business Planning, City of Kitchener
Michelle Lee, Senior Policy Planner, City of Waterloo
Valerie Spring, Senior Planer -Reurbanization, City of Cambridge
6
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Judy Maan Miedema,Principal Planner, Region of Waterloo
ACKNOWLEDGED BY: Justin Readman, General Manager of Development Services
APPENDICES:
Appendix A: Provincial Requirements for an Inclusionary Zoning Study
AppendixB:Evaluation of Potential Impacts of anAffordable Housing Inclusionary Zoning
Policy
Appendix C: Key Questions to be answered in next phase
Appendix D: What we heard
Appendix E: Peer Review Letter of Opinion onInclusionary Zoning Financial Impact Analysis Report
7
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Appendix A-Inclusionary Housing Assessment Information Requirements
Inclusionary Housing Assessment and Monitoring Requirements-(From Ontario Regs)
An assessment report required by subsection 16 (9) of the Act shall include information to be
considered in the development of official plan policies described in subsection 16 (4) of the Act,
including the following:
1.An analysis of demographics and population in the municipality.
2.An analysis of household incomes in the municipality.
3.An analysis of housing supply by housing type currently and planned for in the municipality.
4.An analysis of housing types and sizes of units that may be needed to meet anticipated demand
for affordable housing.
5.An analysis of the current average market price and the current average market rent for each
housing type, taking into account location in the municipality.
6.An analysis of potential impacts on the housing market and on the financial viability of
development or redevelopment in the municipality from inclusionary zoning by-laws, including
requirements in the by-laws related to the matters mentioned in clauses 35.2 (2) (a), (b), (e)
and (g) of the Act, taking into account:
i. value of land,
ii. cost of construction,
iii. market price,
iv. market rent, and
v. housing demand and supply.
Provincial policies and plans and Official plan policies
A written opinion on the analysis from a person independent of the municipality and who, in the
opinion of the council of the municipality, is qualified to review the analysis.
Monitoring reports to include:
1. The number of affordable housing units.
2. The types of affordable housing units.
3. The location of the affordable housing units.
4. The range of household incomes for which the affordable housing units were provided.
5. The number of affordable housing units that were converted to units at market value.
6. The proceeds that were received by the municipality from the sale of affordable housing
units.
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Usvtufe!bewjtpst!tjodf!2:87/!
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SOURCE: Google Earth (2020)
EVALUATION OF IMPACTS OF
INCLUSIONARY ZONING POLICY
Peer Review
Kitchener / Cambridge / Waterloo, Ontario
Prepared for the Cities of Kitchener, Cambridge, Waterloo
September 16, 2020
2 - 80
This document is available in alternative formats upon request by contacting:
info@urbanMetrics.ca
416-351-8585 (1-800-505-8755)
2 - 81
September 16, 2020
Cities of Cambridge, Kitchener, Waterloo
c/o Tim Donegani
Senior Planner
City of Kitchener
200 King Street West
Kitchener, Ontario
N2G 4G7
Dear Tim:
RE: Evaluation of Impacts of Inclusionary Zoning Policy Peer Review (Kitchener / Cambridge /
Waterloo, Ontario)
, April
2020 draft report titled Evaluation of Potential Impacts of an Affordable Housing Inclusionary Zoning
Policy, prepared by NBLC on behalf of the Cities of Cambridge,
Kitchener, Waterloo and Waterloo Region.
Based on our review of the subject report and our own re-cast of selected elements of the associated
financial analyses relied upon to inform the findings of the study, we ultimately support the work
prepared by NBLC and are confident that the study adequately addresses the requirements set out
in Ontario Regulation 232/18 with respect to the implementation of new Inclusionary Zoning
programs. In particular, we have not identified any material deficiencies in the work prepared by
NBLC and generally note that they appear to have completed a detailed, thorough and accurate
financial analysis. This analysis appropriately captures the required nuance and submarket-specific
conditions across the various subject communities while also having regard for the inherently high-
level nature of this type of analysis in informing municipal land use planning policy.
The following opinion letter provides a more detailed overview as to the underlying purpose and
scope of our review, urbanMetrics commentary as to the appropriateness of the underlying
methodology employed by NBLCincluding associated analytical assumptions and statistical inputs
as well as our own professional opinions as to the interpretation of the research findings presented
and final recommendations advanced by NBLC.
www.urbanMetrics.ca | 67 Yonge Street, Suite 804, Toronto, ON, M5E 1J8 | 416-351-8585 (1-800-505-8755) | info@urbanMetrics.ca
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Evaluation of Impacts of Inclusionary Zoning PolicyPeer Review(Kitchener / Cambridge / Waterloo, Ontario)| 1
1.0Introduction
1.1Background
In 2018, the Provincial government passed Regulation 232/18, which allows municipalities to
implement Incertain predefined conditions and parameters.
Simply put, IZ is essentially a housing policy approach that seeks to secure non-market housing as a
biproduct of broader market developments. The policy tool has been implemented in many
jurisdictions throughout the United Statesto varying degrees of successand the approach is now
being actively studied and considered in many Canadian cities, including across Ontario.
In response to the above policy direction at the Provincial level, the Cities of Cambridge, Kitchener,
Waterloo and Region of Waterloo collectively commissioned a study specifically targeted at preparing
a more detailed investigation and testing of local development conditions; ultimately informing
whether the adoption of an IZ policy framework is economically feasible in this jurisdictional and
locational context. More specifically, the purpose of this study has been to explore how the
implementation of a new IZ framework could impact development activity in these communities, with
the objective of maximizing the creation of new affordable housing units and minimizing any
unwanted impacts on investment interest, land values or overall market affordability.
To complete this study, the subject municipalities have retained the services of NBLC, a consulting
practice specializing in housing, development feasibility analysis and real estate strategy. As outlined
in more detail herein, the NBLC study has largely been completed at this stage, including an extensive
supporting research program, the preparation of financial pro forma analyses for a number of
different submarket areas (10), consideration for a range of alternative scenarios or potential
outcomes sitivconsultations with local real estate
professionals active in the Waterloo Region market (i.e., the development community), and delivery
of a complete draft report inclusive of all related research findings, conclusions and recommendations
as of April 2020.
1.2Purpose
The aforementioned introduction of new IZ policies by the Government of Ontario under the Planning
Act resulted in Ontario Regulation 232/18, which was filed on April 11, 2018. The study
commissioned by the subject municipalities and completed by NBLC is ultimately intended to satisfy
the requirement for the identified under this regulation and as part of the
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Evaluation of Impacts of Inclusionary Zoning PolicyPeer Review(Kitchener / Cambridge / Waterloo, Ontario)| 2
for developing new Official Plan policies. As noted in the NBLC report,
thi
and on the financial viability of development or redevelopment in the municipality from inclusionary
zoning by- the following factors:
value of land;
cost of construction;
market price;
market rent; and
housing demand and supply.
analysis
described above that is prepared by a independent of the municipality and who, in the
In satisfying this
measure, the Cities of Cambridge, Kitchener and Waterloo have now retained the services of
urbanMetrics to undertake this peer review and written opinion of the NBLC study.
Although the consideration for implementing IZ policies is a relatively new concept for Ontario
municipalities and therefore very few of these peer reviewsif anyhave been completed to date,
we note that they are commonplace in various other areas of land use planning and the municipal
development approvals process. In particular, they are perhaps most common as part of critiquing
other types of land economics assignments, including market demand and impact studies and/or in
support of dispute resolution (e.g., in preparation for OMB/LPAT hearings, etc.).
In our experience, these types of studies are typically intended to provide a municipality or other
public sector organization with an unbiased, third-party perspective and to further validate (or
refute) the findings presented as part of an original research assignment. To this end,
role for this assignment has ultimately been to ensure the underlying appropriateness, accuracy and
suitability of the study prepared by NBLC, thereby providing the subject municipalities with
additional confidence in the findings presented.
1.3Scope
It is important to make clear at the outset of this review the underlying extent and scope of our
involvement with this assignment. As established in the original Terms of Reference with the City of
Kitchener (and also on behalf of the City of Waterloo and City of Cambridge), this review has generally
been intended to address a number of core elements of the NBLC study and ultimately to prepare the
following key tasks/deliverables:
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Evaluation of Impacts of Inclusionary Zoning PolicyPeer Review(Kitchener / Cambridge / Waterloo, Ontario)| 3
Written opinion of NBLC draft report of April 2020 (as presented in this document).
Determination as to whether the draft report meets the requirements in Ontario Regulation
232/18.
A review of the: (i) appropriateness of the methodological structure of the analysis; and (ii) the
validity of the key assumptions and inputs relied upon by NBLC.
Review of 3-4 sample pro forma analyses prepared by NBLC (assumed to be sufficiently
representative of the larger body of work undertaken).
Commentary on the key findings and recommendations provided, including in the context of
.
In addition to the specific tasks identified above, we have also engaged in ongoing and active
discussions with municipal staff and appropriate representatives of NBLC at a number of occasions,
including liaising with relevant technical/analytical staff to clarify our understanding of the analysis
and key data inputs, as needed.
In light of the above scope of work, and as agreed upon with the subject municipalities before
undertaking this review, we further note that there are a number of specific exclusions and/or
limitations to our review, including but not necessarily limited to the following:
We have not validated the calculation of relevant development-related municipal fees and
charges (e.g., development charges, planning application fees, etc.), which are all assumed to
be sufficiently accurate for the purposes of this review and have already been vetted by each
of the lower tier municipalities involved.
