Fee freeze hurts taxpayers

Mayor's proposal to hold line on development charges would leave city residents on the hook

By SUE-ANN LEVY, TORONTO SUN

Last Updated: 11th November 2008, 4:27am

Terry Bryk, a north Toronto resident, put it most succinctly when he called yesterday Mayor David Miller's "Official Tag Day" for Toronto's deep-pocketed developers.

The retired market research consultant came to the executive committee to point out the unfairness of the mayor's proposals to freeze development charges at their ridiculously low levels while forcing property taxpayers to pick up the slack.

As he noted, this year the city is spending $308 million to create new municipal infrastructure (sewers, road, sidewalks, streetscapes, etc.) needed for new (condo and other residential) development.

Yet development charges to the industry will only contribute $31 million or 10% of the cost. The remaining $277 million (plus interest) will be picked up by taxpayers either through increased debt or through contributions from the operating budget to the city's capital needs.

"Do you seriously believe developers will stop developing in Toronto?" Bryk asked, noting development charges are three times higher in Oakville and higher in most other municipalities in the GTA.

"As a taxpayer I'd like to have a feeling I'm not being charged 90% of the development costs ... I don't think that's fair."

Coun. Cliff Jenkins, who feels development increases should be phased in 50% next year and 100% in 2010, said the intent of the fees are to ensure "growth pays for itself.

"It's not fair to be subsidizing an industry that is very, very profitable," he said.

Nevertheless, these reasoned arguments were quickly drowned out by protests from a selection of developers in their slick designer suits, their paid lobbyists from academia (two professors from Ryerson and York) and the councillors who swallowed their predictions of a soon-to-be-struggling industry hook, line and sinker.

Miller and his minions were only too happy to grant a request from The Developers and Co. to defer their whole decision until Feb. 2 to allow the paid academics to complete a study about the "development industry" and its "impacts on the city."

THE WHOLE PICTURE

Tridel President Leo DelZotto, who led the charge for the deferral, said he wanted to make sure the whole picture was presented and the city was doing the right thing for everyone.

"If you put this bylaw in place, you'll start to turn off the development industry in the 416," he warned, noting he prefers partnerships with the city instead of the "concept of levies."

I guarantee you this sudden need to further study the issue was not precipitated by the proposed one-year freeze on fees but by the city's plan to phase in significant increases starting Feb. 1, 2010. I suspect the "partnership" The Developers will come back with is a case to maintain the status quo using the current credit crunch and a dismal fourth quarter as the excuse for their preferential treatment.

Yet at a briefing two weeks ago, city officials -- with some prodding -- said they've forecasted 11,000 building permits will be issued next year. That's the same number of permits that have been issued on average over the last 10 years.

So the idea the industry is suffering is simply untrue.

I very much resent that taxpayers are expected to absorb the shock of increase after increase. Even The Developers conceded yesterday the land transfer tax has added a "fundamental" cost to the bottom line. It certainly has impacted on home sales, as I hear repeatedly from real estate agents.

As for the Mayor and Co.'s decision to kowtow to developers all in the guise of keeping the city healthy and vibrant -- while picking fights with coffee companies, homeowners, vehicle owners and other entrepreneurs -- I'll repeat that this is payback for their support of the land transfer tax last year.

Comments from councillors Giorgio Mammoliti and Norm Kelly were equally offensive.

"When there's economic uncertainty, it's not a time to pick a fight with our industry partners," said Mammoliti.

"I'm looking forward to the report coming back in the new year," fawned Kelly. "The vehicle is an opportunity to consider the full extent of the partnership (with developers) in this city."

I wouldn't dare suggest that a long list of 2006 election contributions clouded these councillors' positions one bit.

A quick trip to the city's elections office revealed at least 11 donations to Kelly from developers and at least 18 developers contributed to Mammoliti's campaign.

Ah yes, forget about studies and deferrals. I'd suggest the "partnership" between The Developers and the Mayor's Team is already rock solid.