Developer asks council to reconsider fee policy regarding greenspaces

A pair of developers came to the RM of Hanover council meeting last Wednesday morning asking for the municipality to reconsider the way it administers its greenspace fees.

Developers Waldo Neustaedter and Len Neufeld spoke to council regarding their Highland Park development on the east side of Centre Street North in Mitchell, across from Stahn Field Park.

“We’re here today because we’re extremely price sensitive,” said Neustaedter.

The 27-acre development has a mix of single-family homes, duplexes, and townhomes and is geared to first-time homebuyers with a one percent downpayment. The developers are selling the homes at eight percent below the value of the homes and because of this, their margins are very tight.

Neustaedter said the issue is that they want to subdivide the side-by-sides so that homeowners could have titles. Since the developers are subdividing, they are being charged a second greenspace fee.

Subsection 135(6)(b) of the Planning Act allows a municipality to require up to 10 percent of the land in certain subdivisions to be dedicated for public reserve purposes, i.e. parks. Subsection 136(1) allows the municipality to require cash in lieu of that land.

Greenspace fees are used to create parks or to install infrastructure in parks; it can’t be used for maintenance or operations.

“When we implemented this provision, the Planning Act did not specify exactly how the cash-in-lieu amount should be administered. I contacted several municipalities and found that their approaches varied. I also spoke with provincial planning staff for guidance. Their recommended approach was to use the assessed value of the land prior to subdivision and prorate the applicable amount based on the size of the newly created lots. They also suggested that the requirement not apply to boundary realignments where no additional titles are created, but that it apply to other subdivisions,” said Hanover planning manager Jeremy Neufeld.

“Based on that guidance, that is how the municipality implemented the requirement. The question of party wall splits came up fairly early on. After reviewing it, council at the time determined that the fees would also apply to those subdivisions, and that approach has been consistently applied since.”

The price of a side-by-side in Highland Park is $318,500 plus GST, while the land for the lots are assessed at $106,700. Ten percent of the land value is charged for the greenspace fee divided by two for per door charge. The developer has already paid $47,000 in greenspace fees to the RM. For the second greenspace fees, he is required to pay roughly $2,660 more per door. There are 46 doors.

“We feel that we’re not changing density from six months ago when we did the original development of the land, and now we’re going to get another greenspace fee, and so, without repeating myself too much here, it’s a bit of a shock,” Neustaedter told council.

For the second phase of the four-phase development, the developer is looking at land assessed at $292,700, with more than $7,000 per door. There will be 61 doors for that phase.

According to Neufeld, if the side-by-sides were not subdivided and instead were kept as rental units then the greenspace fee wouldn’t be applied again.

Coun. Ed Penner asked if Neustaedter and his partner felt as if the RM was double dipping and Neustaedter said it did feel that way.

“I would say ignorance on our part. In this case, we were not…We did not know that, yeah. I’m not blaming anyone. It’s as simple as that, I think. The other difficulty is that we worked really hard at getting our price in line…This is the first time we’re doing the program with concrete driveways. We actually had a little bit of wiggle room in the Hanover proposal here that we could put concrete driveways in for the folks because usually we couldn’t meet the appraisal…if we keep going with this, I’m not sure if there’s going to have to be some takeaway or something,” said Neustaedter.

Neufeld advised Neustaedter that in the next phase if he amended the agreement and pre-split the duplex lots it would circumvent the issue, but he would have to speak to the municipality’s legal department to see what the potential implications would be.

“We actually did check with legal counsel on that. And legal counsel is biased against it because there’s no builder that can build it within an inch of the allowance or the tolerance to get that party wall exactly where it needs to be,” replied Neustaedter.

Neustaedter said he and his partner were not there to change the RM’s policy, but for the RM to have consideration on what is happening for their first two phases of development so that when they move into Phases 3 and 4 they could make adjustments.

He noted there are eight more doors to sell by the end of the year for the first phase and new sales for Phase 2 are opening in March or April 2027.

“It’s been very well received. The updates have been very, very good. People are very happy,” said Neustaedter.

Reeve Jim Funk said council will take what the developers brought to council into consideration and will respond as soon as possible.