Community benefits at risk for development complex on Caroline

May 29, 2013

To D&I committee July 8

Residents have been asking for an update on the medical/parking/residential complex on Caroline since the photo op appeared in the paper last week, attended by the developer, area doctors and the mayor.

I’ve talked with both city staff and the developer, Nick Carnicelli of Carriage Gate Homes, to get an update.

Demolition of existing buildings on the site is planned within the next month. However the agreement securing community benefits in exchange for increases in height and density to the project has not yet been signed. The deadline for signing the community benefits and development agreements lapsed last year, and was extended in September for another 18 months.

Carriage Gate is seeking relief from some of the community benefits, including affordable housing and less parking.

In addition, Carriage Gate is seeking relief from conditions in the development agreement that require upgrading the hydro service in the area, and burying the hydro wires from John to Pine Streets. A holding zone has been placed on the development until this issue is resolved.

The Carnicellis have been meeting with the Planning Department to discuss these issues. Staff expect to present a report, with options for council’s consideration, to the Development & Infrastructure Committee July 8.

Background:

The project, which takes up the entire block fronting Caroline, John, Pearl and Maria streets, was approved July 5, 2010 for an 8-storey office building, 17-storey 154-unit residential condo, 8 storey 244-space parking garage, and three levels of underground parking (another 278 spaces) . Ground floor commercial is proposed at grade for each building.

Most of the parking garage (184 of the 244 spaces) will service the office/commercial/employee needs of the medical centre. The city secured 60 publicly accessible spaces in the parking garage, a net gain of 23 spaces as the city sold an existing surface parking lot of 37 spaces in the block in order to allow the development to proceed.

The project required both an Official Plan amendment and rezoning, as the existing plan limited height to four storeys, with opportunity to go to eight storeys with provision of community benefits.

The rezoning allowed 8 storeys on the medical centre and parking garage, with a six-storey minimum, and 17 storeys on the condo, with a 12-storey minimum in exchange for the community benefits.

Community Benefits: parking, affordable housing & more

Section 37 of the Planning Act is a planning tool which allows municipalities to accept tangible “Community Benefits” when granting increased density and/or height through a change in zoning or Official Plan policy. A fundamental requirement of the use of Section 37 is that the application being considered must first and foremost be considered “good planning” irrespective of the potential for the community benefit. Generally speaking, there should also be a location or functional connection between the development proposed and community benefits. Community benefits may be in the form of funds or “in kind” payments, and can include public parking, affordable housing and other amenities.

The community benefits secured on the Caroline project include (read report here)::

a) Providing an additional 269 parking spaces.

Required parking for the residential building is one per unit (154) plus .25 for visitor (39) for a total of 193. That is met, plus the plan provides for an additional 85 spaces underground for employees of the medical/commercial units. Another 244 spaces are provided in the parking garage, 184 for commercial use, and 60 for public use negotiated through a land exchange.

Businesses downtown are not required to provide parking for employees or customers, so the net gain of parking is 269 spaces (85 underground and 184 parking garage spaces for the commercial uses).

The estimated value of these parking spaces to service the non-residential component of the development is approximately $6-7 million.

b) Apartment to be constructed to LEED certified environmental standard.

c) Parking garage will contain a green roof design.

d) Residential component will have over 70% affordable housing units
A chart in the report indicates that 112 of the units will be sold between $200k-$265K, which meet Halton Region’s definition of “affordable” using average income for a family of four. The staff report states that “the exact percent will vary with economic conditions,” but estimate that approximately 73 percent of the units will be affordable.

Conditions on zoning approval

Separate from the community benefits, several conditions were outlined in a development agreement attached to zoning approvals, including upgrading and burial of hydro wires. A holding zone was placed on the property until those conditions were met.

According to the staff report, Carriage Gate Group Inc. agreed to the recommended ‘H’ holding zone provisions which requires hydro burial adjacent to the subject site, and paying the full cost of upgrading hydro capacity to this site.

Hydro burial and upgrading, paid 100% by the developer, is a standard requirement of all major developments downtown.

The transformer that would service the Caroline site is located on Pine Street, and the city secured burial of the wires to Pine St, several blocks south of the development site. Carriage Gate has the option to recoup the cost of that burial from other developers who might build in that corridor, but there is a five year deadline. That window is fast approaching. If there is no development within five years, Carriage Gate cannot recoup costs and will pay the entire amount.

