Browsing the archives for the City Ottawa tag.

Why is Ottawa Overpaying Developers for Land?

Green Reality, South March Highlands

The City’s scarce environmental purchase funds appear to be used to overpay Urbandale and other developers when buying lands designated Urban Natural Area (UNA).

According to the Oct 12, 2012 staff report to the City’s Finance Committee, the going price for environmental land acquisition is $160 K / acre which is up 50% over the originally budgeted amount in 2010.

Considering that UNA lands are already undeveloped and cannot ever be developed, you have to wonder how this exorbitant price increase was justified over only 2 years.

Even if staff are using recent price increases for developed land, the math doesn’t work.

  • According to the Ottawa Real Estate Board, the average price of resale homes in Ottawa increased only 2.3% in 2012 over 2011 compared to 7.7% in 2011 over 2010.
  • Inflating the 2010 budget estimate of $101, 250 / acre x 1.077 x 1.023 = $111,554 / acre  in 2012
  • So why are staff agreeing to pay $160,000 / acre?

But is it even believable that land price increases for developed real estate should be used to justify massive increase in value for land that can never be developed?  On what basis would any reasonable person expect there to be any increase in value at all beyond inflation?

  • Allowing for inflation results in only a compounded increase of only about  4%

So how can a price increase of 50% be rationally justified?

  • It seems that either the process is corrupt  or the City managers that are responsible for these funds are so incompetent that they should be dismissed.

A review of land acquisitions from 1998 – 2010 reveals that the most that the City ever paid in the past was only $86 K /acre and that the only transaction in 2010 was at $71 K / acre.

What seems particularly odious is that the same staff were busy justifying a price ranging between $231 K /acre t0 $363 K / acre in Nov 2010.  The Coalition to Protect the South March Highlands asked the City to purchase 74 acres of KNL’s land in Beaver Pond Forest prior to it being clear-cut:

  • KNL Phase 9 is 110 acres of which KNL had already agreed to convey 40% to the City for free as UNA
  • City staff had estimated the value of the remaining 66 acres at $18 M or $231 K / acre for unserviced land that had previously been designated as NEA prior to granting Campeau development rights in the SMH
  • Note that KNL is a joint venture between Urbandale and Richcraft.  It seems that Urbandale has remarkably good fortune in extracting top-dollar from the City for land acquisitions and that City staff are often willing to pay it.

Since UNA land cannot be developed, and tax assessments are supposed to be never more than 3 years out of date, why does the City ever pay more than the assessed value of the land for taxes multiplied by the appropriate inflation adjustment?

So it appears that staff has misled Council on several occasions:

  • By using an estimate of $100 K /acre in the 2010 budget when the City had only paid $71 K / acre that year
  • By reporting to City Council  in 2010 that a fair price was effectively $231 K / acre or higher when Council was deliberating on the Beaver Pond Forest acquisition
  • By consistently overpaying developers by 50% when acquiring UNA land post-2010
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Has the Ottawa Citizen Become a Blogspaper?

Economic Reality, Financial Crisis, Political Reality, South March Highlands, Virtual Reality

Today, Jan 12 2013,  there is no news article to be found anywhere on today’s front page of the Ottawa Citizen’s print edition.  The only article is a columnist’s opinion piece.

The Ottawa Citizen, which has recently been steadily displacing news with opinion on its front page, appears to have taken another step in a transition from being a reputable newspaper to being primarily a compendium of opinion articles – in effect a blogspaper.  Actual reporting of news appears to have become a scare commodity on the front page where opinion-based articles written by columnists appear to be increasingly crowding-out fact-based news.

The reason for this is probably economic as more and more people rely on Internet news sources than print sources.  I’ve been told by former Citizen reporters that fewer than half the reporters that worked at the Citizen in 2005 remain due to rounds of budget cutbacks.  Many of the columnists employed by the Citizen are syndicated across more than one newspaper to reduce costs.

The need to protect non-subscription revenue – i.e. advertising – appears to explain why news reporting over the past few years at the Citizen seemed to become skewed, by what appears to be selective editing, in favour of the interests of its largest sources of ad revenue: new home sales, real estate, car sales, and city notices.

