Good old-fashioned horse-trading has long been a part of the development approvals process. Cities and towns hard-pressed for cash are usually willing to swap density or some other benefit in return for something voters may expect they should provide.
That is how families in the west end of Toronto got a 6,000-square-foot daycare centre in the first NXT tower near the Queensway. It is also how residents of Concord CityPlace near Front Street and Spadina Avenue and Concord Park Place at Leslie Street and Sheppard Avenue got their eight-acre parks.
Each was the city's side of a quid pro quo agreement for development approval. The process is not limited to physical infrastructure. For larger projects, the city also demands developers invest in public art as well.
Smart developers go above and beyond the basics to maintain a friendly relationship with the men and women who get to say yay or nay on their projects.
When Tridel Corp. worked out a deal to buy a large chunk of land occupied by North Toronto Collegiate near Yonge Street and Eglinton Avenue, the agreement was that Tridel would buy the land between Roehampton and Broadway avenues from the Board of Education. The developer would create luxury condo towers on the north and south sections, and the board would use the proceeds from the sale to have Tridel's construction arm build it a new three-storey, 156,000-square-foot school complete with AstroTurf running track.
While it was a purely commercial transaction, Tridel threw in a green roof for the school free.
"The board ran out of money and we thought it would be a nice gesture," says Jim Ritchie, senior vice-president of sales and marketing.
Bottom line, co-operation between the private and public sectors seems to make sense to both parties. Traditionally, however, the city says what it wants and private industry then comes up with variations on how to do it and still make a buck.
Empire Communities, however, has started to take that quid pro quo relationship a big step further. It takes an active approach. All municipalities have long-term plans for civic projects. While towns, cities and townships would dearly love to build roads, sewers, recreation centres and community halls sooner, they have to defer these amenities until they have the money.
So what if a developer with deep pockets offers to advance those plans by paying for the civic improvements now in return for lower or no development charges and fees on future projects?
It is like those television ads you see in which companies offer to buy annuities or structured payments. Need cash now? Sell us your annuity. In the case of municipalities, those annuities are indeed future development charges. To sweeten the pot, some improvements such as new roads may spark new industrial and commercial development as well as residential, which of course means more development charges flowing in and a larger tax base.
Build a road and industry starts moving in with warehouses, factories and offices.
That creates and entirely new source for property and business taxes and does it much sooner than if the municipality had to wait until it could fund the road itself.
Empire has taken this approach with at least two projects. In Brantford, Ont., it owned a big chunk of land but could not develop it because no roads led in or out. But the city had a long-term plan to create a new ring road, the Brantford South Access Road, which would eventually open the area for development.
"We told them we would finance and build the first section, even though it would not lead directly to our property, in return for future concessions on development charges," says Paul Golini Jr., executive vice-president of the family-owned company.
Once that section was opened, the city found it was attracting new business such as Ferrero Rocher and Tim Hortons. "It could see concrete benefits such as a predictable increased tax base and increased employment opportunities and could make a case for immediately extending the road right into our property."
It was a win-win situation.
In Breslau, just southeast of Kitchener, Ont., Empire is building its new Riverland Community. Part of its deal involved donating its presentation centre to the municipality for use as a community centre.
For Empire that meant spending considerably more to create a permanent structure with a full basement, kitchen, 24-foot ceiling heights and even roughing in an elevator for future use by residents with physical disabilities.
The original plan was that the township would build an addition about five years down the road when Riverland was sold out and it took possession of the structure.
"What happened instead was that we started letting the township use the basement for meeting space and events and it was so pleased it advanced its plans for the addition soon thereafter," he says.
Now the planned addition is indeed reality and home to a range of community activities.
Breslau got its community centre years earlier than planned.
"You have to have reasonably deep pockets to do things this way and the project has to be big enough to support this approach, but I do think this is the route to the future - much greater pro-active private and public participation in meeting the needs of communities," Mr. Golini says.