U of G student housing developer must pay development tax, city council says

A developer has to pony up some dough after Guelph city council said it was responsible for development charges on a student housing project.

The city reportedly put a $15.5 million tax levy on the project on 601 Scottsdale Dr., prompting Forum Asset Management to pause the second development phase.

Shanna O’Dwyer, treasurer and chief financial officer (CFO) with the City of Guelph, said the municipal development charges have been discounted. A 15 per cent discount was applied for studio and one-bedroom units and a 20 per cent discount for two-bedroom units.

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“At this time, there are still outstanding planning and engineering items to be resolved before a building permit can be issued, so the timing of issuance is not known, and therefore, the interest accruing will change based on that timing,” O’Dwyer said in an email to Global News.

Forum presented a complaint at a council hearing earlier in May, arguing the project was exempt from the charges because it is on university-owned lands and only intended for student housing.

During the hearing, staff convened as a tribunal to review the complaint and dismissed it, citing that the purpose-built rental units intended for students were not exempt from the charges.

In a statement, the city said the project is already eligible for a $2.6 million discount for the purpose-built rental units under the Development Charges Act.

If the developer rents the units at or below the provincial government’s affordable rental threshold for Guelph for 25 years, it will receive full exemption from the development charges.

Forum Asset Management has until July 8 to file an appeal with the Ontario Land Tribunal.