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HomeMy WebLinkAboutCS 09-03 Ciú/ o~ REPORT TO FINANCE & OPERATIONS COMMITTEE Report Number: CS 09-03 Date: February 10, 2003 From: Gillis A. Paterson Director, Corporate Services & Treasurer Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Recommendation: 1. That Report CS 09-03 of the Director, Corporate Services be received for information and that: 2. Council approve providing relief from the provisions of the 1987 Development Agreement respecting cash-in-lieu of parkland payment for the last phase of the development, being 1200 The Esplanade North, based on the same formulae as was applied to the Millennium Apartment at 1 000 The Esplanade North, at an estimated cost of approximately $160,000 on the condition that City owned microwave equipment be accommodated on the roof of the new building; 3. Council support the application of Provincial Home Ownership Program Funding to this project subject to any future related municipal obligations being approved by Council; 4. should Council wish to consider a further provision of financial assistance to this project the payment of cash-in-lieu of parkland and the City's development charges be deferred until the above ground building permit for this property is issued or six months from the issuance of the below ground building permit, whichever occurs first; 5. the attached By-Law be read three times and passed by Council; and, 6. the appropriate officials of the City of Pickering be given authority to give effect thereto. Executive Summary: At its meeting of December 2, 2002 Council considered the recommendations of Report CS 31-02 and referred the matter back to staff for further discussion with representatives of Options from Homes. I had several discussions with Michael Labbé, President, Options for Homes and Elio Zoffranieri, Senior Manager Report CS 09-03 Date: February 10, 2003 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 2 Planning Services, Deltera Inc. The Director, Planning and Development and myself met with them and discussed the information contained in the original letter and they submitted further information. It is now the appropriate time to report back to the Committee. Under its correspondence of August 23, 2002 Options for Homes has requested deferral of up to $1.4 million of fees and levies payable to the City to assist in the financing of this project. The deferral of the first $700,000 is to result in a savings for Options for Homes that will be directed toward the provision of affordable units with extra accessibility features for 8 to 12 units. The deferral funds would be used to assist purchasers with their down payments. In their latest correspondence, December 23, 2002 they offer to pay interest on the deferred funds until they are repaid when the units are resold. As a result the affordability offered would be for the first buyer only however, the accessibility changes would be permanent. The second $700,000 is proposed to be deferred until after the condominium closes. This would defer fees, levies and charges due to the city at the time of issuance of the building permit until the condominium closes. They propose to pay interest to the City on this deferral and have both deferrals guaranteed by the mortgage holder. Options for Homes have also requested a reduction in the parkland cash-in-lieu obligations established under a 1987 development agreement and Council's support in designating this site as a "Revitalization Zone" in order to secure funding assistance under a Provincial Home Ownership Program. All of the foregoing is discussed more extensively below and in Report CS 31-02. All in all the concessions are designed to reduce the cost of the development, thereby increasing affordability. The deferral also allows Options for Homes to more closely match the paying out of fees and levies to the City with the receipt of funds from financiers or mortgage holders. In effect the City becomes the financier for the development phase of the project. Financial Implications: Generally speaking, any financial concessions provided to a developer or building involving funds that the City will eventually use to finance present or future projects will result in a shortfall that must ultimately be made up from the tax levy, there being no other source of readily available funds available. This would include revenues from development charges for present and future projects identified in the 1999 Development Charges Study approved by Council. It would also include the development of, and the provision of amenities for, parks in the City. That being said, there may be other reasons that the Council wishes to consider in this specific case. This could include granting concessions to the original 1987 agreement regarding the parkland cash-in-lieu payment using the same concession granted by Report CS 09-03 Date: February 10, 2003 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 3 Council in 1998 for the Millennium Building. Some relief from development charges was also provided at that time through capping provisions of the 1987 development agreement. However, it is now many years later, and a new revised and improved by- law for the calculation and collection of development charges has been approved by Council. As previously mentioned in Report CS 31-02 Options for Homes are enjoying significant savings on development charges through the terms of the 1987 agreement which capped City development charge payment at $3,000 per unit. Current City development charges are $4,029 for apartments two bedrooms and larger, and $3,021 for apartments one bedroom and smaller. Furthermore, it is felt that the granting of concessions in regards to Development Charges in particular runs the risk of setting an expensive precedence and it would therefore not appear appropriate to pursue that aspect further. I should also mention that, to the best of my knowledge, these concessions are being sought from the City of Pickering only and not from the development charges levied by the Region of Durham or the school boards. Background: As the original report (Attachment 1) on this matter sets out the details of the items to be considered, they will not be repeated here. The latest correspondence from Options for Homes (Attachment 2) provides further information regarding the granting of financial concessions in regards to development charges and the quantum and timing of payments. Options for Homes advise that any adjustment in expenses to the development will go to one of two places: a) improvements to the building; or b) the pool of money used to develop other similar housing developments in Pickering It appears to be a rather complex set of proposed arrangements of which the financial benefit to Options for Homes, and hence the cost to the City, beyond that indicted in the original report, cannot be quantified at this time. It does appear however that there is not a need for such financial concessions to make the project viable, especially considering they are wiling to pay interest to the City on any deferrals. It appears that the requested deferrals are a request for the City to act as the "banker/financer" for certain costs of accessibility, improvements on future housing while they are willing to pay interest on some funds. The balance would be dependent upon "...the rate of real estate appreciation in Pickering" with a minimum repayment schedule. While one can debate the degree of potential risk to the City, this rather complex proposal would be precedent. The fact that this matter is being considered in the next calendar year (2003) after this matter was first considered by Report CS 09-03 Date: February 10, 2003 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 4 Council at its meeting of December 2, 2002 has increased the parkland