By all indications, the cost of infrastructure for Squamish's oceanfront development won't land on taxpayers, say municipal officials, but they're a hurdle that one developer says will stop the project in its tracks.
Local developer Doug Day questions the feasibility of the 59-acre project currently being negotiated between the Squamish Oceanfront Development Corporation (SODC), Texas-based developer Mathews Southwest Developments and Squamish developer Bethel Lands Corp. The mixed-use project's water mains, sewage lines and flood protection alone will cost tens of millions of dollars, he said.
“The site is worthless because the infrastructure costs are too high,” Day said.
It's the same stance Day took in 2006, when the District of Squamish was in discussions with Qualex-Landmark to undertake the project's construction. Responding to Day's question at an open house in September of that year, the company's president Roger Navabi told residents that servicing to the property would cost an estimated $90 million.
However, the largely residential development was anticipated to draw a $72 million profit. A year later, it was reported capital cost at build-out would amount to approximately $500 million with predicted profits of $80 million over 20 years. Those figures don't acknowledge additional upgrades required to municipal infrastructure as a result of the development, Day said.
Developing the entire site at once makes it impossible to align numbers, he told The Chief. Day suggested the SODC carve the north end of the site into small parcels — an area already serviced — and sell them to pay for the corporation's $9.41 million debt.
“You don't need a partner for that,” Day added.
Day's questions are all a part of current negotiations. The developer is starting with a clean slate, as any prior plans and costs are not applicable to today's situation, Mayor Rob Kirkham wrote in a joint statement from district and SODC officials. The proponents will conduct their own engineering and planning in accordance with the district's development process to determine the servicing and infrastructure numbers.
“SODC, the district and the developer all believe the land has value and that will be evident as details of the land transaction are finalized,” he stated.
The oceanfront project will be dealt with as any other development in Squamish, Kirkham said. The municipality's Subdivision Development Control Bylaw outlines what the developer needs to do to properly service the development. Typically, it is the responsibility of the developer to build the costs of servicing the subdivision into the project's overall budget and foot the bill.
Last year, municipal officials announced the district's water system wasn't large enough to serve the oceanfront development at build-out. At the December 2012 Committee of Whole meeting, engineering staff said the project's water use would require a new aquifer to cover the anticipated additional 45.6 litres-of-water-per-second draw.
That kind of infrastructure is needed to meet Squamish's overall growth, not just the oceanfront, Kirkham told The Chief in a separate interview. The district collects Development Cost Charges (DCCs) from all developers to offset costs related to the increased demand on infrastructure that are created as a direct result of new development. This funding mechanism helps the municipality upgrade the water and sewage systems, Kirkham said.
“Since this infrastructure also provides a great benefit and service-level increase to the rest of the community, taxpayers would also generally pay a portion through property tax and utility rates,” he stated.