At its most recent meeting, London City Council sank to a new low. Yelling, screaming, and telling other members of council they shouldn’t be there — guess who starred in this debacle? Don’t all reply at once.
Of course, it could only be ward 4 Councillor Stephen “Full-time” Orser.
For those of you who missed it, you can find the podcast here on the city’s website. Check out items 19 and 20.
It was quite the rant, involving shooting geese and killing carrots and several other mixed metaphors. Give that guy a medallion.
And indeed, it was Medallion, the developer that has built on the order of 600 units in apartment buildings that Orser was concerned about. After all, Medallion had contributed to his last campaign. Donations of $500 aren’t that easy to come by if you’re counting on your friends and relatives.
But, of course, Orser didn’t have to depend on them because he has Medallion and a host of other developers who are only too happy to line his campaign coffers along with those of other incumbents or likely prospects. After all, it only takes eight votes; you don’t need to encourage all fifteen. And this council has been notorious for its 8-7 votes on dubious development applications. Think PenEquity and Reservoir Hill.
So what was it that so riled Orser?
Earlier that afternoon, only minutes before the council meeting, he and the other council members had received an email message from Medallion that it had been informed that council was planning to make changes in its development charges by-law regarding exemptions from paying development charges, and, should that be the case, the city of London could forget about Medallion building anything more in Old East or downtown.
“Medallion has supported me in the election campaign,” Orser wailed. No doubt he saw a lot of campaign contributions disappearing before his very eyes. How could this happen in an election year?
He was not alone. Equally perturbed were Bud Polhill, Paul VanMeerbergen, Joe Swan, and, you guessed it, Mayor Joe Fontana. Sandy White and Dale Henderson also weighed in on the negative side, but it was difficult to ascertain just what their concerns were.
And , indeed, it would be difficult for most Londoners to figure out just what was at issue.
It’s that complex issue of development charges, also known as DCs. In London when you buy a new house, there is a cost to the city for running services to the new area. There are roads and sewers and watermains; they all cost money. For a new home, that cost of $23,000 is paid by the developer when s/he applies for a building permit and the cost is passed on to the new home buyer. The same is true for commercial developments.
But industrial buildings are not charged; the thinking is that they will eventually hire people who will build homes and be taxed. They are Job creators, something much desired in London which has a high unemployment rate. But when an industrial development doesn’t pay, the cost of providing the infrastructure is still there. Someone has to pony up, and that someone is the taxpayer through increased property taxes.
But that’s not all. Sometime the city wants to encourage developers to locate in certain areas. In London, with all the retail going to the outskirts, we have been trying hard to attract residents to live in the core. Only a healthy growing downtown population can assure the vitality we desire. So we want residential development there. Build it and they will come.
For some time now, London has had a policy of waiving development charges in the downtown with some significant measure of success. Then, a few years ago, the exemptions were extended to the Old East which has been struggling to hold on to its residents and attract more.
The extension was popular with Medallion. Having already built an apartment complex in the northeast of the city, it put forward applications for a couple of developments which were subsequently approved. In all, over $6M for a total of about 600 units, or about $10,000 per apartment unit.
That may not be an unreasonable subsidy if it results in rejuvenating the Old East. But there are other incentives as well: brownfield incentives for building on an abandoned industrial lot, or help with restoring heritage facades. There are tax incentives too. Residential developments downtown may be given an exemption or reduced rate for a few years after which the regular rates are phased in.
All these incentives to locate in a particular area add up. Where do you get the money? And which incentives work best to produce the desired outcome?
Those were the questions posed to council last fall. It was pointed out that DC exemptions are an all or nothing approach. Wouldn’t it be better to turn them into a grant of equal value and then determine which incentives best fit the needs of the particular situation? One size may not fit all.
Additionally, there was the problem of SoHo, the area south of Horton Street and east of Wellington, the area where Loredana Onesan, former business associate of the mayor, was given the green light for a $300M anti-aging/condo development. There had been talk of extending some of the incentives to that area as well but there was no money to pay for them.
So last September, council had directed staff to come up with a different way of dealing with these incentives, one that would turn exemptions into grants and, rather than having them dealt with through the Development Charges By-law which is very cumbersome, to a Community Improvement Plan (CIP), which has more flexibility and would give council greater control. The direction was unanimous: 15-0. Staff was to come up with some options which would then be circulated to the public (i.e. the development community) for comment before the final staff recommendation for council’s consideration.
You may recall that in my last post I discussed how Councillor Joni Baecher had decried the lack of preparation by some councillors for making informed decisions. This was a perfect illustration.
Although they had voted unanimously to go in this direction, now, only a few months later, few seemed to have any recollection of that decision. Staff had done as it was instructed only to be lambasted for its efforts. Developers, it seems, had been tipped off by someone—whom it was not revealed—that their “right” to having development charges waived was now in jeopardy. Predictably, they wrote letters of opposition, threatening to take their business elsewhere. Most vocal were Rygar which had boasted it would be erecting the highest building in London and Medallion, recipient of the largesse of London taxpayers.
It was not unreasonable that Joni Baechler who, as chair of the planning committee, had put forward the motion to turn exemptions into grants and house them in the CIP rather than the DC by-law, was furious with what happened at council. The committee, consisting of White, Henderson, Polhill, the mayor and herself, had unanimously endorsed the staff report. But now, here was the mayor bringing forward a motion which would effectively eliminate any chance of following through. He wanted to retain the status quo of exemptions. Common courtesy would have suggested that he would have at the very least given the committee chair a heads up of what he planned to do. Bur no, he would rather have her be blindsided. And Nancy Branscombe, who had been very supportive of the proposal, suddenly decided that, gee, this wasn’t the time, right before an election and when there was so much concern about the economy, to create uncertainty with investors no matter how good an idea it was. It just wasn’t a good time.
She didn’t say, It’s not a good time now, right when I am looking at running in a provincial election and I need all the donations I can get.
But Orser had no qualms about doing just that. When he got up to speak, he was visibly shaking. His anger was palpable. “Be quiet, Joni,” he told Baechler as he launched into his tirade. Why would they consider cooking the golden goose? Why shoot across the deck? Why kill the carrot? As for Nancy, she shouldn’t even be here; she was running for another office. His words tumbled over each other. He was working so hard. McCormick’s, Kellogg’s. He was tired of this. “Medallion has supported me in my election campaign,” he pleaded. He sounded as if he were about to cry.
Was he on something? Or was he simply playacting, as he so often does.
Apparently, Branscombe thought it was the latter. “You’re so full of shit,” she told him in an aside. She has heard his outbursts before.
After much urging from the sidelines, the mayor called for a short recess to allow Orser to get his emotions under control.
When council resumed ten minutes or so later, and tempers had somewhat subsided, it was decided to do nothing. Leave it to the next council. No matter how beneficial it might be to introduce more flexibility into the incentives programs, and no matter how much assurance had been given that the grant would be equal to the DC exemption, the industry was skeptical. For the industry stakeholders, a bird in the hand was worth two in the bush, a matter which did not escape city manager Art Zuidema.
And councillors who depend on the development industry’s confidence in them to finance their election campaigns were nervous. You don’t want to kill the goose that laid the golden egg.
Or, as Orser put it, “Don’t kill the carrot.”