benefit by $28,000 to $160,212. Based on the 1987 agreement, development of the lands in 2003 would bring a parkland cash-in-lieu payment to the City of $724,269. Applying the same relief formulae used for the Millennium Building in 1998, this payment is reduced to $564,057, representing additional savings of $160,212 to the developer. Desiqnation as Revitalization Area for the Purpose of Homeowner Grant Eliqibilitv Options for Homes originally requested that Council designate the lands proposed for the last apartment tower as a "revitalization area" for the purposes of "making the building eligible for homeowner grants that will soon be available to purchasers in Ontario". In report CS31-02 staff expressed concern over the application of such a formal designation over these specific lands. The Ministry of Municipal Affairs & Housing recently provided some details of the home ownership component of the Affordable Housing Program. The booklet provides that to be eligible for program funding, new homes must be in a 'neighbourhood improvement area' and the homes must be within locally defined affordability limits. Further details will be provided at a later date, when application forms are developed. Ministry staff have indicated that the definition of 'neighbourhood improvement area' is expected to be open to municipal interpretation and is not expected to place obligations or costs on the municipality. As an alternative to placing a formal 'designation' over these lands, Options for Homes have requested that Council provide formal support to the application of Provincial Home Ownership Program Funding to this project. This will provide a general signal to the Province that the City supports the application of home ownership program funding to the Options for Homes project, without formal designation or the acceptance of unknown municipal obligations. Staff generally support this request and have included an appropriate recommendation. Conclusion All aspects were considered by staff with the conclusion that the requested reduction on the parkland dedication payment to match that provided to the Millennium Apartment Building should be supported. This would save the company an estimated $160,212. Council could also consider the deferring payment of parkland cash-in-lieu and City development charges to when the "above ground building permit" is issued or six months from the issuance of the below ground building permit", whichever occurs first. This is the same relief approach as was provided to the Millennium Building and is included as Recommendation 4. The amount of the deferral payment is estimated at $1,224,057 ($564,057 parkland cash-in-lieu plus $660,000 City development charges). Report CS 09-03 Date: February 10, 2003 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 5 While staff are not comfortable with a designation of the site as a "Revitalization Zone" we can support their revised request that Council formally support the application of Provincial Home Ownership Program funding to this project. Staff also feel that the onus for providing financial concession should not fall solely on the City. Options for Homes should also approach the Region of Durham and the School boards for similar considerations regarding the timing of payments. This report has been reviewed with the Director, Planning & Development who concurs with the recommendations. The By-Law has been prepared by the Solicitor for the City. Attachments: 1. By-Law to Authorize the Execution of an Agreement 2. Letter from Options for Homes, dated December 23, 2002 3. Resolution #137-02 4. Report CS 31-02 to the Finance & Operations Committee Prepared / Approved I Endorsed By: ~ð~~~ Gillis A. Paterson Director, Corporate Services & Treasurer GAP:vw Copy: Chief Administrative Officer Recommended for the consideration of Pickering City Council II II II II II II . II , II II , Ii , :1 Ii Ii ¡I il II THE CORPORATION OF THE CITY OF PICKERING BY-LAW NO. Being a by-law to authorize the execution of an Agreement between the City of Pickering and Discovery Place Limited regarding the payment of development charges and cash in- lieu of parkland dedication for the McLevin at Discovery Place on part of Lot 21, Concession 1, Pickering, designated as Part 2, Plan 40R-19316. WHEREAS Section 27 of the Development Charges Act, 1997, S.O. 1997, c.27 and amendments thereto authorizes the City to enter into agreements for the payment of development charges on dates later than the issuing of a building permit; WHEREAS the proposed 220 unit high-rise residential development will be constructed through the issuance of staged building permits, the first permit being a conditional building permit for the underground works and the second permit will be issued for the above-ground superstructure; " Ii II i¡ II II II Ii Ii II II !I I, II Ii " 'I II Ii il !i II II II jl 'I I, II Ii II II ì i I I WHEREAS the City's existing practice requires all development charges and cash-in- lieu of parkland dedication to be paid prior to the issuance of the first building permit issued for the development; WHEREAS the City desires to enter into an agreement with Discovery Place Limited regarding the timing of the payment of the City's development charges and the cash-in- lieu of parkland dedication on the proposed McLevin at Discovery Place condominium development to be located on 1200 The Esplanade North. NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: 1. The Mayor and Clerk are hereby authorized to execute an Agreement with Discovery Place Limited, prepared in a form acceptable to the Solicitor for the City, which provides for the deferred payment of the City's development charges and cash-in-lieu of parkland for the 220 units (McLevin at Discovery Place) development until the above ground building permit is issued or six months from the issuance of the below ground building permit, whichever occurs first. BY-LAW read a first, second and third time and finally passed this 3rdh day of March, 2003. Wayne Arthurs, Mayor Bruce Taylor, Clerk " II I, il !I I: Ii 'I Ij II !, I! II II II Ii II Ii II [ I I 12/24/2002 11:00 4158571743 OPTIONS FOR HOMES PAGE 02 ~ ~ ", t.?~ for Homes ATTACHMENT#~ TO REPORT # (;'2-O1- 4.3 The Key to Home Ownership for Eve.ryone Decernber 23,2002 Gillis Paterson Director, Corporate Services & Treasurer City of Pickering One The Esplanade Pickering, ON LIV 6K7 Dear Mr. Paterson: Re: Municipal Assistance for the McLevin Condominiums Allow me to thank you and Neil Can-oU for taking the time to discuss this matter with us. I ar.\1 pleased to offer the following clarification of our information, First, it is very important to note that any adjustment in expenses to the development will go to one of two places: a) improvements to the building; or b) the pool of money used to develop other similar housing developments in Pickering. Second, our goal, as it relates to our request on the Park Land Dedication Fees, is that this building be treated in a way similar to that of the first MilJennium building as an issue of fairness. The CUlTent agreement, which Emits the size of the development charges, is fair given the fact that the services for the Town Centre were built over a decade ago and setting a cap recognizes this sítuation. In any eventuality, the difference between the benefit received by Millennium I and McLevín on development charges appears to be $4,029 minus $3,754 or $275 per two-bedroom unit. Third, I would confiml that the $700,000 defeITal in favour of helping purchasers who need attendant care services would be used exclusively for individuals in wheelchairs. Any funds not utilized in this manner would be returned to the City when the condominiums Close, It is our goal to approach all of the attendant care facilities in Pickering to look for potentials buyers. In this way, any vacancies created could reduce the waiting list for those fad1jties. 