Ontario Land Tribunal
Tribunal ontarien de l’aménagement du territoire
ISSUE DATE: October 7, 2022
CASE NO(S).: OLT-22-003655 (Formerly PL180753)
PROCEEDING COMMENCED UNDER subsection 17(24) and 28(5) of the Planning Act, R.S.O. 1990, c. P.13, as amended
Appellant: Brookfield Properties (Canada) Inc
Appellant: Oxford Properties Group
Subject: Proposed Community Improvement Plan Amendment (CIP) By-law No. 1207-2018
Municipality: City of Toronto
OLT Case No.: OLT-22-003655
Legacy Case No.: PL180753
OLT Lead Case No.: OLT-22-003655
Legacy Lead Case No.: PL180753
OLT Case Name: Brookfield Properties (Canada) Inc. v. Toronto (“City”)
Heard: August 15, 2022 in writing
APPEARANCES:
Parties
Counsel
Oxford Properties Group
I. Andres
Cadillac Fairview Corporation Limited
I. Andres
City of Toronto
S. O’Connor
DECISION DELIVERED BY G. BURTON AND ORDER OF THE TRIBUNAL
1The City of Toronto’s (“City”) evidence on several appeals under section 17(24) of the Planning Act related to authorization of Community Improvement Plans was presented by way of an affidavit by David Fitzpatrick. The Parties have agreed that this Hearing be in written form. Only one Appeal remains to be determined, that of Oxford Properties Group (“Oxford”). Cadillac Fairview Corporation Ltd. (“Cadillac Fairview”) was not an Appellant but retains the Party Status granted earlier. There has been a settlement with the City in this Appeal, with which Cadillac Fairview concurs.
2Mr. Fitzpatrick provided supporting evidence. He is a project manager in the Planning Research and Analysis Unit of the Strategic Planning, Initiatives and Analysis section of the City Planning division. He is both a professional planner and a professional land economist. He prepares and maintains employment projections for the City and advises on non-residential land use policy in city-wide and area-based studies and land economics matters. He coordinates policy related to economic development and drafts and revises Community Improvement Plans (“CIP”).
3Mr. Fitzpatrick had been involved with the Imagination Manufacturing Innovation Technology (“IMIT”) program since 2017. On April 24, 2018, the City adopted recommendations that a new CIP By-law be adopted that reflected the outcomes of the review. The three existing CIPs would be repealed.
4Mr. Fitzpatrick was involved in drafting the CIP for Brownfield Remediation and Development of Prescribed Employment Uses (By-law 1207-2018, adopted by Council on July 23, 2018). This would provide financial incentives to encourage brownfield remediation and the development of targeted employment uses.
APPEALS
5Only two appeals were filed against By-law 1207-2018. Oxford is the sole remaining Appellant, Brookfield Properties (Canada) Inc. having withdrawn its appeal. Cadillac Fairview remains a Party as the purchaser from the Appellant First Gulf Don Valley Limited, et al. The City has worked with Oxford to develop proposed modifications to Schedule 1 of By-law 1207-2018 to address the issues raised in their appeal. On June 15, 2022, council provided instructions to staff to modify Schedule 1, and to support the proposed modifications at the Tribunal.
PROPOSED MODIFICATIONS
6Mr. Fitzpatrick outlined the proposed modifications to the CIP for Brownfield Remediation and Development of Prescribed Employment Uses. The changes may be seen in Attachment 1 to this decision. He stated that stylistic revisions and a new explanatory note are proposed (Section 5) regarding the Municipal Tax Increment formula. The changes clarify that the formula is intended to capture the taxes attributable only to the portion of the property that was improved by the eligible development. Any increases or decreases in taxes arising from a change in the assessed value of other portions of the property would not be counted.
7Properties that are exempt from taxation prior to redevelopment will have the Base Municipal CVA Taxes calculated as though the property were taxable, based on the methodology as set out. The appropriate municipal tax rate(s) would be applied to the pre-development use of the property.
8Also proposed are revisions to the definition of Gross Floor Area (“GFA”) so that the definition is more consistent with industry best practices. These would allow for the exclusion of major vertical penetration openings for stairwells, elevators and escalators. GFA could then be determined using Building Owners and Managers Association (“BOMA”) standards, or other appropriate methods of measurement.
9For multi-phase Transformative Projects, it is proposed that City Council could approve an alternative to the current seven-year time period for the construction and occupation of a minimum 200,000 square metres (“sq. m”) of net new space.
10The criteria requiring an applicant to demonstrate a need for financial incentives to achieve project viability would include a reference to consultation with the applicant.
