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Home My WebLink AboutDTS-08-049 - Performance Securities for Site Plan DevelopmentI KITCI~NE~ . ~ Development & Technical Services Report To: Development and Technical Services Committee Date of Meeting: April 21, 2008 Submitted By: JefflNillmer, Director of Planning Prepared By: Sandro Bassanese, Site Development Facilitator X741-2305} Brian Page, Supervisor of Site Plan Development (141-2318) Ward(sy Involved: All Wards Date of Report: April 11, 2008 Report No.: DTS-O8-049 Subject: Performance Securities for Site Plan Developments RECOMMENDATION: 1. That Council Policy I-1080 dated March 1,1999 and amended November 9, 2000 be revised by adding the following; 2. c) The performance security is not to be reduced below 25% of the cost of all site development works X50°I° of the original value of the performance security ar $250,000, whichever is the lesser, until the City has received all required Site Development Works Notification Forms, giving complete certification of the site, and the City is in complete agreement with the certification. 2, That clause 3 of Council Policy I-1080 dated March 1, 1999 and amended November 9, 2000 be deleted and replaced with the following; 3 a) If a cost estimate is not completed to the satisfaction of the Director of Planning, the calculations for Let#ers of Credif Based on Lof Area, Fronfage and Use be based on fhe amounts as set out in the annual Fees and Charges By-law, to calculate the amount of the performance security 3 b} After satisfactory completion of all site development works, the total amount of security held by the City shall be released; and further 3. That the Urban Design Manual, Letter of Credit Policy, Letter of Credit Release section, page DS-E-1,11, clause 4, be modified to reflect Recommendation number 1 above. BACKGROUND: The current development trend which has sparked the necessity for this report is the large Commercial Campus developments such as Deer Ridge Centre and Sportsworld Crossing. This trend will more than likely continue into the future as redevelopment opportunities arise. Currently the Urban Design Manual stipulates that at no time can the Letter of Credit for site works be released below 25% of the cost of all site development works ~50% of the value of the original Letter of Credit} held by the City of Kitchener, This becomes problematic when large Letters of Credit are held since significant funds will be held that may not necessarily be reflective of the amount of work to be completed on the site. Commercial Campus developments are complex entities with numerous stake holders and large construction budgets. In most cases the cost estimate for site development works for these projects can be several million dollars. The hold back on performance securities in these cases can be over a million dollars. For example, a Letter of Credit of one million dollars can only be reduced to $500,000.00 even if the value of site development work to be completed is significantly less than $500,000.00. This creates a burden on the developer as the letter of credit amount directly impacts their credit rating and borrowing power potentially limiting their ability to secure funding for a future project. The purpose of the holdback is to ensure that there are sufficient funds to complete the site development works in the event the developer fails to complete the project. Staff believe that such a large holdback can be unreasonable and tie up capital funding of the developer. Staff is now recommending a maximum holdback of $250, 000.00, The proposed revisions to clause #3 of the Council Policy on Performance Securities are a matter of house keeping. Council approved the revised figures to calculate the cost estimate for site development works based on lot area, frontage and use for new developments and for additions, alterations or additional buildings with the approval of the Fee and Charges By-law for 2008. The existing figures were established in ~ 999 and had not been adjusted since. These figures are outdated and are not reflective of current market pricing. The updated figures can now be used to calculate the plan review fee that was adopted this year X3.5 % of the value of the cost es#imate for site development works). By putting the values in the Fee and Charges By-law these values can now be reviewed annually to ensure that they are kept current. FINANCIAL IMPLICATIONS: There are no capital financial implications for the City of Kitchener. COMMUNICATIONS: None required. CONCLUSION; As larger developments are being undertaken in Kitchener our Performance Securities Policy needs to be reflective of these trends. This will allow City staff to hold Letters of Credit that are more appropriate for the remaining site works and place less of a financial burden on the developer. This process will also free assets that the developer may be able to use to pursue further development projects while ensuring that appropriate monies are retained to allow the completion of approved site development works if required. andro Bassanese, MCIP, RPP, A, CSLA Environmental Planner ~~ is age, CET, 0 SLA Supervisor of Site Plan Development Attachments Ilmer, MCIP, RPP it ctor of Development Council Policy I-1080, Performance Securities 2008 Comprehensive Fee Review, Development Technical Services, Planning Urban Design Manual, Letter of Credit Policy, Letter of Credit Release, Pages DS-E-1.10 & DS- E-1.11, CQUNCIL POLICY RESOLUTION POLICY NUMBER: 11080 POLICY TYPE: LAND USE PLANNING DATE: MARCH 1,1999 amended: NOVEMBER 9, 2000 SUBJECT: PERFORMANCE SECURITIES POLICY CONTENT. 