Developers aren't experts in development fees, city lawyers argue as growth-fee challenge hits court
At stake is $30M in revenue already collected by the city - and the future of a mayoral priority
Lawyers for the City of Winnipeg say the leaders of two of the city's largest residential developers lack the expertise to have their opinions factor into a court decision that will determine the future of Winnipeg's growth fees.
The three-year-old legal battle between Winnipeg and developers that want to quash the city's growth fees — which are imposed on new residential developments in selected neighbourhoods at the fringes of the city -- has arrived before the Court of Queen's Bench for three hearings this week.
At stake is nearly $30 million worth of revenue collected by the city so far through the imposition of what it calls impact fees, along with the city's right to continue charging the fees — and the fate of the most significant new revenue-generating mechanism Mayor Brian Bowman fought to create since he was first elected in 2014.
On Monday, in the first of this week's hearings, legal counsel for the city sought to expunge most of the affidavits made against growth fees by Alan Borger, the president of residential developer Ladco, and Eric Vogan, the vice-president of residential developer Qualico.
Lawyers Orvel Currie and Brian Meronek, argued Borger and Vogan lack the qualifications to express positions on legal matters, peppered their affidavits with opinions and should not be taken seriously as experts hired by the city to develop growth fees.
"These individuals can not elevate themselves to that level," argued Meronik, adding he would have expected the developers to hire experts of their own.
Mike Moore, a consultant working for the developers behind the legal challenge, brushed off this argument as rhetoric.
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"I do find it quite incredible that someone who's been in the land-development industry with Qualico for over 40 years and the president of a family whose been in development in this city for 101 years would not be considered experts, whereas individuals with certificates in management or an MBA are being presented as experts," said Moore, the former president of the Manitoba Home Builders Association, speaking outside the courtroom.
The Home Builders Association and the Urban Development Institute — which represents developers — launched the legal challenge in 2017, arguing the city has no right to impose the fees over and above the charges laid out in existing development agreements.
Currie told the court those agreements are irrelevant and argued there is nothing to prevent the city from imposing new charges.
"There's nothing in those development agreements that locks in the municipality and prevents it from doing anything further, legislatively, than it's already done"
Technically, the court has been asked to decide whether Winnipeg has the jurisdiction to levy growth fees on new developments at the fringes of the the city. Winnipeg began charging fees of about $500 for every 100 square feet of new residential space in selected neighbourhoods over the objection of the developers.
The city intended to spend proceeds from the fees on infrastructure to serve new developments, such as roads, sewers, watermains and fire-paramedic stations.
To date, the city has not spent any of the $30 million it has collected, mainly because of the prospect of being forced to return the money if the city loses the legal challenge.
Currie, however, argued the court should not be considering any financial restitution and it's not even clear who would be paid back in that event.
Moore said it should be obvious the fees would be paid back to home builders and their clients if growth fees are declared illegal.
A decision on the challenge is expected in the next four to six months, parties on both sides of the case said.