Beyond a high-level review of their general suitability and consistency with current
development patterns, we have not provided a direct critique nor other commentary on the
conceptual developments considered by NBLC within each of the ten submarket areas
identified (e.g., with respect to overall scale of development, densities, consistency with
municipal policy and development permissions, etc.). We assume that these have all been
appropriately reviewed and accepted by municipal staff before being tested for viability.
We have not prepared a detailed, line-by-line audit of the 140 financial pro forma analyses
produced by NBLC and all corresponding spreadsheets, cell references, etc. Instead, and
respecting the propriety nature of many of these elements of the study, we have undertaken a
more high-level review and recast of sample pro forma analyses provided by NBLC in PDF
format. Given that all of the distinct feasibility analyses and related sensitivities follow a
similar/identical analytical structure and format, these are generally assumed to be
appropriately representative of the entire body of work prepared by NBLC as part of this
assignment.
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Evaluation of Impacts of Inclusionary Zoning PolicyPeer Review(Kitchener / Cambridge / Waterloo, Ontario)| 4
2.0Review
2.1Methodology
The following section details our high-level review of the methodology employed by NBLC to evaluate
the effects of IZ on the financial feasibility of development in each MTSA considering a combination of
tenures (i.e., condo and rental) and affordability types.
Analytical Structure & Approach
In completing this type of community-wide feasibility analysis and ultimately informing future
municipal policies, it is important to emphasize that no two development sites are the same and
individual developers will have varying motivations and return expectations (or requirements) to
consider when investigating a new development project. This presents one of the single greatest
challenges in assessing the impacts of IZ on the financial viability of development across broad market
areas. With this in mind, the following provides a brief overview of our review, understanding and
commentary on the fundamental methodologies and approach adopted by NBLC as part of this study.
The approach taken by NBLC was to first develop prototypical development concepts for each
of the ten submarkets identified based on emerging development trends, as well as
consultations with City staff and the development community. These development concepts
considered both purpose-built rental and condominium/ownership tenures in each
submarket. In our experience, although not without its pitfalls in terms of appropriately
reflecting the potential unique conditions or requirements of individual sites, this general
approach is certainly most common and can generally be considered an emerging
for such high-level analysis. Similarly, we can confirm that urbanMetrics has regularly
employed a similar methodology in other municipal jurisdictions where this type of high-level
demonstrative or illustrative analysis was required.
Utilising these prototypical developments, NBLC then assessed the financial viability of
development using a residual land value (RLV) approach to estimate the maximum land value
a developer may be willingor ableto pay for a development site while also meeting their
own internal development return requirements. Often utilized in the development community
ntial development site acquisitions, an RLV
assessment requires less detail and specificity than a more comprehensive discounted cash
flow (DCF) proforma modelling technique typically relied upon once a site has already been
identified as having some underlying development potential. The latter DCF approach is
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generally more appropriate when a detailed site-specific development concept is being tested
and optimized to ensure returns will be met and financing can be secured. In our experience, if
a development site is unable to pass the preliminary RLV test, it is unlikely to be feasible when
modeled on a DCF basis. As such, while this general approach will not necessarily guarantee
the future feasibility of a given development project, it typically provides an appropriate
measure of viability and economic promise at a much earlier stage such as this (i.e., as part of
a municipal policy exercise).
Given the challenges of evaluating IZ policies across ten distinct submarkets and hundreds of
unique sites, we believe that the RLV approach is appropriate for informing policy-based
decisions such as this, whereas a DCF model is only appropriate for site-specific analysis when
more detailed development plans are available (i.e., detailed design stage of development or
immediately approaching market entry).
Additionally, we note that the NBLC analysis involved the creation of some 140 unique
proforma models, which would have otherwise required an unnecessarily burdensome
amount of time and resources to complete as a DCF for each scenario. It is our opinion that
this additional effort would have been of little to no value to the subject municipalities,
yielding marginalif anybenefit. Similarly, we note thatas a perquisite to undertaking any
more detailed analysis than already prepared by NBLCadditional design conceptualization
and site-specific considerations would have been required, which are not necessarily available
from the three lower-tier municipalities at this time.
In order to estimate the impact to land values associated with the implementation of IZ, NBLC
undertook the following specific work steps:
Firstly, estimates of the base land value for each prototypical development were
established based on prevalent existing under-utilized uses in each submarket area.
Next, redevelopment for both condo and rental residential uses were tested under the
current policy (i.e., with no IZ) to understand if development is viable before an IZ
policy is implemented.
Finally, various implementations of IZ were tested considering different levels of
affordability (condo) and affordability periods (rental). If the land value of any
redevelopment scenario approached (within 10%) or fell below the base value of a site,
NBLC assumed that the viability of the development project would be in question. This
assumes that if a residential developer cannot offer the existing landowner at least
10% higher than a base value, it will not be enough to motivate a landowner to
close their business and sell their site to the developer.
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In executing this assessment, NBLC also notes that: The policy framework is forward looking.
It considers the implications for development if a developer were to pursue land acquisition
and development under current market conditions. Perhaps more accurately, we would
suggest that it rather takes into account current market conditions to then forecast potential
or likely future conditions (e.g., considering growth in both revenues and costs, etc.), which is
a suitable approach in our opinion.
Overall, we find this to be a reasonable approach for understanding the high-level implication of
implementing IZ within each submarket. We do, however, caution that it is unlikely that the
prototypical base land values assigned to each submarket will be consistent with current landowner
actual or perceived values on a more site-by-site basis. NBLC also recognizes and acknowledges this
limitation as part of the following note in Section 5.5 of their report:
This analysis cannot capture certain nuances arising from the nature of a historical land
purchase or the former capitalization of land costs through the operation of an income-
generating use in the interim. Nor can it contemplate the acquisition of land at speculative
values, not fully appreciating the magnitude of impacts from future policy adjustments.
To appropriately reflect this limitation, it will be important for the subject municipalities to provide
sufficient flexibility in their IZ policies, even in areas where financial viability may appear strong with
IZ, as presented in the analysis prepared by NBLC.
Application & Accuracy
As part of our methodological review, NBLC has provided us with detailed RLV models for four sample
submarkets representing varying locational and market conditions across the Region. These include:
the University of Waterloo MTSA, the Central/ Victoria Park/ Queen/ Kitchener City Hall/ Frederick
MTSA, the Fairway MTSA, and the Downtown Cambridge/ Main (Existing BRT/ Future LRT) MTSA.
Although it is outside of the scope of this peer review to perform a line-by-line audit of each model,
we have ensured that the mathematical approach to calculate the residual land value under each
scenario is sound and that the general equations appear to be correctly formed. Furthermore, we
have also conducted a high-spot check across each of the RLV models to identify any obvious
inconsistencies or analytical deficiencies.
Through our review of the sample models provided, we have co-ordinated directly with NBLC on
numerous occasions to obtain further clarification in several areas. These topics and discussions
included, but were not necessarily limited to, the following:
the application of parking requirements and suitability of parking types;
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the use of market revenue assumptions which are higher than their market research reflected
in Table 1;
property tax assumptions;
construction financing rates and construction draw schedules;
the inclusion of HST in both the revenue and cost calculations;
the methodology for valuing the affordable rental scenario with a 25-year term; and
the appropriateness of the discount rate applied.
Based on the high-level scope of this peer review, we cannot be certain that the NBLC analysis is
completely error free, however, based on our detailed discussions and additional background
research, combined with our own review and spot check, we are sufficiently confident that the RLV
approach described above has been applied correctly and accurately.
2.2Inputs & Data
Based on the general analytical structure set out in the previous section of this review, the following
provides a more detailed overview of our findings with respect to a number of the more specific sub-
elements of the NBLC study. This includes the range of specific inputs, assumptions and other
statistical sources relied upon to complete the subject analyses.
Development Concepts
Table 3 of the NBLC report summarizes the prototypical site assumptions (e.g., site area, building
height, Gross Floor Area) while Table 4 summarizes prototypical units and parking assumptions (e.g.,
average unit size, parking ratio, unit and parking pricing, absorption) for each of the ten submarkets.
In our opinion, these assumptions appear reasonable and reflective of both existing policies and
emerging development trends present in each submarket. The general scale and nature of
development contemplated is also consistent with our own professional experience in this part of the
Province, including work directly on behalf of the local development community and/or other
landowners and investors.
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Market Information
The base land values upon which all development scenarios were judged have been calculated
using land values of existing low-density commercial uses. While this may not be a perfect
solution, it likely represents the most appropriate high-level and consistent assumption
available to NBLC in this particular application (i.e., that which best reflects the current
identified). As noted earlier, there are some inherent and unavoidable limitations to this type
of analysis in terms of potential disconnect between the land values modelled in the analysis
versus the actual or perceived values for specific landowners throughout these areas.
This is a distinct challenge of introducing any new IZ policy framework, whereby local
landowners could be reluctant to acknowledge or accept downward pressures on land values.
This reluctance to accept downward pressure on land values can be particularly strong for
sites that currently may be worth more to the owners based on the existing income generating
operations than the one-time payout of selling the site for re-development. NBLC provides an
illustrative example of such a situation on page 6 of their report. Furthermore, we also note
that land values do tend to be more resilient to change or market fluctuation and generally
exhibit a certain level of
per square foot sales levels, which are more immediately responsive to changing market
conditions or consumer preferences, land use policy amendments, infrastructure
announcements, etc.). As highlighted by NBLC, the resulting risk of this dynamic is that overall
development activity is thereby reduced given the weakened financial prospects resulting
from the lower revenue-generating opportunities inherently presented by non-
market/affordable housing options.
