City poised to lower fees for highrise developers
April 08, 2009
Nicole Macintyre
The Hamilton Spectator
http://www.thespec.com/News/Local/article/545009
The city is prepared to give highrise developers a break on parkland fees for the next two years to encourage construction during the recession.
The temporary measure will save builders thousands of dollars on every new unit if they submit their building permit applications before the end of 2010. Council could also consider an extension of the program.
The planning committee endorsed the stimulus package yesterday, despite hearing from a developer who warned it's not enough to encourage investment.
"Hamilton is not competitive," said Carlo Di Gioacchino of Dundurn Capital Partners. "You just have to look around; there are no cranes in this city."
The development company wants to build a 148-unit condo at the old Thistle Club site in the Durand neighbourhood. But Di Gioacchino said the city's parkland fees, which would be close to $800,000 for the condo, mean the project can't proceed.
The city has been reviewing its parkland fees, which are used to create new parks, for several months. Planning staff acknowledge the fees are high for large developments and may discourage projects.
They recommended a fee reduction for townhouses and high-density projects, which will save from $1,000 to $4,500 per unit. The new fees will take effect in 2011.
Until then, the city will offer a greatly reduced rate of only 5 per cent of the land value. For a project of 120 units, that will be a savings of $3,700 per unit.
Di Gioacchino said the initiative won't help him because he doesn't expect to be ready to submit his building permit application until spring 2011 due to market conditions.
He requested the reduced rate for his project until it can go ahead. Staff opposed the request, arguing it would be illegal bonusing.
Staff also cautioned against a permanent break for all high-density projects, noting it would cost the city $250,000 a year in lost parkland revenue.
The issue will be debated again at city council next week.
Councillor Brian McHattie said it's a difficult issue because the city needs money for parks but won't get anything if it discourages development.
"We might be cutting off our nose to spite our face."
The planning committee referred back a proposal to drop the parkland fee for new schools, as the local boards requested. Councillors want to consider the issue as part of the overall debate about old school properties and parkland.
The city is still considering an increase to its development fees.