By Tim Kalinowski
Cypress County councillors had a bitter pill to swallow when Irvine developer Lansdowne Equity Ventures petitioned council for more funding to offset their construction costs for the 39 new lots being put into the hamlet.
The County has spent $12 million getting a new waterline to Irvine and has deferred collection on the offsite levies expected from the new development to get it built in a timely and cost-effective manner for the company. Don Sandford, Chief Financial Officer of Lansdowne, came from Calgary last week to ask for the additional funding. He was joined by Blair Hann of Scheffer Andrew Ltd. and local realtor Gary Ruff.
Hann laid out the findings of his firm’s engineering report which found about $400,000 in upgrades and sewer repairs stemming from a failed previous development on the same site when Irvine was still its own municipality. The Town of Irvine put down new sewer and water in the area over 20 years ago, but when the development failed to take off as expected that same sewer and water infrastructure was left in the ground, and now needs to be upgraded once more. The $400,000 cost cited by Scheffer Andrew Ltd. referred to both the main line in the community itself and the hook ups to the previous development. Cypress County has already committed to upgrading the Irvine main line, taking that off Lansdowne’s plate. However, it was Lansdowne’s perspective that the County was still responsible for the $174,000 shortfall leftover for the hook-ups to the new lots.
Lansdowne was asking last Tuesday that Cypress County make this cost up by waiving the offsite levies for a total of $117,000 savings and by charging new homeowners who build on those lots an additional $57,000 in taxes spread out over time.
“Our profit margin is only about ten per cent,” said Sandford. “It’s pretty tight. That’s why we have to keep our costs in line to do this.”
Sandford pointed out Lansdowne was already putting over a million dollars of its own money into the project.
Discussion on Lansdowne’s ask then moved in camera for the rest of Tuesday afternoon. From all indications it was pretty heated at times as councillors banged it back and forth between themselves to come to a decision which would encourage the developer, but also be fair to taxpayers.
Jeffrey Dowling, Planning Supervisor with Cypress County, called the Courier on Wednesday to report on the results of the discussion. The county opted not to waive the offsite levy fees and declined to impose an additional $57,000 tax burden on new homeowners who may be coming into Irvine over the next few years. They did, however, opt to provide $3,000 in additional funding to Lansdowne for each of the 39 lot water/ sewer hook-up upgrades it puts in up to a maximum of $117,000. This money would be paid after proof of completion of the work was provided by the local contractors as each house comes online. The money would be collected back from offsite levies when houses are moved in or constructed on the site.
“This was a unique circumstance in terms of infrastructure that had been put in by the town of Irvine, and of course when the town dissolved and became part of Cypress County then we have some responsibility, and that’s what council recognized,” said Dowling. “Council was very firm that they wanted to basically pay for the upgrading of the main water and sewer lines that runs through the 39 lots. What this boils down to; to make it viable from Lansdowne’s point of view and competitive with other markets in the area and affordable to new homeowners, there were extra costs that had to be addressed.”
Reeve Darcy Geigle, who represents Irvine, said the decision council made was the best one they could under the circumstances.
“It’s not something Cypress County usually does,” said Geigle on Wednesday. “It’s usually up to the developer (to absorb the costs in making a new development) and we take it over when its done. But this is kind of an agreement way back when the Town of Irvine owned those lots and sold them as serviced. (The infrastructure) was put in and it wasn’t used for so long that now it needs to be replaced.”
Geigle cautions that Lansdowne hasn’t accepted the County’s counter-proposal yet, but he is optimistic they will because the offsite levies have been deferred.
“Usually we need it up front. This way we have delayed it. We’ll recover that money when the development permit gets taken out. Now its just matter of who will pay (that $3,000 per lot). If Lansdowne puts the house on a lot they will pay it. If a homeowner buys the lot and puts a home on it then the homeowner pays it.”
Considering the County has just finished forking out $12 million to get a new water line to Irvine, and will be absorbing a high dollar cost to upgrade the community’s water and sewer main line, Geigle didn’t think an additional $117,000 to get the developer moving on the project was something to blink at.
“It’s all about economic development. We want to get more people there and get that town growing,” said Geigle.