Sunday, October 30, 2011

North Shore News Story re: Community Amenity Contributions

West Vancouver developers say amenity contributions need revision

WEST Vancouver staff plan to propose a change to the way they calculate "community amenity contributions" after the election, following complaints from developers.

CACs are fees paid by developers to cover community impacts caused by building a denser development than would be allowed under previous zoning, and pay for a range of improvements to public space or community services.

West Vancouver is one of several municipalities in the region to calculate CACs based on the increase in the value of land caused by a rezoning, except for the area around Ambleside where it's calculated on the amount of extra square feet in a development.

Michael Geller, the developer behind the recently approved Hollyburn Mews multi-family project in West Vancouver, is one of the few developers to raise the issue publicly, arguing the process is unfair and unpredictable, stifling development. Staff say they have heard private concerns from others as well.

"It's often difficult to determine what the increased value is going to be," said Geller. This happened at Hollyburn Mews, where the original CAC was reduced after the market and the estimated sale price of the new homes dropped between 2008 and 2010.

"Secondly, this process creates an inherent uncertainty. If you don't know how much you're going to have to pay the municipality, how do you know how much to pay for the land?"

He also argued the system encourages rezonings as a source of revenue, something that encourages higher density.

Vancouver was the first city to calculate benefits as a portion of uplift, but the practice has since spread across Metro Vancouver, and to West Vancouver about three years ago.

Geller said he doesn't object to paying for community benefits, but wants a predictable process. He said basing the fee on the cost of new services required because of the rezoning, similar to a development cost charge, would be more sensible.

He even said cities can lose out in revenue under this formula, as in one extreme case, where a project in Vancouver's west side resulted in Geller paying no money in CACs because the land after rezoning wasn't worth any more than he paid for it.

Bob Sokol, West Vancouver's director of planning, said that's unlikely to happen in West Vancouver as the municipality takes into account more than just the selling price. "Our policy is generally that we should benefit from the uplift in value, so what we would say is you wouldn't necessarily consider the initial value of what the developer paid for it, we'd be looking at adjacent properties," he said. "Which a developer would argue would be unfair because they're essentially paying for the uplift twice. But that's the policy."

That said, he accepted staff has heard complaints on more than one rezoning, and that there are difficulties for staff. In particular, calculating the sale projects for many developments is hard because there are often few comparable projects in West Vancouver, as was the case for Hollyburn Mews, and market value is variable.

Sokol said staff are considering applying the rules for Ambleside to the entire district, which would see all developments pay a set fee for any additional square footage a rezoning allows. That would make fees more predictable and easier to calculate, he said, but in the end would be determined by the new council.

But it's also a dicey political issue. The amount, as well as how it was calculated, has been a hot debate topic in the last several developments to come before West Vancouver council.

However, councils aren't legally allowed to turn down a development purely over CACs - there have to be other reasons as well, said Sokol. That means developers also have to sign a form agreeing that the contribution is voluntary.

"Which everybody knows is blatantly false," said Geller. Councillors have come to expect CACs, he said, arguing no project could pass without it.

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