As recommended by NBLC and discussed further herein, there are nonetheless a number of
approaches that can potentially be utilized by the subject municipalities in addressing these
risks, including gradual introduction of policy changes, continued monitoring of market
impacts on a go-forward basis, as well as a broader commitment to frequent and direct
communication with the local development community/landowners.
Revenue Assumptions
Table 1 in the NBLC report summarizes the results of their high-level scan of condominium sale
prices and rents across the ten submarkets, while Table 2 details the affordability levels
considered in the RLV models. Through discussions with NBLC, we note that the market sales
assumption ultimately input into the RLV models (as contained in Table 4) are slightly higher as
they are based on the most recently launched projects captured within the research sample
and therefore most indicative of potential ongoing or future market conditions. Based on our
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high-level review, the revenue assumptions (including additional interim occupancy charges
and various recoveries) appear reasonable.
We will, however, underscore the importance of updating these assumptions regularly on a
go-forward basis, especially considering the potential short/medium-term effects of the
ongoing COVID-19 pandemic.
Ground Floor Commercial Uses in Mixed Use Developments
Although not directly related to the core housing focus of this analysis (i.e., including both market and non-market
components), NBLC acknowledges thatin some areasprevailing planning policy would require developments to be
mixed-use, thereby incorporating some commercial uses within the development on a given site. It is our understanding,
however, that the RLV models prepared by NBLC assume that these types of commercial spaces would be
and therefore have been excluded from their analysis, accordingly.
Based on our experience across suburban and emerging urban markets across Ontario, we note thatwhile nonetheless
important in achieving active and animated complete communitiesthese grade-related retail and service commercial
spaces can, in many cases, remain vacant for many years and indeed reduce the profitability of broader mixed-use
projects. We further note that, during underwriting, it has become increasingly common for developers to assume
revenues from this portion of a given building, yet still consider the associated costs as a more conservative approach
(i.e., appropriately reflecting the potential risks associated with investing in the construction of these non-residential
spaces yet not necessarily realizing the corresponding revenues). Therefore, although we generally agree with the
approach adopted by NBLC in this regard (particularly for the sake of simplicity), we would recommend that any
requirements to include commercial spaces as part of future should be carefully
considered before or in parallel to the implementation of new IZ policy.
Hard Costs Assumptions
The RLV models rely on the hard cost estimates from the Altus Construction Cost Guide. It is
our understanding that these costs per square foot ratios were also vetted and confirmed by
representatives from the local development community as being appropriate in this
application. Given the high-level nature of the development concepts considered and in the
absence of more site or development-specific cost estimates from a quantity surveyor, we
consider the hard costs in the Altus Guide appropriate for inclusion in this type of RLV
analysis.
Soft Cost Assumptions
Municipal development fees (including planning application fees, building permit fees,
development charges, parkland contributions, and property taxes), which make up a large
portion of soft costs, have been included by NBLC as direct inputs from the Region and local
lower-tier municipalities. Other soft costs have been estimated as a percentage of hard costs
utype ratios, a common technique across all real estate
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proforma analysis. In our opinion, this is an appropriate level of detail to have included in this
portion of the analysis and consistent with the approaches commonly utilized by
urbanMetrics.
Other Assumptions
In addition to the more targeted market-based assumptions, the RLV models require several
assumptions that research reveals and therefore incorporate an
element of professional judgement. These include:
Capitalization Rates (Cap Rates)
Combined with the net operating income (NOI) expected from the new buildings, cap rates are
used to estimate an income-value upon completion. Market cap rates across
all asset classes are readily reported on for both current and historical periods, however,
future cap rates are unknown and must be forecast based on the modellbest estimate of
future market conditions and expected investment returns. The cap rates utilized by NBLC are
generally in-line with the current cap rates reported by CBRE in KitchenerWaterloo as of Q2
2020 and in our opinion, are reasonable to assume over the short- to medium-term in the
Region.
Revenue & Cost Growth
The RLV models utilized by NBLC involve consideration for market conditions over future
periods and as such, current market revenue and cost assumptions were assumed to grow into
the future. In particular, NBLC has conservatively assumed that both revenues and costs will
grow by some 2% annually on a go-forward basis. We appreciate this conservative growth rate
(by comparison to recent/historical patterns) and believe that by assuming revenues and costs
will grow equally, the future value of development land is not reliant on growth in market
demand (i.e., revenue growth) outpacing the corresponding growth of costs, which would
then speculatively add value to land into the future.
Moreover, based on follow-up discussions and responses to targeted questions posed by
urbanMetrics, we understand that NBLC have not applied a unique growth rate to the future
municipal fee portion of soft costs (e.g., development charges). This was an active decision on
their part to hold the rate of growth for municipal fees directly in line with other hard and soft
construction costs, with recognition and acknowledgement of the fact that these could
ultimately fluctuate in time. While we note that this could ultimately understate the potential
future costs associated with increased municipal feeswhich could very likely increase at a
rate of greater than 2% on average in the coming yearswe appreciate that this is difficult to
pinpoint based on uncertainty in the future cost recovery needs of the subject municipalities
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in future periods. Regardless, we do not anticipate this will necessarily result in a material
impact on feasibility, as characterized in the context of this study. In particular, as confirmed
and noted by NBLC, these fees are typically levied relatively early on in the development
process (upon issuance of building permits), so any impacts of applying a unique growth rate
to these figures would only be marginal. That is, they are unlikely to deviate significantly from
current rate structures in a relatively short period of time.
A key component of any RLV model is to account for, and preserve, a reasonable developer
profit. NBLC has set-aside a total of 15% of project revenues to reflect this opportunity for
profit-generation. It is important to note thatalthough developers often do not achieve the
targeted profit margin included in their RLV upon completion of a development project
assuming anything less at this early stage of the development process would not allow for the
that development projects often need to see them through more
detailed site-specific planning process and execution. This, in effect, serves to reflect an
appropriate continge on any profit margins, thereby allowing for potential
future fluctuations (increases) in costs, poor sales performance and/or other potential
unforeseen circumstances. Furthermore, a healthy profit margin ensures that projects will
secure financing in terms of presenting more favourably to prospective lenders.
Overall, and in consideration for the above factors, developers typically underwrite their
projects at a baseline or starting point of 15% (in our experience), although anywhere in the
range of 10-20% is generally considered reasonable or an appropriate benchmark in this type
of applicationto target the middle end of this range is appropriate both in
terms of exercising reasonable conservatism, but also in terms of consistency with our own
work and practices of the development community itself.
Discount Rate
The NBLC models assume will occur more than 5
years after land acquisition and a 6.0% discount rate was applied to calculate their present
value and the amount that the developer would be able to pay for land today. Through
supplementary conversations with NBLC, we understand that this discount rate was chosen in
large part through their previous consulting experience with the development community in
comparable Ontario communities. Although it is impossible to know each individual
discount ratewhich undoubtably will vary, typically somewhere in the range of
6% to 12%we believe that 6% is an appropriate keted assumption in this case where
there is a need for consistent and blended averages across multiple properties and
geographies. If anything, however, we do note that this may be potentially optimistic.
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Overall, we believe that the assumptions requiring professional judgement have been reasonably
considered by NBLC and serve to ensure that land values across all scenarios and submarkets are
comparable to their base values.
2.3Interpretation of Findings
As is the case with any land economics assignment of this nature, it is important to not only ensure
the quantitative methods and underlying calculations, assumptions and statistical inputs are sound
and appropriately representative of potential real-world conditions, but also to validate the resulting
interpretation of the analysis and any key takeaways and recommendations. That is, the analysis
achieve some substance in more practical vs. theoretical
applications.
Whereas the previous sections of this review substantiate the more technical aspects of the NBLC
study, the following focuses on providing a secondary review of their end conclusions and
recommendations to the subject municipalities from the perspective of future implementation.
Overall, we agree with the general advice and observations made by NBLC in light of the analysis
presented. There is a direct and immediate connection to the analytical findings established and the
recommendations thereof.
Flexibility in Policy
As noted previously in this reviewand as addressed directly by NBLCit will be critical to ensure
that appropriate flexibility is built in to any future IZ policy established by local area municipalities. In
our opinion, this is generally two-fold:
Firstly, given the hypothetical nature of this analysis for demonstrative parcels of land within
each submarket, there will undoubtedly be unique development conditions, expectations and
resulting land pricing for individual sites in practice versus theoretical development projects.
Although it is impossible to truly capture all the distinct conditions on each of these sites, it is
nonetheless important to accommodate the range of possibilities or potential outcomes in this
regard. As such, a future policy implementation that avoids being overly prescriptive while also
maintaining sufficient protection of the underlying objectives or strategic goals of the
municipalities will be important.
Secondly, and notwithstanding the above, NBLC highlights the obvious diversity of market
conditions across the Region. In addition to general flexibility to bridge the gap between policy
and the realities of the real estate market, it will also be important to encompass the full range
of development conditions presented across the various submarketsand/or individual
sitesidentified within each municipal jurisdiction. At its most basic manifestation, we agree
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cial incentives may be required to
compensate for the obvious reduction in revenues associated with affordable housing
minimums; particularly in the context of poorer-
addition, however, we further note that there could be a myriad of other parameters or
that can potentially be considered by the subject municipalities to improve feasibility
conditions in more isolated cases, including:
adjusting the quantum of affordable housing required (i.e., total % of units or floor
areas required);
or
representation for low and moderate income households;
considering reductions in parking requirements (although we do note that the rates
assumed by NBLC are already relatively low); as well as
offering opportunities for additional density permissions (i.e., simple exchange for
additional market-based height or density).
