Interest charge

‘Opportunity to accelerate’: Barrie could set precedent by allowing development fee deferral for Owen Street project

County of Barrie Robert Thompson.

Is this the exception to the rule or a new standard set for development in the City of Barrie?

The General Committee approved a motion on September 12 that allows for the deferral of full payment of development charges (DC) for part of a 273-unit development on Owen Street, between Worsley and MacDonald streets, until the date of occupancy. The decision must be confirmed at the next meeting of the municipal council.

Junction Group, on behalf of Traditions Seniors Housing, requested the postponement.

“As this is such a big issue in our housing shortage, it’s a great opportunity to ramp up and (incentivize) to start building,” the adviser said. said Robert Thomson. “If they don’t build anything, it’s more of a burden.”

Under the terms of the plan, the deal would be interest-free for its first year and the developer would apply for building permits within 120 days of the deal.

After recent updates, Ontario’s Development Charges Act now allows a similar type of deferral for certain dedicated rental and institutional properties – for-profit builders are allowed to pay more than six equal annual installments, the first payment being due on the initial date of occupancy. Non-profit housing has a longer deferral period of 20 years and 21 equal annual payments.

The problem with Owen? While 223 of the 273 units would be subject to the agreement because they are rental properties, the other 50 will be condominiums.

“This sets a new precedent,” the adviser said. said Gary Harvey. “If we pass this, will it set a precedent for other developers who come knocking on the door looking for the same thing?”

City chief financial officer Craig Millar expressed a similar concern.

“Staff don’t recommend it,” he said. “Creating policy decisions based on individual projects can set a precedent and could advance other developments seeking deferral agreements or exemptions outside of the city’s current framework and related regulations. Such decisions could have a negative impact on the city’s finances, planned capital budget and credit rating.

This deferral agreement could cost the City up to $500,000 in lost interest.

However, these types of incentives can be key to solving the “shortage” of purpose-built rentals available in the city, Mayor Jeff Lehman said.

“This building may not need a new pumping station, but five or 10 will; it’s expensive,” he says. “Who is going to pay for this? CDs are pooled, and each time you give a break, that pool shrinks and the taxpayer has to pick it up. I will support it because it is a very unusual circumstance. The previous one is unlikely to be a problem.

“We’re at this really strange point where we’re seeing other high-rise projects slowing down. (The) average selling price of all homes in Barrie is down, but, at the same time, we’ve had a great 22% increase in construction cost. The economy has changed so much. I wouldn’t want that to become common practice. (But) the better the offer.”

Lehman also noted that while the council entered lame-duck status in mid-August, the recommendation is “right” in order because it does not grant a DC exemption. The lame duck provisions place limits on the power of council before a municipal election.