City council has agreed to refund Barrie developers an estimated $7 million to $8 million in development charges (DCs) as part of a deal mediated by the Ontario Land Tribunal (OLT) that also lowered DCs by 12 per cent.
Council agreed to the deal June 19, backdated to a year ago, after a lengthy closed-door session.
Craig Millar, Barrie’s chief financial officer, said Monday the DCs settlement is not complete until the OLT directs the city to amend its DC bylaw and issue any refunds owing.
City staff expect the final appeal process to be completed by the end of August or into mid-September, he said.
“Once the settlement notice is received, anyone who has paid development charges from the start of the current DC bylaw, being June 23, 2023, would be eligible for a refund,” Millar said. “Staff estimate the DC refunds will be approximately seven to eight million dollars, and will be funded from existing DC reserves.
“While DCs are being lowered, any shortfalls in DC reserves would be collected in future DC bylaw updates, helping to mitigate any additional costs to existing taxpayers," he added.
Development charges are designed to recover capital costs — water, sewer pipes, roads, streetlights, etc. — associated with residential and non-residential (commercial, industrial, institutional) growth within a municipality from developers, so that existing residents don’t have to foot the bill.
DCs are collected by the city as part of the building permit stage of development.
A year ago, council approved the DC-CBC background study and bylaw, but during the following August the city received four appeals to its DC bylaw.
What council approved then were higher, different levels of DCs within Barrie’s former boundaries and in those of the former Innisfil land, the Salem and Hewitt’s properties.
Within the city’s former boundaries, DCs on single and semi-detached homes increased from $87,281 to $89,499 last year, a 2.5 per cent hike. Those DCs were to increase to $111,874 by 2027.
In the Salem and Hewitt’s land, DCs moved from $90,455 for single and semi-detached homes to $100,862 last year, an 11.5 per cent increase, then were to increase to $126,077 by 2027.
“I do not love the increases in DCs. I think that there’s going to be a time, probably next year (2024), when we are begging for housing to be built,” Mayor Alex Nuttall said one year ago, in 2023. “But I am a big believer that growth needs to pay for growth, that we can’t go back to the current taxpayer and ask them to supplement the development that’s happening, specifically in the (former Innisfil land) in the south end of the city.”
The mayor said that still holds true.
“What I said is still valid and we are not going back to taxpayers to cover the difference,” Nuttall said. “Some projects were not achievable within the timeline in the background study and, as such, have been deferred. As the DCs are lowered the shortfalls will be covered in the future DC bylaw updates by the developers themselves.
“In addition, the provincial changes in Bill 185 (the Cutting Red Tape to Build More Homes Act) are estimated to result in an increase in DC collections over the next five years of approximately $68 million," he said.
The appeals came from two of the city’s largest developers, the Hewitt’s Creek and Salem landowners groups, along with Barrie Central Developments and 129 Collier LP, and 440 Essa Developments.
The Salem Secondary Plan Area, located at the southwest corner of McKay Road and Veterans Drive, is to be the site of more than 1,500 residential units when built out. In early 2021, it was estimated these 1,500 units represented $90 million in development charges.
Updated information on the Hewitts Creek Secondary Plan Area was not available.
The city’s development pages say two 12-storey rental towers comprising 293 residential units, interior and rooftop amenity space, and 249 parking spaces are planned for 129 Collier St. Site-plan control is proposed for this address and it’s pending an application submission.
At 440 Essa Rd., a nine-storey, mixed-use building with 262 rental apartments — 39 deemed affordable — are planned, together with ground-floor commercial space. It is zoned for this use, its site plan proposed and under review.
On Nov. 28, 2022, the More Homes Built Faster Act, 2022, (Bill 23) was passed by the province. This made several changes to the DC Act, most notably a five-year, mandatory phase-in of the calculated DC rates beginning with a 20 per cent reduction in the first, decreasing by five per cent annually until the fifth year.
On June 6, 2024, the Ontario government passed Bill 185, the Cutting Red Tape to Build More Homes Act, which repealed Bill 23 and allowed municipalities to increase DC rates.
City staff worked with the development community to reach a mediated settlement led by the OLT, and the city will be asking the OLT to approve the reduction and resolve the outstanding appeals.
The OLT decides land-planning matters when developers, residents and local councils cannot reach agreement. It is the former Ontario Municipal Board (OMB).
The city staff report on Barrie’s DC bylaw concerning this matter remains confidential, so not all of the details of the settlement are known.