Further to above, it could be important to consider appropriate policy mechanism(s) that allow
for site-specific exemptions or other accommodations to achieve appropriate conditions on
unique and/or strategic sites. For example, there will inevitably be sites that are particularly
challenging from the perspective of viability (e.g., severe contamination and remediation
costs, difficult or complex physical/location/access characteristics, awkward relationship with
surrounding land uses, exceptionally large sites for which unique challenges are presented
with respect to phasing and possible absorption timelines, etc.). Loosening of some of the IZ
policies may be required in order to continue to incentivize and/or allow for development to
occur for these types of sites. Similarly, there may be specific strategic sites for which the
various lower-tier municipalities would like to secure additional development to achieve other
planning or economic development-related objectives, which require discretionary relaxation
of policy to alleviate constraints to develop relating to reduced opportunities for revenue
generation.
Gradual Introduction
In their draft reporting, and based on our own discussions with relevant members of their team, NBLC
appears to advocate for introducing any new IZ policies gradually , so as
to provide appropriate advanced warning to landowners and the development community. Although
in theoryand perhaps at face valuethis could delay the delivery of new affordable housing supply
to the Region, we ultimately agree with their assessment and believe that this is a necessary first step
to ensure the longer-term sustainability of the new policy framework. This may also serve to avoid
any unwanted immediate or short- in the local market area(s).
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In addition to establishing a reasonable timeline for introduction of the new IZ policy, this initiative
should also be accompanied by active and regular communication, education and outreach with the
development community to ensure clarity of the intended direction and motivations of this policy, as
well as the anticipated outcomes from the perspective of each of the municipalities.
Monitoring Framework
Consistent with the notion of a gradual introduction of new IZ policies, per above, a related and
subsequent task for the municipalities will be to continuously monitor the market impacts of the new
IZ policy and to actively adjust in response to any unwanted changes. This will also be required to
simply update and reflect constant changes in a dynamic real estate market, including: evolving
construction cost profiles and rates, changing revenue/demand prospects, adjustments to developer
preferences, ongoing supply/demand relationships, broader macroeconomic trends, etc. Similarly, as
alluded to in some of the case study examples identified by NBLC (e.g., New York City), there may be a
need to hear appeals or challenges to the policy in circumstances for which a reasonable agreement
cannot be established between municipal authorities and local landowners/developers.
With respect to future monitoring, however, we recognize that this will be particularly challenging in
an environment of limited financial and/or staff resources and potential lack of in-house subject
matter expertise within each of the subject municipalities. These challenges could also be further
exacerbated by the fact that there likely will not be sufficient scale or magnitude of IZ-related
development activity to justify the costs of monitoring in this manner (e.g., relative to other larger
municipalities where there could be a critical mass of development to warrant such a framework).
One potential solution to this problem would be to simplify the analyses prepared by NBLC and
effectively isolate or reduce to the model to its core principles
same modelling that follows the same general RLV structure but with fewer individual assumptions or
statistical elements to be updated). This may facilitate any future updates by municipal staff and/or
others involved that may not be able to offer the same level of expertise as external consultants.
Although we generally caution municipalities against updating or re-running these types of financial
models in isolation and without an appropriate understanding of the underlying concepts and
requirements for said inputs, this approach may nonetheless offer an interim or temporary solution
that requires less significant time and effort (as well as reduced risk of inaccuracy or
misinterpretation). For example, it is our opinion thatwhile the NBLC analysis may be appropriately
detailed to inform the development of the new IZ policies under consideration as an initial baseline
the modelling structure may be overly or even unnecessarily detailed to be updated on an annual
basis. That said, we would generally encourage the municipalities to leverage this additional rigour
and specificity to best inform the introduction of the new IZ policies at the outset, but thereafter seek
to prioritize the frequency of any monitoring or update schedules established rather than necessitate
a similar level of detail in this monitoring process. Based on our earlier discussions, we believe that
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NBLC shares the same sentiment with respect to the importance of frequent updating, wherever or
however possible.
Perpetuity of Affordable Units
Another one of targeted recommendations is to seek affordability for units created through
IZ in perpetuity, where possible in
support of ongoing municipal strategic objectives (e.g., increasing the supply and indeed the term of
affordable housing supply), we certainly agree with this direction. As noted as part of previous
discussions with representatives of each of the lower-tier municipalities, however, we will caution
that this often places undue pressure and reliance on external sources of funding from other levels of
government (i.e., depending on the depth of affordability being pursued and/or the specific
parameters established as part of the resulting IZ policies and opportunities for exemptions,
additional financial incentives, etc.). More broadly, we note that there will undoubtedly continue to
be a finite source of provincial and federal funding available to support the creation of affordable
housing and municipalities in Waterloo Region will continue to vie for these moneys in direct
competition with other parts of the province and country.
As such, we would simply suggest that the subject municipalities carefully consider the extent to
which they are willing, capable and prepared to support this type of housing over the longer-term
planning horizon, if and where applicable.
3.0Conclusions
Based on our review of the NBLC report and supporting financial analyses, we support their research
conclusions and recommendations with respect to the feasibility of introducing new IZ policies in the
Cities of Cambridge, Kitchener and Waterloo. The following provides a summary of our specific
findings in this regard:
We believe that the RLV approach and analytical structure adopted by NBLC represents a
reasonable and reliable methodology for understanding the high-level implication of
implementing IZ within each submarket.
Although we cannot necessarily guarantee the full accuracy and completeness of the 140
proformas prepared by NBLC, we are sufficiently confident that the RLV approach and analysis
described above has been applied correctly, accurately and in a comprehensive manner.
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The various statistical inputs and other assumptions requiring professional judgement relied
upon by NBLC as part of their analysis appear to be entirely reasonable and consistent with
our own research and experience in this market area.
Although we have identified a number of potential alternative approaches, assumptions
and/or considerations for selected elements of the NBLC study, these would not result in a
material impact to the end results of the study, nor any of the associated study conclusions
and recommendations provided to the municipalities.
Based on our review of the NBLC findings and recommendations, including in the context of
agree with the advice and observations made by NBLC
in light of the analyses presented.
Overall, no fundamental deficiencies nor other issues were identified as part of our review, which
need to be addressed as part of any future updates or re-issuing of the draft reporting prepared by
NBLC to date. Consequently, and as identified at the outset of this opinion letter, it is the professional
opinion of urbanMetrics that the study prepared by NBLC on behalf of the subject municipalities
adequately addresses the requirements set out in Ontario Regulation 232/18 with respect to the
to be prepared in support of the implementation of new IZ policies.
It has been a pleasure conducting this study on behalf of the Cities of Cambridge, Kitchener and
Waterloo and we hope that you find this information helpful in your continued efforts to explore the
appropriate application of new IZ policies across the Region. Please do not hesitate to contact the
undersigned with any questions or comments that you may have, or if further discussion and
coordination is required with relevant members of NBLC.
Yours truly,
urbanMetrics inc.
Christopher White, PLE Matthew Paziuk
Partner Senior Project Manager
cwhite@urbanMetrics.ca mpaziuk@urbanMetrics.ca
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REPORT TO:Planning & Strategic Initiatives Committee
DATE OF MEETING:September 28,2020
SUBMITTED BY:Janine Oosterveld,Manager of Site Development and Customer
Service, 519-741-2200 ext. 7076
PREPARED BY:Katie Anderl, Senior Planner, 519-741-2200 ext. 7987
WARD(S) INVOLVED:Ward 10
DATE OF REPORT:August 26,2020
REPORT NO.:DSD-20-106
SUBJECT:Zoning By-law Amendment ZBA19/013/S/KA
290 Sheldon Avenue North
Thresholds Homes and SupportsInc.
RECOMMENDATIONS:
A.That Zoning By-law Amendment Application ZBA19/013/S/KA for Thresholds
Homes and SupportsInc.be approved-
-20-106 as Appendix A; AND
B.That in accordance with Planning Act Section 45 (1.3 & 1.4) that applications for
minor variances shall be permitted for lands subject to Zoning By-law Amendment
Application ZBA 19/013/S/KA; AND FURTHER
C.That the City of Kitchener grant an exemption to Council Policy MUN-PLA-1035,
proposed on the lands municipally addressed as 290 Sheldon Avenue North, to allow
development on a cul-de-sac having a length greater than 150 metres provided that:
a)buildings are sprinklered; and
b)Direct-to-Fire Alarm Monitoring be installed
EXECUTIVE SUMMARY:
The owner of 290 Sheldon Avenue is proposing to change the zoning of the property from Residential
Four Zone to Residential Six Zone with Special Regulation Provision 756R to permit the site to be
developed with a 25unit multiple dwellingand retention ofthe existing 6 bedroom group home. Staff
recommend that the application be approved.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
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Location Map 290 Sheldon Ave N
REPORT:
The subject property contains a single detached dwelling that isused as a 6 bedroom group home
by Thresholds Homes and SupportsInc.(Thresholds). Thresholds provides subsidized
accommodation through agency-owned properties, and all individuals housed with Thresholds
receive a range of ongoing support services.
