Bait and switch

Council declines reduction in development charges for Picton project

Prince Edward County council has rejected a developer’s request to lower development charges on a shopping plaza currently under construction on Loyalist Parkway on the west end of Picton. Jamie Chisholm of Picton Properties spoke to council during a virtual council meeting last Tuesday evening.

A report from the Development Services Department recommended council approve the development charges reduced rate that was in place as of December 2018. Last fall, Picton Properties received site plan approval from council at a time when the development charges were significantly reduced to incentivize commercial developments. Since that time, development charges have risen significantly, as council retired the 50 per cent development charge reduction that had been in place for all nonresidential and serviced-area residential development.

Chisholm believes that council should honour the development charge rate that had been in place throughout the property’s approval process. “Our hope and expectation was to have this development constructed and open over a year ago,” said Chisholm “Our request today is not only economic, but it is warranted on the grounds of fairness— as referenced in the staff report. The development charge rate that we are expecting was the rate that was in place throughout our approvals process. Were it not for the MTO EA process (and it being a provincial highway) this Centre would likely have been operational over a year ago—maybe two.”

Chisholm stated that even prior to the ongoing COVID-19 pandemic, economic challenges were very real for this site, as the cost of developing bricks and mortar retail are significant with land, soft costs, front ending carrying costs, and the hard cost of site development and building construction. He pointed out that the total cost of phase one will exceed $10 million, and will utilize almost exclusively local consultants and contractors. “Last year, the fees in place were $1.77 per square foot for commercial development. We’re asking that remain in place for a first phase,” said Chisholm. “We certainly would have liked that to apply to the entire development, but after constructive consultation with staff, it was agreed that this rate would apply to the building phase one only. That is the Foodland building at back of site.”

Chisholm also asked that the water connection fees be waived, saying the County was basically double dipping. “We have an existing water service, we’ve contributed on top of that another $88,000 for the extension of that service,” he said. “The notion that we should have to pay a connection fee for a water service that we already have and that we have paid 100 per cent of the cost of the new infrastructure for seems like double dipping.”

Councillor Phil St. Jean asked what kind of precedent this would set, and if other developers would come knocking at the door looking for reduced fees. Peter Moyer, Director of Development Services, didn’t believe this would be an issue. “We don’t have any other developers similar to this that have taken multi-years to get through a process,” said Moyer, adding in that this process started in 2016.

Councillor Phil Prinzen brought up the fact that Chisholm stated the MTO environmental assessment process held up the project significantly, and it was no fault of the County’s. “Why should the County be on the hook if it wasn’t a County problem?” asked Prinzen.

Councillor Janice Maynard sought clarity in what Chisholm’s expectations were. “When you started the process through the planning department the reduced development charges were in place at that time. Were you aware that they were a temporary measure and reviewed annually by council and could be repealed at any time?” asked Maynard. Chisholm found it ironic that the reduction was put in place to spark development, and now the reduction has been eliminated.

“I guess that’s true of any bylaw. I certainly think that if the basis of the incentive was to encourage commercial development, and to the best of my knowledge this may be the first commercial development over that period of time. It seems ironic that now ready to go the decision is to eliminate the very incentive you put in place to encourage companies like mine to invest,” said Chisholm.

Councillor Jamie Forrester asked where the lost revenue would be made up from. “How much of this development charge reduction would be paid by general tax base?” asked Forrester. Moyer explained that the amount was roughly $50,000. “Every year there is a development incentive budget item,” explained Moyer. “For example, this year I’m told it’s somewhere in the $325,000 range, which covers last year’s development charges incentive. So, next year the $50,000 would get covered by that. That is made up by the general tax base.”

“I don’t think this is the right time to be adding this onto our general taxbase,” added Forrester.

Mayor Steve Ferguson stated he sympathized with Chisholm, but council has to look at where they are right now and the stresses taxpayers may be under given COVID-19. He said he would love to support the motion, but the timing isn’t right.

Council voted unanimously to oppose staff’s recommendation to reinstate the development charges reduced rate.