468 Queen SLrr:et East, Lower Levell, P.O. Box 28, 1òronto, Ontnrio MSA. IT7 tel: (416) 867-I50Iojax: (416) 867-/743. website: Qptions.Ícomm.C(~ . e-mail: op[ian.~@Jcomm,ca 12!?4!2002 11:00 4158571743 OPTIONS FOR HOMES PAGE 03 Gillis Paterson Decelì1.tlcr 23,2002 Page 2 Fourth, with respect to the deferral of charges during the development period, I would confinn that this amount would be reduced below the $700,000 to match whatever is available to defer subsequent to the initial $700,000 committed to the attendant care units. Fifth, it is, indeed, our intention that the defen-aIs be designed so that they become revenue neutral for the City. We would suggest that the funds deferred during construction pay an appropriate interest rate and that the deferrals for the attendant care units apprecíate at the rate of rea] estate appreciation in Pickering, We would also be open to a minimum payrD.ent scheduJe, such as we proposed, to offer greater protection to the City on this issue- Since this minimum payment schedule is a back up, a relatively low interest might be appropriate. Sixth, with respect to the designation of the site as a revitalization zone, as an alternate possibility we could simply request that Council move a motion which supports the application of the newly atU1ounced Home Ownership Program from the Ministry of Municipal Affairs and Housing to this site. I have discussed this matter with the Ministry of Housing. They have requested that the rationale for this motion include the low vacancy rate in Pickering, the fact that the site has been partially excavated for the last several years and the need for the site to proceed to complete the neighbourhood. All of the points here are open to discussion. Our goal is to help Pickering residents - both able bodied and those with mobility issues - become homeowners. We wish to do this in a consensual manner and are open to any changes that can bring us and staff together to achieve this goal. Yours tmly, i~ ?Jt-r / Michel Labbé President ML:sn end ", REPCìRT#.t S 4)~"Ì - 0;; INTER-DEPARTMENTAL MEMORANDUM CLERK'S DIVISION DATE: January 24, 2003 TO: Gil Paterson Director, Corporate Services & Treasurer FROM: Bruce Taylor City Clerk Please be advised that the Council of the City of Pickering passed Resolution #137/02, Item #15 at the Council Meeting of December 2, 2002, as follows: 1. That Report CS 31-02 of the Director, Corporate Services & Treasurer, concerning Tridel/Options for Homes Development Final Phase, be received; and 2. That Council advise staff if it wishes to provide relief from the provisions of the 1987 Development Agreement respecting cash-in-lieu of parkland payment for the last phase of the development, being 1200 The Esplanade North, based on the same formula as was applied to the Millennium Apartment at 1 000 The Esplanade North at an estimated cost of approximately $132,000; and 3. That Council advise staff that it wishes to explore possible options for permitting, in addition to the relief from Development Charges in the estimated amount of approximately $112,000 as provided by the 1987 Agreement, any further relief in the form of deferral of all parkland payments, fees, charges and development charges: a) totalling $700,000 or less at an estimated cost of approximately $178,000 until the units are resold or a maximum of 15 years after any agreements are executed; and b) totalling more than $700,000 at an estimated cost of approximately $31,000 until one year following project negotiation; and 4, That should Council determine that it wishes to explore possible options for relief outlined in Recommendations 2 and/or 3 above, that the Chief Administrative Officer, the Director, Corporate Services & Treasurer and the Director, Planning & Development be authorized and directed to enter into discussions with the appropriate representatives of Deltera Inc. and Options for Homes in order to determine and explore all options, the potential costs to the City and to present the results of these discussions at the earliest possible opportunity for the consideration of the Committee and Council; and 5, That appropriate officials of the City of Pickering be given authority to give effect thereto. This resolution is sent to you for your information. Bruce Taylor, City Clerk Al"TACHi"îEN"r #~TO REPORT#. CSØ'?l-~3 Cih¡ D~ REPORT TO THE FINANCE & OPERATIONS COMMITTEE Report Number: CS 31-02 Date: November 13, 2002 From: Gillis A. Paterson Director, Corporate SeNices & Treasurer Subject: Tridel/Options for Homes Development Final Phase . 1200 The Esplanade North (East of Millennium Building) Recommendation: 1. That Report CS 31-02 of the Director, Corporate SeNices & Treasurer be received , for information and that: 2. Council advise Staff if it wishes to consider providing relief from the provisions of the 1987 Development Agreement respecting cash-in-lieu of parkland payment for the last phase of the development, being 1200 The Esplanade North, based on the same formulae as was applied to the Millennium Apartment at 1 000 The Esplanade North, at an estimated cost of approximately $132,000; 3. Council advise staff if it wishes to consider permitting, in addition to the relief from Development Charges in the estimated amount of approximately $112,000 as provided by the 1987 Agreement, any further relief in the form of deferral of all parkland payments, fees, charges and development charges: a) totaling $700,000 or less at an estimated cost of approximately $178,000 until the units are resold or a maximum of 15 years after any agreements are executed; b) totaling more than $700,000 at an estimated cost of approximately $31,000 until one year following project negotiation; 4. Should Council determine that it wishes to consider relief outlined in Recommendations 2 and/or 3 above, that the Chief Administrative Officer, the Director, Corporate SeNices & Treasurer and the Director, Planning & Development be authorized and directed to enter into discussions with the appropriate representatives of Deltera Inc. and Options for Homes in order to determine and explore all options, the potential costs to the City and to present the results of these discussions at the earliest possible opportunity for the consideration of the Committee and Council; and, Report CS 31-02 Date: November 13, 2002 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 2 5. that appropriate officials of the City of Pickering be given authority to give effect thereto. Executive Summary: Deltera Inc. (Tridel) and Options for Homes propose to develop the last phase of the Apartment/Casita complex located in the City's downtown, between Kingston Road and the Esplanade North (1200 The Esplanade North). The project consists of an eleven (11) storey apartment building containing 220 units. In order to accommodate thè development, assist in the provision of affordable home ownership, and provide special accessible units for 8-12 households, Options for Homes and Deltera are requesting that the City provide financial relief in the form of parkland cash-in-lieu payment reduction, and the deferral of parkland, development charge, and other municipal fees and levies. Further, Options for Homes requests that the City designate the lands as a "revitalization area" for the purpose of homeowner grant eligibility. Staff are supportive of initiatives to complete this important area of Pickering's Downtown, with the continuing involvement of Tridel as builder. Generally speaking, staff are also supportive of the concept of providing more affordable ownership housing accommodation in the City. We understand that the external elements of this project will be of high quality standards as the existing apartments at Discovery Place. Tridel has recently submitted a Site Plan Application