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HomeMy WebLinkAboutPLN 22-25Report to Council Report Number: PLN 22-25 Date: October 27, 2025 From: Kyle Bentley Director, City Development & CBO Subject: Universal City Seven Developments Inc. – Request for Development Charges Deferral 1475 Celebration Drive File: D-5000-002 Recommendation: 1. That Report PLN 22-25 regarding Universal City Seven Developments Inc. – Request for Development Charges Deferral be received; 2. That, pursuant to By-law 8190/25, as amended, Council authorize the Mayor and City Clerk to execute a DC Deferral Agreement, subject to any necessary, agreed to, minor refinements as determined by the Director, Finance & Treasurer , the Director, Corporate Services & City Solicitor, and the Chief Administrative Officer; and 3. That the appropriate officials of the City of Pickering be authorized to take the actions necessary to implement the recommendations of this report. Executive Summary: The purpose of this report is to obtain Council’s approval for the City to enter into a Development Charges Deferral Agreement with Universal City Seven Developments Inc., pursuant to By-law 8190/25, as amended. City staff recommend approval of the Development Charges (DC) deferral, in accordance with the Council approved DC Deferral program (Resolution #760/25). The program delays the collection of DCs for Universal City Tower 7 (UC7) from the issuance of the building permit to the first occupancy. The rate at which the DCs would be calculated would be in accordance with the DC Act, which is based on the date the site plan application was deemed complete, namely April 29, 2022. This financial incentive will prevent any undue delay in the construction process of this development. Construction and occupancy of this building will also increase the City’s property tax revenues. Relationship to the Pickering Strategic Plan: The recommendations in this report respond to the Pickering Strategic Plan Priorities of Champion Economic Leadership & Innovation; and Advance Innovation & Responsible Planning to Support a Connected, Well-Serviced Community. PLN 22-25 October 27, 2025 Page 2 Financial Implications: Deferring DC payments places additional pressure on the City’s cash flow, as growth-related infrastructure must be financed in advance of DC collection. Normally, DCs are payable upon issuance of the first building permit; however, under a deferral agreement, the timing of payment is modified from building permit issuance to a different date specified in the agreement – in this case, occupancy. For large tower projects, which can take three to four years to complete, this delay may create DC cash flow issues, particularly for growth related capital projects funded through DC debt. For UC7, approximately $5.7 million (see Table 1) in City DCs would be deferred to occupancy, projected for October 2029, without any associated interest charges. The estimated interest loss associated with the deferred DC is $1,012,588 calculated using a notional investment return of 4.19 percent per annum, consistent with the City’s short-term investment yield. This rate reflects the opportunity cost to the City of funds otherwise held in the Development Charges Reserve Fund. This shortfall will be recouped through higher charges (DC rates) on future developments, shifting the cost of today’s discretionary reduction onto future growth. To bridge this timing gap, the City may need to rely on interim borrowing from DC reserve funds or external debt, which increases financial risk and long-term debt servicing costs. While the Province has encouraged municipalities to use tools that support housing supply, the City must balance these objectives against fiscal sustainability and the adequacy of its DC reserve fund balances. Although the Community Benefits Charge (CBC) does not form part of the DC deferral framework, it is noted for completeness that the proposed development is exempt from the CBC fee (Resolution #966/22). Discussion: The purpose of this report is to obtain Council’s approval to enter into a DC Deferral Agreement with Universal City Seven Developments Inc. (Universal City), pursuant to By-law 8190/25, as amended (DC By-law). PLN 22-25 October 27, 2025 Page 3 Background Universal City Seven Developments Inc. has received Site Plan Approval (File S 06/22) to construct one residential tower (UC7), containing 482 residential units (see Attachment 1, Approved Site Plan). The City deemed this application complete on April 29, 2022. This date is important because under Section 26.2 of the Development Charges Act, the DCs for the development as shown on the submitted site plan are fixed at the rates in effect on the date the Site Plan Application was deemed completed. At the Council Meeting of June 23, 2025 Council approved the 2025 Development Charge Background Study and enacted the corresponding DC By-law, which took effect on July 1, 2025 (Report FIN 08-25, Resolution #760/25). The DC By-law typically requires DCs to be paid prior to the issuance of a building permit. However, to support long-term growth and intensification, Council also approved (at this meeting) the introduction of a DC Deferral Program targeted to high-rise residential, industrial and commercial developments (Resolution #760/25). Phase 1 of this program commenced retroactively on April 1, 2025, and will continue until December 31, 2025. On June 16, 2025, Universal City applied to this DC Deferral Program to defer payment of the City’s DCs for UC7 until the date of first occupancy (as determined by the City). Over the past several months, City staff have been working diligently to review their application for compliance with eligibility criteria and completeness of the required documentation. Staff have determined that Universal City qualifies for a DC Deferral for UC7 and recommend that the City enter into a DC Deferral Agreement (see Attachment 2, Draft DC Deferral Agreement). Attachments: 1. Approved Site Plan 2. Draft DC Deferral Agreement between Universal City Seven Developments Inc. and the City of Pickering PLN 22-25 October 27, 2025 Page 4 Prepared By: Original Signed By Nilesh Surti, MCIP, RPP Division Head, Development Review & Urban Design Original Signed By Raghu Kumar Senior Financial Analyst Development Charges & Capital Management Approved/Endorsed By: Original Signed By Kyle Bentley, P. Eng. Director, City Development & CBO Original Signed By Stan Karwowski Director, Finance & Treasurer NS:KB:ld Recommended for the consideration of Pickering City Council Original Signed By Marisa Carpino, M.A. Chief Administrative Officer Attachment 1 to Report PLN 22-25 Approved Site Plan City Development Department Oct. 06, 2025FULL SCALE COPIES OF THIS PLAN ARE AVAILABLE FOR VIEWING AT THE CITY OF PICKERING CITY DEVELOPMENT DEPARTMENT. S 06/22 Universal City Seven Developments Inc. Applicant: DATE: File No: L:\Planning\01-MapFiles\S\2022 N SA N D Y B E A C H R D Attachment 2 to Report PLN 22-25 DEVELOPMENT CHARGES DEFERRAL AGREEMENT This Agreement is made the ___ day of October, 2025 BETWEEN: UNIVERSAL CITY SEVEN DEVELOPMENTS INC. (the “Owner”) -and - THE CORPORATION OF THE CITY OF PICKERING (the “City”) RECITALS WHEREAS: (a)the City of Pickering passed by-law number 8190/25 (the “City DC By-law”), which imposes development charges against land to pay for increased capital costs required because of increased needs for services arising from development of the area pursuant to the City’s authority under the Development Charges Act, 1997, S.O. 1997, c. 27 (“DC Act”); (b)the City DC By-law permits the City to enter into agreements in accordance with section 27 of the DC Act, to provide for all or any part of a development charge to be paid before or after it would otherwise be payable; (c)pursuant to Report FIN 08-25 adopted by City Council, the City is offering a development charge deferral program for eligible developments that will allow an applicant to pay the applicable development charge s at first occupancy (the “City’s Development Charge Deferral Program”); (d)the Owner is the registered owner of the property municipally known as 1475 Celebration Drive and described in Schedule “A” attached to this Agreement (the “Property”); (e)the Owner has applied for an approval for which development charges are payable within the meaning of the City DC By-law in respect of the Property in order to permit the construction of a 482 Unit condominium development (the “Development”); Page 2 (f) the Owner has requested to enter the City’s Development Charge Deferral Program to defer the payment of development charges relating to the Development which would otherwise be due and payable at or prior to the issuance of the building permit pursuant to the City DC By-law to First Occupancy in accordance with this Agreement. (g) The Parties agree that this Agreement shall be registered against title to the Property by the City in accordance with subsection 51(26) of the Planning Act. NOW THEREFORE in consideration of the mutual covenants hereinafter contained, the sum of ten dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: INTERPRETATION Definitions 1. In this Agreement and in the recitals above, (a) “Agreement” means this Development Charges Deferral Agreement; (b) “Development Charge Amount” means any development charges related to the Development or the processing of any application relating to the Development by the City, and without derogating from the generality of the foregoing development, payable to the City by the Owner pursuant to the following: (i) the City of Pickering Development Charges By-law, being By-law No. 8190/25, as amended or replaced from time to time. (c) “Due Date” means the date that is two (2) business days following first occupancy of the Development as defined herein; (d) “Owner” means the Owner identified on page 1 hereof and such Owner’s heirs, administrators, successors and permitted