September 24, 2013
By Pepper Parr
BURLINGTON, ON.  Sometime in the next couple of week Nicholas Carnacelli will wander across Brant Street to city hall and sit with people in the Planning department, perhaps the Director of Planning Bruce Krushelnicki, and sign the Section 37 Agreement that he wanted.
If Carnacelli was a real sport he would invite Krushelnicki over to the restaurant on the ground floor of the building he owns that houses a decent restaurant and treat him to a decent lunch.
After more than three years of reports, teeth gnashing and hand wringing city hall staff bent to the will of a developer and did it the way he wanted. Was the developer right? Was city hall staff being led around by the nose? The real truth is in there somewhere.
The issue was all about a Section 37 Agreement – which is part of the planning act that lets a city give a developer additional height and density in a development in return for specific benefits that get given to the city. Burlington is one of the few cities in the province that use Section 37 Agreements. One of the reasons for that is we happen to have a Director of Planning who understands fully what can be done with this type of agreement.
Unfortunately, with this specific situation someone one not only dropped the ball – they lost the darn thing and now had a mess on their hands. Someone either thought or wanted affordable housing on the table when it was about parking right from the beginning in the mind of the developer and it was his money everyone was talking about.
Having the Council member who was the strongest advocate for affordable housing unable to properly understand Section 37’s and the process used to get into one of them didn’t help.
The Carriage Gate development will occupy a full city block and change significantly the streetscape for people who live on Caroline east of Brant
The city needs the development at John and Caroline and Nick Carnacelli, president of Carriage Gate, wasn’t about to put up a building filled with affordable housing that he would have to sell the Region who would then rent them out to people who qualified for affordable housing.
In order to sell units to the Region Carnacelli had to price them at a particular price point and these were not going to be units with granite counter tops and high-end appliances which is where the good margins exist
Carnacelli was never going to actually be in the affordable housing business but there were people who wanted him to price his units so they could be bought by the Region and then rented out.
Ward 2 Councillor Meed Ward argued for the need for more affordable housing – and claimed the need was rising. The idea that 73% of the units of a building were to be priced so they could be made into affordable units was a pipe dream at best and someone should have caught this one before it went as far as it did.
The development will be the biggest project the city has seen since the late 80’s.
Carnacelli wanted to put up an eight story office tower that would house medical types for the most part and have the 17 story units consisting of apartments that would be registered as condominium units. In between the two structures would be an eight story garage.
All the back and forth about the make-up of the Section 37 Agreement would have taken place between the planning department and the developer. It is clear now that there was a major disconnect between the two – this isn’t the first time a developer didn’t want to go along with what a planner hoped to see. It does appear to be the first time in Burlington where a developer has balked so publicly. According to the Director of Planning Burlington has done less than ten Section 37 Agreements.
Given the mess this agreement became perhaps the city should just get out of looking for section 37 agreements.
During the debate Monday evening all kinds of little gems of information came to the surface. According to Meed Ward the Region will pay up to $255,400 for a condominium unit that it will then make available to those needing affordable housing.
That sets a price the developer has to sell for if the units he is building are going to be sold as affordable housing. Difficult to have one price for units sold to the Region and another price sold to anyone that comes along – so you have a building full one and two bedroom units being sold for $244,500 – south of Caroline – in Burlington?
There was an audible gasp in the public seating section of council chamber when Meed Ward said the annual income level for an affordable units was $90,000 – really? And that no more than 30% of the annual income could be spent on housing. Thirty percent of that $90,000 income is $30,000 a year which works out to rent of $2500 per month –  where did those numbers come from?
During the debate the Mayor and several Council members spoke of the lesson learned – weren’t they supposed to have known what the math on all this was before they made a decision back in 2010
Ward 2 Councillor Marianne Meed Ward was the lead council member on this file and turned out to be the only person that voted against the staff report which was instruct the City solicitor to amend the agreement with the developer and instruct the Director of Planning request that the owner enter into the agreement.
Can you imagine, a condominium unit south of Caroline being sold for that sum. Carriage Gate will sell its units for whatever the market will bear. The units that are to affordable would be condominium units bought by the Region and then rented out to those who met the affordable housing income levels.
This intersection will become the northern anchor for a block long project that will put a medical office building and a 17 storey condominium tower and an eight story parking garage into a part of the city that has been two storey buildings for decades. Change never comes easily to any community – how will Burlington handle this change?
The developer chose not to sign the Section 37 Agreement that required him to price 70% + of his units at the $255,400 level to meet the WHAT. The planners rethought the situation, wrote up a second report and asked Council to amend the original agreement, which was never signed. The planners were satisfied, the majority of Council was satisfied.
Carnacelli will sign the new agreement, the planning department will recommend that the zoning be changed which council do and the developer can get on with putting up the first significant development the city has seen since the 80’s.
There were some who felt the changes the developer wanted meant the project was now a completely different project and should be started all over. Doing something like that would have sent the file to the Ontario Municipal Board where this developer has won the last two cases that he took there.
Meed Ward did her best to bring about a change. She failed, but she will be back, hopefully with a clearer understanding of how Section 37 agreements really works.