Selective editing is invisible to those not intimately familiar with an issue being “reported”.  It wasn’t until I participated in the Coalition to Protect the South March Highlands that I personally realized the extent of news that simply was not being reported in the Citizen.

  • For example, on more than one occasion I or someone else in the Coalition would be interviewed by a reporter, only to see the Coalition’s perspective omitted or under-represented in the subsequent article.
  • Other media (TV, radio) would report our perspective in a more balanced way, but compared to the print space allocated to support a developer’s or the City of Ottawa’s perspective, it appeared that an editorial slant was silently at work.
  • From discussions with spokespeople for other environmental groups in Ottawa, it appears that selective editing is widespread.  One can only wonder if it will naturally lead to selective reporting by reporters who will see the futility in reporting more than will ever be printed.

I also see the same signs of lack of depth & balance in the reporting of the Idle No More movement that I also have first-hand knowledge of.  For example, prior to running sensational headlines about the audit at Attawapiskat, did the Citizen bother to investigate the other side to the story?

  • How many qualified accountants even exist within a 1000-mile radius of a tiny, isolated, northern community in which few have any opportunity for post-secondary education?  Attawapiskat has an on-reserve population of less than 1,600 people and 1/3 of them are under the age of 19.  Most of its 1000 adults are unemployed, living in crowded, substandard, housing with no running water.
  • As for education, the state of deteriorating buildings caused the elementary school to be closed in 2000 and replaced by crowded portables which hardly promote a positive educational experience in the average -30 C weather during the school year. The space in those portables is only 50% of the standard that is supposed to be funded by the Federal Government.
  • So is it surprising that record-keeping is not to the standard expected by Certified Public Accountants?  There isn’t even a doctor in Attawapiskat, so why would anyone expect to find a professional accountant in a warm and comfy office diligently recording receipts?  The real story is that the Chief’s husband upgraded his accounting skills in a best-effort to try to improve financial accountability and, according to the audit, this resulted in fewer audit concerns.  Much has been made of the daily rate charged for this service, but has anyone inquired into how many days he billed?
  • More to the point, is there actually any evidence of misappropriation of funds?  Or is it possible that it was more expedient for the Citizen to run a story that required less investigative journalism?

The Federal government, who does not advertise much in the Citizen, appears to be the main target for investigative news which provides the illusion of continued balanced reporting to many.   But with fewer reporters on payroll, how long will even this continue?

Today may be remembered as a day of infamy for journalism as no news content at all was reported on the front page.  Headlines and a columnist’s article do not make much of a newspaper – especially for the advertising enriched weekend edition.

There once was a time when the Ottawa Citizen won awards for the high-quality of its investigative journalism.  Sadly those days appear to be gone, and so now I personally rely on the Globe and Mail for old-fashioned, real “news”.  Most bloggers like me are not trained journalists.  Some of us, like some of the columnists in the Citizen, try to present facts along with opinion but our primary service is to share our fair comment on the news – not report the news.

As the Internet inevitably eviscerates the Fourth Estate and replaces it with the Fifth Estate, I for one will miss its professionalism.  Meanwhile I still subscribe to the Citizen because my wife enjoys its extensive funny papers.

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Understanding The Terry Fox Drive Decisions

South March Highlands

On Dec 14, 2010 the Ontario Divisional Court gave judgement  in a judicial review of the Terry Fox Drive Extension environmental assessment process.  This decision, for which leave to appeal may be sought, appears to be precedent-setting and has significant implications in Ontario.

1. Despite the City’s attempt to challenge the standing of the South March Highlands – Carp River Conservation Inc.(SMHCRC), the court ruled that the SMHCRC:

(a) has a genuine interest in the matter;

(b) that there is a serious issue to be tried; and

(c) there is no other reasonable and effective manner for the issue to be resolved.

This appears to be an important precedent that will assist other public interest groups assure their standing before the courts.