assigns; (e) “City” means The Corporation of the City of Pickering acting as a body corporate and all its successor corporations and entities, their past, present and future elected and appointed officials, officers, representatives, employees, servants, agents and their respective successors, assigns, heirs and administrators; (f) “Prime” means the annual rate of interest announced by the Royal Bank of Canada from time to time as being a reference rate then in effect for Page 3 determining interest rates on commercial loans made in Canadian currency in Canada; (g) First Occupancy: means the date an Authority to Occupy certificate is issued for the building by the City of Pickering, or the first occupancy of the building, whichever is sooner; (h) Occupancy: means the definition listed in the Ontario Building Code 2024, under regulations per section 34 of the Building Code Act, 1992 . Schedules 2. The following Schedules are attached to and form part of this Agreement: Schedule A Legal Description of the Property Schedule B Residential Development Charges Information Form(s) Schedule C Letter of Credit Template DEVELOPMENT CHARGE DEFERRAL Development Charge Amount 3. The Parties agree that the site plan application date for the Development is April 29, 2022 and therefore the applicable DC rate for a 1 Bedroom Condominium Unit is $9,707.00; for a 2 Bedroom Condominium Unit $13,702.00; and for a 3 Bedroom Condominium Unit $13,702.00 provided the first building permit is issued within two years of the date the site plan application is approved. DC Rate Schedule Total Units Applicable DC Rate Total One-Bedroom & Smaller Condominium 329 $9,707.00 (4/29/2022 Rates) $3,193,603.00 Two-Bedroom Condominium 141 $13,702.00 (4/29/2022 Rates) $1,931,982.00 Three-Bedroom Condominium 12 $13,702.00 (4/29/2022 Rates) $ 164,424.00 Interest Calculation(s) n/a 2.25% $384,944.35 Page 4 4. The Parties agree that the total number of units in the Development that are subject to the residential development charges rates under the City DC By-laws is 482 with 329 units at the 1 Bedroom & Smaller Condominium rate and 141 units at the 2 Bedroom Condominium rate and 12 units at the 3 Bedroom Condominium rate, for a total of 482 units, as identified above and in Schedule B, Residential Development Charges Information Form(s). Interest between April 29, 2022 and Conditional Building Permit Issuance (June 26, 2025) is $384,944.35. The Total amount of the Development Charges is $5,674,953.35 as shown in Schedule B. 5. The Owner acknowledges and agrees that the deferral of development charges under this Agreement only applies to the units of the Development that are subject to the residential development charges rates under the City DC By-law and does not apply to any other area of the Development that is subject to other development charges rate(s). 6. The Parties agree that the amount of the Development Charge Amount applicable to the Development based on the number of units and the residential DC rate that would otherwise be payable but for the deferral under this Agreement is $5,674,953.35. 7. Notwithstanding sections 3 and 6, the Owner acknowledges and agrees that if, prior to the date the first building permit is issued, the number or type of units subject to residential development charges change, the Development Charge Amount will be re-assessed and calculated pursuant to the City DC By-law. 8. Notwithstanding sections 3 and 6, the Owner acknowledges and agrees that if the first building permit is not issued for the Development by the end of business on January 15, 2027, the applicable residential DC rate and the Development Charge Amount is subject to change. The applicable residential DC rate and the Development Charge Amount will be re-assessed and calculated pursuant to the City DC By-law in accordance with the DC rates in existence at that time. 9. The Parties agree that the Development Charge Amount shall be paid on or before the Due Date. The Owner agrees to notify the City that the Development is to be occupied within five (5) business days of the First Occupancy. 10. The Parties agree the interest rate that shall be applied to the Development Charge Amount shall be Prime percent per annum which shall accrue from the first day following the Due Date. Interest shall become payable only upon default of this Agreement by the Owner. 11. The Owner agrees that if the payment is not received, in whole or in part, by the payment’s applicable Due Date, without limiting or prejudicing and in addition to any other right or remedy the City has in law, the City may draw upon the Security Page 5 to satisfy the unpaid Development Charge Amount and accrued interest and any outstanding amounts not satisfied by the Security may be added to the tax roll for the Property and collected as realty taxes by the City. 12. The Owner acknowledges and agrees that it has not and will not file a complaint pursuant to the Development Charges Act, 1997 with the City or in any other forum, with respect to the determination and application of the Development Charge Amount. OTHER MATTERS Security 13. The Owner shall file with the City a letter of credit (the “Security”) in the amount of $5,674,953.35 (100% of the Development Charge Amount) prior to obtaining a building permit for the Development in order to guarantee the due performance of all of the Owner’s obligations under this Agreement. The Security shall be in a form satisfactory to the City’s Treasurer, as per Schedule C, the Letter of Credit Template. Termination 14. Notwithstanding any provision in this Agreement, the Owner agrees that this Agreement terminates, and the unpaid amount of the Development Charge Amount plus applicable interest, if any, becomes due and payable immediately in full in the event of any default or breach of this Agreement that has not been remedied within five (5) business days following receipt by the Owner of written notice of such breach or default. For purposes of this Agreement, a default or breach of this Agreement shall be deemed to include, but not limited to the following: (a) the Property, in whole or the portion of the Property upon which the Development is located, is sold or otherwise transferred by the Owner; (b) a mortgage, charge, lien, execution or other encumbrance affecting the Property becomes enforceable against the Property and has not been vacated or discharged; (c) the Owner becomes bankrupt, whether voluntary or involuntary, or becomes insolvent or a receiver/manager is appointed with respect to the Property; or (d) payment payable under this Agreement remains unpaid for more than ninety (90) days after it is due and two (2) notices have been provided to the Owner. Page 6 15. Notwithstanding subsection 14(a) above, the Agreement shall not terminate if the subsequent owner or transferee, prior to the date of the sale or transfer of the Property, enters into an agreement with the City in a form and substance satisfactory to the City, acting reasonably, where the subsequent owner or transferee agrees to observe and perform all of the Owner’s covenants, agreements and obligations under this Agreement as if the subsequent owner or transferee was an original party hereto. The Owner shall not assign or transfer this Agreement without the written consent of the City. 16. The Parties agree that it shall be a default if the Owner fails to obtain the building permit, or if the Development requires more than one building permit, the first building permit, by December 31, 2025. Indemnity 17. The Owner agrees to defend, indemnify and hold harmless the City from any and all manners of action, causes of action, claims, suits, losses, debts, dues, accounts, bonds, covenants, contracts, damages, costs, interest, demands, liabilities, applications, directives, third party claims or actions, and prosecutions, directives and/or orders by a governmental authority, directly or indirectly incurred, sustained or suffered by or asserted against the City arising out of, relating to or resulting from the breach of this Agreement and any other obligation of the Owner under this Agreement; provided, however, that the foregoing indemnity shall not apply with respect to a breach by the Owner that arises as a result of the negligence or wilful misconduct of the City or anyone for whom the City is responsible in law. 18. Without limiting any of its covenants and obligations set out elsewhere in this Agreement, the Owner agrees to pay all reasonable costs and expenses in connection with (a) the registration and discharge of this Agreement against title to the Property; (b) the preparation of consents to this Agreement; (c) the preparation of assumption agreements for this Agreement; (d) without limiting the generality of the foregoing, all reasonable legal costs and expenses incurred by the City in the event that it takes any legal action in response to any breach or default of this Agreement by the Owner. 19. The Parties agree that the obligations contained in section s 17 and 18 shall survive expiration and/or termination of this Agreement. Page 7 Registration 20. This Agreement shall be registered against title to the Property by the City and shall be enforceable against the Owner and all subsequent owners of the Property. 21. The Owner shall reimburse the City for the cost of registering this Agreement and all related documents against title to the Property, including, but not limited to: (a) the registration and discharge of this Agreement against title to the Property. 22. At the request of the Owner, the City shall forthwith execute a consent to the discharge of this Agreement from title to the Property provided that the Owner has paid to the City the full Development Charge Amount, all other amounts outstanding under this Agreement, and registration expenses for such release. Recitals 23. The recitals contained in this Agreement are true and correct and are legally binding and form a true part of this Agreement. Extended Meanings 24. This Agreement shall be read with all changes in gender or number as the context may require. Further Assurances 25. The Parties covenant and agree that at all times and from time to time hereafter upon every reasonable written request to do so, they shall make, execute, deliver or cause to be made, done, executed and delivered, all such reasonable further acts so as to effectively implement and carry out the true intent and meaning of this Agreement. Notices 26. Any notice required in writing in this Agreement shall be delivered to the following address: To the Owner at: Attention: Steven Warsh, President (Chestnut Hill Developments) Phone No.: 416.649.4470 E-mail: stevenwarsh@chestnuthillhomes.ca Page 8 And to the City at: One The Esplanade Pickering Civic Complex Pickering ON L1V 6K7 Attn: City Clerk 27. Notice shall be sufficiently given if: (a) delivered in person; (b) sent by registered mail; or (c) sent by electronic transmission during normal business hours on a business day. 28. Each notice sent shall be deemed to have been received, (a) on the day it was delivered; (b) on the fifth business day after it was mailed (excluding each business day during which there existed any general interruption of postal services due to strike, lockout or other cause); or (c) on the same day that it was sent by electronic transmission or on the first business day thereafter if the day on which it was sent by electronic transmission was not a business day. 29. The Owner may change its address for notice by giving notice to the City Clerk in the manner provided in this section. Time of the Essence 30. Time is of the essence of this Agreement and every part of this Agreement and no extension or variation of this Agreement shall operate as a waiver of this provision. 31. When calculating the period of time within which or following which any act is to be done or step taken pursuant to this Agreement, the date which is the reference day in calculating such period shall be excluded. Rights and Remedies 32. All rights and remedies given to the City by this Agreement are distinct, separate and cumulative and may be jointly or separately exercised by the City and shall Page 9 not be deemed to be in exclusion of any other rights or remedies available to the City under this Agreement or in law. No delay or omission by the City in exercising any such right or remedy shall operate as a waiver of them or any other right or remedy, and no single or partial exercise of a right or remedy shall preclude any other or further exercise of them or the exercise of any other right or remedy. 33. This Agreement is made entirely for the convenience and benefit of the Owner and is in no way to be construed as a waiver or surrender of any rights or remedies that the City may have to recover the Development Charge Amount by any lawful means from present and future owners of the Property or as taxes upon the Property. Successors and Assigns 34. The Owner shall not assign this Agreement without first obtaining the City’s consent which may not be unreasonably denied. 35. This Agreement shall enure to the benefit of and shall be binding upon the Parties hereto and their respective heirs, executors, administrators, successors and permitted assigns. Entire Agreement 36. This Agreement constitutes the entire agreement between the Parties with respect to the matters set out herein and may not be modified except by subsequent agreement in writing and executed by the Parties. Severability of Terms 37. All of the terms of this Agreement are severable from each other and will survive the invalidity of any other term of this Agreement. Acknowledgment 38. The parties acknowledge having had an opportunity to review this Agreement with their legal advisers and acknowledge that they fully understand all of the terms contained in it and that the only consideration for this Agreement is as referred to above. Applicable Law 39. This Agreement shall be construed in accordance with and governed by the laws of the Province of Ontario. Page 10 Electronic and Counterpart Signatures 40. This Agreement and any Ancillary Agreements may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which, when taken together, shall be deemed to be one and the same agreement or document. A signed copy of this Agreement or any Ancillary Agreement transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Agreement or such Ancillary Agreement for all purposes. 