Developer short on cash – puts the touch on the city, city gives sweet deal. Better than maxing out the credit card.

By Staff

BURLINGTON, ON. May 29, 2011 The Molinaro Group given better than normal terms on development charges. Letter from the developers’ planner to the city treasurer

sets out the details and the rationale used.


February 3, 2010

Ms Joan Ford, Acting Treasurer

City of Burlington.


Dear Joan:

Re:     Request for Deferral of Development Charge Payments.

The Molinaro Group – 551 and 569 Maple Avenue, City of Burlington.

Please accept this letter as a request to defer development charge payments for the above project, which is a 186 unit condominium apartment building. We understand that the city has some experience in deferred development charge payments with separate policies for both residential and non-residential projects. With respect to the residential option, we understand the current policy permits deferring development charges for a building over 11 units in size for a period of 180 days on the condition that a Letter of Credit be provided for the full development charge amount.

This request is to modify that policy for this property in two ways. First, it is proposed that the development charges be paid in four equal installments at each of the four phases of developments as follows:

1st installment        At time of issuance of Building Permit for building foundation.

2nd installment    Six months after the issuance of the building permit for building foundation.

3rd installment    Six months after the second installment.

4th installment    The earlier of six months from the third installment, occupancy or registration of the project.

In addition, my client is requesting that there be no Letter of Credit provided during this time as it would defeat the intent and offset the benefit of staging the payments of development charges. In addition, it is the preference of my client not to pay any interest at the time installment payments are made. However, if an interest payment is required, they would recommend the interest rate be established at prime.

The rationale for this request is as follows. The sheer size of this project at 186 units creates a significant financial challenge of front ending all of the development charges when it will be approximately three to four years before the income is received by the developer from the time the initial payment is made. In other projects, including plans of subdivision and smaller multiple-unit properties registration ad the issuance of permits can be staged to a smaller, more manageable phases This not only minimizes the amount of payment required, but to allows the developer revenue on periodic basis to offset the cost of subsequent development payments. In this case. Full payment is required for all 186 units in advance of any income stream to the developer.

Secondly, as an infill project which utilizes, for the most part, existing infrastructure, we believe there will be less demand on development charges infrastructure costs for the Municipality than would be the case for greenfield developments.

The design of the project and support of the development by Council were focused in part upon the ability of the project to offer units within an affordable range, as defined by the Region. Any assistance which can be provided to mitigate somewhat the financial burden for this project through the staging of development charge payments would help to maintain the level of affordability provided by the project.

Another key feature of the development is the extent to which conservation initiatives are built into the development to achieve LEEDS accreditation. This reduction in the use of municipal services which is a key component of the LEEDSS accreditation process, will minimize the impact the project will have on municipal services

For the reasons outlined above, we feel the request is reasonable and will not create any significant financial impact on the Municipality. The developer is still committed to paying the full development charges. The staging of the payment of development charges is consistent with options available at other forms of housing.

Thank you for your consideration of this latter.


Fothergill Planning and Development Inc

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