Downtown development faces challenge from local residents who claim rules are being broken.

September 23, 2013

BY Pepper Parr

BURLINGTON, ON.  It has been so long since Burlington has seen a high-rise building that includes office space in the city that we may have forgotten what this kind of development means to a city.

An eight story office building and a 17 story apartment building with an above ground parking garage in between the two.  Somewhere along the way some people let themselves believe that 70+% of the apartments were going to be affordable housing.

The Carriage Gate project is a  mixed use development consisting of an 8 storey office building, a 17 storey, 154 unit apartment building, an 8 storey above-ground parking garage, three levels of underground parking garage, and ground floor retail/service commercial uses.  

A group of citizens will argue before Council that changing the content of the Community Benefits negotiated in exchange for extra height and density on the Caroline/Elizabeth Street development is a mistake and are asking: “Do they have the right to make this change or does this become a new project?”

In 2010, council approved the project and changed the Official Plan on this site to grant double the height for an 8 storey office building and parking garage, and over four times the height for a 17 storey apartment building.

In exchange, the Developer agreed to negotiate a Section 37 Community Benefits Agreement which was to have over 70% of the units as “affordable” housing under Halton Region’s definition of affordability.

Nick Carnacelli, the developer doesn’t see things this way. He argues that he got the additional density for the parking that he put in place and that affordable housing was not part of the deal.  At the committee meeting where the issue was threshed in the city planner explained that while some people felt there was a deal in place – there is no deal in place until the documents are signed and as of today the Section 37 agreement has not been signed.  The city did approve the change to the Official Plan

According to community advocates the community benefits document that was to be signed by the develop included:  a) providing an additional 269 parking spaces; b) Apartment to be constructed to LEED certified environmental standard; c) Parking garage will contain a green roof design and  d)  Residential component will have over 70% affordable housing units.”

The Official Plan change was approved and changed. The developer is asking for a reduction in the affordable housing component from 73% to 27%. 

The community advocates maintain the developer is not now willing to sign the agreement.  They argue that the project cannot proceed until the Section 37 Community Benefits Agreement is signed as it was an integral aspect of the deal and was to be registered on the title of the property.  They add that the zoning bylaw cannot be changed and a building permit cannot be issued until the Section 37 Agreement is signed .

The change to the Official Plan has already be made but the zoning by-law amendment remains outstanding. Some were surprised that any changes could be made without the attendant agreements being signed or that the changes to zoning and the official plan were not made conditional to the community benefits agreement.

Bruce Krushelnicki patiently explains that Section 37 agreements cannot be made conditional.  The benefits to the community are separate from the issuing of an Official Plan change or a change in the zoning bylaw and the issuing of a building permit.

“A section 37 Agreement is one that allows the city to reap certain benefits when an advantage is given to a developer allowing an increased return on a development.  The development has to stand on its own merits – it is only if it stands on its own merits and is approved by a city council that we planners can then negotiate a Section 37 agreement.”

Much of the council committee debate on affordable housing focused on the question: is there a place for affordable housing in the downtown core south of Caroline?  Where should affordable housing be located and who should be paying for that housing?.  Council committee heard arguments that social housing is a Regional responsibility and should be addressed at the Regional level and that developers should not be expected to take on this social service.  The city already has a significant amount of social housing on John Street, immediately north of Pine and south of the Burlington transit station.

 Staff and the owner agreed to a total direct community benefit valued at $6-7 million to be spent in the provision of parking as well as several other benefits that do not have direct costs but which are nevertheless community benefits.

The Planning department also notes that other Section 37 Agreements where affordable housing was secured the amount was less than 30% in  all instances.

Carnacelli explained that the affordable housing units he would have built were so small that families would not be able to live in them thus defeating the purpose of social housing in the downtown core.

Is the city working with a developer who has out maneuvered them several times?  Does the developer understand the process better than the people he has to deal with at city hall?

The project has been something of a paper nightmare for the planning department.  A condition of the agreement approved by Council in 2010 was the imposition of an 18 month deadline for the signing of the required agreements. The bylaw passed by Council at that time was not enacted because Carriage Gate Group Inc. did not enter into the required agreements or pay the rezoning unit fees within the specified time-frame. The conditional approval lapsed on January 5, 2012.  In September of this year  Council granted an 18 month extension to the approval lapsing date.

