CITYPLACE
BUYERS FACING EXTENDED “OCCUPANCY FEE PERIOD” DUE TO MISSING BRIDGE
Charles Hanes
January 1, 2008
Somewhere around 2,500 condo buyers at Cityplace have seen their
“Occupancy Fees” extended for an indefinite time period due to repeating delays
in building a bridge across the old railway lands making them renters (with the mortgage
portion or “Phantom Mortgage” of their “Occupancy Fees” not accruing
to their mortgage).
Listening to the various players it is said that these delays have “raised the
hackles of developers and city officials“ although, bridges are not built overnight
and I am hard pressed to see why, once again, the burden of this type of screw up is
simply passed on to the poor buyer!
The completion of this bridge is a requirement imposed by the city of Toronto for
CityPlace to register its N1, N2, West One and Galleria condo towers, which sit
in a block west of Spadina Ave. and south of Fort York Blvd.
The Toronto Star recently quoted Alan Vihant, a vice-president at Concord Adex (developer)
as saying: "We've got people moved in on one of our blocks, and they want to
financially close and become owners and not tenants". Concord Adex, has agreed to
finance the building of the bridge.
Adam Vaughan, local city councilor (Ward 20, Trinity-Spadina), is quoted in the same
article say that “it is GO Transit who is slowing up the program as they must approve
the bridge design and GO Transit has rejected every version of the bridge's support system
submitted to them. Go is doing everything in their power to be obstructionist,"
Vaughan says. "Yes, their responsibility is to deliver transit services, but they
have a role to play in helping us build the city. It's not fair. They don't care whether
2,200 people can live in their building."
The bridge is to be located at Portland St., west of Spadina and east of Bathurst St. It
was designed to link neighbourhoods north of Front St. to CityPlace and the waterfront,
providing access to one of the most impressive natural path systems for pedestrians,
joggers, cyclists, and tourists in the world (runs from deep Whitby to Burlington along
Lake Ontario).
Frequently the city requires developers to finance community improvements and/or assisted
housing when they apply for permits to develop these glass residential piggy banks. The
bridge is one of these imposed community improvements Concord Adex is required to make in
order to develop the area south of the rail tracks.
The developer must finance and build the bridge, with the city taking ownership on
completion. Vaughan says the bridge is an important project in his ward and will play an
essential role in renewing the waterfront "in a way that's built on a pedestrian
scale."
GO Transit's manager of transportation planning and development, is reported in the
Toronto Star as saying that while “talks are progressing, it is up to the city to
either agree to a design that works for GO or scrap the bridge idea entirely. The existing
plan, which calls for a supporting column near the rails, could interfere with the
sightlines for train signals“, GO is reported saying.
GO has proposed a clear-span (no supporting columns) design, but that idea does not seem
to work for Concord Adex or the city. "That's ridiculous," Vaughan is quoted in
the newspaper saying. "They know the only way to build a clear-span bridge is to shut
down service for three to four months. They won't let that happen." |
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My question is:
“how is it that consumers end up paying for GO and the City Council interfering with
the delivery of this critical component of a residential condo development“?
Our Mayor and Council have been spouting off a great deal of late about how savvy they are
in running this city. Well, here’s a glaring contradiction to those allegations! How
is it that the only party being negatively impacted in this is the consumer? The consumer
is the one party with absolutely no control over anything to do with this. Who is
responsible for allowing this failure to negotiate a settlement on the construction of
this bridge within the confines of the Agreements that everyone knew to be in place?
People have a lot of money riding on these small spaces and these prolonged occupancy fees
materially affect their purchase price and resulting return for having invested here! The
City is getting all of it’s “hidden fees” (levies, etc.) but through
it’s inability to fulfill it’s obligations under the Agreements the consumers
are getting fleeced. The question is, “is this right”?!?
More political infighting it seems but this time it is directly and negatively affecting
innocent third parties, you know, those buyers who now are facing paying extended
“Occupancy Fees” that are the equivalent to rent! Tack these monthly add-ons
onto your purchase price and you will see that the developer is not overly upset about
this development however the developer continues to face the construction fees so time
becomes the issue for them as well.
All eyes have to turn to the City, you know our municipal government who just introduced
an additional new Land Transfer Tax. This bridge issue reflects directly onto their
ability to play the roll that they will have to play to earn their new found cash flow
(new Land Transfer Tax) yet in over five years since the site plan was submitted, no-one
got around to addressing this bridge issue.
The solution is not rocket science but the occurrence suggests a very serious deficiency
in the overall game plan of condo development in this city where Joe Average Consumer (who
trusts in the system to protect him/her) is left holding the bag every time!
Simply register these condos now and get the consumer off the hook and resolve the bridge
issue involving future development of the buildings west of or including Parade. It’s
not that Concord Adex is opposing paying for the bridge. They put in excellent parks, art
and living space around their condos for years now and have not shied away from paying for
civic upgrades.
“The obligation to get approval to build that bridge is the city of Toronto's,"
according to Cityplace. "GO is saying, we want more time“. The consumer is left
sucking their thumb and paying the bill while GO and the city stumble on.
It’s not like this issue crept up over night! It takes time to build a bridge! People
are already living in N1 and N2 which occupied well after West One. N1 and N2 occupied as
recently as last month so it is abundantly clear that Concord Adex was fully aware of this
issue while it required buyers to occupy thereby shifting the financial burden of carrying
the construction financing over onto the purchasers. Oh, don’t worry the Agreement of
Purchase and Sale allowed for such occurrences. It just strikes me as strange that under
an alleged Condo Act to protect buyers, this would or could work out this way.
My clients are asking me about Luna, the next development west of Montage just before
Parade as I have investors and end user purchasers in each of these developments. My
instincts are that the bridge issue should not interfere with these other buildings as
they have a ways to go before completion and the bridge issue will work itself out one way
or another in a very short while. Unfortunately, as I said above, it takes time to build a
bridge over a multi span of railroad tracks and if the design has not as of yet been
agreed upon then you can expect those occupancy fees to continue for quite a while. |
