Why is the Todsen development proposal still undecided, one year after it came to Council for first reading (after many years of preamble and set-up)? The proposal is now the subject of a second Public Hearing, scheduled for July 7, 2021 at 10:00 AM.
After a year, what could possibly still be a point of debate?
Firstly, to date the proponents, including some Town staff and Council members, have provided no compelling urgency to move the Town’s specified Urban Containment Boundary and proceed with this proposal — a proposal which is in direct opposition to community preferences voiced in Qualicum Beach’s current Official Community Plan — just to accommodate the personal financial aspirations of the applicants.
Secondly, after multiple false starts, the issue of how much the Todsen and Happach applicants would contribute towards Qualicum Beach amenities, in exchange for turning part of QB’s iconic Estate Residential Properties into a subdivision is still up in the air. More recently, the protracted debate on this proposal was further muddied by (mis)information and half-truths presented in a highly irregular motion by a member of Council in an attempt to overturn the Town’s existing Community Amenity Contribution policy.
We first reported on the Todsen / Happach proposal to create a subdivision inside the eastern edge of the Estate Residential Properties on July 3, 2020. Readers can catch up on our earlier reports:
- QB’s iconic Estate Properties to be replaced by subdivisions? | Jul 3, 2020
- Council disregards planning professionals, media mis-reports | Jul 24, 2020
- The proposed Todsen subdivision – the next chapter | Aug 8, 2020
- Todsen proposal creeping closer to D-Day | Feb 04, 2021
Community at odds with proposal — does QB need this project and is it appropriate?
First-time visitors to Qualicum Beach frequently beam when they discover our town, and for good reason. QB has evolved to become a very desirable place to retire and / or to open a business, and a destination for visitors drawn by the community’s unique ambience blessed with abundant natural assets (spectacular beaches and mature woodlands interspersed with small-scale farms). Our quality of life is a big draw; it is what sets us apart from the ubiquitous cookie cutter expansion prevalent in towns and cities on the Island and elsewhere across BC, littered with big box stores, parking lots and fast food outlets clustered around subdivision tracts. Qualicum Beach is not an industrial centre nor a big box shopping mecca. QB’s small-town image, natural assets and lifestyle are our currency.
Our retiree population needs hundreds of people to provide personal services and to staff retail stores, as does our tourism sector, jobs that are going unfilled because of too-low wages and non-existent affordable rental suites, problems that existed before the pandemic. This community snapshot provides a template for our housing needs, and a guideline for the Town’s future housing development strategy and plans. How does the Todsen proposal fit, or does it? We see no evidence that the Todsen proposal would help meet these needs.
Proponents of the Todsen proposal argue that unfettered growth is not only inevitable but necessary. If 100,000 additional people want to move to the mid-Island to live in a McMansion, bring it on — think of all the new property tax revenue. These folks tend not to talk much about the traffic, the noise, the depleted aquifers, the loss of nature, the gutting of our small scale, local retail and service sectors, etc. While this group, mostly comprised of moneyed would-be developers, construction contractors, and (some, not all) realtors is relatively small in number, they can have outsized influence on the look and feel of our future Town, unless there are appropriate controls to balance short-term private interests with the longer-term public interest.
“Councils can expect careful scrutiny from the public when considering proposed rezonings. The public is looking for confidence that the community plan they were consulted on is being followed, both in law and in spirit.”
BC Provincial Government
Opponents argue that the Town is already an appropriate and desirable size, with room for modest growth and/or revitalization as long as it is well-planned and effectively managed. These folks believe that a primary existential threat to the sustainability of Qualicum Beach is the tens of thousands of people who would migrate to our district and threaten our capacity to maintain a desired quality of life unless we find a way to say NO to rampant housing sprawl. In response to the Todsen proposal, some QB residents not only feel the only recourse is to say no to a new subdivision of unnecessary houses, but that there should also be a freeze on building of any new houses in QB until rental units become at least 10% of our dwelling stock. That would suggest that the Town’s first and only priority in the short-term should be creating a few hundred permanent long-term purpose-built rental suites, ideally in multi-story buildings nestled on vacant land adjacent to the treed fringes of our “Village” core, inside the existing Urban Containment Boundary.
A third group of QB residents are busy doing their own thing, and are only occasional spectators at the unresolved and increasing tensions and conflicts in Town related to who’s driving the bus and where is it going. And yet, this is the group that has the most at stake in the struggle, and for whom the recent spate of misinformation and half-truths, if accepted, might have the greatest impact.
How much would the Todsens contribute to the Town’s amenities? — still up in the air
A year ago, at its July 15, 2020 Regular Meeting, QB Council requested that a “Land Lift Analysis provided by a third party professional in accordance with Policy Number 3008-11 – Community Amenity Contributions” (CAC) be provided by the Todsens.
A land lift analysis is simply an estimate of the change in property value were the property to be converted from the current zoning (no building potential) to the requested state of zoning (subdivided into 16 lots with individual land titles within a bare land strata). Municipalities use LLAs in negotiating developer contributions towards roads, parks, recreation facilities etc. — amenities that not paid for through Development Cost Charges (DCCs), costs that would otherwise be borne by taxpayers.