11In addition, a note would be added to Appendix 2: Development Grants (TIEGS), section 3.2, to clarify that Development Grants are available for Transformative Projects within the Financial District (as shown in the Official Plan, Map 6), subject to council approval.
12Stylistic changes would simplify and clarify how grant amounts will be adjusted where eligible GFA is not occupied by the eligible use(s) or user(s) for the year in which the grant is calculated. Grants would be reduced accordingly.
13Appendix 2, section 5(iii) "Other Conditions", would provide flexibility for office developments to achieve energy performance standards other than Toronto Green Standard Tier 2 requirements.
14In Mr. Fitzpatrick’s opinion, By-law 1207-2018 as modified by Exhibits "G" and "H" in his Affidavit (Exhibit 1) has regard for matters of provincial interest in section 2 of the Planning Act, including: (k), the adequate provision of employment opportunities; and (p), the appropriate location of growth and development. It is also consistent with section 28(1) of the Planning Act which defines a “community improvement project area” as:
a municipality or an area within a municipality, the community improvement of which in the opinion of the council is desirable because of age, dilapidation, overcrowding, faulty arrangement, unsuitability of buildings or for any other environmental, social or community economic development reason.
15His testimony was that By-law 1207-2018, as modified, is consistent with the Provincial Policy Statement 2020 (“PPS 2020”), including policies within 1.3 - Employment, and 1.7 - Long-Term Economic Prosperity.
16It also would conform with policy 2.2.5, Employment of the A Place to Grow: Growth Plan for the Greater Golden Horseshoe (“Growth Plan 2020”), and will also help achieve environmental policy objectives in 3.2.7 Stormwater Management and 4.2.10 Climate Change.
17Mr. Fitzpatrick also opined that the modifications would conform with section 5.2.2 of the Official Plan that establishes policies for implementing a CIP. His view was that the modifications to the Transformative Project criteria to the time period for multi-phase projects do not alter the underlying intent of the program; they would provide greater flexibility to approve grants for complex development applications.
18Mr. Fitzpatrick also addressed the modifications to the Toronto Green Standard Tier 2 requirements for energy performance. He concluded that the introduction of alternative compliance options for energy performance for offices reflect evolving technology, standards and best practices. Any changes or alternative compliance option or standard would have to be accepted by the City of Toronto Chief Planner.
19The additional modifications proposed are consistent with the original intent of the By-law and will provide clarity and guidance for its implementation. Thus, the proposed modifications to By-law 1207-2018 are generally minor in scope, will provide clarity and flexibility, improve the implementation of the IMIT Program, and represent good planning.
Order
20The Appeals are allowed in part, and the Proposed Community Improvement Plan Amendment By-law No. 1207-2018, as modified on consent of the Parties, is approved.
21Community Improvement Plan Amendment By-law No.1207-2018 is hereby amended in the manner set out in Attachment 1 to this Order.
22A consolidated version of By-law No.1207-2018 incorporating the approved amendments is attached as Attachment 2 to this Order.
“G. Burton”
G. Burton
vice-chair
Ontario Land Tribunal
Website: olt.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248
The Conservation Review Board, the Environmental Review Tribunal, the Local Planning Appeal Tribunal and the Mining and Lands Tribunal are amalgamated and continued as the Ontario Land Tribunal (“Tribunal”). Any reference to the preceding tribunals or the former Ontario Municipal Board is deemed to be a reference to the Tribunal.
ATTACHMENT 1
ATTACHMENT 1
IMIT Program CIP By-law 1207-2018 – Modifications
Additions are shown with a red underline.
Deletions are shown with a red strikethrough.
By-law 1207-2018, adopting a Community Improvement Plan for Brownfield Remediation and Development of Prescribed Employment Uses is modified as follows:
5 MUNICIPAL TAX INCREMENT
The programs described in this CIP will provide financial incentives utilizing all or a portion of the "Municipal Tax Increment", which, for the purpose of this plan shall be defined and calculated as follows:
Formula: Municipal Tax Increment = Destination Municipal CVA Taxes – Base Municipal CVA Taxes.
Base Municipal CVA Taxes means the amount calculated by multiplying the Current Value Assessment(s) (“CVA”) applicable for the taxation year in which a Financial Incentive Agreement is signed for the Property upon which the Eligible Development is to be constructed, by the municipal tax rate(s) applicable for the Property, for that taxation year. The Base Municipal CVA Taxes shall be fixed in this manner for the purpose of determining the Municipal Tax Increment, subject to any adjustment arising from assessment appeals or changes to the CVA made by the Municipal Property Assessment Corporation ("MPAC") through requests for reconsideration, equity changes or gross error, and shall remain unchanged for the duration of the term of the payment of Development Grants.