The applicant is proposing to change the zoning to permit intensification of the site to provide
affordable,supported housing. The existing house is proposed to remain as a 6 bedroom crisis and
respite care facility, and will continue to bestaffed 24/7 with two staff. A new multiple dwelling is
proposed to be constructed which would contain 25one-bedroom units.The original development
proposal also included a new 5 bedroom residential care facility within the multiple dwelling. Through
the review process,technical concerns were raised with respect to emergency access for the
residential care component andthe applicant has elected to proceed with only the multiple dwelling
component,in addition toretention ofthe existing group home.
The site is located in a predominantly residential neighbourhood, which has been developed with a
mix of low and medium density residential uses including single detached dwellings and a mid-rise
condominium tower.Astacked townhouse development has recently been site plan approvedin
principleat 289and 295Sheldon AveN. 290 Sheldon Avenue backs on to Randerson Green and
is adjacent to Highway #7.
Planning Analysis:
Provincial Policy Statement, 2020
The Provincial Policy Statement (PPS) provides policy direction on matters of provincial interest
related to land-use planning and development.The PPS is supportive of efficient development and
land-use patterns which accommodate an appropriate range and mix of residential and other uses,
in order to achieve a complete community. The PPS supports focusing growth and development to
settlement areas, and supports a land use pattern within settlement areas that isbased on achieving
densities and a mix of land uses that efficiently use land, resources, and infrastructure,and which
support active transportation and are transit-supportive. Policies also supportthe provision of an
appropriate range and mix of housing types by establishing and implementing targets for the
provision of housing which is affordable to low and moderate income households, permitting and
facilitating all forms of housing required to meet the social, health and wellbeing requirements of
3 - 2
current and future residents. Local housing prioritiesare articulated in the
which was prepared by the Region to coordinate with policies of the PPS and Places to Grow.
Thesubject lands are located in a settlement area, and theproposed zoning facilitatesthe
development of the subject property with a low-rise residential usethat efficientlyuses the lands and
existing infrastructure. The proposed development is located in an urban area with proximity to
transit routes, parks and open spaces, and a variety of uses including public institutions, service and
commercial uses. The density of the development is appropriate and will not create adverse impacts
on the surrounding neighbourhood. The proposed multiple dwellingand existing group home help
provide a rangeof housing options within the community andwill help to achieve targets for the
provision of affordable housing for a priority population, as identified inthe RegionHousing Action
Plan. Planning staff is of the opinion that the proposed ZoningBy-law Amendmentis consistent with
thepolicies and intent of thePPS.
A Place to Grow: Growth Plan for the Greater Golden Horseshoe, 2019(Growth Plan):
The Growth Plan supports the development of complete and compact communities that are designed
to support healthy and active living, make efficient use of land and infrastructure, provide of a range
and mix of housing types,and support transit viability. Policies of the Growth Plan focus growth
within the delineated built-up area.
Tdelineated built up area, represent intensification and
will help the City achievedensity targets. The surroundingneighbourhood is primarily residential
with institutional, commercial and service uses nearby.Theproposed zoningwill permita form of
housing (low rise apartments)that improvesthe range of housing options within this neighbourhood.
The additional housing will make use of existing infrastructure and support existing transit. Housing
policies of the Growth Plansupportthe development of a range and mix of housing options that will
Planning
staff is of the opinion that the applications conform to the Growth Plan.
Regional Official Plan (ROP):
Urban Area. The subject lands are designated Built-Up Areain the ROP. This neighbourhood
provides for the physical infrastructure and community infrastructure to support the proposed
residential development, including transportation networks, municipal drinking-water supply and
wastewater systems.
Regional policies require Area Municipalities to plan for a range of housing in terms of form, tenure,
density and affordability to satisfy the various physical, social, economic and personal support needs
of current and future residents. Regional policies also support the provision of special needs housing
in all residential designations.The proposed zoningincreases the range and mix of housing forms
within this neighbourhood, and the applicant is proposing to develop this site with housing that is
both affordable and which may be considered special needs housing. Planning staff is of the opinion
that the proposed Zoning By-law Amendment conforms to the Regional Official Plan. Regional
Planning staff have no objections to the proposed applications andhaveprovided comments
evelopment applications.
3 - 3
City of Kitchener Official Plan:
Urban Structure Community Area
The lands are identified as a Community Area in the Official Plan. The planned function of
Community Areas is to provide for residential uses as well as non-residential supporting uses
intended to serve the immediate residential areas. Intensification ispermitted within Community
Areas in accordance with the applicable land use designation and the Urban Design Policies in the
Official Plan. The proposed development must be sensitive to and compatible with the character,
form and planned function of the surrounding context.
Land Use Designation Low Rise Residential
The Low Rise Residential land use designation permits a range of low rise dwelling types including
low risemultiple dwellings. Policies provide for a maximum Floor Space Ratio of 0.6which may be
increased to 0.75 where it can be demonstrated that the increase in the Floor Space Ratio is
compatible and meets the general intent of the policies of the Plan. The maximum height of buildings
in the Low Rise Residential designation is 11.0m at the highest grade elevation.Relief from the
building height may be considered for properties with unusual grade conditions provided the
increased building height is compatible with the built form and physical character of the
neighbourhood.
The developmentconcept shows a future FSR of 0.57 whichcomplies with the maximum FSR of 0.6
based on the existing lotsize. The subject lands back onto Randerson Green, which is a small city
owned green space. Parks staff has identified that they intend torequest a park land dedication
through the site plan approval which will reduce the sizeof 290 Sheldon Ave by about 0.046
hectares, resulting in the future FSR of 0.63. The lands to be dedicated will not be developed with
buildings whether they remain part of the 290 SheldonAve N, or are added to Randerson Green.
Staff feel it is appropriate to include special zoning regulations which will allow the FSR to be
calculated based on the pre-dedication lot size of 0.46 hectares.
Further discussion with respect to compatibility and character is provided in the Urban Design section
of this report.
Housing
The Official Plan policies support the provision ofan appropriate range, variety and mix of housing
types and styles, densities, tenure and affordability to satisfy the varying housing needs of our
community through all stages of life. The proposed development incorporates the existing Group
Home which provides asupervised and supportive living environment for a small group of residents,
with the proposed multiple dwelling for residents who can successfully live independently, but with
some degree of support from Thresholds. Special needs housing is defined in t
as any housingused by people who have specific needs beyond economic needs. The PPS provides
examples of special needs housing including housing for persons with disabilities such as mental
health disabilities. The proposed developmentis amultiple dwelling,and residents live
independently, with supportson a needs basis.
Official Plan policies support the provision of appropriately scaled special needs housing in any land
use designation which permits residential uses, provided the use and building form is compatible
with the surrounding context. Special needs housing is encouraged to locatein close proximity to
public transit, commercial uses, parks and have convenient access to community, social and health
services. The subject site is located in a residential neighbourhood and within a 10 minute walking
3 - 4
distance of several bus routes including an I-Xpress route, commercial areas along King Street East
and Ottawa Street South, andcommunity uses including churches, parksand recreationaluses.
Urban Design & Compatibility
Official Plan policies seek to ensure thatresidential intensification within existing neighbourhoods
will be designed to respect existing character by beingsensitiveto surrounding context.Policies
indicatethat all new residential buildings in predominantly low density neighbourhoods should be
compatible with and respect the massing, scale, design and physical character of the established
neighbourhood and have bothappropriate landscaped areas and parking areas provided on site.
The neighbourhood is generally characterised with low rise residentialhouses, however the subject
site is located at the edge of the neighbourhoodabuttingHighway #7 to the east, a small city green
space to the north(Randerson Green), a9storey apartment building is located to the east, anda
new low-rise multiple dwelling has recently beensite planapproved in principle to the south. There
is one house located immediately east of the subject site and this property is zoned R-7 which would
also permit multipleresidential development.
The proposed R-6 zone will permit development of a low-rise multiple dwelling. The buildingis
proposed to be 3 stories high from the highest grade elevation, with an exposed basement lobby
which will create a 4 storey elevation facing the street. While higher thansurrounding single
detached dwellings, the proposed buildingissetback back from Sheldon AveNand recessed behind
the existing single detached dwelling which is proposed to be retained and will continue to be used
as a group home. The existing housewill be most prominent along the street, and will continue to
contribute to the look and feel thatis valued by residents of this neighbourhood. Staff is of the opinion
that the proposed building is compatible with respect to massing and scale of the neighbourhood.
Details of the elevations will be finalized through the Site Plan review, however the conceptual
architectural design is contemporary using a variety of materials, warm tones and materials that take
inspirationfrom the surrounding neighbourhood. Conceptual drawings depict facadeswithJuliet
balconies and with windows on all sides.Parking is setback back from the street and is located
behind the façade of the existing dwelling, allowing for landscaping along the street. The site design
will also allowfor the retention of many of the trees in good condition around the periphery of the
site, including trees along the Highway and within the lands to be conveyed to the City as part of the
future park land dedication. Details of the landscape design and outdoor amenity spacesfor
residentswill be reviewed and detailed as part of the site plan approval process.
Emergency Access and Requested Exemption to the Emergency Services Policy
City policyrequiresthat new development and redevelopment be designed to ensure adequate
protection by fire services. The subject property is located on a section of Sheldon Ave Nwhich
exceeds the maximum cul-de-sac length of 150 metres as identified in the Council Policy.The length
of Sheldon Ave Nis an historical situation which pre-dates the current Emergency Services Policy.
