HomeMy WebLinkAboutDTS-06-018 - Request for Deferral of Development Charges, 233 Lawrence Ave
J
Development &
Technical Services
Report To:
Date of Meeting:
Development and Technical Services Committee
Submitted By:
Prepared By:
February 6, 2006
JeffWillmer, Director of Planning (741-2325)
JeffWillmer, Director of Planning (741-2325)
Mike Seiling, Acting Chief Building Official (741-2669)
Ward 6
Ward(s) Involved:
Date of Report:
Report No.:
Subject:
January 31, 2006
DTS-06-018
Request for Deferral of Development Charges
Blaze Properties Inc.
233 Lawrence Avenue
RECOMMENDATION:
That the request of Blaze Properties Inc., for 5 to 7 year deferral of development charges
payable on a 42-unit multiple dwelling development at 233 Lawrence Avenue, be refused.
BACKGROUND:
The proposed development of a 42-unit apartment/stacked townhouse complex at 233
Lawrence Avenue has received site plan approval in principle; a copy of the site plan is
attached. Mike VolI, president of Blaze Properties Inc., has made a request (see copy attached)
for deferral of the development charges. DCs are normally payable prior to issue of building
permit. The deferral request is for a period of 5 to 7 years.
The proposed development is not part of a Regional program such as the Affordable Housing
Partnership Program, which provides funding assistance for rental housing projects including a
grant to cover Regional development charges. In the future it may qualify for programming now
under development.
Mike VolI has developed other innovative low rise multiple residential projects in Kitchener and
the surrounding area, including: life-lease bungalow townhouses at 50 Midland Drive (The
Cottages of Livingstone Circle); stacked townhouses on Herbert Street at Union Street; and the
Morningside retirement community southeast of New Hamburg.
REPORT:
Justification
There are limited examples of past approvals for deferral of development charges. Typically,
they have been justified as affordable housing projects under one of the Region's programs,
with the deferral allowing the building permit to be issued to accommodate construction starting
while funding is awaited. This request does not fit in with the intent of past deferrals.
Development Charae Fund
In recent years the Development Charge Fund has had a strong positive balance and could
sustain the cash flow implications of limited DC deferrals. However, as presented by staff at the
December 12 2005 budget meeting, it is expected that the DC fund will have a negative balance
for the 2007-2015 period. Any deferral of development charges - even with interest payable -
will further magnify this situation.
Central Neiahbourhoods Rate
In order to encourage investment and reurbanization in the inner city, the City implemented an
area-specific charge as part of the 2004 Development Charges By-law. This method
recognizes that in the Central Neighbourhoods most engineered service infrastructure is already
in place to accommodate infill and reurbanization. For multiple dwelling units this resulted in a
Central Neighbourhoods charge of $2,983 per unit, compared to $4,940 per unit in the
Suburban Area - a difference of approximately 40%. The Central Neighbourhoods charge is
directed primarily toward "soft services" such as recreation, parks and libraries. The 233
Lawrence Avenue development benefits from the Central Neighbourhoods DC rate.
Administration
If the deferral request is approved, a development charge deferral agreement must be entered
into and registered on title. Through the agreement, the owner would acknowledge their
obligations, including interest, and agree that in the event of default the City would collect the
charges in like manner as municipal taxes.
Staff have concerns with the administrative issues raised by any such deferral, and even more
so with a long term deferral as requested in this case. Consideration must be given to collecting
the deferred development charge and by which staff group. Building Division staff administers
development charges including the determination of the correct rate applicable and payment
prior to building permit issuance. Two questions arise should a deferred development charge
agreement be entered into; what staff group will monitor the due date and request payment for
the amount owing some five years from now and who will act on this request if the amount is not
paid? How will City staff enforce payment should the applicant ignore our request for payment?
Presently all DC's are payable prior to building permit issuance. Therefore the Region, both
school boards and the City receive payment prior in-advance and collecting the fee is not a
problem down the road.
