Cambridge Maintains Core Area Development Charge Exemptions

  • 05/27/19
  • |          Cambridge

Good news for developers, not so much for residents

The City of Cambridge has taken another step forward in setting its new development charges this week, but there is still much more work to do before the June 23 deadline.

On Tuesday, council voted 7-2 in favour of retaining the current exemption on development charges for the city’s three core areas for another five years.

While the region’s development charges exemption on core areas lapsed at the end of February and may not be renewed, Cambridge council has decided that it is too early to reinstate its charges.

During Tuesday’s debate, acting city manager Jeff Wilmer urged Cambridge councillors to maintain the exemptions, which will make pending projects like the Gaslight District and others financially viable.

“We have been shown pro forma budgets for downtown core developments that there is just not a business case to do the development without the incentives. The incentive makes the difference,” he said.

The move would mean that funding will need to be made up elsewhere, which would result in an increase in the city’s taxes of 1.5 per cent and in the water and sewer rates by 0.2 per cent and one per cent, respectively.

That was too much for councillors Jan Liggett and Pam Wolf, who opposed keeping the exemptions. They favoured a plan which would have increased development charge fees by 10 per cent over each of the next five years.

Liggett argued that many people are struggling to pay their taxes now, while the developers can more easily afford to pay development charges on their projects.

Wolf noted that the development charge exemptions have been in place for 20 years and have had little impact on core area redevelopment. She suggested bumping the development charge rate by 10 per cent each year might provide incentive to land owners who have been sitting on their properties for years to move forward with redevelopment projects.

Wilmer said that while the city provided development incentives in the past there is still more it needs to do.

“It’s a whole suite of factors that apply. I think we are at an inflection point here, a positive one. We have so many competitive advantages in our core areas, but the business case still isn’t there yet.”

Wilmer said there is a time to reinstate development charges in the downtown cores with an appropriate notice to developers, however, “I am easily persuaded the time is not yet for Cambridge.”

Mayor Kathryn McGarry told council that with the regional development charges exemption, “Kitchener has had the biggest benefit reaping tens of millions of dollars. It is over $40 million of investment that has happened in their downtown core and that’s due in part to the LRT. Contrary to that, Cambridge has seen about $13 million of development investment and so has Waterloo.”

With council’s decision to retain its exemption of core area development charges for another five years, city officials believe that Waterloo Region will likely follow suit and also reinstate its exemption of development charges to encourage development here.

Meanwhile, more work needs to be done regarding the city’s industrial development charges. A draft proposal on those charges includes a huge increase that would make Cambridge less competitive than surrounding municipalities. Staff will come back to council in mid- June with an update.

Municipalities set their development charges every five years to help offset the cost of new fire stations, libraries and other services that must be expanded to accommodate growth in the community. Cambridge must have its new development charges bylaw in place by July 1. Council is slated to make its final decision on the new bylaw June 23.

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