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Dealing with developers: municipal bonusing spurs debate

By Raja Moussaoui , CBC News Posted: Apr 25, 2013 1:24 PM ET ast !pdated: Apr 25, 2013

":45 PM ET

#e$tio% 3& a'ree(e%ts a))ow (u%i$ipa)ities to se$ure *e%e+its +or a $o((u%ity u%der'oi%'

si'%i+i$a%t )a%d dee)op(e%t- .A%drew upto%/CBC

% Noe(*er o+ )ast year, a shouting match erupted i% Toro%to $ity $ou%$i) $a(*ers- Mayor

Ro* ord ur)ed a$$usatio%s at Cou%- Ada( au'a%, $a))i%' a 1 (i))io% dea) tat au'a%

se$ured wit a dee)oper a 6sa7edow%-6

ord8s out*urst is just o%e s%ippet i% a (u$ 'reater de*ate oer te a(*i'uous, ad o$ %ature

o+ #e$tio% 3& o+ te P)a%%i%' A$t, a 6de%sity +or *e%e+it6 a'ree(e%t i%trodu$ed *y te proi%$e

i% 19"3- t a))ows (u%i$ipa)ities i% %tario to se$ure *e%e+its +or a $o((u%ity u%der'oi%'

si'%i+i$a%t )a%d dee)op(e%t- % Toro%to, ward $ou%$i))ors $a% %e'otiate cash and in-kind

 benefits +ro( dee)opers )oo7i%' to *ui)d i'er a%d wit 'reater de%sity ta% is a))owed i% te

;o%i%'-

6#o(e peop)e ti%7 tat it8s just a +or( o+ *)a$7(ai),6 said deputy (ayor <ou' =o)yday- 6A

dee)oper $a% 'et (ore de%sity a%d (a7e (ore pro+it o++ o+ a pie$e o+ )a%d *y payi%' o++ te $ity-

% so(e $ases, te (o%ey $o(i%' i%to $ertai% areas is astro%o(i$a)-6

 A re$e%t paper *y Aaro% Moore +ro( te %stitute o% Mu%i$ipa) i%a%$e a%d >oer%a%$e

reports tat +ro( 200& to 2011, 159 a'ree(e%ts were rea$ed u%der #e$tio% 3&, wi$ i%$)udes

3"? separate *e%e+its-

'Too much power in councillors' hands'

Tese *e%e+its i%$)uded i(proe(e%ts to pu*)i$ par7s, p)ay'rou%d a%d $o((issio%ed pu*)i$artwor7s- @i)e a)(ost a)+ o+ tese *e%e+its were paid i%7i%d, te $as *e%e+its a)o%e 'ar%ered

13& (i))io%-

 @i)e te $ity p)a%%i%' depart(e%t %e'otiates te a)ue o+ te #e$tio% 3& *e%e+its, it is up to te

dis$retio% o+ te i%diidua) ward $ou%$i))or o+ te dee)op(e%t area to de$ide ow tose

 *e%e+its wi)) *e a))o$ated- =o)yday says te p)a%%i%' depart(e%t %eeds to ta7e a stro%'er ro)e i%

tese de$isio%s-

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6Tere is too (u$ power i% te $ou%$i))ors8 a%ds,6 e said- 6Dou ru% te ris7 o+ a $ou%$i))or

putti%' te (o%ey i%to ti%'s tat $ou)d *e te *est +or te( $o(e e)e$tio% ti(e-6

 au'a% ee(e%t)y disa'rees- 6Te %otio% tat po)iti$ia%s sou)d%8t ae a%y power is

a*surd,6 e said-

 As a resu)t o+ te $o%do *oo( is dow%tow% ward .@ard 20, Tri%ity#padi%a au'a% as%e'otiated (a%y #e$tio% 3& a'ree(e%ts wit dee)opers- Top o% is a'e%da is se$uri%' tese

+u%ds +or a++orda*)e ousi%'-

6@e% peop)e say tat te power sou)d *e trusted to *ureau$rats, %ot to te de(o$rati$a))y

e)e$ted peop)e, wat tey8re sayi%' is tat te $o((u%ity sou)d ae %o power,6 said au'a%-

6 +i%d tat o++e%sie-6

Patri$7 <ei%e is a dee)op(e%t )awyer wo as pra$tised (u%i$ipa) a%d p)a%%i%' )aw i%

Toro%to +or te past 35 years- =e says tese spe%di%' de$isio%s )a$7 oersi't *y te p)a%%i%'

depart(e%t, are %ot 'oer%ed *y a de+i%ed pro$ess a%d are %ot )i%7ed to a po)i$y tat addresses

)ar'er p)a%%i%' 'oa)s-

6Tere is a dis$o%%e$t ere *etwee% te dee)op(e%t pro$ess, wi$ is detai)ed a%d ri'orous,

a%d te (ore ad o$ approa$ +o))owed *y #e$tio% 3&,6 said <ei%e-

<ei%e says tat $ity sta++ as do%e a 'ood jo* o+ tryi%' to sta%dardi;e te syste( *y $reati%' a

set o+ guidelines- Te pro*)e(, oweer, is tat so(e $ou%$i))ors $oose %ot to +o))ow it-

6#e$tio% 3& is %ot *ei%' used i% te way tat it was i%te%ded,6 said <ei%e-

 A tool for 'good planning'

#i%$e te $ity8s ++i$ia) P)a% $a))s +or i%$reased dee)op(e%t i% $ertai% areas a)o%' (ajorroads, %ear pu*)i$ tra%sit, a%d witi% dow%tow% Toro%to $ity $ou%$i) as approed (a%y %ew 

dee)op(e%ts tat eF$eed te outdated ;o%i%' *y)aws-

+ $ity p)a%%i%' deter(i%es te dee)op(e%t represe%ts 6'ood p)a%%i%'6 a%d ;o%i%' approa) is

'ra%ted, te% #e$tio% 3& *e%e+it a'ree(e%ts are %e'otiated- Tey are (ea%t to 'ie areas

eFperie%$i%' 'rowt a way to i(proe teir $o((u%ity seri$es a%d a(e%ities-

6t8s a p)a%%i%' too) to e%a%$e te Gua)ity o+ te e%iro%(e%t were a dee)op(e%t ta7es p)a$e

to (a7e 'ood p)a%%i%' *etter,6 says Peter a%'do%, a$ti%' (a%a'er o+ te $ity8s p)a%%i%'

diisio%-

The approval process: how it works

% Toro%to, #e$tio% 3& a'ree(e%ts are %e'otiated o% a $ase*y$ase *asis- =ere is te pro$ess:

• Te dee)oper approa$es te $ity p)a%%i%' depart(e%t to i%$rease te de%sity o% te

site to 'reater ta% wat is per(itted *y te ;o%i%' *y)aw-

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• + te $ity p)a%%er a'rees, te appraisa)s se$tio% o+ te $ity8s rea) estate seri$es esti(ates

te a)ue o+ te additio%a) de%sity at tat parti$u)ar site-

• % (a%y $ases, te $ity p)a%%er tries to se$ure 15 to 20 per $e%t o+ te a)ue +or #e$tio%

3& *e%e+its +ro( te dee)oper-

• Te $ou%$i))or approa$es te dee)oper wit a )ist o+ *e%e+its or a(e%ities tat tey

 wou)d )i7e to se$ure, wi$ tey %e'otiate-

Te $ity8s guidelines state tat #e$tio% 3& a'ree(e%ts $a%%ot *e app)ied a$ross te *oard as a

sta%dard per$e%ta'e, +or +ear tat te *e%e+its $ou)d *e $o%strued as a% i))e'a) taF- !%der tese

'uide)i%es, ea$ a'ree(e%t is %e'otiated o% a $ase*y$ase *asis-

Issues surrounding Section 3

 A lack of clarit!:  Aaro% Moore, P<, a%d postdo$tora) +e))ow at te M> a%d autor o+

6Tradi%' <e%sity +or Be%e+its: #e$tio% 3& A'ree(e%ts i% Toro%to6 poi%ts to te a'ue wordi%' o+ 

6+a$i)ities, seri$es or (atters6 i% te P)a%%i%' A$t- =e sites tis )a$7 o+ $)arity is as pro*)e(ati$,resu)ti%' i% a %u(*er o+ $o%tradi$ti%' i%terpretatio%s o+ wat $o%stitutes #e$tio% 3& *e%e+its-

or eFa(p)e, Te %tario Mi%istry o+ Mu%i$ipa) A++airs a%d =ousi%' states tat te *e%e+its

$ou)d *e put toward 6i%te%si+i$atio%, 'rowt (a%a'e(e%t a%d tra%sit supportie%ess-6

Mea%wi)e, te %tario Mu%i$ipa) Board i%sists o% a dire$t $o%%e$tio% *etwee% te *ui)di%'

proposa) a%d te $o((u%ity *e%e+it, su$ as *ui)di%' a par7 or p)ay'rou%d adja$e%t to te %ew

dee)op(e%t-

% 200&, i% a% e++ort to reso)e te $o%+usio%, te City o+ Toro%to $reated a set o+ guidelines

and protocols- Tis do$u(e%t states tat te #e$tio% 3& *e%e+its ae to *e spe%t o% spe$i+i$

