SmartCentres at Mountain Plaza will not receive an extention on development credits
The massive real estate investment trust with delayed development plans at Mountain Plaza mall will not receive an extension to hold onto $840,000 credit for city fees.
Mayor Fred Eisenberger says he does not begrudge SmartCentres for seeking more time to keep the development charge credits. But they should not be taking advantage of taxpayers' dollars to do that forever and always."
On Wednesday, in a 12-2 vote, council overruled a committee decision last week to extend SmartCentres' deadline by two years to get on with planned construction or lose the development-charge exemption.
The city offers development charge demolition credits when builders flatten buildings with plans to construct anew on sites. Development charges fund servicing needs, such as sewer pipes and roads, that arise from construction.
The demolition credit takes into account that servicing already exists where buildings were razed for plans to construct new buildings. To discourage lots from sitting vacant for long periods after demolitions, the city sets a five-year limit on credit extensions.
In 2010, SmartCentres, which another real estate investment trust, Calloway REIT, purchased in 2015 for $1.16 billion, razed the 256,957-square-foot Upper James mall at Fennell Avenue East.
The city issued permits for the construction of six buildings, which made use of 209,709 square feet of demolition credits between 2009 and 2012.
In 2015, council approved a two-year extension for expired credits, and three more years in 2017, with credits expiring for land that was still vacant.
With Taco Bell and Penguin Pickup joining Walmart and other retailers in the plaza, 44,781 square feet worth of expired credits remained in 2020.
In a report before last week's audit, finance and administration committee, city staff recommended denying SmartCentres' request for another five-year extension.
SmartCentres' Kevin Rachman called the $840,000 in credits an integral part" of the next phase's viability, noting large sites can be complex and time-consuming to develop. So we're stuck in a bit of an impasse in that way."
The application for the northeast corner of the plaza will be strictly retail, but a further mixed-use redevelopment, is also planned, he said.
Councillors at the committee meeting voted 4-3 in favour of a compromise - a two-year extension with a nine-month deadline for SmartCentres to submit a site plan.
But on Wednesday, Coun. Brenda Johnson said she'd changed her mind after considering Coun. John-Paul Danko's remark that the developer's plans were scrawled on the back of a napkin."
I agree this property has been left to rot," Johnson said.
Councillors Maria Pearson, Chad Collins and Lloyd Ferguson also argued last week the extension would allow SmartCentres to carry out its plans and add to the city's tax base. On Wednesday, Ferguson sided with the 12-vote majority, but Pearson and Collins stuck to their guns.
Coun. John-Paul Danko, who represents the mall's location in Ward 8, noted SmartCentres also stands to gain about $900,000 in additional development charge credits if it demolishes remnants of the old shopping mall. I don't think we should be adding onto that additional benefit."
Coun. Maureen Wilson said SmartCentres has not been damaged in any way" by the COVID-19 pandemic, citing a $25-million payout to shareholders last week alone.
My point is this company can afford to develop. They're a multinational corporation."
Teviah Moro is a Hamilton-based reporter at The Spectator. Reach him via email: tmoro@thespec.com