1. That for development proposals approved under Section 41 of the Planning Act the City may require the owner to provide performance securities prior to the issuance of any building permits, in a form and amount satisfactory to the City Solicitor and the Director of Planning. The performance securities shall be held as security far the completian of required site development works. 2. If a cost estimate is completed to the satisfaction of the Director of Planning the following shall apply: a} The amount of the performance security shall be 50% of the total cost of all site development works; b} After satisfactory completian of 50% of the value of site development works, the amount of security held by the City shall be reduced, as set out in the site plan agreement, by amounts in accordance with the cost estimate, for additional works completed; 3. If no cost estimate is completed to the satisfaction of the Director of Planning the fallowing shall apply: a} Far new development, the amount of the performance security shall be based an the following, which may or may not represent 50°/° of the total cost of all site development works, but in no case shall the amount be less than X50,000.00: Residential: $60,000 per hectare + 640 per metre frontage Industrial: $20,000 per hectare + 150 per metre frontage Institutional: $25,000 per hectare + 500 per metre frontage Commercial: $60,000 per hectare + 540 per metre frontage I~ITCHENER Page 1 of 2 DECEMBER 2001 PQLICY NUMBER: I-1080 SUBJECT: PERFORMANCE SECURITIES 3., cont'd b~ Far additions, alterations or additional buildings on developed sites, the amount of the performance security shall be based on the fallowing, which mayor may not represent 50°I° of the total cost of all site development works, but in no case shall the amount be less than $25, 000.04: Residential: $30,000 per hectare + 300 per metre frontage Industrial: $10,000 per hectare + l5 per metre frontage Institutional: $12,500 per hectare + 250 per metre frontage Commercial: $30,000 per hectare + 250 per metre frontage c) After satisfactory completion of all site development works, the total amount of security held by the City shall be released. 4. Subsequent to the provision of performance securities under 3 above, a cost estirnatemay be provided and security reductions granted under 2 above. 5. This policy shall not apply to the City or any local board thereof, the Regional Municipality of Waterloo ar any local board thereof, the Kitchener-UVilmot Hydra Inc,, the Waterloo Region District School Board, the Waterloo Catholic District School Board, or the Federal or Provincial Government or any crown agency thereof, or hospitals as defined in the Public Hospitals Act, R.S.O. 1990. Development approvals for such agencies may be subject to the following requirement: a~ That in the event the facilities or improvements required by the Agreement are not completed prior to occupancy, as specified by this agreement, due to adverse weather conditions or other extenuating circumstance, occupancy will be approved, provided that a Letter of Undertaking and Indemnity is given by the Owner to the City's Director of Planning agreeing to complete the outstanding site work within a specified time. G. That a new fee of $100.00 per inspection be established for re-inspection of outstanding site works related to requests far final release of Letters of Credit. KITCHENER Page 2 of 2 DECEMBER 2001 CITY OF KITCHENER 208 COMPREHENSIVE FEE REVIEW DEVELOPMENT TECHNICAL SERVICES PLANNING { rr ~ ~ ~ '- ~ { ' ~ ` t • ~ , r~ ~ k i~APP~ . BLf I~ , ~ 1N C~ UD~D ~ ~` ` ~F ,: F'E~ DESCRIPTION ~ ~ f, - ` ~ 3' ~. l c syx~ y' ' , ~ ~ , ~ ~~ ~, ~ : s{~ ,~ n 2Y0~-, V"{T~r~j ± ~u !+a... - , . ~N~ ~:~ 3} ~~~4 , , ,1 ` ~~ 4; ~~ s ~ ~FF~C~T~V~:, , ~~~Y17T4~ ~'~1:=TT ~j pi ~~~ Jt.a Official Plan Amendment $6,000 N N N N 2008-01 -Minor Eliminate N N N N Subdivisions and Vacant Land Contlo: -application fee* plus $6,230 N N N N 2008-01 -per unit fee $130 N N N N 2008-01 -maximum $12,600 N N N N 2008-01 -major modification $4,530 N N N N 2008-01 -minor modification $2,350 N N N N 2008-01 -registrationlsingie stage $1,900 N N N N 2008-01 - each add'l 5190 N N N N 2008-01 Zane Chan a 68,000 N N N N 2008-01 Re uest for Environment Records 5110 N N N N 2008-01 Information Letters 648 N N N N 2008-01 Letter of Credit Based on Lot Area Frontage and Use- New Development -The amount of the letter of credit shall be based on the following, which mayor may not represent 50°I° of the total cast of all site development works, but in no case shall the amount be less than $15,000 Residential -per hectare PLUS 668,000 N N N N 2008-01 - per metre frontage $600 N N N N 2008-01 Industrial -per hector PLUS $35,080 N N N N 2008-01 -per metre frontage 6300 N N N N 2008-01 lnstitutional -per hectare PLUS $40,000 N N N N 2008-01 - per metre frontage ~ #500 N N N N 2008-01 Commercial -per hectare PLUS 660,000 N N N N 2008-01 - per metre frontage 6800 N N N N 2008-01 Additions, alterations or additional buildings -The amount of the letter of credit shall be based on the following, which mayor may not represent 50°!