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Staff Report
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Report To: Council
Date of Meeting: February 10, 2020 Report Number: CAO-004-20
Submitted By: Andrew C. Allison, CAO Resolution#:
File Number: By-law Number:
Report Subject: Parkview Lodge Expansion
Recommendations:
1. That Report CAO-004-20 be received;
2. That Council either,
a. provide direction respecting a specific financial contribution to be made towards
the cost of relocating the existing intersection pedestrian signal (crosswalk) for
Parkview Lodge’s proposed expansion (with the funds to be drawn from the Tax
Rate Stabilization Reserve Fund); or
b. enter into a development charges deferral agreement in which local
development charges will be paid to the Municipality in 21 equal instalments
over 20 years at no interest;
3. That Council provide direction to staff regarding an enhancement being made to the
crosswalk at Municipal expense; and
4. That all interested parties listed in Report CAO-004-20 and any delegations be
advised of Council’s decision.
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Report CAO-004-20
1. Background
1.2 In June of 2017, Council approved a zoning by-law amendment application to rezone
153 King Avenue East. The approval will facilitate an expansion of the existing
Parkwood Seniors residence located at 165 King Avenue East.
1.3 In February of 2018, an application for site plan approval was submitted to permit a
three storey, 37-unit addition to the existing two storey seniors residential building which
contains 43 units.
1.4 In June of 2019, Council approved a tax rebate as a condition of Parkview’s receipt of
funding under the Federal-Provincial Social Infrastructure Fund – Investment in
Affordable Housing (SIF-IAH) Program.
1.5 Through Resolution #C-256-19 passed on July 2, 2019, Council authorized the
execution of a development charge deferral agreement with Parkview stating that “no
interest will be payable for 18 months from the date that the building permit is issued
(consistent with the Region’s approach)” and “any further deferral, with or without
interest, will be at the discretion of Council”.
1.6 Parkview received other incentives from the Municipality as described in Report
CAO-013-19.
1.7 The engineering drawings submitted in support of the site plan application propose to
shift the existing driveway access to the combined property slightly to the east to
accommodate the design of the proposed addition. These drawings showed that the
existing pedestrian crossing signal (a Regional service) is in conflict with the new
driveway location and must be relocated. The crosswalk signal is located between the
existing entrance to Parkwood and the Gift of Art to the east accommodating a crossing
of King Avenue providing access to the Municipal library, park and places of worship
among other uses on the north side of the street (see photo).
Report Overview
This Report responds to a request for assistance from Parkview Lodge in relation to its
proposed affordable housing project on King Avenue East in Newcastle. The particulars of
Parkview’s request are set out in a letter from Joyce Kufta, Chair, Parkview Lodge, to the
Mayor dated January 24, 2020 (Attachment 1).
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Report CAO-004-20
1.8 Comments provided by Planning Services to the applicant and agent at the end of
March of 2019 identified that the proposed entrance modification requires the relocation
of a utility pole and pedestrian crossing signal, and that the applicant would be required
to obtain approval for the relocation of both prior to the final approval of the site plan.
1.9 A revised submission addressing the March comments was received towards the end of
June. At the end of July, staff emailed to the consultant to see if there was progress on
the utility and pedestrian crossing signal relocation required to accommodate the
driveway as proposed.
1.10 In early December, Parkview was anxious to get approval for its site plan application,
but the required approval regarding the relocation of the crosswalk signal had not been
obtained from the Region. It was only in December that Parkview became aware of the
potential cost of the pedestrian crossing signal relocation (estimated to be $80,000 -
$100,000).
1.11 In a letter to the Mayor dated January 24, 2020 (Attachment 1), Joyce Kufta, Chair of
Parkview Lodge, has requested that the Municipality’s assistance in resolving this
servicing issue. The specific request of Council is to,
a. contribute 50% of the cost of the crosswalk allocation up to $100,000 and 100%
of any cost over that amount; and/or
b. defer development charges “over a 20-year period at a low, nominal interest rate”
in order to effectively offset a portion of the crosswalk costs.
1.12 At the General Government Committee meeting on February 3, 2020, Committee
referred Ms. Kufta’s letter to the CAO with direction to report back.
1.13 In a letter dated January 28, 2020 (Attachment 2), Parkview has requested financial
contribution from the Region of Durham towards the relocation costs. As of the date of
this report, the Region has not formally responded to Parkview’s request , but we have
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been advised that Regional staff are considering the implications of the changes to the
Development Charges Act (see section 2.6 below).