Affordable Rental Housina
The Regional Municipality of Waterloo administers programming, including financial assistance,
to support the development of affordable rental housing. The City's role, implemented primarily
through the official plan and zoning by-law, is to promote the development of housing that
provides a range of consumer choices of housing type and affordability, distributed in
appropriate locations. Once zoning is in place, the City has little or no control over the
affordability range of the housing that is developed.
FINANCIAL IMPLICATIONS:
The amount of the deferral being requested is $2,983 per unit x 42 units = $125,286. The
interest cost on this amount equates to $5,011 per year of deferral (based on an interest rate of
2
4%). As noted above, based on the projected cash flow of the development charge reserve
funds over the next 5 to 7 years, any deferral agreement would require the City to borrow
additional funds to maintain a positive cash flow balance.
COMMUNICATIONS:
None required.
CONCLUSION:
In the past when the City has agreed to requests for deferral of development charges, it was to
assist with short term (4-6 month) cash flow challenges facing developers of affordable rental
housing under the Region's Affordable Housing Partnership Program. This request for a 5 to 7
year deferral, at a time when the City's DC fund is projected to have a negative balance for most
of the next 10 years, is not supportable.
Jeff Willmer
Director of Planning
Mike Seiling
Acting Chief Building Official
Attachments:
Site Plan of Proposed Development
Letter from Blaze Properties
3
~
J I,
.3^'if 38N3tJM'ifl
~~
0-
en
~__C")
E:~~
r-- __C")"'-
o N -- C")
o E E cO
Lb I'-:r--~
~ ~ ~gj~
~ ~N ~~~
~ 5~~cO:S
J- ~~ ~~~
<( CO = 0 > ""0 CO
J- r:r. 0. <0 8 Cl.) :r:
en I ~cO en~-
~ .~::: ~ :5 ~ ~
U5 ~~~~~~
r:::--
o
o
Lb
o
o
N
:J:I:
~ ~
:s2 0
Co
a...
Cl.)
:s
=:;
LL
en
Cl.)
""0
:::J
C3
E
<D
0.
C/)
co
-- en
C/) Cl.)
~ ~
~5}
C/) Cl.)
::g.a
II.2E
?i C/)<OL.()
~ ~~~
~ ~ E
...c-<O
! -! ~
~ ~.~
~.~ ~
~~o
U5 g E
~ ~-~
~-g~
.~~ ~
Q) e 0.
o::a...(/)
en en en
c c c
~~~
a... a... a...
~
E
L.()
6
E
-3:
""0
Cl.) en
c c
~:e
""0 :::J
Cl.) U
...Cl Q)
om
;; C3
co c
Cl.) 0
..... U
co ""0
::!:::: Q)
co .....
...c :::J
0.0
en 0.
CO...c
= en
<CE
())
~
.. -0
Ll.J .
=~
LL ---.J
0"-0
<C~
u3
0....
U)
U)
~
::::r
~ I-
'-0 I. z
~ W
CI) ~
~ I-
~ 0:::
0 C <(
a...
CI) W
0.... 0
U) en
.c W
0
Z CJ :>
0:::
0 W
~ en
(Y) --.J
l- I- <(
<( CO ~ 0
z
U l- I
0 0
---.J ... W
I-
0.... ---.J 0 0
0.... I- z
<( <(
0.... I-
Z '-0 ~dj
::) CO ~~
f'.... 1- g
0.... CJ~
Ll.J Z
I- ::) 0
U) 0....
CD
0
0
N
~-
>-
. . 0:::
0<(
W:::J
~o:::
>CC1
Ww
o:::u..
z
c:c
...
A.
W
I-
-
tn
L{)
N
0
N L()
0
~ 0
N
0 ....
.---
s: 0
0_ >-
---.J
L{) ~ ~
w ---,
--.J W
0 <( I-
0 <(
en 0
u
ZLl.J
~
Ll.J
U
Z
Ll.J
~
~
::)
U)
Ll.J
I-
~
Ll.J
0....
o
~
0....
Ll.J
N(Y)
::)(Y)
CO N