A plan to redevelop the former Preston Springs property got a pass from council Tuesday as it voted to end its policy to exempt developers from having to pay millions in development charges for projects in the city's three core areas.
The policy has cost the city an estimated $33 million in development charges (DCs) since 2015, revenue that has to be picked up by taxpayers to fund everything from new roads and in-ground infrastructure to libraries and fire services.
The incentive did its job to encourage growth in the city's three core areas, and was responsible for getting investments for major projects like the Gaslight District, the Cambridge Mill towers and the residential towers planned for 55 Kerr Street.
Haastown Holdings hoped to be another investor to take advantage of the waived development fees to support its plans for the former Preston Springs property.
The company that owned the former heritage hotel before it was torn down by the city in December 2020, pleaded with council in February to keep the waiver intact until it could come up with the necessary documents to submit a full application for its planned redevelopment of the site.
And on Tuesday council did just that, creating an early payment agreement with the company that will give them until Oct. 31 to submit all of the necessary documentation, including a site plan, heritage impact study and traffic study.
Haastown Group planning consultant Chris Pidgeon cited the traffic study as one of the major hurdles in meeting the city's deadline of April 20.
That's when the city's policy to end its core DC exemption will kick in.
He told council a study wouldn't be effective at demonstrating compatibility with what they plan until normal traffic levels resume around King and Fountain streets, which were reduced during the pandemic. He said work on that can move ahead in May and June with a full report submitted to the city by early fall.
Allowing the exemption to continue so the Preston Springs redevelopment can have its DCs waived through the early payment agreement will add another $4.74 million to the lost revenue tally.
Allowing the core exemptions to continue until Oct. 31 for other projects on the books, however would have allowed a further $6 million in waived DCs to escape city coffers.
Letting the core exemption policy to continue indefinitely would have added an estimated $22.6 million in waived DCs to the tally, bringing the total amount of fees lost to the policy to $55 million.
But the thought of seeing the Preston Springs site languish weighed on council as developer Paul de Haas told them the project he's been working on for the better part of a decade simply won't happen without the DC exemption.
Haastown has been embroiled in a legal fight with the Architectural Conservancy of Ontario and the city over the demolition of the old hotel in 2020, effectively putting the redevelopment plans on hold until that was resolved. The pandemic stalled those hearings.
But in the meantime, Haastown was encouraged to submit a planning application for the site once it learned of the city's plan to eliminate its core DC exemption policy.
That brought de Haas to Tuesday's meeting, where he asked council to waive the DCs for the project, or watch the end of the policy be "the final nail in the coffin" to his plans.
"These exemptions are absolutely critical to the redevelopment of this property," he said. "The site challenges, constraints and escalating construction costs are just too great to overcome without this incentive."
He told council his firm has collaborated with architects from Europe on a design that pays respect to the legacy of the Preston Springs Hotel and looks forward to a "modern adaptive redevelopment."
He offered a brief presentation that featured early drawings of the plans showing two towers around a central podium structure that resembles the former hotel.
Pidgeon explained a site plan the company submitted to the city last month. It shows direct access to Fountain Street with street level commercial spaces, a point in a mid-rise tower, heritage gardens to the north with direct access to Abraham Street, podium parking and amenities.
The centrepiece of the redevelopment would be a central piazza called Preston Square, he said.
Coun. Donna Reid said seeing this move forward at "an extremely important corner of Preston" with such a "flagship" project is something she doesn't think the city can pass up.
"I can't imagine if we do not support this development by having the exemption of DCs, it will not happen," she said. "And we will have that space empty and it will look rough and disorganized and empty for the foreseeable future."
Coun. Mike Mann said they all "felt a tremendous feeling of loss" when council had to agree with city engineers on the demolition of the original hotel.
Now he's hopeful Haastown can build something iconic at the site that recognizes the heritage structure it will replace.
Since the city's development charges policy for the cores included the same incentive for affordable housing, Coun. Pam Wolf proposed an amendment to the motion to address that issue.
She wants to see staff prepare a grant program and policy to waive development charges for affordable housing anywhere in the city.
DCs are currently deferred and interest free for 20 years for affordable units built in all core areas and regeneration areas already.
Coun. Scott Hamilton agreed with keeping the incentive for that purpose.
"I don't think all of a sudden we'd see a massive explosion of affordable housing developments in the city," he said. "I think it's incumbent on us and important for us to do every single thing we can to ensure that affordable housing is built as soon as it can be in this city."
But Coun. Jan Liggett was more cautious and wants to see a report from staff first.
She said she doesn't believe council was fully aware of the burden taxpayers were taking on when they agreed to the DC exemption and doesn't want council to "fall into the same trap again."
