Report to: General Committee Report Date: April 22, 2010

SUBJECT: Development Charge Credit/Reimbursement Application – Jade Kennedy Development Corporation

PREPARED BY: Kevin Ross, Ext 2126

Alain Cachola, Ext 2711

RECOMMENDATION:

1) That the report entitled “Development Charge Credit/Reimbursement Application – Jade Kennedy Development Corporation” be received;

2) That Council authorize Town Wide Hard Development Charge credits not exceeding $538,647.55 to Jade Kennedy Development Corporation, in accordance with the Town’s Development Charge Credit Policy for the cost of land acquisition and construction of South Unionville Avenue extension;

3) That Council authorize Area Specific Development Charge credits and reimbursement not exceeding $3,362,338.94 to Jade Kennedy Development Corporation for the cost of land acquisition and construction of a storm water management facility;

4) That the Mayor and Clerk be authorized to execute a development charge credit and reimbursement agreement with Jade Kennedy Development Corporation, or their successors in title to the satisfaction of the Treasurer and Town Solicitor;

5) And that staff be directed to do all things necessary to give effect to this report.

EXECUTIVE SUMMARY:

Not applicable.

PURPOSE:

The purpose of this report is to obtain Council’s authorization to grant Area Specific Development Charge credits/reimbursement and Town Wide Hard Development Charge credits to Jade Kennedy Development Corporation. The credits/reimbursement relates to works that are included in the Area Specific (ASDC) and Town Wide Hard (TWH) Development Charge by-laws as follows:

TWH – Road Construction

a) The design, contract administration and construction cost for the 3^rd and 4^th lane of sections of the South Unionville Avenue Extension from Kennedy Road to Greenwater Gate.

ASDC – Storm Water Management

a) The design, contract administration and construction costs of a storm water management facility and outfall adjacent to the South Unionville Square

b) The land costs related to the storm water management facility

These works are necessary for Jade Kennedy Development Corporation to proceed with development of their site located at 65M 3178, Block 172, RP 65R30830 Parts 4, 5, 8, 12 and 13, in South Unionville.

BACKGROUND:

Jade Kennedy Development Corporation (hereafter referred to as “The Developer”) is currently in the process of having their site plan approved for the construction of a mixed used development at 8333 Kennedy Road. The development is proposed to include office and retail space as well as townhouses with a two-level underground parking garage.

The Developer approached the Town requesting authorization to undertake the construction of the storm water management facility and outfalls, as well as the extension of South Unionville Avenue, subject to the Town providing development charge credits and cost reimbursement.

South Unionville Avenue

South Unionville Avenue is an east-west collector road identified in the Secondary Plan and is approximately 80% constructed. There are two (2) sections to be completed along South Unionville Avenue in order to provide a transportation link from Kennedy Road to McCowan Road and provide an alternate east-west route. The Developer’s construction will address the major section from Kennedy Road to Greenwater Gate (see Attachment A). The other section east of Harry Cook Drive is currently the subject of discussions with the South Unionville Landowners Group. A staff report providing the status of financing for this section will be carried to Council prior to the summer recess.

Town Wide Hard Credits - Road Construction

The Town Wide Hard Development Charge by-law quantified the cost associated with the property acquisition, design, contract administration and construction of South Unionville Avenue from Kennedy Road to Greenwater Gate. In order to facilitate an early completion of these works and meet their development schedule, the Developer has proposed to up-front finance and construct the Town related works (i.e. construction of 3^rd and 4^th lanes), in exchange for development charge credits, to be captured at the issuance of the building permit for their development. The Town has entered into similar agreements with developers in the past.

Certain components of these works, as shown below and as described above, have been included in the Town’s 2008 Town Wide Hard Development Charge By-law. The development charge (DC) credits will be limited to the lesser of $538,647.55 (the amount included in the Background Study) and the actual cost of the infrastructure. Based on the Developer’s tendered cost, the value of the works that qualify for DC credits will be $497,042.08. The cost of the works is not final at this point and the quantum of DC credits (which are based on actual cost) will more than likely vary somewhat from the tendered cost, to a maximum of $538,647.55.

The Town will secure these works to cover the warranty period through a construction agreement and the Developer will comply with all the Town’s standards for design and construction. The Developer has requested that these credits be applied upon the issuance of the Building permit when DC’s are calculated and payable. The Town is empowered to enter into credit agreements by Section 38(1) of the Development Charges Act, 1997 which provides as follows:

“If a municipality agrees to allow a person to perform work that relates to a service to which a development charge by-law relates, the municipality shall give the person a credit towards the development charge in accordance with the agreement.”