for this project which is currently under review by staff. This report outlines details of the requests, as staff understands them, and considers the related financial implications. Council direction is necessary in order to confirm its interest in considering further the request for the parkland reduction and the reduction and deferral of fees and chargès. Financial Implications: The total estimated benefit to the developer, representing either a direct cost to the City, or lost income is as follows: Parkland Dedication Development Charges Deferral of $700,000 Deferral of over $700,000 Total Benefit $132,355 112,476 178,000 31 ,132 $453.963 Any financial decisions favouring the developer, especially those involving development charges, will have to be made up by an increase in property taxes as the majority of these items affect the Development Charges Study approved by Council in 1999. Report CS 31-02 Date: November 13, 2002 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 3 Background: Deltera Inc. (Tridel) and Options for Homes proposes to complete the development of lands betWeen Kingston Road and the Esplanade North with an eleven (11) storey apartment building containing 220 dwelling units (see Attachment 1). In letters from Options for Homes and Deltera Inc. dated August 23, 2002 (see Attachment 2), and August 29,2002 (see Attachment 3) respectively, various requests of the City are set out pertaining to the reduction and deferral of municipal fees and development charges. We have reviewed the Options for Homes letter to the Chief Administrative Officer dated August 23, 2002; the Report to Council from the Town Solicitor dated May 23, 1998 on the previous Phase (Millennium Building); the agreements between Duffin Developments Inc., Discovery Place Limited and the Town of Pickering dated January 19, 1987, and June 3, 1998; other documents as provided to us. The following is based upon our understanding of the foregoing. The current proposal calls for 220 units of which 51 per cent (113 units) are one bedroom and 49 percent (107 units) are two bedroom or larger. Comments in this report pertain to the financial considerations requested of the City and not the Region nor the School Boards. Michel Labbé's letter of August 23, 2002 lays out the detail of his request of the City. This report addresses the issues in the order they appear in that letter. Also attached for information is: a letter dated September 3, 2002 from McLevin Co-Operative Development Corporation (see Attachment 4); an Information Flyer/Letter outlining the project dated July 10, 2002 (see Attachment 5); an Options for Homes 'Frequently Asked Questions' sheet (see Attachment 6); a letter dated September 11, 2002 from the Chief Administrative Officer to Deltera Inc. (see Attachment 7); and, a letter dated September 16, 2002 from the Chief Administrative Officer to the President, Options for Homes (see Attachment 8) Reduction of Cash-in-Lieu for Parkland Dedication Fees The letter of August 29, 2002 from EIio Zoffranieri, Senior Manager Planning Services for the Deltera Inc to the Chief Administrative Officer contains the following statement, in part: fl. ..this letter shall serve as a formal request for both deferral and reduction of the cash-in-lieu of parkland dedication requirement.. .using the same formula used for the Millennium Building...." On January 19, 1987 Duffin Developments Inc., Discovery Place Limited and the Town entered into a Development Agreement respecting the development of lands that currently comprise the Tridel Apartment and Casita projects. Section 33 of the agreement provided that a cash-in-lieu payment for the provision of parkland be paid for Report CS 31-02 Date: November 13, 2002 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 4 each residential condominium apartment building prior to the issuance of a building permit for that building. The agreement ~e.t out a formulae for the determination of the payment amount which included a 10% per annum increase (not compounded) in the amount payable to provide for inflationary and other escalating factors. According to the Agreement the payment is to be calculated as follows: U ,392,825 x N 5 (where N is 1.0 if the payment is made in 1987, and increases at the rate of 0.1 per year thereafter) At the time the Agreement was entered into the parties anticipated that the entire five phases of the development would be built out by June of 1990. Unfortunately the economic climate changed and to date, only four of the five phases have been completed. . The first three phases of the development, consisting of two apartment towers and the Casitas, provided parkland cash-in-lieu payments in accordance with the agreement formulae (totaling $1,086,403). The forth phase, being the 253 unit 'Millennium' apartment building received some relief in cash-in-lieu payment from Council. Rather than apply the formulae of the agreement, Council agreed to a payment option which used the Casita 1994 parkland payment of $473,560 indexed by the rate of inflation since 1994 established by the Consumer Price Index for Toronto. This resulted in a payment of $512,335 for the Millennium phase. This represented a benefit of $72,650 to the developer. Deltera/Options for Homes requests that Council apply the same relief approach to the cash-in-lieu requirements for the final apartment tower phase. They request that the payment be based on the Casita payment, indexed by the rate of inflation since 1994. This will result in a payment of $564,057, which represents a benefit of $132,355 to the developer (payment of $696,412 would be required under the formulae of the 1987 development agreement if the building permit is issued in 2002). " ; Desianation as Revitalization Area for the Purpose of Homeowner Gran~ Options for Homes, in its August 23, 2002 letter, requests that the lands proposed for the apartment tower development be designated by Council as a "revitalization area" for the purposes of "making the building eligible for homeowner grants that will soon be available to purchasers in Ontario". It is stated that this grant will be between $6-8,000 per unit and available to purchasers whose incomes are below the 60th percentile for Pickering, who are currently renting and buy in a revitalization area. Mr. Labbé of Options for Homes advised that the grant monies would reduce the first mortgage on the units, lowering the monthly carrying costs by about $50 per month for each unit. Report CS 31-02 Date: November 13, 2002 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 5 Staff contacted the Ministry of Municipal Affairs and Housing to receive information on the homeowner grants referenced by Mr. Labbé. The Ministry advised that details on the affordable urban homs ownership program have not yet been finalized or released, although discussions between the Province and some stakeholders have been held. It appears that the Federal Government may tie its participation in the grant program to housing that is made available within designated 'revitalization areas'. Until such time as details are available respecting this anticipated grant program, it would be premature for the City to apply any specific 'designations' to this area, such as a 'revitalization area' designation. Further, these lands are located in the City's downtown core, within a complex of prestige buildings and in an area considered to hold high development potential and desirability. The appropriateness and necessity of designating these lands as a 'revitalization area' would have to be fully considered. Municipal Fees and Levies Options for Homes further requests that the City defer the first $700,000 of municipal fees and levies to when the suites are resold. This deferral is requested in order that their client, the McLevin Corporation, can help 8-12 households