HomeMy WebLinkAboutFIN 09-15 •
Cali 00 == Report to
Executive Committee
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Report Number: FIN 09=15
Date: April 13, 2015
From: Paul Bigioni
Director, Corporate Services & City Solicitor
Subject: SR&R Bay Ridges Ltd. - Request to Defer Payment of Development
Charges
Recommendation:
1. That Report FIN 09-15 of the Director, Corporate Services & City Solicitor be
received;
2. That, pursuant to By-law 7324/13:
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a) the request by SR&R Bay Ridges Ltd. to defer the payment of the City's
q Y Y 9 pY Y
share of Development Charges in the amount of approximately $967,723 to
the earlier of: (i) six months after the commencement of foundation
construction of the Phase II building at 1261 Bayly Street, Pickering and (ii)
when above grade construction at the said address is commenced, be
approved;
b) that the requirements of Section 14(2) of By-law 7324/13 be waived
accordingly and that the date of issuance of the final building permit will
determine the applicable Development Charge rate and, if the final building
permit is issued before, July 1, 2015, that the payment of Development
Charges will be based on the current rate plus interest, be approved; and
c) . that, to govern the terms of the deferral, SR&R Bay Ridges Ltd. be required
to enter into a Development Charge Deferral Agreement with the City on
terms satisfactory to the Division Head, Finance & Treasurer and the
Director, Corporate Services & City Solicitor; and
3. That the appropriate officials of the City of Pickering be authorized to give effect
thereto.
Executive Summary: SR&R Bay Ridges Ltd. ("SR&R") wants to proceed with
construction of a second residential condominium tower on its lands located at 1261
Bayly Street, Pickering. Pursuant to the City's Development Charges By-law 7324/13
(the "DC By-law'), the City share of development charges is payable at the time a
building permit is issued. For the purpose of overcoming a cash flow obstacle at the
beginning of construction, SR&R has requested a deferral of up to six months of its
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FIN 09-15 April 13, 2015
Subject: Request by SR&R Bay Ridges Ltd. to Defer Payment of
Development Charges
obligation to pay development charges to the City. City staff recommend approval of the
deferral because it will speed up the process of construction of this condominium
development. This benefits the City by bringing in new residents and helping the City to
meet its Provincial Growth Plan population and density targets in the City Center area.
Construction and occupancy of this building will also increase the City's property tax
revenues.
The deferral will not result in any reduction in the amount of the development charges
paid to the City by SR&R.
Financial Implications: Deferral of the payment of development charges will not
result in any loss of DC revenue for the City. In fact, the City may receive higher DC
revenues if SR&R's final building permit is issued after June 30th. The economic benefit
to the City is the earlier receipt of property taxes for this project. Once fully occupied,
this building is expected to generate approximately $270,000 of property tax revenue
annually for the City.
Discussion: The Council of the City of Pickering adopted the Report FIN 29-13 of
the Director, Corporate Services & City Solicitor on the 2013 Development Charges
Study and enacted By-law No. 7324/13, the City's current DC By-law. The DC By-law
requires payment of development charges prior to issuance of a building permit.
Typically, a municipality will consider a request to defer the payment of development
charges when it is in the broader community interest to do so. It should be noted that in
June, 2010, Council approved a deferral of development charges for SR&R's first.
condominium tower.
In the specific request before us, SR&R has requested a deferral to assist it in matching
its financial obligations with its funding sources. Construction of a condominium
building involves large upfront costs associated with underground works. Funds flow,
whether from construction financing or units sales, well after underground work must
begin. The deferral would assist SR&R in beginning construction sooner. This benefits
the City by bringing in new residents and helping the City to meet its Provincial Growth
Plan population and density targets in the City Center area. Construction and
occupancy of this building will also increase the City's property tax revenues. Once fully
occupied, this building is expected to generate approximately $270,000 of property tax
revenue annually for the City.
SR&R is requesting deferral to the earlier of six months after the commencement of
foundation construction or when its above grade work commences. The amount
requested to be deferred is $967,723. being the City's development charges only.
SR&R will have to make separate deferral requests to the Region and the School
Board. Total Development Charges payable to the City, Region and School Boards is
estimated to be $3,475,632.00 From a financial perspective it is not whether or not
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•
FIN 09-15 April 13, 2015
Subject: Request by SR&R Bay Ridges Ltd. to Defer Payment of
Development Charges
such a deferral would cost the City, but rather that is it a good business practice to grant
this request. SR&R will be required to enter into a Development Charge Deferral
Agreement pursuant to the Development Charges Act(Ontario). This Agreement will
specify that the development charge amount shall, if unpaid, be added to SR&R's tax
roll and collected in the same manner as taxes.
Attachments: Not Applicable
Prepared By: Ap, ,ved/Endorsed By:
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Stan Karwowski Paul i on
Division Head, Finance &Treasurer Direc`.r, orp+rate Services & City Solicitor
Recommended for the consideration
of Pickering City Ci Council
aZde at 342 /5
Tony Prevedel, P.Eng.
Chief Administrative Officer
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