Carnacelli faces some exceptionally stiff costs on the hydro side of the project.  In order to get hydro to the site he was expected to pay for the cost of getting a hydro lines up from Lakeshore to his site.  Once that hydro line is in place anyone south of the Carnacelli site, which is at Caroline and Elizabeth, would get a free ride.  Carnacelli felt hydro should put the line in and then have anyone developing along the route pay for a share of the cost.

The Molinaro Group didn’t have to pay for the costs Carnacelli is expected to pay to get hydro into  the buildings they  built along Lakeshore Road because the hydro line ran along Lakeshore.

The Carriage Gate project is to have a total of 522 parking spaces of which 193 spaces were required for the residential portion of the development and 60 public spaces were required as part of the land sale. The site is located within the Downtown Parking Exemption Area (DPEA) and therefore the provision of parking is not required except for the residential units. The developer was thereby providing an additional 269 spaces that would not otherwise be required by this development. The estimated value of these parking spaces to service non-residential development is approximately $6-7 million. The developer however will charge a fee for those parking spots when they are used.

The staff report points out that approval was granted almost three years ago  when the initial Section 37 community benefits were being discussed.  In that time economic and market conditions have changed. In that time costs, including but not limited to, development charges, hydro and construction, have increased significantly.

The community advocates argue that a lot of  due diligence, expense and research went into the preparation of the original Staff Report presented to Council on July 5, 2010 which included wording for a Section 37 Community Benefits Agreement which they maintain resulted in the approval of the development. 

They suggest that “if the deal can be changed on this development after the approval process has been completed, this sets a precedent going forward for every Development throughout the entire City of Burlington.”  True perhaps but the Section 39 “deal” has not been signed and as Krushelnicki explains – it isn’t a deal until it is signed.

The community advocates argue that “altering a Section 37 Agreement after the approval process is complete merits a very serious review as developments of this size are going to change the landscape of Burlington forever and this deal sets a serious precedent going forward.  When is a deal not a deal?

Krushelnicki would respond – a deal is not a deal until it is signed.

The community advocates suggest that any change to the approved Section 37 Community Benefits Agreement on the Carriage Gate Development makes it a different project and thus warrants further serious review.

The signatories to any agreement can negotiate changes before the agreement is signed and city planners have reviewed the requested changes and approve of the requested changes.

 Is this a battle between Marianne Meed Ward, Councillor for that part of the city this project is to be built in, and the development community along with those who argue Burlington desperately needs new office development in the downtown core if the city is to have a core that is viable?

There are some impressive properties along Caroline that may not be comfortable with a large office/residential complex parked on their shoulder.

There are those who argue that Meed Ward does not understand the economics of development and is giving the city a bad reputation as a place for developers to ply their trade.

The city has to comply with a provincial Policy Statement that requires the Region to develop a specific amount of housing and a specific number of jobs.  The city does not have a choice – that is what we must do and if a project like Carriage Gate helps the city meet that requirement – they will negotiate the best deal they can get and then happily approve it.

Burlington currently faces negative net growth in the amount of Industrial, Commercial and Institutional (ICI) tax levels.  The money to run the city comes from taxpayers for the most part and if it isn’t raised on the ICI side – then it will come from the residential side.

The issue, actually the elephant in the room is what kind of development will there be in the downtown core?  That’s one on which there is the kind of community consensus this council would like to see. Should Burlington office development just be on the North and South Service Roads and over along Burloak?

During the committee debate Meed Ward suggested that if the community benefits were being scaled back then the height and density given should be scaled back as well.

The buildings in this photograph are gone – the developer bulldozed everything as they moved on both the constructions and their marketing plans.

What Carnacelli argues is that the development charges he has to pay have increased 40% since he started work on the project.

Staff in their report have recommended to Council that the city solicitor be directed to re-work the Section 37 agreement and have it conform to what the developer has asked for while a group of citizens want Council to send the project right back to the drawing table and see it as a new project.

The developer has already flattened the buildings that were on what was once called Tudor Square and has begun to market the project.  Would anyone care to wager on what city council will do Monday evening?  If there is ever going to be any serious or significant development in the downtown core the Carriage Gate project has to be approved.  That might mean holding their nose for some.





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1 comment to Downtown development faces challenge from local residents who claim rules are being broken.

  • Susan Lewis

    I didn’t know that one parking spot costs between $23,300.00 and $26,000.00. Wow, cars cost a lot more than I realized.

    (“The estimated value of these parking spaces to service non-residential development is approximately $6-7 million.” divided by 269 spaces.)
    Editors note: It’s not quite that simple. An underground parking spot is said to cost $30,000 to put in place.