Summary of South Unionville Avenue Costs & Credits

Storm Water Management Facility (SWM)

The South Unionville area is substantially built out and requires the construction of a storm water management facility, as provided for in the 2008 DC Background Study, to provide the necessary drainage capacity required to service the remaining growth expected in the community. The stormwater management facility is proposed to be constructed to the North East of the South Unionville Avenue and Unity Garden Drive intersection (see Appendix A).

Area Specific 42A Credits/Reimbursement - SWM

The Area Specific Development Charge (ASDC) by-law quantified the cost associated with the property acquisition, design, contract administration and construction of a storm water management pond for the South Unionville area. In order to facilitate an early completion of these works, and meet their development schedule, the Developer has proposed to up-front finance and construct the storm water management facility and outfall, in exchange for (1) development charge credits for their ASDC’s and (2) a reimbursement of the remainder of their costs from the ASDC reserves when the works are complete and meet the Town’s approval. The Town has agreed in principle to grant development charge credits and reimburse the Developer for the actual costs incurred which will be limited to the lesser of $3,362,338.94 (the amount included in the Background Study) and the actual cost of the works estimated to be $3,101,345.44.

The Developer submitted an original design for the storm water management pond which did not satisfy the Town’s Engineering criteria for ponds (i.e. grading) and they were advised to provide another design that will satisfy the Town’s storm water management criteria. The Developer approached the Town and proposed an alternative design for the storm water to be conveyed to an underground tank rather than a surface pond. This storm water management design is new to the Town but will create more usable land space in the development as the land area above the storm water management facility can be used for recreational activities. The Town’s Engineering Department conducted an assessment of this proposal based on the drainage requirements of the South Unionville community and determined that (1) the construction of this facility will better serve the needs of the community and (2) after the construction of this facility, there will be no further requirement for storm water management facilities in the area. The Town notified the South Unionville Landowners Group of the proposal and conducted meetings with the parties to discuss the design and estimated cost of the facility.

Based on the Developer’s tendered cost, the value of the works that qualify for development charge credits will be $3,101,345.44. By utilizing the tendered cost, the Developer will be able to recoup the cost of the works through $154,346.50 in ASDC credits and the remainder of $2,946,998.94 through a reimbursement from the Area Specific 42A DC reserve account. The cost of the works is not final at this point and therefore the amount reimbursed (actual cost) will more than likely vary somewhat from the tendered cost, to a maximum of $3,207,992.44 ($3,362,338.94 – $154,346.50). The Town will secure these works to cover the warranty period through a construction agreement and the Developer will comply with all the Town’s standards for design and construction. The Town has entered into reimbursement agreements with developers in the past.

The community is substantially built out and as a result, the development charges currently in the Area Specific reserve fund (42A) is sufficient – based on the tendered cost – to cover the cost of the works. Town staff, therefore, recommends that the construction cost of the storm water management facility, net of ASDC credits, be paid to the Developer from the Area Specific 42A DC reserve. There are no other infrastructure works required in the area, therefore after these works are complete this by-law may be repealed at the next update of the Development Charge Background Study.

Summary of SWM Costs & Credits/Reimbursement

Development charge credits have been used in a number of development applications to facilitate the construction of infrastructure in advance of the Town’s capital program.

Town staff support this request for Town Wide Hard and Area Specific Development Charge credits, as well as Area Specific reimbursement, subject to the terms set out in the Development Charge Credit Policy, including:

· Definition of the scope of the work and the responsibilities of the Owner.

· Deposit of financial securities to guarantee completion of the work and payment of any additional development charges owing.

· Definition of credit and reimbursement amounts to be applied to the development.

· Identification of time schedules for various activities.

FINANCIAL CONSIDERATIONS

There is no net financial impact to the Town. Development Charge credits are provided to the developer in exchange for the construction of the works included in the Town’s Development Charge By-law. The amount to be reimbursed for the storm water management facility has been collected from prior development and also has no financial impact.

ENVIRONMENTAL CONSIDERATIONS:

Not applicable.

ACCESSIBILITY CONSIDERATIONS:

Not applicable.

ENGAGE 21^ST CONSIDERATIONS:

Not applicable.

BUSINESS UNITS CONSULTED AND AFFECTED:

Finance, Engineering and Legal Services Departments.

RECOMMENDED BY: