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The Globe and Mail

Debate over Vancouver fee system puts developers and public at odds

A man paces back and forth while talking on his cell phone outside of the Vancouver Convention Center July 26, 2010.

JOHN LEHMANN/The Globe and Mail

Vancouver got $223-million last year in fees and special charges from developers, an amount equal to about a quarter of the annual city budget.

But it got a large chunk of that through a unique system of painstaking negotiations that are done project by project – something that Vancouver's reigning political team and incoming general manager of planning think needs to be simplified.

The development industry agrees, but former planners worry that residents will lose money for all kinds of community benefits, from parks and daycare centres to cultural spaces and affordable housing, if the system changes too drastically.

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"Having a negotiated system allows you to calibrate closely and it maximizes what the public gets," said former planning director Larry Beasley, who presided until 2006 over many projects that brought in millions.

"I do not think it makes sense to move to a one-size-fits-all system from the public's point of view."

Brent Toderian, the city's planning director from 2006 to 2012, said he is concerned that if Vancouver moves away from its negotiated system it will "leave a lot of money on the table" for developers.

That's because any kind of fixed rate will have to be low in order to make sure smaller builders aren't put out of business by something too high, he said.

City politicians and planners have been facing a barrage of pressure lately from developers and the public about the negotiated fees, especially as suburban communities are starting to look at whether they too should set special fees for the larger projects they're starting to see.

In response, there have been hints from the Vision team that governs the city that they're amenable to changing the system. Along with that, the city's incoming general manager of planning, Brian Jackson, said he believes there should be a system with "more certainty."

Mr. Jackson, who starts his job in Vancouver on Aug. 27, points out that Richmond, where he currently works, has a flat fee for development projects that allows it to pay for affordable housing, public art, day care and city beautification.

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He said a completely flat fee is likely unworkable in Vancouver, where the value of land and buildings swings substantially in different areas.

But, he said, the city could identify ranges of fees and also come up with that number much earlier in the process so developers considering buying a piece of land have more certainty.

Developers have been increasingly critical of Vancouver's system in the last few years, especially in relation to disputes along the Cambie Corridor. The city developed a general plan to increase density along that Canada Line street, which prompted some developers to pay high prices for land there and then say they shouldn't be subject to high development fees as well.

Residents in many parts of the city have also been critical the last few years of what they call "spot rezonings" and dubious about whether the community benefits from money that planners are getting from developers.

What complicates everything is that it's not completely clear to the public how the final figure that developers are charged is calculated. In the city's report on the money it collected from developers in 2011 – $180-million in "community amenity contributions" on top of the flat-rate $55-million from developer cost levies – different projects were assessed wildly different amounts.

For the Shannon Mews project, a controversial rezoning on Vancouver's west side that will redevelop an existing site with about 400,000 more square feet of building and taller towers, Wall Financial will provide the city with $31-million in public benefits.

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At Marine Gateway on the south end of Cambie Street, the developer PCI only had to contribute $9-million in community benefits for a rezoning that will allow the company to build 877,000 square feet more than what was previously allowed.

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