It’s not often a municipal council has the opportunity to make a big trade.
At its meeting on July 19, Grey Highland council approved a trade between the municipality and a Markdale developer. The developer has proposed to build a new community park/playground that will be transferred to Grey Highlands when completed in exchange for a discount on its development charges.
The Centre Point Subdivision development in Markdale offered to build a new park as part of phase one of its large development in Markdale. Once an agreement is reached with the municipality, the park would be constructed immediately and will be located at the end of Uplands Drive.
“Instead of paying the development charges, they’re going to pay for the cost of the park,” Anna McCarthy, the municipality's director of finance, told council.
The development charges act does allow a municipality to give credit to a developer when the municipality agrees the work is in relation to a service provided for in its local development charges bylaw.
In this case, the parks and recreation development charge for the 172 units of phase one of the project would be just over $500,000. The park being proposed, which includes playground equipment, basketball nets and a multi-sport court, would cost approximately $500,000. The developer would still pay the remainder of the development charges for the project of more than $1.9 million.
McCarthy explained that, at this point, the proposed trade is a concept deal. She said the municipality and the developer would still have to reach a formal agreement outlining the terms and conditions of the deal. Her report asked council to approve the concept and authorize staff to work on a formal deal with the developer.
The report generated plenty of questions and comments from members of council.
“Is this common? What’s in it for the developer?” Coun. Joel Loughead asked.
CAO Karen Govan said such agreements are quite common in the municipal world. She said the early development of a recreational park could be used as a “sales tool” by the developer to attract people interested in purchasing units in upcoming phases of the development.
Both Loughead and Coun. Paul Allen expressed worries that the financial figures for the proposed park included in the report were too high and not realistic.
“I’m concerned with the dollar figures,” said Allen.
Loughead agreed and said he was concerned the $500,000 estimate was too high in order for the developer to get a larger discount on the development charges. Loughead said he expected staff to conduct “robust and rigorous testing” of the amounts being quoted.
McCarthy said the amounts in the report were an estimate by the developer and more precise details would come forward once a deal was reached on an agreement. McCarthy said the deal would be based on the proposed work being “reasonable.” Her report also stated that the design of the park would be reviewed and approved by the municipality prior to proceeding.
“I don’t think the developer has reason to inflate those costs,” she said.