with physical disabilities and requiring care to purchase in the building (special accessibility units). Further, the deferred funds would be used to help people with their down payments to make units in the building affordable at various income levels (see Attachment 2). If this amount determines affordability of the units, then based upon the information provided in Mr. Labbé's letter, affordability ceases for the original target owner audience upon resale. Fees and levies normally payable to the City are: Building Permit Fees (estimated) Site Plan Approval Draft Plan of Condo and Release Parkland Dedication Development Charges Total Payable $145,000 6,250 1,800 696,412 660.000 $1.509.462 Development Charaes In considering Deltera's request for a reduction in parkland cash-in-lieu payment, one must also take into consideration the reduction in City development charges provided by the terms of the 1987 agreement. While the parkland payment requirements under the 1987 agreement are significant, so is the relief provided by the Agreement in development charge payments. The agreement requires that the City development charge (unit levy) be the lesser of the amount of the Town's two-bedroom apartment Report CS 31-02 Date: November 13, 2002 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 6 residential unit levy in effect on the day of payment by the owner or $3,000 per unit if paid after January 31, 1990. When Co4n~il granted the parkland payment relief for the Millennium apartment building in 1998 and processed the building permit, the Town's two-bedroom apartment development charge was $3,754 (excluding hydro payment of $663). Consequently, the provisions of the 1987 development agreement did provide significant savings to the developer of approximately $92,778. The City's current two- bedroom apartment unit development charge is $4,029, resulting in a significant savings to the developer of $1029 per two bedroom unit as shown below. Consideration must be given to the development charge savings provided to the developer through the 1987 agreement when considering any financial relief that Council may wish to grant respecting parkland cash-in-lieu payment. The 1987 Agreement "caps" development charges at $3,000 per unit, which is confirmed in the 1998 agreement which, when multiplied by the 220 units, equals $660,000. Inherent in this condition is an unrecognized savings to the developer under the City's current Development Charge By-Law as follows: Size Development Charge/Unit $3,021 $4,029 No. of Units 133 107 Total $341,373 431,103 . 660,000 ìj 12.476 One bedroom & smaller Two bedroom & larger Less "capped" amount Unrecognized loss to the City The proposal calls for the deferral of the $700,000 until the units are sold OR a minimum of $100,000 per year commencing 5 years after registration of the condominium and thereafter for 8 % years. The letter states that this would ".. .guaranteeing a 21 % rate of return". There were no details of this calculation but assuming $100,000 per year for 8 % years equals $850,000. The difference or additional funds over the deferred $700,000 would be $150,000 which would appear to produce the 21 % rate of return. HOWEVER, the calculation ignores the time value of money or the lost interest income on the money deferred. In other words a dollar today is worth approximately 4 per cent more than a dollar one year from now. Conversely, a dollar on year from now is worth 96 cents today. As perhaps a "worst case" scenario, assuming registration takes place one year later plus the deferral of 5 years thereafter plus the repayment timeframe of 8 % years (assuming no resale) equals a total deferral of 14 % years. Under these assumptions the $850,000 is worth approximately $522,000 today. This results in a savings to the developer, or a loss to the City of $328,000, or 47 per cent. Deducting the $522,000 from the original deferred $700,000 results in a direct cost to the City of $178,000 or 25 per cent. 'Report CS 31-02 Date: November 13, 2002 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 7 Under a "best case" scenario, registration takes place immediately upon completion, which occurs quickly and resales occur at the rate of 10 per cent per year. While no details are provided on the amount payable to the Cityúpon resale, dividing the deferred $700,000 by 220 units yields $3,182 per unit or a total of $70,000 per year. This would occur for the first 5 years totaling $350,000 with $100,000 payable in years 5 through 8 Y2. The estimate present value of this stream of funds is $536,000 representing a cost to the City, or saving to the developer, of $164,000 or 23 per cent. Options for Homes also request a deferral of any amounts owing the City in excess of $700,000 until n.. .after the closing of the condominium". We assume this refers to the registration of the condominium. If correct, then $809,462 ($1,509,462-700,000) would be deferred for one year resulting in a present value of $778,330 and a savings to the developer, or cost to the City of $31 ,132. Mr. Labbé's letter states that the deferrals would be guaranteed by Home Ownership Alternatives Non Profit Corporation. Until more is known about this company, we cannot offer comments on this aspect. Conclusion The total estimated benefit to the developer, representing either a direct cost to the City, or lost income is as follows: Parkland Dedication Development Charges Deferral of $700,000 Deferral of over $700,000 Total Benefit $132,355 112,476 178,000 31,132 $453.963 Any financial decisions favouring the developer, especially those involving development charges, will have to be made up by an increase in property taxes as the majority of these items affect the Development Charges Study approved by Council in 1999, General Pickering Hydro Development Charges applicable prior to August 1999 and no longer payable save the developer approximately $145,000 using the 1998 amount. Mr. Labbé's letter states that ".. .Our building will generate approximately $400,000 in property tax revenue annually". If correct, the City's portion of this amount would be approximately $154,000 using 2002 Tax Rates, the balance being shared between the Region of Durham and the School Boards. 5. 6. 7. 8. Report CS 31-02 Date: November 13, 2002 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 8 I would like to point out that while the letter contains several references to the need for the City to agree to the requests in order to make the project affordable, and to provide accessible units, oral communication from Mr. Labbé to the City's CAb's office indicated that Options for Homes' marketing campaign does not take into consideration the financial effects of any of the above mentioned reductions or deferrals. This would seem to indicate that favourable consideration by the City would not have any financial effect on their proposal. This needs to be clarified. Finally, the foregoing is subject to review and revision as discussions continue, more details become known and I become more familiar with this matter. I must caution that our current financial climate within the City's operations make granting financial concessions a matter that requires serious consideration. . Attachments: 1. 2. 3. 4. Location Map . Letter from Options for Homes dated August 23, 2002 Letter from Deltera Inc. dated August 29,2002 Letter from McLevin Co-Operative Development Corporation dated September 3, 2002 Information Flyer/Letter dated July 10, 2002 Options for Homes 'Frequently Asked Questions' Letter to Deltera Inc. dated September 11, 2002 Letter from Options for Homes dated September 16, 2002 Report CS 31-02 Date: November 13, 2002 Subject: Tridel/Options for Homes Development Final Phase 1200 The Esplanade North (East of Millennium Building) Page 9 Prepared By: Endorsed By: K ~(~ Neil Carro- Director, Planning & Development --~~ ~.. -c".. Gillis A. Paterson Director, Corporate Services & Treasurer Approved By: Attachments Copy: Chief Administrative Officer Recommended for the consideration of Pickering ~ Co it .-, #-1-TOREPORT# Cs :J/., 0 0: a::: 0 0 a::: a::: 0 () ::¡, ~ Q ~ 0: City of Pickering Q <: Planning & Development Department l' DATE NOY. 7, 2002 eS/li/2602 89:45 4168671743 OPTIONS FOR HOMES PAGE 62 ATTACHMENT#';¿ TO REPORT # (:5 ;JI-():J. ~. for Homes The K", to Home Ownership for .Everyone August 23, 2002 "",' ~ f. . CAe,) ~RECEI\!ED; SEP 11 , ; FlU: NO.: , "-- . /,8;:"\{ "r'{). f '... ::...:.:.. ' "', Dear Mr. Quinn: . "......:Y.Y.D./COPYlCIRCULATETO: . : ¡,;'ì,'fS-:.:i. COUNCIL I . !;~:!~:..":.9.§VEL ClERI( , ::IRf'.:~~G. . CORP. SERVo ~ ; UJ:~.EC. HUMAN RES. I :'.~i::.f_.___.~__.p..EI3AL . ,. .;s,~'i2£: ¡ CORP. PROJ,&POL "~!\N'~\~L-+-+EÇON, DEV. \¡:~.-t-! GUST. CARE , ) ",,_.,..,.._~..", - , Thomas J. Quinn Chief Administrative 'Officer Planning & Development Department One The Esplanade. . Pickering, ON LIV 6K7 Re: Municipal Assistance with the :Development of the Condonlinium at 1200 TIle Esplanade North o~ behalf of our client, the MeLevin Corporation Further to our severa! conversations~ I would confinn that we are requesting, on bebaif of our client. the McLevin Corporation, municipal assistance in several ways to make our development mor~ effective. and accessible to potential purchasers with ~oderatc incomes. First and foremoSt. we would ask that the site be designated a revitalization area for the purposes. of making the building eligible for homeowner grants that will soon be available to p~hasers in Ontario. This grant wiU be between $6-81000 and available to purchasers, whose incomes are below the 60th percentile ~or Pickcring~ who are currently rentirig and buy in a. revitalization axea. . I have not seen a definition for 'revitalization area' ,but I am sure it would apply to a piece of . pFoperty that is an undeveloped hole in the middle of a fully developed neighboumood; , . Secondt we wou)d request that the City ofPickerlng agree to defer $700,000 of its mÙnicipal fees and levies in order to allow the Corporation to help 8-12 households, with physical disabilities and requiring.care, to purcháse in the building. This, as you know, is a group of individuals with limited income who can beneñt significantly from the. ability to design units to meet their needs prior to the stan of construction. . The deferred funds would be us~d to help people with their down payments to make th~ units in . the building afforda.'bl~ at y~OUS income levels. . The deferred :funds would be repaid when the suites are resold so that the affordability would last for one occupant but the accessibiiity changes to the suites would be pennanent. 468 quæn Street EtJSt.l.Dwer Levell, p.o. BoX 28, i1n'QlItO, Onttttio M5A. lIT . rei: (416) 867-1SO¡. fax: (41{j) 867-174.3 . website: oprions.icoÌ11m.ca . e-rnaJJ: oplionsll9icomm.ca C~!¿~f~~~¿ c=:~~ 4158571743 OPTIOí'¡S FOR f-'DM=:5 PAGE 03 Thoma Quinn Avgust23,2002 I"age 2 . The :repayment of the deferrals would be guarante~ by Home Ownership Alternatives Non- prò.iit Corporation (BOA), a company that will hold $4, 700~OOO in mortgages vvith respect to this site. They will also agree: to a repayment schedule that will pay a minimum of $100;000 per year' starting five years after registration. of the condominium and running for eight and om~-ha1f , years, thus guaranteeing a 21 % rate of return. 1 b~ve incJuded a copy of the cunettt repayment rate on other developments completed to date as confumation that the funds will 'be available as , required. . T'hird, and critical to the success of our development. is a request that the City' defer the . collection of the balance of all fees and levies over and above $700.000 until ërlter the Closing' of . the'condominium. Once again, BOA wou1d provide its cozpOTate guarantee as to the payment of 'these funds. The importance to the development is tha~ because the Corporation is a non-profit, it needs ~elp coming up with the equity. required by its lenders to provide its construction fi~cing~ Municipal deferrals) such as those requ(;:!stcd here and pro~ided on our last deyelqpment, by th~ City of Toronto, are an important part of aohieving the financial requirements set by our lenders... .. It is important to not!:: that our builCiing will generate approximately $400~OOO in property tax revenue annually. The sooner this begins, the better it is for all involved We believe veri strongly that the requests contained in this letter are reasonabl=, given the housing crisis that we are aU trying to address as effectively as possible. It will also allow for the creation of a bui1ding that will address longstanding neighbourhood issues. Specifically this bui]ding and this neigbbourhood is the best place in Pickering to provide: units designed to accommodate individuals with aocessibì1ity issues. lithe municipality supports our request, instead of producing two or three accessible units. we will be abl~ to produce Ai sufficient nwnber to provide the numbers needed to support fu.11-time attendants. Attendant care is critical to maximizing the effectiveness of accessible units. We would request ~ :m~eting with the appropriate individuals so. that we can discuss. these requests furth(;:!t' and provide the information )rou need tobrlng them tc? a. successful conclusion. Yours truly, ~.~/ Michel Labbé President ML~sn enol. cc: Elio Zoffranieri B9/11/2002 09:45 4168671743 OPTIONS FOR HOMES 19~ for Homes PAGE 04 The: Key to Home Ownership for Everyone Repâyment Experience on Other Developments St. L,awreoce (70 Mill Street [95 ~Q]) Closing (September: J 998) ,Voluntary 7 'Rental 2 1999 Sale Voluntary Rental 2000 Sale Voluntary 2001 Sale Voluntary Rental 2002 (April) Sale Voluntary Total Sale Volunta.rjr Rental - 5 1 5 . - :; '2 5 '2 1 4 3 - 17 15 -.! 9 11 . 5 8 7 40 (42%) ParHament Square (3.9 Parliament Street lIS] QuitsD Closing (April 2000) Voluntary 45 Rental -L . 49 (27%) , 468 Queen Stlæt Ei13t, lower-Level2, p.o. BOX28, Toronto, OIItorio MSA 117 ' let. {4161 (lõ7-!5fJl" fa;c (416) 867-1743.. websJte: optfons.k:omm;ca. e-maJJ~aptions@icornm.Ctl --,--,~ww~ U~,4~ ",.U::;~t:) l i'i,j Alternative¡¡ Mort¡ap R,epaYØ1Ol1.t JIÙyZ3,2002 Pase.:! Re1nainder of2000 Volun~ . . .. ~ Sale 1 - 2001 Voluntary . Sale 2002 (May) Voluntary Sale Total Sale Voluntary Rental 3 -! ...! 13 50 4 - MID Street (80 MiU Street [144 o:nits]). Closing (May 2002) Sale Voluntary Rental Remainder of 2002 Sale. Total Sale Voluntary Rental 1 43 2 1 2 43 2 OPTIONS FOR HŒ~ES PAGE, as 3 11 4 67 (37%) 46 1 47 (32%) ATTACHMEI\.!T#-3- TO REPORT#-.C'S..3J~. a~ , ì eEL TE.RA ""-- f CA.~ :~r!~iVED: f S£~~~~200l '¡':IL::: UQ . i. _"::'~'~-~l--~-.. ;.!'18E~' in ¡ , -"'-.'" .-...J.._- -, " ¡:;-\i'lfl/GOPY/Cm6irA"r";;: ~o;-- --.-- -.- ,'.... c' . .;¡.:\~~:.. cour~c;:.--. I ' -:.:~::N. 8. ~E"VEL CJ£.R.J{:=-'-L :,"-::.R, &i:MERT conp.: ::-;¿;t¡v. ¡ ; ~~L & REC. , ì HUMf\i;;;"R-q-.'-¡ ; >-jRE Tï.~,;,'-"'--. I ~f1UN. PROP. .rto~p.;RèJ:&PõL- f,IRANSIT ECON, DEV; i.18RARY GUST. CARE Deltera Inc. 4800 Dufferin Street Toronto, Ontario M3H 5S9 Telephone: (416) 661-9290 Fax:: (416) 661-0978 Internet: www.tride!.com August 29, 2002 Mr. Tom Quinn City Manager City of Pickering Picketing Civic Complex One the Esplanade Pickering, Ontario L 1V 6K7 ,,'- Dear Sir: . . Re: Request for Deferral and ~eduction of Cash-in-Lieu for Parkland dedication Fees Final Phase - McLevin Corporation . Further to a meeting of May 3' 2002, with yourself, His Worship Mayor Wayne Arthur, Mr. Mike Labbe.of-Options for Homes. Mr. Tony More crf our offiee, Mr. Neil Carrol of- your office and myself, this letter shall serve as a formal request fl?r both deferral and reduction of the cash-in-lieu of parkland dedication requirement to be paid by the developer using the same formula us~dfor the Millinium building, being 1000 The Esplanade'. . The deferral will be more particularily set out in a separate letter being forwarded directly to you through Mr. Labbe wherein he wiJ! be requesting a deferral for other fees and charges such as Development Charges, Building Permit Fees etc~ Trusting the aforementioned is ~ufficient for you to commence the necessary process ami should you rl:it¡uire additional information or wish to discuss this matter further, please contact the writer. We would like to take this opportunity to thank you in advance for your favourable consideration of this matter. . r: Efio Zoffranieri Sr. Manager Planning Services M..mh..r "of .,.h... Tþi!