2. Despite the City’s assertion that the Minister of the Environment as well as the City of Ottawa should have been a party to the case, the court ruled that the City on its own exercised a statutory power of decision that was subject to judicial review.

This aspect of the decision appears to indicate that municipalities will be held accountable for the effect of their own decisions, notwithstanding the involvement of other authorities.

3. Despite the City’s assertion to the contrary, the City’s decision to proceed with construction of the road is a statutory power of decision and thus subject to review.  Furthermore, the City’s decision to proceed without filing an Addendum that was available for public review has broad public interest implications because of the lack of opportunity for public review.

This appears to indicate that municipalities who decide to proceed with projects without filing an Addendum that was available for public review are subject to judicial review by the courts.

4. Despite the City’s assertion that the situation was moot because the road was near completion, the court agreed that it is not too late to address items such as whether the environmental mitigation is appropriate.

This means that it is not too late to do the right thing.

5. With regard to whether the City of Ottawa was required to file an Environmental Assessment (EA) Addendum the court determined that it could not conclude that the City’s decision to proceed without filing an Addendum was unreasonable.

This aspect of the decision appears to raise a number of questions which require careful consideration by members of a broad community of interest. 

In summary the SMHCRC successfully defended itself on several legal challenges made by the City of Ottawa on questions of legal standing, applicability, mootness, and the extent to which the City was subject to judicial review. 

The SMHCRC now has 15 days to consider whether it should request leave to appeal on the remaining aspects of the decision.

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City Auditor Finds That Staff Is Soft On Developers

South March Highlands

Misquoted

The Ottawa Citizen completely mis-quoted my letter to the City of Ottawa’s Auditor General.

The Citizen’s headline “No audit for South March development” is inaccurate –development in the South March Highlands has already been audited as part of the AG’s review of the Development Review Process and the City’s performance has already been found questionable.  The real headline should have been the one I used for the title of this blog posting.

City Management in agreeing to pull up its socks has effectively admitted that City staff are soft on ensuring that developers meet the pre-conditions of subdivision development.

In my letter to the city Auditor General, I did not (as misquoted by the Citizen) “charge that the developer was refusing to meet a number of required conditions” even though that may be true with respect to conditions applicable prior to starting any phase of development or construction. 

I questioned why it took 1,567 signatures on a petition and a motion by City Council to require staff to do what they should already have been doing all along – enforce oversight on a developer meeting the pre-conditions of subdivision development.  I charged that planning staff were lax in the oversight, validation, and verification of conditions of subdivision.

I pointed out that the City’s Greenspace Master Plan identifies this area as one of the most significant natural areas of the City and that anything less than strict attention to the conditions of subdivision approval and applicable environmental studies would be irresponsible as well as in violation of the City’s Official Plan.

I stated that this situation was far from acceptable and questioned by the Mayor has not held the City Manager accountable for this incredible and ongoing failure.  The Auditor General replied that his audit of the Development Review Process had already turned up similar issues and that Management had agreed that these needed to be addressed.

In my follow up letter to the Auditor General I asked that the results of his audit and that the improvements being made by Management be made public.

The full text of my original letter and my follow-up letter can be found on the other tabs of this post.

July 28 Letter To AG

Mr. Lalonde,

The Planning Act requires municipalities to oversee development applications for subdivisions.  Yet 1,567 signatures on a petition were required to ensure that City Council passed a motion on July 14 to direct staff to do what they should already have been doing all along – enforce oversight on a developer meeting the pre-conditions of subdivision development.

At a public meeting held the following night, it was obvious that planning staff had not read in detail the preconditions of subdivision development, nor could they explain why so many conditions were unmet given that the developer has already developed prior phases.  Staff were unable to produce any details or copies of the documents that were supposed to be approved, nor were they able to identify which plans must have updates prior to each phase of subdivision, nor could they identify the approval status of the storm water management plan.

Furthermore, it appears that City staff have become so lax in the oversight, validation, and verification of conditions of subdivision, that the developer, KNL/Urbandale,  has become upset about the City starting to exercise their duties and has filed a complaint with the OMB.

