BYLAW NO. 1906 - McCallum Road DCC Agreement (Project Number 6) Approval Bylaw No. 1906, 2020

Staff Report to Council

Date:

June 1, 2020

Department:

Engineering

Subject:

McCallum Road DCC Agreement (Project Number 6) Approval Bylaw No. 1906, 2020

Background

The City of Langford has a Development Cost Charge (DCC) Bylaw No. 1700 that outlines regionally benefitting projects in Roads, Stormwater and Parks categories as well as associated DCC rates for different types of land uses. As development proceeds Development Cost Charges are paid to the City and/or the Developer constructs one or more of the projects. The City also has a corresponding Policy POL-0003-ENG that allows for Developers to obtain credits for work completed as part of any Development Cost Charge project.

The purpose of this report is to inform Council of a development site specific bylaw for recovery of Road DCCs.

Commentary

The City has several development sites that are larger tracts of land that get subdivided and sold to others to develop, other than the original Developer who rezoned the subject lands. Alternatively in larger scale or multi development sites the overall property gets developed over several years, however the Road Development Cost Charge project, typically a road improvement project, is triggered by conditions of rezoning to be constructed at the onset of site development.

This means that Developers who are the parent Developer of the property that must construct the (Road) Development Cost Charge project are often paying for that project up front, but not realizing the DCC credits toward building permits on the subject site because they have sold the other development areas or are constructing the remaining development in stages after the DCC project is constructed.

The City obtained a legal option that by making a stand alone bylaw with accompanying agreement, this would allow the parent Developer of these larger or phased development sites to recover the DCC payments for any properties within the parent Development site over time, to a maximum of 5 years after substantial completion of the DCC project, the 15 years being started on December 31 of the year the project completes.

The City anticipates a few of these options arising and has been advised by our legal counsel that a site specific bylaw is required for each example.

Financial Implications

None noted.

Legal Implications

Staff obtained a legal opinion and had the associated Bylaw No. 1906 with corresponding agreement prepared by our legal counsel.

Options

That Council:

1. Give first three readings to McCallum Road DCC Agreement (Project Number 6) Approval Bylaw No. 1906, 2020;
   OR
2. Do nothing at this time with respect to McCallum Road DCC Agreement (Project Number 6) Approval Bylaw No. 1906, 2020

Respectfully submitted,

Submitted by:
Michelle Mahovlich, P.Eng, P.Geo, Director of Engineering

Concurrence:
Adriana Proton, Manager of Legislative Services – email approval

Concurrence:
Matthew Baldwin, MCIP, RPP Director of Planning – email approval

Concurrence:
Michael Dillabaugh, CPA, CA, Director of Finance – email approval

Concurrence:
Braden Hutchins, Director of Corporate Services – email approval

Concurrence:
Darren Kiedyk, Chief Administrative Officer – email approval

:mm

Attachment: McCallum Road DCC Agreement (Project Number 6) Approval Bylaw No. 1906, 2020 with corresponding agreement

CITY OF LANGFORD

BYLAW NO. 1906

A bylaw to authorize the McCallum Road DCC Agreement for Project Number 6

The City of Langford in open meeting hereby enacts as follows:

Citation

1. This bylaw may be cited for all purposes as “McCallum Road DCC Agreement (Project Number 6) Approval Bylaw No. 1906, 2020”.

Agreement and DCC payment Approval

2. The City is authorized to enter the agreement attached as Schedule “A” of this bylaw and to pay out of the City’s development cost charge reserve fund established for road purposes all payments required by the City to be made under that agreement.

READ a first time this ____ day of ________, 2020
READ a second time this ____ day of ________, 2020
READ a third time this ____ day of ________, 2020
ADOPTED this ____ day of ________, 2020

Mayor

Corporate Officer

Schedule A of Bylaw No. 1906

MCCALLUM ROAD DCC AGREEMENT (PROJECT NUMBER 6)

THIS AGREEMENT is

BETWEEN:
1054105 B.C. Ltd. (Inc. No. BC1054105)
303 – 1788 West 5th Avenue
Vancouver, B.C. V6J IP2
(the “Owner”)

AND:
CITY OF LANGFORD
2ND floor, 877 Goldstream Avenue
Langford, B.C. V9B 2X8
(the “City”)

WHEREAS: A. The Owner is the registered owner in fee simple of the lands legally described as:

• PID: 030-760-691
  Lot A Sections 112 and 112A Esquimalt District Plan EPP88774
• PID: 030-760-704
  Lot B Sections 112 and 112A Esquimalt District Plan EPP 88774
• PID: 030-760-712
  Lot C Sections 112A Esquimalt District Plan EPP 88774
• PID: 030-760-747
  Lot F Section 112A Esquimalt District Plan EPP88774
• PID: 030-760-755
  Lot G Sections 112 and 112A Esquimalt District Plan EPP88774
• PID: 030-760-763
  Lot H Sections 112 and 112A Esquimalt District Plan EPP88774

(the “Lands”);

B. On February 18, 2018, the City amended its official community plan by bylaw number 1461 and its zoning bylaw by bylaw number 1749 to facilitate development of the Lands and as a condition of adoption of the amendment bylaws the Owner granted the City a covenant which was registered against the Lands under section 219 of the Land Title Act under number CA6644295;

C. Covenant number CA6644295 restricted the use or development of the Lands until the Owner constructed specified works and services, including the road project defined below as the “McCallum Road DCC Project”;

D. Covenant number CA6644295 has since been discharged from the Lands and replaced by Covenant number CA7459516, which restricts the use or development of the Lands until the Owner has either constructed specified works and services, including the McCallum Road DCC Project, or entered a servicing agreement with the City to do so; and