41. This Agreement shall be effective from and after the date of signing by the City, or by its duly authorized designates. IN WITNESS WHEREOF the parties have executed this Agreement and if required may do so with counterpart signatures. OWNER 2025/ / Name: Title: 2025/ / Name: Title: I/We have authority to bind the Corporation THE CORPORATION OF THE CITY OF PICKERING 2025/ / Kevin Ashe, Mayor 2025/ / Susan Cassel, City Clerk Page 11 Schedule A Legal Description of the Property CON 1 S PT LOT 21 NOW 40R30834 PART 3 (NOW 40R32304 PARTS 8, 12, 13, 15, 19-20) [NTD: To be provided by Owner] Page 12 Schedule B Residential Development Charges Information Form Universal City Seven (UC7) CITY DEVELOPMENT CHARGES RATES BASED UPON DEVELOPMENT SITEPLAN APPLICATION DEEMED COMPLETE DATE OF APRIL 29, 2022. Page 13 Page 14 Page 15 Schedule C See Attached Letter of Credit Template. Required form for Letter of Credit [Insert name of]) Agreement To: The Corporation of the City of Pickering, Civic Complex One The Esplanade, Pickering, ON L1V 6K7 Re: Description of Lands Affected (Use exact description from ‘Lands Affected’ clause in Agreement) City File: (SP#, S# or D#) We hereby authorize you to draw on [insert name of bank], [insert address of bank], for account of [insert name of company or companies obtaining security] up to an aggregate amount of [insert amount of security in figures and in full] available by drafts at sight for 100% on demand as follows: Pursuant to the request of our customers(s), the said [insert name of company or companies obtaining security], we [insert name of bank], [insert address of bank], hereby establish and give to you an irrevocable Letter of Credit in your favour in the total amount of [insert amount of security in numbers and in words] which may be drawn on by you at any time and from time to time upon written demand for payment made upon us by you which demand we shall honour without inquiring whether you have a right as between yourself and our said customer(s) to make such demand, and without recognizing any claim of our said customer(s) . Provided, however, that you are to deliver to [insert name of bank], [insert address of bank], at such time as a written demand for payment is made upon us a certificate signed by you agreeing or confirming that monies drawn pursuant to this Letter of Credit are payable to you or are to be or have been expended pursuant to obligations incurred or to be incurred by you with reference to your file regarding a [insert either Site Plan Control, Subdivision or Development Agreement] dated [insert date of Agreement], between [insert name of owner referenced on Agreement, other than City and Encumbrancer(s)] and The Corporation of the City of Pickering; this Letter of Credit is required pursuant to section of that Agreement. Partial drawings are permitted. The amount of this Letter of Credit shall be reduced from time to time as advised by notice in writing given to us from time to time by you. This Letter of Credit will continue up to and including [insert date of expiry of Letter of Credit] and will expire on that date and you may call for payment of the full amount outstanding under this Letter of Credit at any time up to the close of business on that date. It is a condition of this Letter of Credit that it shall be deemed to be automatically extended for one year from the present or any future expiration date hereof, unless thirty days prior to any such date, we shall notify you in writing by registered mail that we elect not to consider this Letter of Credit renewed for any such additional period. We hereby covenant with drawers, endorsers, and bona fide holders of drafts drawn under and in accordance with the terms of this credit that such drafts will be duly honoured if drawn and negotiated on or before [insert date of expiry of Letter of Credit] or any automatically extended expiry date. The drafts drawn under this credit are to be endorsed hereon and shall state on their face that they are drawn under [insert name of bank], [insert address of bank]. Dated this day of , 20 . Instructions for completing Letter of Credit: 1. Letter of Credit must be typed on bank letterhead. 2. Information required in square brackets must be provided where indicated, without brackets. 3. Phrases shown in round brackets must be included without brackets where there are two or more companies comprising the customer. 4. The date in the sixth paragraph must be at least one year from the date of the Letter of Credit. 5. The date in the seventh paragraph must be the same as the date in the sixth paragraph. 6. Bank signatories must show name, printed or typed, and title, in addition to signature. Acceptable Banking Institutions: 1. Letters of Credit may be accepted from any of the following six largest banks set out in Schedule I of the Bank Act (R.S.C.1985, C.B-1.01, and any amendments thereto): • Bank of Montreal • Bank of Nova Scotia • Canadian Imperial Bank of Commerce • National Bank of Canada • Royal Bank of Canada • Toronto Dominion Bank 2. Letters of Credit may be accepted from other Schedule I banks and Schedule II banks listed in the Bank Act (R.S.C. 1985, C.B-1.01 and any amendments thereto), that meet and maintain minimum credit ratings as described in the City’s Letters of Credit Acceptance policy 3. Letters of Credit from any other institutions, including trust companies, credit unions and Schedule III banks, will not be accepted.