In conversations with city staff and with city councilors I am told that this lack of practice is to commonplace as to be accepted as normal business as usual.   Yet it is far from normal, and it is even further from being acceptable.   It is a mystery why our Mayor has not held the City Manager accountable for this incredible and ongoing failure. 

The area where this subdivision development is occurring is identified in the City of Ottawa’s Greenspace Master Plan fieldwork study as containing 3 of the most significant natural areas in the City.  Anything less than strict attention to the conditions of subdivision approval and to the applicable environmental studies (such as the Special Study conducted by the City in 2004) and subwatershed management  plans would be irresponsible, as well as being in violation of the City’s Official Plan and the City’s statutory obligations.

The area is so sensitive, and residents are so opposed to its development, that this subdivision has a special condition (Condition 11) that requires the developer, prior to each phase of development,  to produce and maintain a communications strategy regarding development plans, schedule, and status.  This condition has NEVER been met and staff cannot explain why they have allowed any development to proceed to-date without it having been met to the City’s satisfaction.

Will you conduct an immediate operational audit of this situation?

Regards,

Paul Renaud

July 30 AG’s Response

Good Afternoon Mr. Renaud

 Thank you for your email and your interest in this file.

I have reviewed your concerns.  In our audit of the Development Review Process, we have identified similar issues to yours.  My understanding is that Management is addressing them.  Finally, all my resources are currently assigned to complete my 2010 audit plan.

For these reasons, I do not plan do conduct an operational audit of the project.

Respectfully,

Alain Lalonde CIA, FCGA
Auditor General
City of Ottawa

July 30 Follow-up

Mr. Lalonde,

How may I obtain a copy of your findings and the steps that Management claims to be taking to address them?

We are obviously concerned about the possibility for gaps between the audit of the overall process and the failures of this project to-date.  Since you do not intend to conduct an operational review of this specific project, it is only by comparing the project issues that we have encountered to the results of your audit that we can be assured that further gaps do not exist.  For example, as they might arise in the handling of environmentally sensitive development projects.

Also, understanding the remediation plan proposed by Management is important to satisfying the concerns of citizens that the steps Management is taking will be sufficient as measured in terms of this environmentally sensitive project.

Regards,
Paul Renaud

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Ottawa Citizen Continues to Whitewash TFD

South March Highlands

The Ottawa Citizen has put so much white wash over the Terry Fox Drive (TFD) extension project that it will soon be unsafe to drive.  Each article that they publish seems to add more white-wash than the last.

The article, “Councillor muses about Terry Fox land swap“, quotes Marianne Wilkinson as saying she wants a park, but “the road must go ahead“.

Click on each tab below to reveal why she is wrong.

Why?

There is no economic justification for spending $47.7 M on a road that will sever the eco-connectivity of the area that Councillor Wilkinson wants to create a park in.

The original justification for the road evaporated with the tech bubble in 2001.  The City’s Auditor General in 2007 found that the population projections used to justify it and several other projects were unrealistic since actual growth has been 80% less than forecasted. 

City Management agreed, yet the traffic study for the road has never been corrected, nor was Council approval obtained to continue to proceed with a project of this magnitude having no economic justification.

No wonder Council can’t balance the City budget.

Who?

According to the Census, only 26,000 people in Kanata live north of the Queensway and most of them live south of South March Highlands – Morgan’s Grant, Dunrobin, and North March being the only communities in the north end of Kanata.

Meanwhile there have been 4 roads built in Kanata to enhance north/south connectivity (in addition to the 4-land March Road) since TFD was planned in 2000:

  • Hertzberg road now connects to TFD,
  • Kanata Avenue links to Campeau and TFD,
  • CastleFrank now crosses the Queensway,
  • TFD links Centrum to Kanata south.

The City is also spending $18 M to upgrade Goulbourn Forced Road so that is will be a usable road. 

How many roads do 26,000 people need?