$apita) proje$ts a%d 'oes o% to )ist a %u(*er o+ per(issi*)e $ate'ories i%$)udi%' erita'e

$o%seratio%, a++orda*)e ousi%', day$are $e%tres, pu*)i$ art, p)ay'rou%ds a%d i(proe(e%t to

tra%sit +a$i)ities-

Te $ity8s 'uide)i%es state tat p)a%%i%' sta++ sou)d assist te ward $ou%$i))or wit %e'otiati%'

te *e%e+it a'ree(e%ts- #ta++ is supposed to re$o((e%d we% it is appropriate to as7 +or

 *e%e+its, wat types o+ *e%e+its to reGuest a%d ow to upo)d ++i$ia) P)a% po)i$ies- But tese

'uide)i%es are o+te% %ot +o))owed-

"ower concentrated in the hands of the ward councillor: Te ward $ou%$i))or de$ides

 weter or %ot to ta7e te adi$e o+ te p)a%%i%' depart(e%t a%d weter to $o%su)t wit te

pu*)i$ a+ter te *e%e+its ae *ee% se$ured-

6Te ward $ou%$i))or a%d te $o((u%ity $ou%$i) are %ot *ou%d *y te opi%io% o+ te p)a%%i%'

sta++,6 said a%'do%-

6Tere are so(e $ou%$i))ors wo wi)) %e'otiate dire$t)y wit te dee)oper a*out $o((u%ity

 *e%e+its,6 says a%'do%- =e says tat a)tou' it is %ot i% )i%e wit te proto$o), it so(eti(es

as a *e%e+i$ia) e++e$t-

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6Te ward $ou%$i))or as a )ot o+ i%+)ue%$e wit te dee)oper wit respe$t to te approa) o+ te

app)i$atio% at te $o((u%ity $ou%$i) )ee),6 said a%'do%- 6#o(eti(es tey $a% %e'otiate

 *e%e+its o+ a i'er a)ue te% sta++ (i't *e a*)e to do-6

But e says tis approa$ $o(es wit draw*a$7s: te ++i$ia) P)a% po)i$ies (ay %ot *e +o))owed

i+ #e$tio% 3& +u%ds are %e'otiated witout $o%su)tatio% wit $ity sta++-

6Te art o+ $ity *ui)di%' is proper)y i%ested i% te po)iti$ia%s tat ru% $ou%$i)- A%d to prete%d

tat te$%o$rats wo ae a jo* at te City o+ Toro%to $a% $o(e i% a%d $a%'e tat, is a*so)ute

i%sa%ity,6 says au'a%-

#ouncillors can act as 'ward dictators'

or(er Toro%to *ud'et $ie+ <aid #o7%a$7i re$e%t)y wrote a% arti$)e tit)ed 6Re+or(i%' City

Ree%ue6 +or Noae $es %rbis, a% ur*a% p)a%%i%' a%d (u%i$ipa) 'oer%(e%t pu*)i$atio%-

=e writes: 6City p)a%%i%' o++i$ia)s ae )itt)e de+e%$e a'ai%st te pra$ti$e o+ $ou%$i))ors a$ti%' as

 ward di$tators esta*)isi%' perso%a) priorities +or a(e%ities a%d i%serti%' te( i%to%e'otiatio%s ----To e%sure a $o%siste%t, (ea%i%'+u) use o+ #e$tio% 3&--- a)) dee)op(e%t de$isio%s

sou)d *e approed at $itywide $o((ittees a%d +ro( tere, at $ou%$i)-6

&ow the mone! is being spent

Moore %otes i% is paper tere as *ee% )itt)e pu*)i$ de*ate a*out tese a'ree(e%ts a%d, so +ar,

te (ajority o+ te spe%di%' as *ee% aried, i%$o%siste%t a%d spread a$ross a %u(*er o+ s(a))

proje$ts-

%e 7ey tre%d ide%ti+ied i% Moore8s paper is tat (ost o+ te spe%di%' as *ee% i% te +or( o+