>'\CI" r"--,.- \39/11/2002 89: 45 4168671743 OPïIONS FOR HOMES PAGE 86 , " MCLEVIN CO-OPERATIVE DEVELOPMENT CORPORATION 468 Queen Street East, Lower Level 2, fI.C: Sox 28 Toronto, Onterio M5A 117 Tel: f416) 867-1501 Fox: (4.16) 867.1743 ' September 3, 2002 . AnACH¡V¡Et~T#~ TO REPORT#~-o..) Thoma.9 J. Quinn . Chief Administrative Officer Planning & Development Department One The Esplanade Pick.ering, ON LIV 6K7 Dear Mr. Quinn: Re: Vpdåte on 1200,Tbe Esplanade Nortb I am pleased to provide the following update on our progress with fC$pect to the condominium development at 1200 The Esplanade North. We have now had four set!\) of presentations to the neighbo1U'S and Durham residents. Our first pair of pres~tations was on July 27 and WI:1S advertised exclusively to the residents at Discovery Place. Ncady 120 people attended and half were there to get additional infonnatlon about the develop:m~t. . . The other three sets of presentations, held on August 10, 17. and 24, were advertised first to Pickering residents, then to aU of South Durham. In all, we received 81 $lOO"deposits. We CUlTentlyanticipate generating 25 sales .from these deposits. . Based on our previous experience, w~ would anticip~te a s2gnÜiéant loea! demand far OUt suites. To date our cxþcrience with this development bM been v~ satisfying. We will keep you aware of our progress throughout the fall. Should you wish specific details, please call me at (416) 867-1501, extension 226. y otU'S trúty, " / ~~" Michel Labbé Development Consultant ML:sn ., ., . , .,-- 'AC ¡MENT # ...éL TO RS'ORii # C5 ~ ~ " ~ é7~forHomes ,-.11 . f ~. ... ~ ' The Ko/ tD Hamr: Ownen;hip for Everyone to. . ~ ~ ' '. ~, . ~ ¿ 468 Queen Street East. P.O. Box 28, Toronto, ON, MSA 117 Phone: (416) 867-1501, Fax: (416) 867.1743 , - . . ¡ , July 10, 2bo2 1 5 2002 .,'". Dear Millennium Place Resident: Options For H~mes was establisned 10 years ago with one goal in mip.d. We wanted to offer ' quality housing at attractive prices. We have devd6ped five condominiums to date in the Greater Toronto Area, which .have achieved this goal. ' Our next building will be COllstructed on ' the vacant land at, 1200 The Esplanade North. This site represents an unprecedented opportunity to fii1ish the development of your complex with a high quality condominium. .. Municipal officials have asked that we offer this option to own in this final phase to the immediate neighbolirhood, their mends and relatives. TIris is your opportunity to be the first in 1IDe for tbese homes at an eJÇtremely attractive cost price~ ,Our marketing' approach is respectful and l°'o/-key. At our ftee presentations, our sales consultants will pro'vide all relevant information to enable you to make an informèd decision. By using a low cost, ftenzy-ftee approach, we save on expenses and pass these sa":Ïngs on to' you. To date all of our condominiums have had owner occupancy levels above 95% and have been positive additions to their respective neiÏghbourhoods. There is no better way: of continuing this achievement than targeting those ~ho live next door -, or their mends ànd relatives. . Our condoÎDiDiums start at: $ 87,596 Studio ' 472 $ 801.46 98,640 one-bedroom 540 905.30 126,900 one-bedroom' 700 1,166.42 ' 139,500 two-bedxoom 750 1,275.80 160,200 two-bedroom 900 '1,477.88 "'Based on 5% down, includes P&I (five.year term), taxes, un1ities, amenities and mamtenance. *Price does ;pot inc,1ude Alternative Mortgage. Parking starts at $5,500 . You must register to attend one of our fIrst ftee presentations scheduled for: Saturday, July 27, and August 10, 2002. . Please pass this informaTIon on to friends and relatives. To register, please call (416) 867-1501, or visit our website at www.options.komm.ca. We look forward to seeing you there. Yours truly, ~ h~~ Michel Labb-é President' ATïACHMENT#...k._TO REPORT # C~ 3/-0';¿ &~ . for Homes The Key to Home Owner~p for Eve1J1one FREQUENTLY ASKED QUESTIONS '. . , What is Options For Homes Non-Pr6fit Corpora~ion (Options)? Options For Homes is a pr:ïvat~"not for profit, corporation led by deveiopment professionals who' obtain. access to residential land and pre-sells ownership homes to low- and moderàte-income households. It co-ordinates the design and develop1Ìient of buildings on these lands with the goal of keeping all costs to a mín:imum on behalf of these households. For whom does Options work? The initial purchasers of the condominium homes form a Co-operative Housing Corporation for whom Options co-ordinates the development. This Corporation acts as the developer of thè buildings and retains Options as their Development Consultant. How is ~ptions paid? Options receives a fee for its services which is included in the purchase price of the homes. . . Does the Options' concept require government subsidies?, NO. The Options' conc~t has been ~esigned to reach low- and moderate-income households without any form of government subsidy. It has also been designed to focus traditional real estate market mechapisms directly at the issue of affordable housing in such a way as to be more and more effective over time. '. What has Options achieved sO far? . , . To date Options has five condominiums completed or under construction. 1. The Weston Village Co-operative has successfully developed and sold a $6 million, 42-unit, townhouse condominium at Lawrence Avenue and Weston Road in Toronto. Prices for the three-bedroom townhouses ranged :ITom $128,900 to $152,000. The homes were affordable to households with incomes as low as $32,000 per year. , , . 468 Queen Street East, LowerLeve12, P.O. Box28, Toronto, Ontario MSA 1T7 tel: (416) 867-1501. fax: (416) 867-1743 . webSÌte: options.lcomm.ca . e-mail: options@icomm.ca Page 2 Frequently Asked Questions 2. The S1. Lawrence Co-operative has successfully completed and sold a $17 million, 95- unit, apartnient condominium at Parliament and Front Streets, a 15- minute walk .:trom downtown Toronto. It has one-, two- and three-bedroom suites that sold at $50,000 below the cost of other newlY. çopstructed condominiums in the same area. The suites were sold to households with incomes as low as $16,000 per year. 3. The Parliament Square Co-operative is a 181-unit condominium, one block .:trom the S1. Lawrence building. It is a $32 million building and offers attendant care services to 12 purchasers who require care because of personal mobiIityrestrictions. It has been able to offer bachelor suites for as little as $65,000. Several owners are in an income bracket below $15,000 per year. The building was fully sold as of November 1999, four months before final occupancy 4. . The Mill Street Co-operative is a 144-unit building completed and occupied at the end of 2001. It has a value of $27 million and is located next door to the S1. Lawrence condominium. 5. The Shermount Co-operative started the construction of its $70 million" 430-unit townhouse and apartment condominium at 650 Lawrence Avenue West in March of 2001. The City of Toronto agreed to defer the payment of its development charges, levies and permit fees in order to allow the Co-operative to accommodate fifteen (15) low-income seniors in the building. Options has three clients cun-ently developing their condominiums. 