2. Discussion
Design
2.1 Staff from Engineering Services have offered to undertake preliminary design work for
the required relocation. After completing the design work, the current estimate of
$80,000 - $100,000 can be refined. This design work can be done at no cost to
Parkview.
2.2 Suitable relocations were evaluated based on existing conditions, impacts and type of
crossing. It was determined that moving the existing intersection pedestrian signal (IPS)
approximately 35 metres to the west of its current location was the most efficient design
with respect to cost and impacts. It is also recommended that in order to save some
expense, the IPS be replaced with a pedestrian cross over (PXO) system similar to the
one recently constructed on Silver Street in the downtown Bowmanville area.
2.3 In accordance with Goal B.1 (Complete the Implementation of Downtown Plans) in the
Municipality’s 2019 to 2022 Strategic Plan, Council should consider incorporating
streetscape design features similar to what was previously designed and constructed for
Beaver Street and King Avenue intersection into the design of this PXO. The
streetscape would include bump outs with the PXO. It would improve pedestrian
visibility and safety. It would also implement traffic calming to the area and shorten the
crossing distance for pedestrians. Design elements would be consistent with those
developed in the 2014 Newcastle King Avenue Revitalization Streetscape Master Plan
and Implementation Strategy. A photo of the Silver Street PXO is provided below to
provide an idea of what the relocated crossing could look like.
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Cost Contribution
2.4 The streetscape enhancements described in section 2.3 above would be a Municipal
responsibility and are estimated to cost $50,000. 50% of this amount could be funded
from Roads and Related Development Charge Reserve Fund. The balance of the
enhancement work could be funded from the Tax Rate Stabilization Reserve Fund or
levied in the 2020 budget (not currently in the 2020 budget).
2.5 Any Municipal contribution to the crosswalk relocation for amounts that would otherwise
be the responsibility of Parkview could be funded from the Tax Rate Stabilization
Reserve Fund or levied in the 2020 budget.
Development Charge Deferral
2.6 As stated above, through Resolution #C-256-19, Council has authorized the execution
of a development charge deferral agreement with Parkview stating that “no interest will
be payable for 18 months from the date that the building permit is issued (consistent
with the Region’s approach)” and “any further deferral, with or without interest, will be at
the discretion of Council”. That agreement has not been executed because
development charges are not payable until a building permit is issued. The building
permit for this project cannot be issued because the site plan agreement has not been
finalized.
2.7 Based on information that has been provided to staff, local development charges on this
project will be $303,086 and Regional development charges will be $472,341.
2.8 Effective January 1, 2020, the Development Charges Act has been amended to require
payment of development charges in 21 equal payments over a 20 -year period for non-
profit housing developments. This effectively means that the Municipality must alter the
direction given by Council through Resolution #C-256-19. The deferred amount is
$288,653.
2.9 The legislation allows the Municipality to charge interest on the deferred amount up to a
rate prescribed by the Province of Ontario, however there has been no prescribed rate.
This means that each municipality can dete rmine its own interest rate.
2.10 The area treasurers in Durham have met and are discussing options for dealing with this
new legislation to ensure fairness to taxpayers as well as consistency amongst all
Durham municipalities. While individual rates may differ, the formula for determining the
interest rate will hopefully be consistent. At this point, no interest rate has been set.
Staff’s preference would be to see a common approach across the Region (local and
Regional), but given timing constraints, it may not be possible to have that in place
before Parkview needs to proceed. What follows, therefore, is a discussion of options
available to Council currently.
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2.11 One option would be to set the interest rate equal to the inflationary factor for the
development charges. This sets a predictable annual amount and inflates the funds
collected by a cost of living index.
2.12 A second option is to set an interest rate annually based on the Municipality’s bank
interest rate as at January 1 in each year. Such a rate would compensate the
Municipality for the funds that would otherwise have been invested, while at the same
time provide some financial benefit to Parkview.
2.13 The final option is to establish a 0% interest rate. This would obviously be the most
impactful rate in terms of incentivising the development of non-profit rental housing.
2.14 It is important to note that even if the interest rate established by Council for this project
(or any other eligible project) is 0%, there is no obligation on the part of the Municipality
to “top up” the development charge reserve account to recover the cost of incentivising.
This is a fundamental difference as compared to the development charge credits that
are currently in the Municipality’s DC By-law – any such credits must be paid for through
general levies.
2.15 In order to understand the financial benefit that will accrue to Parkview as a result of a
lower interest rate, we need to consider their cost of borrowing using other credit
facilities. For reference, Parkview’s refinancing interest rate for its existing mortgage is
2.8%. The CMHC direct co-investment rate (which will be the largest borrowing for this
project) is currently approximately 1.6% which will be locked in for a ten -year term. If
Council establishes a 0% interest rate on the deferred payments, the savings to
Parkview is estimated to be between $48,500 (based on the current CMHC rate) and
$84,900 (based on their existing mortgage) over 20 years. Any savings in relation to
interest on deferred Regional development charges would be in addition to this amount.