6desira*)e isua) a(e%ities6 su$ as par7s, roads, streets$apes a%d pu*)i$ art-

=e poi%ts out tat to date, o%)y siF per $e%t o+ te +u%ds ae 'o%e toward a++orda*)e ousi%',

a% area were oter (u%i$ipa)ities i% Ca%ada a%d te !%ited #tates ae +o$used teir de%sity

a'ree(e%t +u%ds-

 au'a% is wor7i%' to $a%'e tat tre%d- =e as *a$7ed a (otio% i% $ou%$i) tat is part o+ a%

oera)) o*je$tie to esta*)is a +ra(ewor7 +or se$uri%' a++orda*)e ousi%' trou' #e$tio% 3&

a'ree(e%ts-

6@e8e *ee% doi%' it o% a% ad o$ *asis, a%d we wa%t a )e'a) a%d po)i$y +ra(ewor7 so it *e$o(es

$o%siste%t o% a site*ysite *asis-6

But e stro%')y opposes te $riti$is( o+ Toro%to8s #e$tio% 3& a'ree(e%ts i% Moore8s paper-

6Cou)d it *e (ore pres$riptieH Des- But ta7e issue wit te u%der)i%ed assu(ptio%s wi$ are

prese%t i% tis report,6 said au'a%- 6Priorities are%8t a)ways set *y 'oer%(e%t- + te peop)e

o+ te $ity are%8t setti%' te priorities, te% it8s %ot a de(o$ra$y-6

one! left unspent

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Most o+ te #e$tio% 3& +u%ds te $ity as se$ured as %ot *ee% spe%t-

+ te 13& (i))io% i% $as *e%e+its tat ae *ee% se$ured *y te $ity +ro( 200& to 2011, ?3

(i))io% as *ee% re$eied, a%d o%)y 11 (i))io% as *ee% spe%t-

Te $ity does%8t re$eie a%y +u%ds u%ti) te dee)op(e%t is i% use, *ut Moore eFp)ai%s tat ee%

o%$e te $ity as te (o%ey, o+te% it re(ai%s +ro;e% i% *ureau$rati$ pro$esses-

#o(eti(es tis is due to a )a$7 o+ $o((u%i$atio% *etwee% te ward $ou%$i))or wo se$ures te

 *e%e+it a%d te arious $ity depart(e%ts tat $oordi%ate $ity proje$ts, su$ as te par7s

depart(e%t or te tra%sportatio% depart(e%t- A)so, i+ a $ity depart(e%t as oter priorities tey 

(ay %ot ae te ti(e to +o$us o% a %ew proje$t- % so(e $ases, tey (ay %ot ee% *e aware tat

te (o%ey as *e$o(e aai)a*)e-

6Te de)ay o% spe%di%' te +u%ds is a di)e((a +or us,6 said a%'do%- 6@e wis te (o%ey $ou)d

 *e spe%t (ore Gui$7)y te% tey ae *ee%-6 =e says tey are tryi%' to address te issue trou'

 *etter $o((u%i$atio%-

#onfusion over development charges vs( Section 3

Te +u%ds tat $o(e u%der #e$tio% 3& are %ot te o%)y +u%ds tat (u%i$ipa)ities re$eie +ro( a

%ew dee)op(e%t- ter $ar'es i%$)ude a )a%d tra%s+er taF, a% assess(e%t o+ 'rowt, as we)) as

o%'oi%' taF ree%ues-

Most %ota*)y, tere is te <ee)op(e%t Car'es A$t, wi$ +o))ows tat a (u%i$ipa)ity sou)d

%ot ae to $arry te +i%a%$ia) *urde% o+ %ew dee)op(e%t-

Te $ity u%der'oes a detai)ed a%a)ysis a%d $o(es up wit a )ist o+ dee)op(e%t $ar'es tat

i%$)udes +u%di%' +or po)i$e seri$es, )i*raries, par7s, waters, sewers a%d roads, to deter(i%e te

+u%di%' %eeded +or a %ew dee)op(e%t to pay +or itse)+-

Tis set o+ ite(i;ed dee)op(e%t $ar'es (ust *e paid *y te dee)oper *e+ore a *ui)di%'

per(it is 'ra%ted, to $oer te i(pa$t tat te %ew dee)op(e%t p)a$es o% $ity seri$es-

Criti$s o+ te #e$tio% 3& a'ree(e%t say tat tis ri'orous pro$ess o+ esta*)isi%' dee)op(e%t

$ar'es, sta%ds i% star7 $o(pariso% to te ad o$ app)i$atio% o+ #e$tio% 3& +u%ds-

Sharing the wealth

Moore8s paper a)so poi%ts to te +a$t tat (ost o+ te #e$tio% 3& *e%e+its se$ured ae *ee%

$o%$e%trated i% a +ew dow%tow% wards, i%$)udi%' au'a%8s, as a resu)t o+ te $o%do *oo(-