According to OCRI, high tech employment is lower now than it was in 2000 and is likely to be flat for the foreseeable future (click to enlarge):

Graph of OCRI: Knowledge Based Employment Showing Flat Trend

Negative to Flat 10-year Growth In High Tech Employment

With the demise of Nortel, causing its parts sold off to foreign investors, we are unlikely to see significant employment growth returning to Kanata.

Who does the Councillor expect to use this road?

How?

The Citizen chose not to challenge Councillor Wilkinson on how she expects to justify a park to the NCC when TFD extension will sever eco-connectivity to it.

Scientific studies have proven that the road severs both the existing park in Trilliam Wood and the future park that the Councillor wants to have south of the road.  The leading scientific expert on the area, Dan Brunton, has called the road a “Berlin Wall” because it creates an impassible obstacle that will kill any animal that tries to cross it.

The City’s own Forest and Greenspace Advisory Committee, consisting of an expert panel of ecological advisors, passed a unanimous resolution expressing “grave concerns about the ecological damage caused by the TFD extension”, denouncing the proposed mitigation measures as inadequate as well as the failure of the City to protect the area. 

The Ottawa Field Naturalists, Canadian Bio-Diversity Institute, Greenbelt Coalition, Riverkeeper, Ecology Ottawa, Sierra Club, Save Our Greenspace, and several other ecological and community groups have jointly issued a statement appealing that the road be abandoned.

In trying to promote a park and build a road, how does the Councillor expect to have her cake and eat it too?

When?

Councillor Wilkinson is right in asking that the NCC extend the Greenbelt to embrace the South March Highlands.  The entire area should be a park that is out of the reach of the developer-driven planning at City Hall.

However when will the Councillor drop her support for a road that is no longer needed?

When will she rescind delegation of authority to City staff that enables them to approve developer plans for this area without public review?

If the Councillor were actually opposed to development in the area she would be using every mechanism available to her to delay it. 

When will she act as she speaks?

Conflict of Interest?

One can only wonder about why the Councillor floated a $100 M price tag for the purchase of land that cost considerably less for the developers to purchase.

In 2012, the land will soon be close to worthless from a developers’ perspective when habitat protection automatically kicks in as a result of Ontario’s Endangered Species Act. 

There are 17 species-at-risk identified with the South March Highlands, many of which currently reside in lands owned by developers.  With habitat protection, it will be very difficult and costly for developers to develop this area.

At some point, Ontario’s Ministry of the Enviornment will also get serious about dealing with the Radon gas that is embedded in the granite beneath the area.  This gas will be released by any blasting done for development and is already a health hazard for existing residents of North Kanata.

Environmental mitigation for radon gas emissions will make it harder for developers to sell homes in the area.

Without the road, developers will have to rework their draft plans for subdivisions, involving costly engineering work.  And even if the road is allowed to proceed, the environmental assessment process for development in such a sensistive area should be subject to lengthy public review.

Selling the land to the NCC at even cost plus 10% makes better business sense from a developer’s perspective because it creates more economic cash flow than tying up expensive capital for diminishing returns.

It appears that the Councillor is not experienced in the art of business negotiation, so why is she batting about high price tags?   Is it because the City is too accustomed to giving developers whatever they want?

Ecology Ottawa, Do_Developers_Run_City_Hall, examined campaign funding by developers for City Councillors in the last election.  It will be interesting to see how much funding from developers goes to Wilkinson and other candidates in this year’s election.

Ecology Ottawa also tracks the environmental voting record of all City Councillors and it will be very interesting to see if there is any inverse correlation between the declining environmental grades given to several councillors and any increased campaign contributions they receive from developers in the upcoming election. 

As an example you can see from page 2 of postcard-and-grades, the Councillor for North Kanata’s environmental record has deteriorated from a B to a C-D rating since the last election.

While we are looking at the long hand of developers, we should also ask why doesn’t the City’s editorial board ever allow its reporters to challenge the road? 

Could it have something to do with the significant amount of advertising revenue from the City of Ottawa each year? 

Or perhaps the massive amount of advertising revenue from advertising from developers.  This volume is enough to justify a whole section of the paper each week called “New Homes”.

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