1. 2. 3. The Pentland Co-operative is selling a 208-unit apartment building east of the Pickering Town Center. The Queen Street Co-operative is developing a 282-unit townhouse and apartment condominium at the comer of Queens Plate Drive and Rexdale A venue in north Etobicoke. The McLevin Co-operative is developing a 456-unit townhouse and apartment condominium in the Malvem Town Centre in northern Scarborough. . How does Options prevent the flipping of its homes for quick profits? Because Options cuITently makes homes available at 10-15% below market value and will offer even better reductions in the future, all homes carry a second mortgage on title that equals the difference between the cost price and market value. These mortgages are payable upon resale and go into an equity pool that must be used to develop other similar proj ects. This allows owners to sell at any time and benefit from a market appreciation only on the funds they invested themselves. There has be'en $1.9 million in cash and $13 million in mortgages generated on the first five buildings (see the attached Co-operative Deferral example). Page 3 Frequently Asked Questions For whom can Options provide homes? Options' concept can provide homes for all income groups and household situations except the hard-to-house, or individuals who currently dq not have the skills to care properly for their housing. More specifically, Options enables individual or households with limited resources to own homes by increasing the amount of their Alternatives Mortgage, thereby adding to their downpayments. The third wave of Options projects should be offering 20-30% of the homes to households below Toronto's poverty line. Why can. Options do what no one else has been able to do? By focusing exclusively on affordability, Options brings a unique perspective to the housing market (see the attached coSt comparison chart). This allows us to eliminate co$tly amenities, vastly reduce marketing costs and eliminate overall development profits. An average reduction of $40,000 per suite has been achieved to date in the City of Toronto and $20,000 in smaller municipalities.' . Why is Options talking to government agencies? Left on its own, the Options' concept will take AO to 50 years to become a successful national source for affordable housîng. Given proper policy support and infra-structure development support, low- and moderate-income Canadians can benefit from this concept in a significant way (10-20,000 units per year) within 5 years. Is Options willing to share its knowledge? YES. Options is not interested in becoming a national company with offices.in each major urb~ area. Instead we would prefer to train and monitor several non-profit organizations in the delivery of the Options' concept in their respective regions. If the opportunities were sufficient in any given region, Options would train several organizations. To date, OptIons is working with other organizations in Ottawa, in the Kitchener Waterloo region of Ontario, and in the Vancouver area of British Columbia. 'OtJ¡ 0# ATTACH M ENT#-1- TO REPORT#Q.3I-o~ Pickering evil: CO] , One The Espl¡ Piclœring, OJ D Ll1 Direct Attess 9D5.42C cltyofpickerlnE PICKERING OFFICE OF THE CHIEF ADMINrsTRATIVE OFFICER Deparlment 905.4,20.4648 Fac:shni1e 905.420.6064 c:ao@clty.piclœring.on.ca September 11, 2002 , EIio Zoffranieri Deltefí~ Inc. 4800 Dufferin Street Toronto, ON M3H 5S9 Subject: Tridel/Options for Homes Development of Final Phase' East of 1000 The Esplanade (Millennium Building) City of Pickering ,File: PO 1000 Thank you for yoÙr letter of August 29, 2002, respecting the 'request for deferral and reduction of cash-in-iieu for parkland dedicaUof1 fees, final phase-McLevin Corporation'. The City looks folìNard'to the completion of a quality development Qn this important block' within ou~ downtown. Your letter provides a specific proposal for, a reduction in cash-in-lieu of parkland .payment and makes reference to a forthcoming request from Mr. Labbe of Options for Homes for deferral of parkland payments and other charges such as development charges, building perr:nit fees, etc. ' , , ' , ,While I understand the reasòns for Tridel's' and Options for' Homes' request for relief in , variouspäyment requirements, I would be very concerned if the current marketing being conduç::ted by Options for Homes; including unit prices, is in any way dependent on financial relief being' approved by Pickering Council. To date the City has not provided an indication of its acceptance of any redwçtio"n or deferral of payments related to this apartment development. Our meeting of May 3', 2002 was a general discussion,. and it was concluded at that meeting that a City, position on any reduction or deferral of payment,s could only be determined following a definitive proposal by Tridel/Options for , Homes, and full consideration by Cquncil. \l\(hile ¡ can advise of my g,eneraJ support toa possible reduction in parkland' cash-in-lieu payment based 00 the same ~ormu¡a used for the Miflennium building, this" and other requested reductions/deferrals require t~e formal approval of Pickering Council. It would be inappropriate to secure pfjbIic interest 'in this development based on potential financial reductiqns/deferrals that have not been, formally approved. If any such assumptions have been included in the marketing ofthis project, those representing the project will be on their own to deal with any public concern, should approvals not be secured. ' Eno ZofITanieri Tr-idellOptioris for Home$ Development of Fina! Phase , L September 11,20D2 .' . Page 2, ,Upon receipt' of details from Mr. Labbe respecting proposed deferral? in fees and charges, f will instruct appropriate City staff to review thè request and report to me directly,' wiH then bring the matter.forward for CouncU'sconsideratiori, Again, I look. forward to working, with 'you in the col11.pletion of this final phase of dev~Iopment Yours truly " .....-- . . T ~9:lr Copy: . Mayor Arthurs Members of Council, , ' Directo'r', Corporate Services & Treas~rer Director, Operations & Eme~gency Services Director, Planning & DèJeloÞ.ment . Solicitor for the, City Michel Labbe (Options. fòr Homes) CiiJ¡.,a# Þ:rrACHlvlEl"¡T # -L ro REPORT#~ I ~ 0.;1 Pickering Civic Complex One The Esplanade Pickering, Ontario Canada LlV6K7 Direct Access 905.420.4660 cityofpickering.com September 16,2002 Michel Labbé President Options for Homes 468 Queen Street East Lower Level 2 P.O. Box 28 Toronto, ON M5A iT? Subject: Condominium Development at 1200 The Esplanade North McLevin Corporation City of Pickering - File: PO 1000 Thank you for' your letters dated August 23, 2002 and September 3, 2002, both of which were received at my office by fax on September 11, 2002. I have forwarded copies of these letters to appropriate City Staff for review and comment back to my office. I expect that a meeting will be arranged between yourself and City Staff in the near future to allow for further discussion of your proposal. I have attached for your information, a copy of my September 11, 2002 letter to Elio Zoffranieri of Deltera Inc., to which you were copied. The letter outlines the fact that to date, the City has not approved any reductions/deferrals of payments related to this project and expresses my concern if marketing of the project has included any dependency on financial relief from the City. While City staff will give full consideration to your proposal, any financial relief or area designation will require formal Council approval. Yours truly TJQ:lr Attachment Copy: Mayor Arthurs Members of Council Elio Zoffranieri (Deltera Inc.) Director, Corporate Services & Treasurer Director, Operations & Emergency Services Director, Planning & Development Solicitor for the City r..