The city is currently reviewing its hydro burial and upgrade policy for the downtown, and exploring cost sharing agreements that might include a contribution from the city or Burlington Hydro or both. However, any changes to that policy would only apply to new developments and can’t be grandfathered back. For recent developments on Pine, Pearl, Elizabeth and Brock streets, the developers paid 100% of the hydro upgrade and burial.

Community Benefits at risk:

In response to changing market conditions, Carriage Gate is seeking a reduction in the percent of affordable units from over 70% to about 28% of units. Mr. Carnicelli told me the goal is to increase the size of some of the units (and thus their price) which would reduce the overall unit count from 154-124 units.

The project is currently being marketed on Carriage Gate’s website as “luxury condos” under the name “The Berkeley.” Visitors are invited to register on the site “for first choice of suites and views.”

Carriage Gate is also looking for a reduction in the parking garage from 8 storeys to the minimum requirement of 6 storeys. That would reduce the commercial parking by about 60 spaces.

Finally, Carriage Gate is seeking changes to the hydro upgrade and burial provisions due to cost, specifically the requirement to bury the hydro from the property all the way to Pine St. They are still committed to burying the hydro in front of the development site itself.

Though the staff reports stated the developer had agreed to all of the conditions and community benefits, Carnicelli told me he raised concerns about the hydro provisions and affordable housing mix at the time the project was being approved. His view is he is overcontributing to the community benefits.

How community benefits are calculated

Normally community benefits are calculated based on the increased value of the land from the increase in zoning related to height and density. That increase in land value from upzoning is split 50-50 between the city and developer, with the value of community benefits being calculated based on the city portion. Carnicelli has asked for a valuation report on the property to determine the cash value of community benefits required as a result of the increase in land value due to the Official Plan and rezoning changes.

A staff report on how to proceed with this development and address the changes requested by Carriage Gate is expected to come before the Development & Infrastructure Committee July 8.

Read the 2010 staff report, development agreement and community benefits document and appendices here

My Take:
I was invited to attend the groundbreaking photo op but declined out of concern that the community benefits and development agreement have not yet been signed on this project and may be at risk. That means the commitments made to the community during the approval process are at risk.

This project was approved before my time on council, but as a resident I shared my view that the medical centre and parking are a welcome addition to downtown. The extra 23 public spaces, though small, were also welcome. I did not support the 17 storey condo. There are two and three storey single family homes and townhouses on one side of the development; kitty corner is two apartments however these are significantly setback and surrounded by greenspace. A 17-storey condo built right up to the street is too much for this site.

That’s still my position, and I don’t believe the condo is necessary to achieve the benefit of the medical centre and related parking.

The community was promised certain benefits in exchange for increased height – more than four times the zoning of 4 storeys, and double the zoning when community benefits are provided.

The affordable housing component was referred to by members of council when they approved the Official Plan and zoning changes. In addition to the medical centre, affordable housing, increased parking and the aesthetic improvements of hydro burial were all mentioned as offsets to the highrise, which was clearly beyond the intended Official Plan and zoning for the area.

I will do what I can to preserve these benefits.

I would support extending the 5-year time frame to allow a longer period for the developer to recoup the hydro costs down to Pine Street. That section includes a municipal parking lot which is slated for some sort of redevelopment down the road. The city could consider paying its share of the burial/upgrade relative to that property sooner rather than later.

I am also arranging a meeting with staff at Halton Region to determine options to retain affordable housing here. The downtown sorely needs smaller units at lower price points – we already have many units targeted to the luxury market. Though some adjustment to the affordability mix may be reasonable, I will not support a significant reduction in affordable units here.

If agreement can’t be reached to retain the promised benefits and conditions, I will be seeking a corresponding decrease in the height that was granted in exchange for these benefits.

Finally, the way this project is unfolding reinforces my concerns about the use of Section 37 of the Planning Act to exchange increases in height and density for community benefits. These very community benefits are now at risk. If they’re not upheld, the public will be shortchanged of the commitments made to offset the impact of more height and density.

As this situation reveals, changing circumstances and economics put community benefits at risk over time, and developers will come back and seek exemptions.

Ultimately, it is up to city council to resolve this issue and put the needs and commitments to the community first.