Two Sisters Resort Corp. won’t be paying a nearly $1 million regional development fee for its Parliament Oak hotel underground garage; however, it’s unclear how or if the region will make up the money.
After an extensive debate among Niagara Region councillors on Thursday night, Nov. 20, council voted 14-11 to go ahead with waiving the fee.
The decision stipulates that the cost will not come from the regional taxpayer, impacting the property tax levy; however, at this time, regional staff say they don’t know where exactly the money for that fee will come from.
That fee would’ve seen the developer, Two Sisters Resort Corp., pay $904,819 to Niagara Region — a development charge for the second level of an underground parking garage for what’s expected to be a luxury hotel at 325 King St. in Old Town.
The Town of NOTL asked the developer to add this second level of underground parking, where originally there was going to be above-ground parking.
The developer’s lawyer, Tom Richardson of Sullivan Mahoney LLP, told regional council this was changed after “considerable objection” from the project’s neighbours.
With this change, the lot coverage of the hotel will be 25 per cent, and there will be more landscaping surrounding the hotel above ground.
Lord Mayor Gary Zalepa, who sits on regional council, voted in favour of waiving the fee along with 13 other regional councillors. NOTL Coun. Andrea Kaiser was not present at the Nov. 20 meeting: her email said she was away on vacation until Nov. 24.
Zalepa told The Lake Report that this development should be encouraged to have underground parking and make better use of its space for landscaping.
“This allows for all the pressure that we know we have on parking to be accommodated on-site in an underground facility, so that we’re not dealing with on-street parking, we’re not dealing with on-grade, above-grade parking,” he said.
“It shows that the proponent — the owner of the property — was willing to make the further investment to get this right for the community and that’s going to go a long way.”
In July, NOTL council agreed to support the developer’s bid to reduce their development charges for the hotel’s second level of underground parking by writing a letter to the region.
Under Ontario’s Development Charges Act, the region is required to collect development charges from developers. If unpaid by the developer, they will be added to the levy.
When asked directly by Welland Coun. Leanna Villella if the cost for this development charge is going to be passed onto the taxpayers of the Niagara region, the region’s chief administrative officer Ron Tripp said, “As this point, I don’t know,” and that regional staff is reviewing a variety of other options.
“We’re in the process of seeking legal advice,” he said. “There potentially are options. Maybe or maybe not desirable options, but that’s why I can’t give a definitive answer at this point in time.”
This move by regional council comes from the region’s corporate services committee, which voted on Nov. 5 to recommend that this one-time exemption from the development charge for underground parking be approved and not be charged against the levy.
Some councillors during the Nov. 20 meeting shared their concerns that, regardless of what the committee’s recommendation states, the source of that funding is still unknown — and could come from the wallets of residential taxpayers.
“If you can’t give a definitive answer, I don’t think any of us can give a definitive answer at this point,” Villella told Tripp. The councillor ultimately voted against waiving the fee.
When asked where the money will come from if not the general levy, Zalepa said that regional council “made really clear” it doesn’t want this development charge to be funded from the levy and that “this is something that needs to be revisited in the development charge bylaw.”
“We think that there’s an ability to look at the way that these structures are charged under the development charge and I think that’s what we’ll be looking forward to coming back,” he said.
Also during the meeting, regional councillors discussed at length Niagara’s development charges bylaw.
The region’s rules differ from the Town of NOTL when it comes to development charges for underground parking: where underground parking is exempt from the town’s development charges, it’s not exempt from the region’s charges.
Some councillors who supported waiving the fee pointed to this charge in the region’s bylaw as a mistake and shared overarching concerns about the bylaw.
“I think the way we do development charges is wrong,” said Port Colborne Coun. Bill Steele. “Quite frankly, it’s a crapshoot.”
Zalepa told The Lake Report he’d be in favour of that development charge being removed.
“It doesn’t make sense to tax something that we actually want. We’d be better to tax the above-grade parking because we’d actually prefer people to put the parking underground.”
Welland Mayor Frank Campion said the charge for underground parking should not be in the region’s bylaws and that this charge will discourage developers from building this type of parking.
Niagara Falls Mayor Jim Diodati echoed his sentiments, pointing out that the Parliament Oak project achieves the region’s goal of adding more green space to the area by moving its parking underground.
“For the obvious reasons, we want to encourage underground parking, not discourage it,” he said.
However, a few councillors who voted against waiving the fee shared that they believe the developer was, in fact, aware of the development charge beforehand.
“We’re sitting here and somehow the thought of development charges slipped through the minds of all of those people. We have a seasoned developer, mayors and we have a lawyer who understands this,” said St. Catharines Coun. Haley Bateman. “I’m not buying it.”
Zalepa, who asked questions of the regional chair about the process the developer underwent when submitting their plans to the Town of NOTL, said he believes the discrepancy arose from the change in the project from the original application.
“I can surmise that’s where the gap was: the additional parking was never part of the original application.”
He told The Lake Report that he’s not going to speculate on whether or not the developer knew about the change and its impacts.
“At the end of the day, they’re looking for relief for a project that has significant community benefit.”
The latest version of the region’s development charges bylaw was passed in 2022, with its charges based on an in-depth background study as required by the province’s Development Charges Act.
In two years, the region will be able to reopen its development charges bylaw and alter its charges as it sees fit, depending on the background studies it conducts.
Richardson said the developer was looking at $5.3 million in regional development charges, including the underground parking lot fee. With this fee waived, it will still need to pay more than $4 million to Niagara Region for this development.
— With files from Daniel Smeenk.