2.16 It is staff’s recommendation that any decision respecting Parkview’s request not be
taken to mean that Council has established a formal policy on the issue of the rate of
interest to be applied in similar situations going forward. Council’s position on a deferred
development charges interest rate for non-profit developers can be established (and
incorporated into the Municipality’s Affordable Housing Toolkit) when Council is
considering all development charge issues applicable to the Municipality’s 2020
Development Charges By-law.
3. Concurrence
This report has been reviewed by the Director of Finance, Acting Director of
Engineering Services and Municipal Solicitor who all concur with the recommendations.
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4. Conclusion
It is respectfully recommended that Council provide direction to staff.
Staff Contact: Andrew C. Allison, CAO, aallison@clarington.net, 905-623-3379 ext.2002
Attachments:
Attachment 1 – Letter dated January 24, 2020 from Joyce Kufta to Mayor Foster
Attachment 2 – Letter dated January 28, 2020 from Joyce Kufta to Chair Henry
The following interested parties will be notified of Council's decision:
Joyce Kufta, Chair, Parkview Lodge
Tim Welch, Consultant, Tim Welch Consulting Inc.
Nancy Taylor, Commissioner of Finance and Treasurer, Region of Durham
John Henry, Regional Chair and CEO, Region of Durham
Parkview
NEWCASTLE LODGE FOR SENIOR AND FAMILY DWELLINGS
165 KING ST. EAST
NEWCASTLE, ONTARIO
L1B 185
January 28,2020
Mr. John Henry, Chair
Regional Municipality of Durham
605 Rossland Road East
Whitby, ON LzN 5A3
Dear Regional Chair Henry:
Parkview Lodge is an experienced non-profit housing provider which has been working towards
an expansion of its existing housing in Newcastle to create an additional 37 affordable
apartments for seniors.
The project has been allocated Federal-Provincialfunds through the Region of Durharn and is
also currently finalizing a low interest loan through the Canada Mortgage and Housing
Corporation. As well, Parkview Lodge itself is providing an almost 53 million equity contribution
to this new housing through refinancing of its existing building.
As you are aware, the process of municipal planning approvals can take a lot of time. The
project has had many challenges to work through over the past months including a number of
cost pressures related to changes in the locationldetails of site servicing and changed
foundation design to dealwith soils issues, but we are anxious to see construction begin.
ln December it was identified that there would be an estimated $100,000 cost to relocate to
the east the municipal crosswalk adjacent to our current driveway. Quite frankly our budget for
new affordable non-profit housing cannot absorb such a large additional cost at this time.
Parkview Lodge can contribute one half towards this estimated cost and we are prepared to
budget up to $50,000 towards it. Staff of the Municipality of Clarington are working on the
preliminary design of the crosswalk and we believe they will do their best to design a crosswalk
that is functional and cost efficient. lt is our understanding that the crosswalk on King Avenue
is very close to the dividing line between Clarington and Durham responsibilities for King
Avenue/Hwy 2, and the Region's roads division has been involved in the crosswalk relocation
discussions.
We are requesting that both the Region of Durham and the Municipality of Clarington cap our
one-half contribution at 550,000, and contribute the balance of funds to the cost of the
crosswalk allocation. We recognize that budgets are tight for all organizations but we know that
the Region of Durham has the lead municipal role in supporting the creation of new affordable
housing and has especially focused on support for new seniors affordable housing. Given the
Region's lead role in affordable housing we feel it is reasonable to ask for a modest contribution
to the infrastructure costs required for this project.
We are also open to an alternate approach of dealing with this cost of municipal infrastructure
(the crosswalk) and that could be through the long-term deferral of Region development
charges. The Provincial government recently made a series of changes through its Bill 108
legislation which allowed for municipal governments to defer development charges for non-
profit affordable housing developments over a 2O-year period. lf the Region of Durham could
agree to defer the charges over that 2O-year period at a low, nominal interest rate, that would
be an approach that could effectively offset a portion of the crosswalk costs.
We would like to take this opportunity to ask to meet with you to discuss this matter in the very
near future. We look forward to hearing from you either through e-mail at
iovcekufta@rosers.com or by phone at 905-404-5501.
Yours truly,
Joyce Kufta, Chair
Parkview Lodge
cc. Alan Robins, Director of Housing