The Todsens obtained the requested land lift information from their appraiser, Cunningham & Rivard Appraisals Ltd., on August 10, 2020. Four months later, the Town determined that this land lift analysis had to be redone ”to correct an important assumption about the current permitted use” of the 6.4-acre property. Apparently, Town Planner Luke Sales didn’t spot or react to this rather obvious flaw until late December 2020.
So the same appraiser then re-jigged his previous analysis, using the same method as in his first appraisal, and delivered a second land lift report to the Todsens on January 22, 2021. This second version was made available to the public, included in the package of information for the first Public Hearing held on February 10, 2021. Ten days later, Second Opinion QB provided its observations about the questionable land lift figure in the article Fog obscures Todsen land lift.
It seems we weren’t the only ones questioning what appeared to be a very low estimate of the expected value of the property if it were to be approved for subdivision. At the February 24, 2021 Council meeting, Council deferred third reading, instead instructing staff “to commission a complete, independent review of the appraisal provided by Cunningham & Rivard Appraisals Ltd. before going further with consideration of the proposed zoning and Official Community Plan amendments … ; … the independent review will be conducted on behalf of the Town, at the expense to the Town,” i.e. not on behalf of and paid for by the Todsens, as was the case with the first appraisal and the re-do.
Not only did Council question the conclusion of the Todsens’ two land lift appraisals, they also challenged the “comparable sales” method used by appraiser Kelly Sayers to arrive at the questionable figure. After reading the two Cunningham & Rivard appraisals, we would agree. Several of the so-called comparable examples that were used by Sayers differ fundamentally from the Todsen proposal.
In March 2021, Town Planner Luke Sales obtained a professional opinion of the methods used by Sayers. Three of the consultant’s observations stand out:
- “The comparable sales approach [the approach used by Sayers] is a good approach when there are a sufficient number of directly comparable sales in the local market, but it is not always valid when there are few comparables and/or the comparables show a large spread in value.” Check. The Todsen request is a unique local situation, i.e. Sayers’ comparables weren’t comparable.
- “The most common alternative approach would be a land residual (or proforma) approach. The land residual approach analyzes the likely financial performance of the actual development proposal (revenue and costs) and uses the financial analysis to estimate the land value that would likely be supported by the proposed subdivision.” Check. That’s exactly what several of us “non-professionals” have been attempting to do, and keep coming back to the reality that 16 large serviced lots in a nice Qualicum Beach seaside neighbourhood would be worth at least $5 million in today’s market.
- “On its own, the comparable approach used in the appraisal is not ideal for a CAC [Community Amenity Contribution] negotiation and a more detailed analysis using the residual land value approach would likely be a more reliable indicator in this particular case.” Check.
“While site-specific OCP amendments to accommodate unanticipated developments are legally permissible, it is recommended that local governments anticipate land use changes with periodic comprehensive reviews of the plan rather than undertake frequent OCP amendments.”
BC Provincial Government
This same consultant, Coriolis Consulting Group, was then contracted by the Town to perform the third kick at a land lift analysis, this time using their recommended residual land value analysis methodology. They submitted their analysis to the Town on June 25, 2021, concluding that “the land value for the 6.4 acre subject site is [would be] between $2.2 to 2.5 million if rezoned to permit the proposed 16 lot subdivision.” For context, this is between 37.5% and 56.25% higher than the rezoned value estimate provided by Cunningham and Rivard in August 2020, and repeated in January 2021.
It is reasonable to expect that this revised figure will continue to beggar public belief, given, for example, the two smaller lots in the adjacent Cottages at Eaglecrest that are currently listed at $450,000 each.
The Town’s CAC Policy 3008-11, developed by Town Chief Administrative Officer Daniel Sailland and approved by the current Council in 2019, is also in play with the Duttons’ Pheasant Glen subdivision proposal. At its Third Reading on April 28, 2021, Council directed staff “to engage a land lift analysis per the Town’s Community Amenity Contribution Policy of the proposal for 1025 Qualicum Road [Pheasant Glen] to be presented between third reading and adoption… without the need for an additional public hearing.” We are still waiting for the land lift analysis for the Pheasant Glen proposal to surface.
Sudden attack on Town’s Community Amenity Contribution policy by Councillor Harrison
At the June 16, 2021 Town Council meeting, Councillor Scott Harrison attempted to dramatically restrain the possible amenity contributions payable to the Town of Qualicum Beach by both the Todsens and the Duttons by introducing a Notice of Motion to re-write the Town’s existing Community Amenity Contribution Policy, including explicit replacement instructions. Harrison’s gambit is highly irregular. Policy revisions would normally be drafted by professional municipal staff in response to broad objectives set openly by Council, with appropriate stakeholder consultation.
Harrison claims that only big cities like Surrey and Vancouver use a land lift basis for CACs and that, here on the Island, Ladysmith, Nanaimo, North Saanich, Langford, Colwood and Central Saanich don’t use a land lift methodology for CACs. Harrison neglected to mention that other communities like the City of Courtenay and the District of Tofino do include land lift analyses in their CAC policy.
