ALBERTA DEVELOPMENT OFFICERS’ ASSOCIATION 2019
Overview 1. Introduction 2. Strategies for the Sale of Municipal Land 3. Creating a Vision & Standardization 4. Redevelopment 5. “Short Snappers” www.brownleelaw.com 2 2
Keys to Successful Development Create a Vision Standardization Think Outside the Box Be Proactive www.brownleelaw.com 3 3
Typical Real Estate Sale Typical realtor forms of agreements have perils if land is not already developed www.brownleelaw.com 4 4
Including a term in a Sale Agreement that the development must be completed following closing is ineffective www.brownleelaw.com 5 5
Promises to develop land after closing… www.brownleelaw.com 6 6
Doctrine of Merger PROMISE CLOSING/ NO TO TITLE REMEDIES DEVELOP TRANSFER www.brownleelaw.com 7 7
Sale & Construction Agreement Use a form of Agreement where responsibilities are “front-loaded” www.brownleelaw.com 8 8
Define the Development Set Deadlines to Commence / Complete Construction Development Agreement, Security, Permits, Financing in Place www.brownleelaw.com 9 9
Risk Management Option to purchase the lands back if deadlines not met www.brownleelaw.com 10 10
Register Option to Purchase on Title Obtain Transfer Back on Closing www.brownleelaw.com 11 11
ORIGINAL PRICE REPURCHASE PRICE www.brownleelaw.com 12 12
For large parcels of land, recommend a staged development www.brownleelaw.com 13 13
Success Story #1- City of Red Deer: Thinking Outside the Box www.brownleelaw.com 14 14
Timberlands 13 acre parcel sold in 2 phases o Phase 1- grocery store & mixed-use retail/residential (complete) o Phase 2- commercial retail & professional offices www.brownleelaw.com 15 15
During Construction www.brownleelaw.com 16 16
After Timberlands North Timberlands South www.brownleelaw.com 17 17
Creating a Vision Infrastructure Growth Standards & & Servicing Expectation Expectations Needs www.brownleelaw.com 18 18
Planning Vision Statutory plans with municipal vision Plans for development MDP, ASP, NASP, LUB www.brownleelaw.com 19 19
Infrastructure Plans Master Utility Studies What is needed for renewal & for new development Determine infrastructure funding or cost recovery options • Who will construct? Who will finance? www.brownleelaw.com 20 20
Standardization Create design & construction standards suitable for Municipality’s needs www.brownleelaw.com 21 21
Clear expectations and requirements Efficiencies in the plans process for constructing municipal improvements www.brownleelaw.com 22 22
Approval & Publication of Design & Construction Standards Section 638.2 of the Municipal Government Act www.brownleelaw.com 23 23
Development Agreements Important cost recovery tool Can require an applicant to construct and pay for: • Roads, walkways & public utilities • Off-street parking & loading facilities • Oversized or extended infrastructure www.brownleelaw.com 24 24
Standardized Development Agreements Create level Create clear playing field expectations of developers www.brownleelaw.com 25 25
Create administrative efficiencies Expedites Consistency in Improves negotiation & enforcement inspection & execution with acceptance customization process www.brownleelaw.com 26 26
SECURITY IS THE KEY Standard level - Minimize cost & Avoid stagnation full cost recovery manage risk of development www.brownleelaw.com 27 27
Standardize the form of security Chartered bank, Automatically Irrevocable Draw on- ATB, or renewable or letter of credit demand redeemable credit union www.brownleelaw.com 28 28
Off-Site Levies • Cost recovery tool • Recoverable infrastructure/facilities: o Water, sewer, storm sewer drainage, roads, connections to provincial highways o Recreation facilities, fire halls, police stations, libraries www.brownleelaw.com 29 29
Spread costs Reduces May based on upfront cost encourage benefit of developers development www.brownleelaw.com 30 30
Who will construct off-site levy infrastructure? OSL Municipality reserves or Builds borrowing Front- Ended by Levy credits Developer www.brownleelaw.com 31 31
Success Story #2 – Leduc County: Off- Site Levy & Developer Front-Ending www.brownleelaw.com 32 32
OSL for roads, OSL policies water, & sanitary provide for front- ending • Servicing vision for industrial area • Developer front- ends portion of infrastructure Nisku Spine Road County provides • Important levy credits & infrastructure reimbursement • Built ahead of through capital schedule Agreement www.brownleelaw.com 33 33
Before - 2011 After - 2017 www.brownleelaw.com 34 34
Encourages Development in Industrial Area December 2018: Amazon announced plans to build new 1,000,000 square-foot customer fulfillment facility at Nisku Business Park www.brownleelaw.com 35 35
Redevelopment Challenges Fragmented Ownership Developed land different owners with different goals www.brownleelaw.com 36 36
Anxiety & fear of change NIMBY Vocal landowners can be influential www.brownleelaw.com 37 37
Risk of Losing Investment Risk losing investment or Developer Potential profit margins too FEAR has to outcome small to make purchase land unknown project worth pursuing www.brownleelaw.com 38 38
Barriers Created by Planning Application complexity and uncertainty Discourages Unforeseeable expenses due to redevelopment unclear process Uncertainty of results www.brownleelaw.com 39 39
Barriers Created by Planning Ba rrie rs Cre a te d by Pla nning Lack of funding for analysis Discourages Inappropriate land redevelopment use standards Poor planning causing incompatibility www.brownleelaw.com 40 40
Solutions to Support Redevelopment Take Stock Ripe for redevelopment? www.brownleelaw.com 41 41
ASP: Planning & Plan It Infrastructure LUB: LUB: Nonconforming Redistricting Buildings LUB: Parking Requirements www.brownleelaw.com 42 42
Sequential Remediation/ Supervision Remediate brownfield in stages www.brownleelaw.com 43 43
Evaluate Financial Tools/Infrastructure Local Cost Improvement Off Site Levy Comparison Tax Generally Community Available Revitalization Infrastructure www.brownleelaw.com 44 44
Programs/ Funding FCM Green Municipal Fund www.brownleelaw.com 45 45
Success Story # 3: Town of Cochrane – Successful Redevelopment Domtar The Site Quarry www.brownleelaw.com 46 46
Before: 2010 www.brownleelaw.com 47 47
Domtar wood treatment facility: coal tar/creosote mixture www.brownleelaw.com 48 48
During www.brownleelaw.com 49 49
After: Current Development www.brownleelaw.com 50 50
New Business Since 2011 In & Around the Quarry www.brownleelaw.com 51 51
Projected Assessment Increase $125.5 million $113 140 million Assessment ($ million) 120 100 80 60 40 20 0 2012 2014 2016 2018 2020 2022 Year www.brownleelaw.com 52 52
SHORT SNAPPE RS www.brownleelaw.com 53
#1: Increase Permitted Uses www.brownleelaw.com 54 54
#2: Get Your Development House in Order Standard Development Agreement Utility Right-of-Way Agreement Road Dedication/ Widening Agreement Purchase & Sale Agreement www.brownleelaw.com 55 55
#3: Development Agreement Same agreement as neighbouring municipalities www.brownleelaw.com 56 56
#4: Streamline Planning Process Enhance administrative approvals www.brownleelaw.com 57 57
Questions? LORNE I. RANDA Partner, Edmonton Office lranda@brownleelaw.com Direct: 780-497-4832 Twitter: @foipguru www.brownleelaw.com
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