9 > 12

There’s an interesting story about Mizrahi Developments in The Citizen. And by interesting, I mean irritating. Mizrahi, looking to develop properties at 1445 and 1451 Wellington Street West, had submitted a development plan that was rejected. The plan called for a 12-storey tower for the location at Wellington Street West and Island Park Drive. The plan hit a snag, however, since it was designed in total defiance of a nine-storey zoning limit.

Wellington Street West falls under the Wellington West Community Design Plan. The CDP states that Wellington Street West should have a height limit of six-storeys for all buildings. This is what is called for for an “historic main street”. If you question the wisdom of this, a quick stroll down the street will be illuminating. The street and neighbourhood isn’t a forest of skyscrapers. Low-rise buildings abound, and a certain character and charm lives there.

And let’s not forget that four- to six-storey buildings might just be the most effective way to achieve the city’s much-sought after intensification.

So, you may ask, why would Mizrahi be given permission to build a nine-story tower, clearly contravening the CDP? It is because the land falls under the brownfields policy. “Brownfields” are lands which are (or are thought to be) contaminated, requiring some expensive clean up before they can be useful. It is in the city’s best interest to have these lands cleaned and developed, so we give developers some breaks to help facilitate this.

One such break is allowing the development to exceed the otherwise agreed upon height restriction. In this situation, the brownfields policy allows for a development up to nine-storeys. This should be a win-win (though possibly a bit of a loss for people who will get less sky). Unfortunately, this concession (on top of the other concessions they’ll receive) was not enough for Mizrahi.

After being rejected the first time, they made some modifications and re-submitted their plan to build a 12-storey tower. Yes, though the (increased) height limit was the stumbling block the first time, Mizrahi didn’t feel it necessary to change the height of the proposed tower.

Mizrahi’s justification came down to one thing, money. If all goes as planned, Mizrahi will spend a total of approximately $6 million to purchase both properties. That’s a lot of coin, and Mizrahi wants to make sure that the investment can be recouped. More storeys equals more tenants equals more rent. Mizrahi claims to need the additional revenue to make the project economically viable.

Lost in this analysis, however, is the question of why Mizrahi would purchase the lands for an amount that was not economically viable. If the lands are contaminated, that should be reflected in the price (driving it down). It Mizrahi did not take proper care in its purchasing decisions, it is not really the city’s problem (though they are trying to make it our problem).

Of course, there is a reason why Mizrahi thought the land purchase was economically viable. The developers assume that they can just exert their will on council and planners to build 12-storey tower, zoning regulations and CDPs be damned. There is a history of this happening, of course, so it is not ridiculous for a developer to think it can happen once more. Again, though, such a calculation should be built into the price at which one is willing to purchase the lands. This is called risk and successful companies manage it as a matter of course.

If council and city planners stick to their guns and reject any development project greater than nine-storeys, Mizrahi will have gambled and lost. It is not the city’s job to protect companies that embark on such risky gambits.

Perhaps the city’s brownfields policy needs to be reviewed. Perhaps the CDP for Wellington West needs to be revised. These are valid policy discussions to have. Gifting additional revenue streams to a corporation is not.

5 thoughts on “9 > 12

  1. Pingback: Going Back to Six? Mizrahi Developments, Design Plans and Environmental Clean UP | Steps from the Canal

  2. Pingback: Support for Mizrahi Development? | Steps from the Canal

    • I’m not exactly sure what you’re getting at, unfortunately. Are you arguing that those other developers shouldn’t have gotten those grants? Are you saying there’s some scam underway? Either is kind of beside the point here, from what I can tell.

      Mizrahi claims that the current land can’t be profitable when building to the demands of the CDP. They gambled that they could get the specs changed. Today, they lost (though they threaten to go to the OMB). They say without changing the decision, they’ll have to sell the land. I don’t necessarily believe everything they claim, but it seems clear that they planned to be able to change zoning laws. There was a risk that they wouldn’t be able to do that–and, as it stands, they can’t.

  3. Pingback: Sad Developer is Sad | Steps from the Canal

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