Cou%$i))ors wo represe%t wards outside tese i''rowt areas ae eFpressed $o%$er% tat#e$tio% 3& (o%ey sou)d *e spe%t i% a way tat *e%e+its te e%tire $ity-

6Dou $a% say #e$tio% 3& )a%ds i% just a +ew %ei'*ouroods, *e$ause tat8s wat it8s tere +or,6

said au'a%- 6Tere are dee)op(e%t do))ars tat 'et a$$rued i% te $ity tat %eer 'et spe%t i%

te wards tat are eFperie%$i%' 'rowt, *e$ause tey ae e%ou' $apita) trou' #e$tio% 3&-6

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 au'a% says it8s possi*)e to se$ure (ore $itywide (o%ey +ro( dee)opers *y i%$reasi%' te

rate o+ dee)op(e%t $ar'es-

6Te $ou%$i))ors wo wa%t (ore (o%ey out o+ a dee)op(e%t, do%8t wa%t to ta7e it +ro( a

dee)oper, tey wa%t to ta7e it +ro( $o((u%ities tat are eFperie%$i%' te 'rowt,6 said

 au'a%-

Section 3 case Studies:

To 'ie a% idea o+ te 7i%d o+ proje$ts paid +or *y #e$tio% 3& (o%ey, ere are $o(paratie

eFa(p)es o+ #e$tio% 3& *e%e+its a)ued at 1 (i))io%

)*ample +:

o$atio%: @ard 20 1"1, 9, 203 Ri$(o%d #t- @-, 10 Ne)so% #t-

Cou%$i))or: Ada( au'a%-

Cou%$i) Approa) <ate: e*- ", 2011-

Brea7dow%:

100,000: A++orda*)e ousi%'

900,000: (proe(e%ts to streets$ape a)o%' Io% #t- *etwee% Juee% #t- @- a%d ro%t #t- @-K

streets$ape i(proe(e%ts a)o%' Ri$(o%d #treet @est *etwee% !%iersity Ae%ue a%d

#padi%aK streets$ape i(proe(e%ts to Ne)so% #treet, erita'e $o%seratio% studies +or te

Li%' / #padi%a East Pre$i%$t-

)*ample ,:

o$atio%: @ard 3" 50,?0,&0 Tow% Ce%tre Court a%d a%ds Adja$e%t to A)*ert Ca(p*e))

#Guare EFte%di%' to Tow% Ce%tre Court-

Cou%$i))or: >)e%% <e Baere(ae7er-

Cou%$i) Approa) <ate: Apri)- 14, 2005-

Brea7dow%:

500,000: $i)dre%8s p)ay'rou%ds a%d eGuip(e%t at Trude))e #t- Par7, a%d a)o%' M$Cowa% Rd-

100,000: #$ar A%i(a) Ce%tre i(proe(e%ts su$ as <o' Le%%e) Co%stru$tio% Proje$t

"0,000: par7s or trees p)a%ti%' or s$oo) p)ay'rou%ds-

20,000: #$ar*orou' +)a's +or (u%i$ipa) a%d $ii$ purposes *y City a%d Cou%$i))or-

100,000: #$ar*orou' @a)7 o+ a(e-

200,000: p)ay'rou%ds +or par7s a%d s$oo)s $)ose to #$ar*orou' Ce%tre-

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)*ample 3:

o$atio%: @ard 1", 2? is'ar #treet

Cou%$i))or: A%a Bai)ao

Cou%$i) Approa) <ate: May, ?, 2011

Brea7dow%:

1 (i))io%: A++orda*)e )ie/wor7 studios or artist wor7 studios, desi'% a%d $o%stru$tio% o+

is'ar Par7, re%oatio% a%d restoratio% o+ Car%e'ie i*rary *ui)di%', a%d/or pu*)i$ art i% te

 i$i%ity-

)*ample :

 a)ue o+ *e%e+its: 1 (i))io%

o$atio%: @ard 2&, 5?"5"0 Iaris #t-, 99103 Car)es #t- E

Cou%$i))or: Ly)e Rae-

Cou%$i) Approa) <ate: May 2&, 2009-

Brea7dow%:

1 (i))io% : Proposed Co((u%ity Ce%tre poo) at #er*our%e/@e))es)ey a%d te Iaris #t-

i(proe(e%t proje$tK at )east 400,000 wi)) *e spe%t o% pu*)i$ art-

ttp://www-$*$-$a/%ews/$a%ada/toro%to/dea)i%'witdee)opers(u%i$ipa)*o%usi%'spurs

de*ate1-13"2??9