Properties that are exempt from taxation prior to redevelopment will have the Base Municipal CVA Taxes calculated as though the property were taxable, based on the methodology set out herein and the appropriate municipal tax rate(s) being applied to the pre-development use of the property.
Destination Municipal CVA Taxes means the amount calculated by multiplying the CVA~~'s~~ attributable to the Eligible Development on the Property, once it is fully completed and assessed, as reflected in the returned assessment roll applicable to the first full taxation year following the completion of the Eligible Development and reassessment of the Property, by the municipal tax rate(s) applicable to the Property and the Eligible Development, at that time. The Destination Municipal CVA Taxes shall remain fixed for the purpose of determining the Municipal Tax Increment, subject to any adjustments to taxes arising from assessment appeals or changes to the~~ Destination Municipal~~ CVA made by MPAC through requests for reconsideration, equity changes or gross error, and shall remain unchanged for the duration of the term of the payment of Development Grants.
For greater certainty, the Municipal Tax Increment formula is intended to capture the taxes attributable only to the portion of the Property that was improved by the Eligible Development and is not intended to capture any increases or decreases in taxes arising from a change in assessed value associated with any other portion of the Property. Accordingly, how the Base and Destination Municipal CVA Taxes are calculated will depend on the specifics of each project.
9 DEFINITIONS
xi. Gross Floor Area (GFA): the total area of all wholly enclosed floors in a building, above and below grade, measured from the exterior of the main walls at the level of each floor, including , as well as areas used by vehicles for purposes of parking or loading, or both. For greater certainty, GFA may be determined using BOMA standards or other appropriate methods of measurement.excluding major vertical penetration openings for stairwells, elevators and escalators; but excluding
xxiii. Transformative Project: a large development that must be approved by City Council as a Transformative Project and that must demonstrate the following attributes by way a business plan:
a minimum investment of $1.5 billion;
a minimum of 200,000 square metres net new space that will be constructed and occupied within 7 years (or in the case of a multi-phase project, such alternative time period as Council may deem appropriate);
create a minimum of 3,000 net new jobs to the City of Toronto;
be of superior architectural design that includes unique and exceptional attributes;
have the ability to act as an anchor within its district and to stimulate collateral new investment;
demonstrate a clear need for financial incentives in order for the development to be financially viable, verified by a qualified third-party satisfactory to the Chief Financial Officer of the City, in consultation with the applicant;
must be linked to regional transit;
provide significant amenities that are accessible to the public and will transform the nature of the area; and
meet all the criteria for a standard IMIT application;
APPENDIX 2: DEVELOPMENT GRANTS (TIEGS)
3.2 Targeted Sectors – General Grants
Development Grants will be available for buildings and facilities that are wholly occupied by one of the following sectors or uses, including ancillary offices, storage and repair (but excluding residential units), or for the GFA they occupy in multiple-tenant buildings and facilities:
− Call Centres;
− Computer Systems Design and Services;
− Information Services and Data Processing;
− Scientific Research and Development;
− Software Development;
− Tourism Attractions; and
− Transformative Projects (including within the Financial District), subject to approval by City Council.
In order to receive General Development Grants, eligible GFA in wholly occupied or multiple-tenant buildings and facilities will be required to meet all Development Grant program conditions, including the requirement that the development of the eligible uses must have a total minimum construction value of $3,000,000 and add at least 500 square metres of new eligible GFA.
4 GRANT CALCULATION
4.4 Adjustments
The proportion of the Municipal Tax Increment upon which the annual grant will be based will be the lesser of:
i. the proportion of gross floor area occupied by the eligible use(s) or user(s) in the first year in which the Development Grant is payable; or
ii. the proportion occupied by the eligible use(s) or user(s) for the year in which the grant is calculated.
Grant amounts will be adjusted to reflect:
− any eligible GFA that is not occupied by the eligible use(s) or user(s) for the year in which the grant is calculated (grants will be reduced accordingly);
− the amount of any applicable rebate of municipal taxes paid to the property owner; and
− any subsequent changes in the total municipal taxes payable in any year due to reductions resulting from assessment appeals. Where such tax changes occur after grant amounts have been paid, future year grant entitlements will be reduced accordingly. Any overpayment of grant amounts arising from subsequent reassessment or tax reductions will be deemed to be a debt owing to the municipality.
5 OTHER CONDITIONS
iii. Office developments must conform, at a minimum, to the Tier 2 requirements of the Toronto Green Standard, or to such other equivalent standard identified in the Toronto Green Standard as an alternative compliance option for energy performance as may be accepted by the Chief Planner. All other developments must meet the Tier 1 requirement. Details on the Green Development standard can be found at: https://www.toronto.ca/city-government/planning-development/official-plan-guidelines/toronto-green-standard/