Report to: Committee of the Whole                                           Date of Meeting: June 27, 2006

 

 

SUBJECT:                          Development Charge Deferral – Jolis Investments (Ontario) Limited

PREPARED BY:               Jennifer Nelson  (2640)

 

 

 

RECOMMENDATION:

That the report titled “Development Charge Deferral – Jolis Investments (Ontario) Limited be received;

 

And that the Mayor and Clerk be authorized to execute an agreement with Jolis Investments (Ontario) Limited to defer the payment of the Town’s Town Wide Hard and Area Specific development charges in respect of the development of the industrial subdivision legally described as Part of Lot 17, Concession 3, being drafted approved 19T88018, to the satisfaction of the Town Solicitor;

 

And that the agreement provide for the deferral of the Town Wide Hard and Area Specific development charges to be payable at the earlier of:

 

–        Issuance of the first building permit for each block.

OR:

–        10% payable at execution of the industrial subdivision agreement;

–        20% payable three months after the date of execution of the industrial subdivision agreement;

–        35% payable six months after the date of execution of the industrial subdivision agreement; and

–        35% payable twelve months after the date of execution of the industrial subdivision agreement;

 

And that the development charge be calculated at the rate in effect at execution of the industrial subdivision agreement;

 

And that the letter(s) of credit posted to fulfill the requirements of the industrial subdivision agreement not be reduced or released unless the amount of the letter(s) of credit exceeds the total of:

–        the obligations outstanding on Schedule “E” of the Jolis Investments (Ontario) Limited industrial subdivision agreement; and the amount of the Town Wide Hard and Area Specific development charges outstanding.

 

And that staff be authorized and directed to do all things necessary to give effect to these recommendations.

 

 

 

 

 

 

1. Purpose                     2. Background                      3. Discussion                        4. Financial        

 

5. Others (Environmental, Accessibility, Engage 21st, Affected Units)             6. Attachment(s)

 

PURPOSE:

The purpose of this report is to seek Council approval to enter into an agreement with Jolis Investments (Ontario) Limited that would allow for the deferral of the Town of Markham Town Wide Hard Development Charge and Area Specific Development Charge to the earlier of two events:

–        The issuance of a building permit for each block;

Or

–        Within one year of the execution of the industrial subdivision agreement with payments occurring on prescribed dates.

 

 

BACKGROUND:

In accordance with the Town’s Development Charge By-laws, the Town Wide Hard and Area Specific Development Charges are payable upon execution of a subdivision agreement, and the Town Wide Soft development charges are payable upon issuance of a building permit.  The Town’s standard practice requires 30% of the Town Wide Hard and Area Specific development charges to be paid upon execution of the agreement and a letter of credit be posted for the remaining 70%, to be drawn in equal amounts at 6 and 12 months from the date of execution.

 

A representative from Jolis Investments (Ontario) Limited met with Staff to request that their development charges be deferred to the earlier of: the issuance of a building permit for each of the six blocks; or that the total Town Wide Hard and Area Specific development charges, for all six blocks, be payable within one year from the execution of the agreement with payments occurring on prescribed dates.  It was requested that the payment schedule be as follows and that a letter of credit not be required for the deferred amounts:

                                 

TOWN’S STANDARD PRACTICE

REQUEST BY JOLIS

Date

Payment

Date

Payment

Execution of Subdivision Agreement

30%

Execution of Subdivision Agreement

10%

 

 

3 months after execution

20%

6 months after execution

35%

6 months after execution

35%

12 months after execution

35%

12 months after execution

35%

 

Section 27(1) of the Development Charges Act, 1997 states that “a municipality may enter into an agreement with a person who is required to pay a development charge providing for all or any part of a development charge to be paid before or after it would otherwise be payable.”.

 

Staff have reviewed the request and have no objection to the terms of the deferral.

 

 

 

 

FINANCIAL CONSIDERATIONS:

The deferral of development charges is a cashflow issue.  The deferral of development charges will be established as an accounts receivable that Jolis Investments (Ontario) Limited will be required to pay. 

 

Jolis will be required to post a letter of credit for approximately $1.7m to secure the obligations on Schedule “E” of the subdivision agreement.  Schedule “E” of the subdivision agreement lists all items for which letters of credit are required to be filed by the owner upon execution of the agreement.  Staff are recommending that the letter of credit not be reduced until such time as the amount of the Schedule “E” outstanding obligation and the development charges owing is less than the amount of the letter of credit.

 

In the event of default, section 32 of the Development Charge Act allows for any unpaid development charges to be added to the tax roll and collected in the same manner as taxes.


 

 

RECOMMENDED

                            BY:    ________________________          ________________________

                                      Barb Cribbett, Treasurer                     Andy Taylor, Commissioner

                                                                                                of Corporate Services