Development on such a cul-de-sac is permitted subject to either provision of a secondary emergency
access route, or other alternative life safety measures such as sprinklers and Direct Detect as
outlined in the policy.
Thresholds originally proposed to change the zoning to permit an expansion to the residential care
facility/group homeuse, as well as to permit a multiple dwelling. Fire Services staff has reviewed
3 - 5
additional residential care facility cannot be supported without a secondary emergency access,
however, the existing group home may remain in the single detached dwelling. An appropriate
alignment of a secondaryaccess route has been explored at length, however due to restrictionson
the Ministry of Transportation regulated portion of the lands (within 14 metresof the highway), it was
determined that a permanent secondary access route is not feasible. As such, Thresholds has
agreed not to pursue the expansion of the residential care facility, focussing instead only on the
multiple dwelling.
Thresholds Housing and SupportsInc.
Policy to permit the proposed multiple dwellingwithout a secondary emergency access, on a cul-de-
Eion
criteria outlined in section 3.6 of the Emergency Services Policy, Thresholds has agreed to construct
the multiple dwelling with a residential sprinkler system conforming to the latest version of NFPA
13D, or other standard acceptable to the Chief FireOfficial, and a direct-to-fire monitoring system.
These measures are above and beyond the typical Building Code standard for a multiple dwelling
and improve the response times for Emergency Services and life safety for future residents. Details
of this solution will be finalized through the future Site Plan Approval and Building Permit processes.
Fire staff is satisfied that with the provision of these additional life safety measures the proposed
development is appropriate.Based on the foregoing, Fire and Planning staff recommend that the
requested Exemption to the Emergency Services Policy be approved.
Proposed Zoning By-law Analysis:
The subject property is zoned ResidentialFour Zone (R-4) which permits a range of low-rise low
intensity residential usessuch as single detached, duplex, and semi-detached dwellings. The
applicant is proposing to change the zoning to Residential Six Zone, with Special Regulation
Provision 756Rto permit the site to be developed with a new multiple dwelling in addition to the
existing group home.
Special Regulation Provision 756Ris proposed as follows:
a)The maximum building height measured from lowest grade level shall be 13.5 metres
and may exceed 110% of the building height measured from the highest grade level.
The purpose of this regulation is to permit a three storey building, which is fourstoreys
from the lowest grade elevation. The subject lands have a substantialgrade change
between Sheldon Avenue and the developable area. In order to accommodate a
driveway with appropriate and accessible grades,one sidethebasement
level will be fully exposed, allowing for a lobby which is accessible from the driveway
and parking area. The new buildingis recessed behind the existing house, and will not
be prominent along the street, therefore having a minimal impact to the streetscape.
The other elevations of the building will comply with the maximum 10.5 metre height.
b)Where lands affected by SpecialRegulation 756Rarededicated to the City, the
maximum Floor Space Ratio for development on the retained portion may be
2
calculated based on a lot area of 4639.1 m(being the size of the lands prior to any
dedication).
3 - 6
The purpose of thisregulation is to allow the Floor Space Ratio to be calculated based
on the current lot size. City Parks has indicated that they will request that a small
portion of the sitebe conveyed to the City and added to Randerson Green rather than
requesting cash-in-lieu paymentfor parkland dedication.Byreducing the lot size, the
amount of gross floor area permitted by the FSR calculation is reduced, reducing the
size of the building. As the dedicatedlands will not be developed and will be held
publicly, this regulation wouldnot result in any actual increase in density over what
can be constructed on the current lot with a cash payment, and the neighbourhood
receives the benefit of a larger green space.
c)That on a lot containing a group home or small residential care facility with up to 6
bedrooms and a multiple dwelling with up to 25 dwelling units, parking shall be provide
as follows:
Small residential care facilityor group home2spaces per facility
Multiple dwelling with up to 25 units 0.4spaces per unit.
The purpose of this regulation is to permit a reduced parking requirement for the
proposed development.AParking Assessmenthas been submitted in support of the
proposed parking reduction. The assessment is based on the actual parking demand
of other multiple dwellings operated by Thresholdsand finds that most tenants do not
have personal vehicles, and parking spaces are primarily used by staff and visitors to
the site. Thestudy demonstrates that the maximum parking requirementper unit at
similar multiple dwellingsoperated by Thresholds isbetween 0.08 and 0.25 spaces
per unit (inclusive of staff, resident and visitor parking)representing a demand of
between 2 and 6 spaces for the 25 unit multiple dwelling. A small residential care
facility is required to have 2 parking spacesby Zoning By-law 85-1and this is not
proposed to change.Staff recommend a parking rate of 0.4spaces per unit, which is
slightly higher than the ratio demonstrated by the parking study to further ensure that
parking can be accommodated on-site, and that staff and visitors do not regularly rely
on on-street parking.Transportation Services staff have reviewed the Parking
Assessment and concur with the findings. They agree that the proposed parking ratios
are appropriate for the proposed development. Further, parking spaces will not be
assigned to the small residential care facilityor multiple dwelling allowing support staff
to use parking spaces during the day, and visitors to use parking evenings and
weekends.
d)Off-street parking and loading spaces may be located between the façade of a new
building and the front lot line (SheldonAve N), and between the façade of an existing
building and the side lot line abutting a street (Highway #7). Parking and loading
spaces must be setback a minimum of 10.0 metres from Sheldon Ave N.
Parking lots for a multiple dwellingare generally not permittedto be located between
buildings and the street. The purpose of this is to ensure that streetsare animated by
buildingsand landscaping. The parking loton the subject siteis proposed to be
setback behind the façade of the existing house, but between the new building and
Sheldon Ave N, and the existing house and Highway 7. The parking area is setback
back a significant distance from Sheldon AveN, is at a higher elevation and will be
screenedby landscaping. It is also fullyscreened from the highway by the existing
3 - 7
noise wall, and staff is of the opinion that it will not causea negative visual impact.
The proposed location also ensuresthat the parking area is separated and screened
from neighbouring dwellings,mitigatinglight trespass and headlight glare which may
result from it being in a rear yard.
e)a residential care facility or a group home shall be permitted to have up to 6 residents
and shall only be located in a building existing on the date of the passing of this by-
law.
The purpose of this regulation is to only permit the existing group home/small
residential carefacility. Due to the length of the cul-de-sac, it has been determined in
consultation with Fire, that permitting additional residents in a residential care or group
home setting is not supportable without an Emergency Access Route. As discussed
previously, the proposed additional life safety measures of a sprinkler system and
direct-to-fire alarm monitoring system is an acceptable alternative for amultiple
dwelling, but Fire cannot support increasing the number of residents in aresidential
caresettingin this location.
f)a multiple dwelling shall have a central air conditioning system, and special building
components as identified in the Environmental Noise Assessment.
The purpose of this regulation is to ensure that requirednoise mitigation measures
are incorporated into the multiple dwelling when it is constructed. The Region is
satisfied with the Noise Assessment and the addendum thereto, and these measures
must be incorporated to ensure indoor sound level criteria are achieved.
Staff isof the opinion that the proposed R-6 Zone together with the special provisionswill provide
for a form of development that is compatible with the neighbourhood, which will help to improve the
mix of housing types, and which will appropriatelyaccommodate on-site parking needs,and which
represents good planning.Staff recommend thatthe proposed Zoning By-law Amendment be
Reports, Studies and Technical Memos:
The following Reports and studies were considered as part of this proposed Zoning By-law
Amendment:
Planning JustificationReport: 290 Sheldon Ave
Prepared by: GSP Group, October2019
Preliminary Environmental Noise Assessment: 290 Sheldon Avenue North
Prepared by: MTE Consultants Inc., October 24, 2019
o Environmental Noise Assessment Addendum
Prepared by: MTE Consultants Inc., August 18, 2020
Functional Servicing and Stormwater Management Report: 290 Sheldon Avenue North
Prepared by: MTE Consultants Inc.,September 26,2019
3 - 8
Salt Management Plan: 290 Sheldon Avenue North
Prepared By: MTE Consultants Inc., December 12, 2019
General Vegetation Overview and Tree Management Plan
Prepared By: MacKinnon & Associates.,(last revised) September 27, 2019
Parking Assessment
Prepared By: Salvini Consulting,September 26, 2019
Department and Agency Comments:
Preliminary circulation of the applicationwas undertakenNovember 20, 2019 to applicable City
departments and other review authorities.Copies of comments may be found in AppendixC
this report.
Comments of the following City Departments and Commenting Agencies are attached:
Kitchener Engineering&Utilities
Kitchener Fire
Kitchener Environmental Planning
Region of Waterloo
All questions and comments related to the proposed land use change have been resolved and
staff are supportive of the proposed Zoning By-law Amendment.
The following Departments and Agencies have indicated they have no concerns or comments:
Kitchener Transportation Services
Kitchener Building Division
Kitchener Parks and Cemeteries (Design and Development)
Waterloo Region District School Board
Waterloo Catholic District School Board
Grand River Conservation Authority
Ministry of Transportation
Community Input& Staff Responses
Staff received written responses from twenty-threehouseholds with respect to the proposed
January 29, 2020 and was attended by thirty-fiveresidents.In addition,a petition against a future
trailconnection from Montgomery Road to Ottawa Street with sixty-five signatures was submitted.
A broad range of questions and comments were heard from property owners andare discussed
below.
