Owner of former Kellogg factory decries big development fee

Is a fee charged by city hall preventing the redevelopment of former industrial sites?

The owner of the former Kellogg factory says he’s facing a $5-million bill that has him regretting his decision to redevelop the site.

The Junction Climbing Centre, which has helped revitalize east London – faced the same issue six years ago

Owner John Kudelka explains, “When we went for the building permit we were asked if we were aware of the development charges on the property. We weren’t.”

City hall requires any conversion from industrial to commercial use to pay the full development charges. The Junction paid $100,000.

“It really does hold back businesses like us looking to repurpose industrial space,” Kudelka says.

Development charges are paid to city hall based on the type and size of new construction for growth expenses like new roads, libraries and fire halls.

But new industrial parks are usually near the highway, so finding new uses for former industrial properties in the heart of the city is a challenge.

The former Kellogg plant will host a trampoline park, brewery and hotel – after a $65-million redevelopment.

But a letter from the owner says had they known earlier about the $5-million fee, “We would have either not purchased it at all, or it would have been purchased strictly as a warehousing centre.”

City staff is now recommending the charges no longer apply to commercial conversions of pre-existing buildings.

They’ve determined that in most cases these conversions do not create demand for new municipal services, and there are very few each year.

City council will discuss the proposed change next week.



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