° of the fatal cost of all site development works, but in na case shall the amount be less than $40,000 Residential -per hectare PLUS 630,080 N N N N 2008-01 - per metre frontage 6300 N N N N 2008-01 Industrial -per hector PLUS 61Y,500 N N N N 2008-01 -per metre frontage $150 N N N N 2008-01 Institutional -per hectare PLUS 620,000 N N N N 2008.01 -per metre ftontage $250 N N N N 2008-01 Commercial -per hectare PLUS 530,000 N N N N 2008-01 - er metre fronta a $300 N N N N 2008-01 Awning Signs: - era Im of si n #ace - min of $155 $20 N N N N 2008-01 Banner Signs: - er si n, 14 da s 630 N N N N 2008-01 New Home Development Signs: - er si n, er ear, max 4 ears 6658 N N N N 2008-01 PAGE 31 Design Standards LETTER OF CREDIT POLICY Letter of Credifi Release 1. The securities posted based on a cost estimate are to cover 50% of the cost of all site devel- opmentworks.Therefore, full or partial release of any securities cannot be applied for until over 50% of the site development works have been com- pleted. 2. Any request f or f ull or partial release of the letter of credit must be supported by the following documentation, which certifies that the site development works have been completed ~n accordance with the approved plans: A Site Development Works Notification Form f or item # 1(SWNI/Grading) from the prof es~ sional consultant who prepared the plan must be sent to: Engineering Technologist, Department of Public Works City of Kitchener, City Hall P.G. Box 1118 2~4 King Street West Kitchener, Ontario NZG 4G7 With copies to: (i) Administrative Assistant Department of Business and Planning Services, Building Division, and ' (ii} Environmental Design Technologist Department of Business and Planning Services, Planning Division A Site Development Works Notif ication Form f or items 2-8 f rom the Landscape Architect) Consultant who prepared the Landscape Plan. A Site DevelopmentWorks Nofification Form f or the site lighting f rom .the Lighting Engi- neerlConsultantswho prepared the Lighting plan. A Site Development'Works Notif ication Form for the site noise from the Engineer~Consult- antswho prepared the Noise Study. The three forms noted above must be sent to: Environmental Design Technologist Department of Business and Planning Services, Planning Division 3. Upon receipt of the f our above noted f orms, the Department of Business and Planning Services may make an inspection to verify that the Site Development Works are in- stalled in accordance with the approved plans. Should we f ind any discrepancies and/or deficiencies, an inspection report will be issued to the owner and the appropriate consultants} . Any revisions to the approved site, landscaping, lighting, and/or tree saving plans require approval f rom the Director of Planning, prior to installation of the works. Upon completion of the items outlined in the inspection report, the applican# shall notif y the Department of Business and Planning Services f or f urther inspection, These further inspections wild be carried out at cost of $100.00 per inspection, paid in advance. All site development works are to be main- tained and all plant material is to be in a healthy vigorous state f or approval. A landscape contractor's plant material guar- antee is not acceptable to receive release related to dead or poor condition plant material. Design Standards LETTER OF CREDIT POLICY 4. Final acceptance of the site development works by the City may occur between May 1st and actober 31st only. Due to environ- mental conditions, f final acceptance of the installation of plant material, sodding and/or seeding cannot be carried out between November 1st and April 30th. Between these months there will be no reduction in the Letter of Credit held to ensure satisf ac- torycompletion of the installa~.on of plant material, sodding and/or seeding. The reduction to the Letter of Credit will be based on the amount of site and landscape works that we are able to assess as estimated by the Department of Business and Planning Services. Please note that a reduction to the Letter of Credit does not necessarily consti- tutefull acceptance of any of the site devel- opment works. The City will not reduce the Letter of Credit below Z5% of the cost of all site development works (50% of the value of the original letter of credit}, until the City has received all required Site Development Works Notification Forms, giving complete certification of the site, and the City is in complete agreement with the certification. ~ ~iqq C`ifi ~ of K;trhanar i ~rh~n npsion S#andards And Policies