Theme: Traffic and Parking
What We HeardStaff Comment
The proposed amount ofparking Transportation Services staff have reviewed the Parking
will notbe sufficient for the Justification Study and are satisfied that the recommended
development.parking ratioof 0.4 spaces per unit is appropriate for the
proposed development.housed by
Thresholds typically do not own a personal automobile and
instead cycle, walk and use transit.
3 - 9
On-street parking is in high Staff acknowledge that visitors to the Auditorium park on
demand during events at thesurrounding streets. While a parking reduction is proposed,
Kitchener Auditorium. This staff is of the opinion that sufficient on-site parking is
development will further impact provided to accommodate the regular needs of the
problems caused by on-street proposed development and do not expect that there will be
parking.a regular overflow onto local streets.
The pavement width of Sheldon In accordance with Complete Street Guidelines, the
Avenue was narrowed when it preferred pavement width fora local street is about 7.0
was recently reconstructed. With metres. This design prioritizes space for sidewalks,
parking on both sides of the boulevards and street trees, while accommodating travel
street it can be difficult for lanes for vehicles and on-street parking as well as drive
vehicles to pass each other.lanes. The narrower pavement width has the effect of
With increased traffic, this may helping to slow local traffic. Sheldon Ave N is currently built
be a problem.with an 8.0 m pavement width as the design preceded the
Complete Streets Guidelines. Parking is currently permitted
on both sides of certain sectionsof Sheldon Ave N. If there
is concernin the futurewith the ability for vehicles to
maneuver safely, Transportation staff have indicated that
they could explorelimiting parking to one side of the street.
Traffic calming measures should The city maintains a list of streets where traffic calming
beinstalled on Sheldon Ave N.measures have been requested, and requests are prioritized
for interventions. Transportation Services staff indicated
Sheldon Ave N would likely not meet the criteria for physical
traffic calming measures such as curb extension or speed
humps, however, it would be possible to explore surface
treatments such as an intersection mural at Fairmount Road
and Sheldon Ave N. This could be further explored as a
once the top coat of asphalt is applied following the
Fairmount Road reconstruction.
Sheldon Ave N was not designed Transportation Services staff has reviewed the proposal
to accommodate increases in and have not identified capacity constraints on SheldonAve
traffic that will cumulatively result N, or at nearby intersections.
from this development and the
townhouses which were also
recently approved.
Will bus routes be extended into The Region of Waterloo has indicated that there areno
the neighbourhood?plans to extendbusroutes into the neighbourhood. There
are existing bus routes on nearby arterial roads including
Weber Street, King Street and Ottawa Street. These are
within about a 10 minute walk of the subject site and
provide adequate access to transit.
Vehicles have been cutting Staff have reached out to the owner regarding this concern,
through Randerson Green to and the they have indicated that landscape contractors
access the subject lands.required an alternate access to the site while Sheldon Ave
N was being reconstructed. The owner has advised
contractors that they must access the property via Sheldon
Ave N rather than through Randerson Green.
3 - 10
Theme: Pedestrian Connection along Highway
What We HeardStaff Comment
Residents do not currently At the outset of this proposal, staff identified that there may
support further exploration of a be a long term opportunity for an off-road connection along
trail connection from Montgomery the highway between Montgomery Road and Ottawa Street
Road to Ottawa Street North. North to improve pedestrian and cyclist accessibility through
the community. This trail connectionis not going to proceed
at this time. Should it be revaluated at sometime in the
future, a separate neighbourhood consultation process will
be initiated by the City.
Theme: Neighbourhood Character and Building/Site Design
What We HeardStaff Comment
Residents like that the building is
set back from the street with
parking hidden from street.
Concern from nearby condo The proposed buildingis a maximum of 3 stories high from
owners that their view will be the highest grade. The existing condominium buildingis9
blocked.stories high. While residents of with upper storey units facing
eastwill likely see the new building, given existing vegetation,
longer range views will likely not be impacted.
Concerns about changing The subject neighbourhood,while historically developed with
character of neighbourhood from mostly single detached dwellings, has for many years been
single detached dwellingsto zoned to permit lowand medium rise multiple dwellings. The
multiple dwellings, and the proposed zoning and development is less intensive than is
cumulative impacts of permitted by the R-7 zone on neighbouring lands, and is
intensification and consistent with the permissions on lands zoned R-6
redevelopment.elsewhere in the neighbourhood.
Questions about whether fencing,Landscaping, fencing and visual barriers will be further
trees and additional landscaping considered through the site plan review process.
would be installed.
Concerns about construction Staff acknowledge that there may be some disruption during
nuisance, traffic, noise etc.the construction period, including dust,noiseand construction
traffic. Construction activity is generally limited to day time
hours (between 7 am and 7 pm) and Building, Engineering
and/or Property Standards staff will be able to respond to
concerns during the construction period and can work with the
neighbourhood and the owner to mitigate these.The owner
will be required to direct construction traffic to use the most
direct route to the site from a major street in order to limit
impacts on local streets.
3 - 11
Theme: Affordable& Supported Housing
What We HeardStaff Comment
Several residents commented
that they liked that this proposal
need for affordable housing.
Concerns were raisedregarding Affordable housing is a much-needed option for many people
the operationand management ofwho are HumanRightsCode.
the proposed housing People who need affordable housing are part of every
development, and behavioural community. They often already live in the communityand may
characteristics of future residents.currently beunder-housed or struggling to pay rent. When
neighbourhoodsare inclusive, they meet the needs of more
residents, and provide more opportunities and choices for
everyone. Both affordable and market-rate housing must
meet the same building restrictions and design standards of
the neighbourhood and can be designed to fit in with the
character of the area. A Canadian study of 146 supportive
housing sites found that there was no real increase in crimes
in general, or in violent, property, mischief or disorderly
conduct crimes in the areas (Alice de Wolff,Weare
Neighbours:TheImpactofSupportiveHousingon
Community,Social,Economic,andAttitudeChanges,
Wellesley Institute, 2008).People who need affordable
housing are already part of the community, andsupported
housing can provide more stability and security.
(http://www.ohrc.on.ca/)
Planning Conclusions
In considering the foregoing, staff are supportive of the proposed Zoning By-law Amendment to
permit 290Sheldon Ave Nto be developedwith a low rise multiple dwelling. Staff isof the opinion
that the subject application isconsistent with policies of the Provincial Policy Statement, Growth Plan
for the Greater Golden Horseshoe, and the Regional Official Plan, and City of Kitchener Official Plan
andrepresentsgood planning.Staff further recommend that the requested exemption to the
Emergency Services Policy be approved.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
the delivery of core service.
FINANCIAL IMPLICATIONS:
There are no financial implications associated with this recommendation.
3 - 12
COMMUNITY ENGAGEMENT:
INFORM & CONSULT -The proposed Official Plan Amendment and Zoning By-law Amendment
wereoriginally circulated to property owners within 120 metres of the subject lands in November
2019. Staff received responses from twenty-three households, which are summarized as part of this
DJanuary29,
2020and was attended by 35 residents. Notice signs are also posted on the property. A courtesy
notice of the public meeting will be circulated to all property owners responding to the preliminary
circulation and who attended the Neighbourhood Information Meeting.Notice of the Public Meeting
will be given in The Record on September4, 2020and a copy of the Notice is attached as Appendix
Bwill be
council/committee meeting.
CONCLUSION:
Theproposed Zoning By-law Amendment isappropriate and representsgood planning and it is
recommended that the application be approved.
REVIEWED BY: Janine Oosterveld, Manager of Site Development and Customer Service
ACKNOWLEDGED BY: Justin Readman -General Manager, Development Services
APPENDICES:
AProposed Zoning By-law Amendment
BNewspaper Notice
CDepartment and Agency Comments
DPublic Comments
Requested Exemption to Emergency Services Policy
3 - 13
PROPOSED BY LAW
________,2020
BY-LAW NUMBER ___
OF THE
CORPORATION OF THE CITY OF KITCHENER
(Being a by-law to amend By-law 85-1, as amended,
known as the Zoning By-law for the City of Kitchener
Thresholds Homes and SupportsInc. 290 Sheldon
AvenueNorth)
WHEREAS it is deemed expedient to amend By-law 85-1;
NOW THEREFORE the Council of the Corporation of the City of Kitchener
enacts as follows:
1.Schedule Number175of-law Number 85-1ishereby amended
by changing the zoning applicable to the parcel of land specified and illustrated as
Area 1on Map No. 1, in the City of Kitchener, attached hereto, from Residential
FourZone (R-4)toResidential Six Zone (R-6) with Special Regulation Provision
756R.
2.ApD-law 85-1is hereby amended by addingSection 756thereto as
follows:
756.Notwithstanding Sections4.2,6.1.1.1.d),6.1.2 and 40.2 of this By-lawwithin
the lands zoned R-6,756Rand shown as being affected by this subsection
on Schedule Number 175the following special regulations
shall apply:
a)The maximum building height measured from lowest grade level
shall be 13.5metresand may exceed 110% of the buildingheight
measured from the highest grade level.
b)Where landsaffected bySpecialRegulation 756Ris dedicated to
the City,themaximum Floor Space Ratiofor developmenton the
retained portion may be calculatedbased on a lot area of 4639.1
2
m(being the size of the lands prior to any dedication).
c)That on a lot containingagroup home or small residential care
facilitywithup to 6 bedrooms and a multiple dwelling with up to 25
dwelling units,parkingshallbeshared between uses and
unassigned, andshall be providedasfollows:
Group home or small residential care facility 2spacesper facility
Multiple dwelling with up to 25 units 0.4spacesperunit.