E. The City wishes to make this agreement regarding development cost charge offsets and payments in order to provide incentive to the Owner to complete the McCallum Road DCC Project as soon as possible;

NOW THEREFORE, in consideration of the terms and conditions set out below and other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree as follows:

Interpretation

1. In this Agreement, (a) “Associated Lands” means the lands legally described as PID 030-760-721 Lot D Section 112A Esquimalt District Plan EPP88774 and the lands legally described as PID 030-760-739 Lot E Section 112A Esquimalt District Plan EPP88774;
   (b) “Cost Recovery Limit” means $6,945,934, which is equal to the portion of the cost of the McCallum Road DCC Project that is included in the calculations used to determine development cost charges imposed by the City for roads;
   (c) “DCC Credit Policy” means the City’s road and storm drainage DCC credit policy adopted by resolution as Amendment No. 2 June 2016;
   (d) “DCC Payment” means a payment made to the Owner in respect of the McCallum Road DCC Project under section 4;
   (e) “McCallum Road DCC Project” means all work necessary to complete the project referred to as McCallum Project Number 6 (Millstream to Citation) in Schedule “C” of City of Langford Development Cost Charge Bylaw No. 1700, 2017;
   (f) “Owner’s DCC Credit” means the offset that will be available to, or that has been provided to, the Owner in respect of the McCallum Road DCC Project under subsection 565 (1) or (2) of the Local Government Act;
   (g) “Professional Engineer of Record” means a member in good standing of the Association of Professional Engineers & Geoscientists of British Columbia who has provided to the City a letter of engagement confirming that they have been engaged by the Owner or its agent for the McCallum Road DCC Project; and
   (h) “Transferred DCC Credit” means an Owner’s DCC Credit that has been transferred to another person in accordance with section 8 or 9 of the DCC Credit Policy.

Condition

2. The City’s obligation to make payments under this Agreement arises only after the McCallum Road DCC Project is substantially completed by the Owner and only if the McCallum Road DCC Project is substantially completed by the Owner within the term of the Agreement. For the purpose of this Agreement, the McCallum Road DCC Project is substantially completed when the City issues a certificate of substantial completion for the project to the Owner.

Term

3. This Agreement commences on the date it is fully executed and ends on the earlier of
   (a) the date that is fifteen years after the date on which it is fully executed, and
   (b) the date the total of
   (i) all Owner’s DCC Credits that have been used by the Owner to offset development cost charge payments, plus
   (ii) all Transferred DCC Credits,
   (iii) all payments made by the City to the Owner under section 4, plus
   (iv) all payments made to a person to whom the Owner has assigned its right to payments under section 4
   reaches the Cost Recovery Limit.

Payments to the Owner

4. Subject to section 5, on or before December 31 of the year in which the McCallum Road DCC Project is substantially completed by the Owner, and on or before December 31 of each subsequent year of the term of this Agreement, including December 31, 2035, the City shall pay to the Owner all development cost charges for roads received by the City in connection with the subdivision or development of the Lands, the Associated Lands or other lands in the City of Langford owned by the Owner or an affiliate (as that term in defined in the Business Corporations Act (British Columbia)) of the Owner during the portion of the term of this Agreement preceding that December 31, less the amount previously paid to the Owner under this section. The obligation to make the final payment required by this section survives the termination of the Agreement.

5. The City is not required to make any payment under section 4 that would cause the total of all amounts referred to in section 3 (b) to exceed the Cost Recovery Limit.

Reduction of Owner’s DCC Credits

6. The Owner’s DCC Credits are reduced by the amount of any Transferred DCC Credits and any payments made to the Owner or to a person to whom the Owner has assigned its right to payments under this Agreement.

Interest

7. No interest is payable by the City in respect of road development cost charges collected by the City and payable to the Owner under section 4, including for the period from the time they are collected by the City until the time they are paid to the Owner under section 4.

City’s Obligation Limited to Collected Amounts

8. The City’s obligation to make payments under section 4 is limited to amounts actually received by the City from owners of the Lands and the Associated Lands and the City has the sole discretion, without liability to the Owner, to determine the amounts of development cost charges payable to the City by owners of the Lands and Associated Lands, including by determining whether any reductions or exemptions are applicable in any case.

Assignment of Right to Payments Under Section 4

9. The Owner may assign the Owner’s right to payments under section 4 to another person or persons by giving written notice to the City in accordance with section 36 of the Law and Equity Act that it is assigning absolutely to that person or persons its right to payments under section 4. A person to whom an assignment is made under this section takes the assignment subject to all conditions and restrictions that would have been applicable to the Owner’s right to such payments under this Agreement in the absence of the assignment.

Notices

10. Any notice to be given under this Agreement shall be in writing and may be delivered personally or sent by prepaid registered mail. The addresses of the parties for the purpose of notice shall be the addresses set out in this Agreement. A party may at any time give notice in writing to the other party of any change of address for the purpose of this Agreement.

Amendment or Waiver

11. No amendment to or waiver of any part of this Agreement is valid unless in writing and executed by the parties.

Entire Agreement

12. This Agreement is the entire agreement among the parties respecting development cost charges in relation to the McCallum Road DCC Project and the Owner agrees that the City has not made any other representations or warranties respecting any entitlement to development cost charge credits or payments in relation to that project.

City’s Powers Preserved

13. Nothing in this Agreement fetters the legislative powers of the City.

Applicable Law

14. The laws of British Columbia govern the interpretation and enforcement of this Agreement and the parties accept the jurisdiction of the courts of British Columbia in relation to such matters.

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year written below.

1054105 B.C. Ltd. by its authorized Signatories:

Name:

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Date: ____________________

City of Langford by its authorized Signatories:

Mayor:

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Corporate Officer:

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Date: _____________________