Sun Life, PenEquity, Taxpayers

At the June 25th, 2013 Council meeting when discussing the PenEquity rezoning, the Mayor took the opportunity to raise the issue of a proposal that occurred a number of years ago – Sun Life (SL – wanted to expand the Urban Growth Boundary for a warehouse and Council didn’t). He implied that if he were on council then, things would have turned out different. He claims council of the day had, “In fact, told Sun Life (SL) that their investment was not important enough…” (livestream: http://bit.ly/ujLjLY  3:05:50).

My ire was up with this reference as I heard the same nonsense a few years ago. I can even imagine who was whispering in his ear. Given I had only 5 min. to speak I opted to focus on the application and didn’t comment on the SL reference. Since then, the comments have niggled me like a black fly for a number of reasons.  The assertion was wrong (see SL blog written 2009 below), but more importantly, there is a disconnect with respect to the implications of planning decisions, by many, if not a majority on council. London is undergoing an Official Plan review called ReThink and in short order, council will be debating and discussing the UGB just as we did when SL issue was raised. It is critically important that members of council understand not only the provincial “rules” around expanding an UGB, but the costs of growth at the periphery.  The ReThink financial analysis has modeled three types of growth in London over 50 years: COMPACT, HYBRID and SPREAD (read sprawl) full report: http://bit.ly/10uzjju. The results indicate the SPREAD model capital cost equal $4.2 billion. That’s180% or $2.7 billion more than the compact model! Operating costs under the SPREAD model cost $88.5 million per year, $70 million more than the compact model and $52 million more than the hybrid model. Imagine the prosperity we would have with $52 million – $70 million in savings each year if we make prudent planning decisions… or we can continue to struggle to keep taxes low, struggle to fund prosperity plans, and continue to support SPREAD planning that increases costs and adds to our infrastructure deficit.

If we are to set this city on a course of prosperity and sound fiscal management we must understand the foundational planning principles that guide our direction. If we fail, the impacts will be felt long after we have vacated our respective council seats.

P.S.
I am reprinting my Sun Life Blog written in 2009. I hope you will take the time to read it as we are undergoing the same Official Plan – ReThink process and I feel a strong sense of deja vu.

SUN LIFE
It is interesting how a story can be spun so that fact becomes fiction and perception becomes reality. So here are the facts about the Sun Life story. It is not a simple story to tell, so bear with me.

Every five years municipalities must evaluate their Official Plan (OP). This document guides city planning. It sets out policies that articulate how the city will grow and reviews the Urban Growth Boundary (UGB), a line, around the urban area of the city that allows for development within the line and agricultural protection outside the line. The OP MUST be consistent with the Provincial Policies Statement (PPS – In short, if the city has ample land for future growth within the UGB you can’t expand it).

To determine whether there is enough land within the UGB for the city to grow, planning staff completed a full examination and advised council that “Based on the empirical analysis.., and having regard for the Provincial Policy Statement, there is no need to consider the addition of new lands into the City’s UGB through the 2006 Official Plan Review process. As demonstrated, the City of London has a more than adequate supply of both residential and non-residential land to meet development needs in the 15 to 20-year time horizon set out in the Official Plan and the 2005 PPS. In fact, based upon current trends and assumptions, the City currently has enough residential land to last 29 years.”

It is not surprising, given the financial benefits, that as of May 2007, 39 landowners requested to have their lands included in the UGB. One of those requests came from a landowner in the south whose agent indicated Sun Life was interested in developing a warehouse on the property but had not submitted any application. The staff report advised us that, “None of the submissions for inclusion represent immediate emergent opportunities that cannot be reasonably accommodated elsewhere on lands already designated for urban use.” As there was no application, no concrete evidence in support of expanding the UGB, the Planning Committee, at the time, voted no change. We also passed a motion that recommended the London Economic and Development Corporation (LEDC) and Senior Staff work with Sun Life to review their needs and all available land options.

Staff met with Sun Life. It wasn’t until June of 2008 that Sun Life submitted an official plan amendment. Shortly thereafter, the bottom fell out of the economy and on Jan. 6, 2009 the General Manager of Planning received an email from Sun Life that indicated, “…under these much changed economic circumstances; it would not be prudent to continue with this project”.

Some members of council who are the political spokespersons for development landowners saw an opportunity to make some noise and were quick to denigrate others with name calling, and elementary school banter. They were really mad they didn’t get their way.  What is even more interesting is the same individuals claim to stand for low taxation, yet this project would have cost taxpayers a minimum of $19 Million in addition to the already $65 Million that has been spend on purchasing, zoning and servicing industrial land, not to mention the $700 Million infrastructure deficit. They didn’t care about taxpayers when Vic Cote the General Manager of Finance for the city stated that, “As a stand alone investment by the city, it doesn’t make sense.” Cote questioned the financial models presented saying it could be used to justify any investment. “The city has limited dollars and must prioritize, he said, and warehouses with few jobs, rank lower in the pecking order to plants that are labour intensive, such as London’s Hanwha factory, which makes quality counters and floors. If this was Hanwha, it would be a good investment. It is not Hanwha.” (LFP Nov. 5 2009)

Joe Belanger of the London Free Press wrote a column about the Sun Life issue called, “This is why development rules exist”. Belanger states, “Don’t listen to the sniping by several council members about an opportunity lost because of opposition from the so-called socialist cabal on council. It is simply not true…Big money, big business or both have a way of attracting the attention of some politicians, who then seem willing to do whatever it takes to ensure that proponent is appeased. At the end of the day council made all the right decisions on this issue….If anything, this experience should serve as a reminder of why there are rules in place for land development and the folly of trying to ignore, circumvent, bend or alter those rules”. Well said.

Reference docs:
Power point presentation to Planning Committee on the Official Plan Review http://www.london.ca/Official_Plan/PDFs/OP-Donna2.pdf

Provincial Policy Statement: http://bit.ly/7x4lML
The province will not allow the expansion of the UGB unless it can be demonstrated that:
A)           sufficient opportunities for growth are not available through intensification, redevelopment and designated growth areas to accommodate the projected needs over the identified planning horizon;
B)            the infrastructure and public service facilities which are planned or available are suitable for the development over the long term and protect public health and safety;
C)             in prime agricultural areas:
1. the lands do not comprise specialty crop areas;
2. there are no reasonable alternatives which avoid prime agricultural areas; and
3. there are no reasonable alternatives on lower priority agricultural lands in prime agricultural areas; and
D)             impacts from new or expanding settlement areas on agricultural operations which  are adjacent or close to the settlement area are mitigated to the extent feasible.

 In addition, the polices of Section 2 of the PPS must be applied: Wise Use and Management of Resources and Section 3: Protecting Public Health and Safety. (ref: http://www.mah.gov.on.ca/Asset1421.aspx)

Land Needs Background Study: http://www.london.ca/Official_Plan/PDFs/FINALLandNeedsBackground11May07.pdf

3 thoughts on “Sun Life, PenEquity, Taxpayers

  1. It really is amazing to see how far some politicians will go without even understanding the rules. My goodness… thanks for shedding some much needed light on this situation, Joni!

  2. I don’t really understand, after all your writing, why the Sun Life warehouse is not a good thing ( Although, after ING’s experiences with owning empty warehouses who knows what Sun Life is thinking ). The Tweet didn’t seem to get to the point…As per Ontario government zoning regulations, isn’t it funny that issues regarding “Prime Agricultural Land never seem to impied the growth of Toronto. Hmmmm. Maybe they want the industry and want to keep us in farming ????

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