3 - 14
d)Off-street parking and loadingspacesmay be locatedbetween the
façadeof a new buildingandthe front lot line(Sheldon Avenue
North), and between thefaçadeof an existingbuildingandthe
sidelot line abutting a street (Highway #7). Parking and loading
spaces must be setback a minimum of 10.0metresfrom Sheldon
Avenue North.
e)asmall residentialcarefacilityora group home shall be permitted
to have up to 6 residents,shallonly be located in a building
existing on the date of the passing of this by-law, and may be
located on the same lot as a multiple dwelling.
f)Amultipledwelling shall have a central air conditioning system,
andspecialbuildingcomponents asidentified in thePreliminary
EnvironmentalNoise Assessment,for 290 Sheldon Avenue North,
dated October 24, 2019,andtheaddendumtheretodated August
18, 2020,prepared by MTE Consultants Inc.
PASSED at the Council Chambers in the City of Kitchener this
day of,2020.
_____________________________
Mayor
_____________________________
Clerk
3 - 15
SCHEDULE 192SCHEDULE 193
SCHEDULE 175SCHEDULE 174
3 - 16
DSD-20-106
Appendix B
PROPERTY OWNERS AND INTERESTED PARTIES ARE INVITED
TO ATTEND AN ELECTRONICPUBLIC MEETING TO DISCUSS
A PROPOSED ZONING BY-LAW AMENDMENT
UNDER SECTION 34OF THE PLANNING ACT
290 Sheldon Avenue North
Thresholds Homes and Supports is proposing a Zoning By-law Amendment to permit the lands at 290
Sheldon Avenue North to be developed with a multiple dwelling.
In keeping with physical distancing measures recommended by Public Health due to COVID-19, anelectronic
public meeting will be held by the Planning & Strategic Initiatives Committee, a Committee of Council which
deals with planningmatters,on:
Monday,September28, 2020at 7:00 p.m.
(live-stream video available at kitchener.ca/watchnow)
If you wish tomake written and/or verbal commentseither in support of, or in opposition to, the above noted
proposalyou may register as a delegation at kitchener.ca/delegationsor by contacting Legislated Services at
519-741-2200 ext. 2203by no later than 4:00 p.m. on September 28, 2020.Aconfirmation email and instructions
for participating in the meeting electronically with be providedonce your registration is received.
If a person or public body would otherwise have an ability to appeal the decision of the City of Kitchener
to the Local Planning Appeal Tribunal, but the person or public body does not make oral submissions
at a public meeting or make written submissions to the City of Kitchener prior to approval/refusal of this
proposal, the person or public body is not entitled to appeal the decision.
ADDITIONAL INFORMATIONis available by contacting the staff person noted belowor byviewing the report
contained in the meeting agenda (posted 10 days before the meeting at www.kitchener.ca-click on the date in the
Calendar of Events and select the appropriate committee).
Katie Anderl,SeniorPlanner -519-741-2200 x 7987(TTY: 1-866-969-9994);katie.anderl@kitchener.ca
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Department and Agency Comments
Hi Katie,
Engineering is ok with the zone change with a
proposed sanitary flow of 1.44L/s.
surcharge in the trunk sewer, but through detailed design we will ensure the inverts into the new building are high
enough.
Thanks,
Christine Goulet, C.E.T.
Project Manager | Development Engineering | City of Kitchener
519-741-2200 Ext. 7820 | TTY 1-866-969-9994 | christine.goulet@kitchener.ca
Hi Katie,
I got comments back from Angela Mick who I circulated for the water distribution portion. Per her comments
below, they should tap into the new watermain on Sheldon, instead of the old watermain within the easement.
Thanks,
Christine Goulet, C.E.T.
Project Manager | Development Engineering
519-741-2200 Ext. 7820
From: Angela Mick <Angela.Mick@kitchener.ca>
Sent: Thursday, November 28, 2019 1:24 PM
To: Christine Goulet <Christine.Goulet@kitchener.ca>
Subject: 290 Sheldon
Hi Christine,
The proposed servicing shows a 100 mm from the existing easement. This watermain is old. The 200mm
watermain on Sheldon is new. They have to cut the asphalt to remove the existing service so it would be best to
tap from the new, larger watermain.
Flows are fine
Regards,
Angela Mick, P.Eng
Manager Quality Management and Water Programs | Kitchener Utilities | City of Kitchener
519-741-2600 x 4408 | TTY 1-866-969-9994 | angela.mick@kitchener.ca
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Department and Agency Comments
Hello Katie,
to Direct Detect and Sprinklering, and implementation of a Fire Route Plan through the Site Plan
Approval Process.
Hope that helps,
Greg
Date: 20 December 2019
To: Katie Anderl, Kitchener Planning
Aaron Hill, MacKinnon & Associates
From: Barbara Steiner, Senior Environmental Planner
cc: Sandro Bassanese, Urban Designer, Kitchener Planning
Subject: Zoning Bylaw Amendment ZBA19/013/S/KA
290 Sheldon Avenue North
Thresholds Homes & Supports
DĻƓĻƩğƌ ĻŭĻƷğƷźƚƓ hǝĻƩǝźĻǞ ğƓķ ƩĻĻ ağƓğŭĻƒĻƓƷ tƌğƓ (GVO). 27 September 2019. MacKinnon
& Associates.
Environmental Planning staff has reviewed the environmental supporting documentation and advise that we are in
support of the Zoning Bylaw Amendment noted above, provided that confirmation regarding Species At Risk is
provided as outlined in Comment 1 below.
Sandro Bassanese also preliminarily reviewed the plan to ensure that Urban Design staff are in agreement with the
d development moves on to Site Plan Approval (SPA). If required, any other urban
design comments will be provided under separate cover by Sandro
We offer brief comments below to ensure drawings can be appropriately amended and stamped approved at the time
of Site Plan Approval.
1.Although the species table indicates that there are no (tree) Species At Risk, the City would like confirmation
at this time that no Butternuts are present that could be affected by the proposed development. Sometimes
other species (Black Walnut) can be confused for Butternut (White Walnut).
2.The GVO / Tree Management Plan (MacKinnon & Associates 27 Sept 2019) is not consistent with a separate
an agreed to
as part of the SPA. This will ensure that when removals occur only those trees approved by the City for
approved Tree Management Plan sh
protective fencing).
3.The Tree Management Plan submitted as part of SPA (called a ƩĻĻ ağƓğŭĻƒĻƓƷ Ή 9ƓŷğƓĭĻƒĻƓƷ tƌğƓ) must
have surveyed locations of trees on the site, not approxim
not surveyed.
4.
5.The Limit of Disturbance (Grading and Servicing) must be coordinated and accurately shown on both the
Grading / Servicing / SWM Plan and the Tree Preservation / Enhancement Plan.
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Department and Agency Comments
Hi Katie;
I can confirm no butternuts or hybrids were observed. While my arborist isn't a certified butternut assessor, she is
familiar with Walnuts/Butternuts and their hybrids, and all tree observed on site were Walnuts.
Aaron Hill BLA, OALA
Landscape Architect
MacKinnon & Associates
A21-550 Parkside Drive
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Department and Agency Comments
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Department and Agency Comments
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Department and Agency Comments
Hi Katie,
Staff at the Waterloo Catholic District School Board have no concerns with the above noted application.
Have a wonderful day.
Lindsay Ford
Manager of Planning, Waterloo Catholic DSB
480 Dutton Drive, Waterloo, ON N2L 4C6
tel: 519.578.3660 ext. 2253
fax: 519.884.6635
Hi Katie,
The Waterloo Region District School Board has no comments on or concerns with this application.
Shawn Callon
Principal Planner
Good morning Katie,
The subject property at 290 Sheldon Avenue North is not regulated by the GRCA under Ontario
Regulation 150/06. As such, we will not be providing comments on this application.
Andrew Herreman, CPT |Resource Planning Technician
Grand River Conservation Authority
400 Clyde Road, PO Box 729, Cambridge, OntarioN1R 5W6
(519) 621-2763 x 2228|www.grandriver.ca
Katie,
MTO have no further issues with this proposal.
John Morrisey
Senior Project Manager (A)
Corridor Management Section
Engineering Office
Ministry of Transportation
659 Exeter Road, London, ON
N6E 1L3
Telephone 226-984-8397
Fax 519-873-4228
John.morrisey@ontario.ca
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Department and Agency Comments
From: Melissa Mohr <MMohr@regionofwaterloo.ca>
Sent: Tuesday, August 25, 2020 2:27 PM
To: Katie Anderl <Katie.Anderl@kitchener.ca>
Subject: \[EXTERNAL\] RE: 290 Sheldon (ZBA 19-13) update
Good Afternoon Katie,
Please see the attached memo from Joginder related to the addendum.Please note that the Region
agrees with the implementation of the special regulation within the Zoning By-law as the comments above
indicate that all items can be addressed at Building Permit stage.
Should you have any questions or require additional information, please do not hesitate to ask.
Kind Regards,
Melissa
Melissa Mohr, MCIP, RPP
Principal Planner
Planning, Development and Legislative Services
Region of Waterloo
150 Frederick Street, 8th Floor, Kitchener ON N2G 4J3
Cell: 1-226-752-8622
mmohr@regionofwaterloo.ca
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