Wednesday, September 26, 2012

Land vs Cash Issue Back With a Vengence

A recent decision by the Eastern Newfoundland Regional Appeal Board is likely to ignite a fresh round of discussion and debate regarding this issue.

An appeal was launched by a group called Concerned Citizens of Torbay being represented by Torbay resident Derek Staubitzer and it was conducted on September 14, 2012. The appeal was filed in response to a Council decision regarding Motion Drive Estates but is bound to have a more significant impact on this development and future decisions. The Board found in favor of the Appellant and has sent the matter back to Council to be reexamined and amended.

The following is a copy of the decision as it was delivered by the Appeal Board on September 17, 2012.

Motion Appeal Decision

After this decision it is going to be interesting how council proceeds. Whatever they decide they should do it quickly as they owe it to the developer and the residents to come to a speedy resolution so that he can proceed with his development.

After reading the decision it is clear that Council has the right to accept cash in lieu of land in a development where they feel there is sufficient green space. The issue is how they determine what the amount of cash should be as in the town's Municipal Plan the phrase "Fair Market Value" is used and Council has been applying the land value as per the Municipal Assessment Agency or "Raw Land Value" as we have heard it referred to. The appeal board basically said that Council needs to go back and reevaluate how they determine what the value of the land is because there is a conflict between the Town's Municipal Plan and how they are determining the value.

One thing to mention however is that currently the Municipal Plan is under a mandatory 5 year review and Council could easily make changes to the plan to accommodate the way they assess the value. In fact they don't even have to wait until the review is completed to do this they could simply make an amendment to the plan. For instance as I see it they could remove the phrase "Fair Market Value" from the plan and replace it with "Assessed Value" which would essentially remove the conflict between the motion and the Municipal Plan and allow Council to proceed as it always has. I am not sure if this change could be done that easily and there could be other implications with Municipal Affairs but it is something to keep in mind and be watchful for.

Depending on how Council proceeds with this could have a significant impact on how much money we receive as a town going forward. I still don't feel that is is fair to expect a developer to pay what the land would sell for after they have developed the subdivision. For instance if a subdivision has 10 lots that are selling for $100,000 after the roads and other infrastructure is constructed by the developer is it fair to expect them then to give the town $100,000? I don't know what the answer is but I would hope that there would be a happy median that can be reached.

Another action the town could take would be to appeal the decision to the Supreme Court of Newfoundland  and they have 10 days after the Boards decision is received. This would no doubt be a costly affair and the optics of the thing would be hard to stomach. People would view it as the town spending tax payers money to go to court to fight for the right to make decisions that would see us get less money from developers than we may be entitled to. Try selling that to the electorate.

Stay tuned I am sure there will be more to come on this issue going forward.