Developers render of an six-story residential building under construction at 488-500 Upper Wellington Street in Hamilton Credit: HANDOUT

The Ontario Land Tribunal will decide if parkland dedication fees can be calculated on the date a demolition permit is issued, or should be continued to be calculated when construction permits are issued.

$1,592,016 is at stake, the difference between what the City of Hamilton says the parkland fee should be, and what LiUNA says it should pay for its new construction 6-storey residential building with 261 units.

A three-day hearing began Tuesday morning.

The City of Hamilton argued it can calculate pre-Bill 23 parkland dedication fees at 488-500 Upper Wellington Street because demolition permits were issued on January 26, 2022.

LiUNA argues the Planning Act’s parkland dedication fee should be calculated based on construction permits, not demolition permits.

Building permits for geotechnical systems were issued on May 10, 2023, and a conditional permit for foundation construction was issued on July 28, 2023.

Bill 23 Parkland Dedication Fees Cap

Bill 23, the More Homes Built Faster Act, imposed new caps on municipal development charges.

Following Bill 23, municipal parkland dedication fees are capped at no more than ten percent of property value for parkland dedication fees when developments are being constructed on five hectares or less.

488-500 Upper Wellington’s property value is $6.7-million, making the capped parkland fee $670,000.

The uncapped fee, under the City’s pre-Bill 23 development charge bylaw, is $2,262,016.

A difference of $1,592,016.

LiUNA paid the amount, under protest, and filed this OLT appeal.

Post Bill 23 Appeals in Hamilton

This is the second post-Bill 23 OLT dispute in the City of Hamilton.

The City won in the other case involving 71 Main Street in Dundas in which that developer argued parkland dedication fees should be charged only when the final building permit was issued.

In that case, the foundation permit was issued before Bill 23, and the OLT ruled parkland dedication fees can be charged when the first building permit is issued.

Today’s case differs because the City is now arguing that because demolition permits are “building permits” under the Building Code Act, the City can charge parkland dedication fees based on the date of demolition permits.

If the OLT rules for the City, properties across Hamilton in which demolition occurred before Bill 22would be subject to higher parkland dedication fees. Following this logic, both the City and developers could argue for development charges to be based upon past demolition dates, depending which is more favourable.

Is A Demolition Permit a Building Permit for the Purposes of Development Charges?

The OLT must decide if parkland dedication fees can be charged when a demolition permit is issued for a property subject to a proposed development application, even if that application has not received final approvals. No permits have been issued for the new development.

Arguments at OLT

LiUNA’s lawyer, Jason Park of Kagan Shastri DeMelo Winer Park LLP, told the Tribunal that the City’s position contradicts the Planning Act’s plain meaning and the legislation’s intent.

“It is our position that that is not in line with the intention of that provision, or the plain and literal meaning of the words building permit for development or redevelopment,” he said, adding the Planning Act’s development charge provisions use of building permit “is not meant to capture a demolition permit.”

City lawyer Peter Krysiak said that demolition permits are building permits and that parkland fees are charged upon the issuance of a demolition permit. Therefore, the City’s decision is a statutory interpretation.

“This is an appeal about statutory interpretation. The broad issue in this appeal concerns what is a building permit. Specifically, the Tribunal will have to determine if a permit for demolition is a building permit.”

“This is not a planning issue, but rather a statutory issue, which can be resolved by applying the correct interpretation to the appropriate legislation,” Krysiak said.

He added that there is “no basis either in law or in common sense to support” LiUNA’s argument that parkland fees should be charged when municipalities issue building permits.

Krysiak says LiUNA’s case “will involve twists, leaps and bends applied by the appellant to definitions and to applications of statutes in order to contort the language to a shape that suits their case.”

He said LiUNA was doing this because “there is a refund to the tune of about $1.5-million on the line.”

“The City trusts the Tribunal will not be misled by these tactics and will apply the law and common sense to dismiss this appeal.”

The first witness called was Fengate Asset Management’s (LiUNA’s investment manager) Director, Development Anthony Girolami, who told the Tribunal that the City only sought parkland fees when the developer applied for their construction permits.

Girolami said it was only after Bill 23 came into effect that the City informed him fees were calculated upon the issuance date of the demolition permit.

In cross-examination, the City’s lawyer questioned Girolami regarding if the City had any obligation to inform him about the parkland dedication fee when issuing demolition permits.

Expert Witness Says He’s Never Heard of Charging DCs Based Upon Demolition

The second witness on the stand was land development expert Ed Newhook.

Newhook was Director, Research and Planning, for the former City of North York from 1992 to 1999. In this role, he says he led “the review of consolidation of” Parkland bylaws “for the newly established amalgamated municipality of Toronto.”

He is a

Newhook testified he is unaware of any instance of parkland land dedication fees being levied using the date of a demolition permit.

“This is the first time I’ve seen this,” he said. “Very obviously, from my position, the Building Code Act cannot act as the legislation that directs the parkland dedication.”

Newhook emphasized that parkland dedication fees are development charges. The Planning Act states, “development means the construction erection or placing of one or more buildings or structures around the land or making an addition or alteration to a building or structure.”

He testified that development and development charges are tied to increases in the size of structures or the usability of a property.

“The underlying principle for the Parkland dedication requirements of the Planning Act is that there’s the appropriate amount of Parkland and related facilities for new development and the incremental population who will occupy, work, or visit these new developments,” Newhook stated. There is no incremental demand created by demolition. Therefore, there is no need for parkland at that stage.”

Newhook said the City of Hamilton’s novel interpretation is driven by a desire to capture the $1.6-million in additional parkland dedication fees.

“If there’s a motivation for the City of Hamilton to go outside of what is the norm in parks planning, it is, in fact, the difference between the $2.262-million and the amount that would be owed to the City of Hamilton under the cap scenario.”

The City will present its case on Wednesday. Closing arguments are scheduled for Thursday.

Additional Notes

The OLT hearing panel is Members Sarah Bobka and Bita Rajaee.

For zoning purposes, the building is considered a six-storey building, but for Building Code purposes, it is considered an eight-storey building. This is due to its mezzanine level and indoor roof amenity space. TPR, like all parties in the OLT hearing, refers to it as a six-story building.

Sarah Kagan is a co-counsel for LiUNA.

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Published: March 26, 2024
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