Adding to this misinformation, Harrison stated that the BC provincial government firmly discourages using a land lift approach, quoting from two guides (long and short versions) published in 2014:
What is missing from Harrison’s notice of motion is the context also provided by the BC government for their caution. In his motion preamble, Harrison chose to quote only the first half of the following statement in the Guide, omitting the second half which we have bolded: “Negotiating CACs based on a [land] lift approach is inconsistent with the principles set out in this Guide, and is the approach most likely to reduce the supply of developable land and housing, thereby contributing to higher housing costs.”
This highlighted qualifier is significant. The BC government’s guidance is cautionary and relevant to communities who have either a shortage of housing or a shortage of buyers. Neither of these conditions are generally relevant to Qualicum Beach, nor specifically relevant to the Todsen proposal. We have no compelling need for the type of houses proposed to be built in the requested subdivision, nor would the size of a Community Amenity Contribution to the Town in any way affect the sales price of the dwellings.
That last part bears repeating — the size of CAC would not affect the sales price of the dwellings, contrary to the myth frequently voiced by the developer crowd, as well as by their supporters on Council. Sales prices are determined by the market. Period. In a free market, the developer will charge whatever price the market will bear. For better or worse, that’s what defines a free market. This fact of life is reinforced in the short Guide quoted by Councillor Harrison where the provincial government, in cautioning against prohibitively high CACs, acknowledges that “a housing developer faced with significant CACs cannot simply increase the selling price of the units, as the selling price is set by the market.”
Given the specifics of the Todsen / Happach proposal, the CAC would be a negotiated portion of the windfall land value escalation that would occur as a result of rezoning to permit a subdivision. The property owners could cash in immediately by flipping the entire property with its new zoning, or they could proceed with subdivision, maybe construct dwellings on a few lots, and eventually flip the remaining lots. In this latter scenario they would collect their windfall profit on the land in 16 pieces rather than all at once.
Bottom-line: The negotiated CAC amount would affect only the size of the property owners’ substantial return on investment, and would in no way be borne by the eventual purchasers of any homes there.
There is additional good advice in the provincial Guide. For example, it encourages municipalities to “Set targets for CACs — and be open to negotiation at time of rezoning.” In its Policy, the Town has been clear in setting a target: “The Town will seek an amenity contribution equivalent to 50% of the additional land value created by the rezoning, based on a land lift analysis.” The Town has also been clear in the Policy under what circumstances they might reduce or even waive a CAC; neither the Todsens nor the Duttons qualify for any of these exceptions or exemptions.
The District of Tofino’s policy is similarly clear in setting its target: “The District’s goal is to realize 50% of the land value increase.” Their community amenity contribution for allowing the change in “use” of the property is in addition to any “density” bonuses collected for changing the number of permissible units on a property.
Both the District of Tofino and the City of Courtenay maintain distinct reserve accounts for collected amenity contributions. There is a full and transparent on-going accounting to the public for each of these reserves. Qualicum Beach could adopt this “best practice” too.
Included in the recommended practices in the government’s Guide is the following advice: “Before deciding if and how to pursue CACs, local governments need to ensure that these CACs are obtained legally, fairly and in a way that maintains public confidence in the local government and its community plan.” [emphasis added]
“Councils can expect careful scrutiny from the public when considering proposed rezonings. The public is looking for confidence that the community plan they were consulted on is being followed, both in law and in spirit. Understandably, public confidence in the Council and the OCP [Official Community Plan] would be eroded if they believed that the plan would be amended whenever an opportunity arose to increase local government revenue. While site-specific OCP amendments to accommodate unanticipated developments are legally permissible, it is recommended that local governments anticipate land use changes with periodic comprehensive reviews of the plan rather than undertake frequent OCP amendments.” [emphasis added]
Wise words indeed.
CAO Sailland attacks his own policy at the last minute
We are gobsmacked to discover, as an end note to the planning staff report for the July 7, 2021 Public Hearing, the following statements by CAO Daniel Sailland: “I think it is important to acknowledge that the [Town’s CAC] policy has not achieved what it set out to do. …Regardless of the decision made by Council on this particular application, I think it is important for our organization to revisit the entirety of this policy as soon as possible.” Wow. In one short paragraph, Sailland, by discrediting his own (2019) policy, has blown away the Town’s only significant leverage in negotiating an appropriate community amenity contribution, should this application be approved.
In addition to the bad, but apparently intentional, timing of Sailland’s remarks, he appears to have prematurely jumped to a conclusion that the existing CAC policy is wrong. If and when a corporate policy is deemed to not be meeting its objectives, the executive’s responsibility is to first determine the root cause. Is the policy itself flawed? Or, is the policy OK, but the processes used to effect the policy deficient in some way(s)? Or are both the policy and processes OK, but the people who perform the processes insufficiently skilled or directed to be in compliance with these directives?
It is perhaps time for an independent process audit at Town Hall to get to the fundamental root of the problem. Or, at a minimum, make adjustments based on learning from the experiences of those other municipalities who do successfully manage a community amenity contribution program for the benefit of their communities.