Guelph Tribune - January 30, 2009

'Flip-flop' has Armel seeing red

By Doug Hallett, Guelph Tribune
News

Jan 30, 2009

The lawyer for local developer Armel Corp. is warning of "dire" consequences for Guelph's west end if a big commercial development goes on the former Lafarge site.

Gordon Petch is also accusing city council of a "complete flip-flop" on the issue. He vowed that Armel will keep fighting the development at the Ontario Municipal Board, even without the city as an ally.

"It has been so frustrating, and the consequences are so dire," the highly experienced Toronto lawyer told the Tribune on Wednesday. "You can understand why Armel is not going to throw in the towel. They have no choice."

Petch predicted development at Armel's West Hills commercial site will be permanently stunted if a big commercial development is allowed on the former Lafarge gravel pit site bordering the Hanlon Expressway.

Armel is already having trouble leasing a 53,000-sq-ft. commercial building that it built near the Zehrs at West Hills, Petch said.

"Most of it is empty, because most of the tenants who were going to go there are waiting in the weeds and seeing if they can't go to Silvercreek" instead, he said.

Even a large government liquor store that was supposed to go into West Hills has stopped negotiating with Armel and might go instead into the development on the former Lafarge land proposed by Silvercreek (Guelph) Developments Ltd., he said.

If the Silvercreek development goes ahead, Armel would probably be able to fill up its 53,000-sq.-ft. building eventually, but "that would probably be the end of it (major commercial development at West Hills)."

And this, he said, would drastically alter the future of the surrounding west end community that Armel has been building for the past 30 years.

The West Hills site is designated as one of four big commercial nodes –on the city's eastern, western, northern and southern outskirts –in the commercial policy for Guelph adopted in 2005 by the previous city council.

Future phases of the West Hills commercial development now situated at Paisley and Imperial roads are supposed to extend to the west side of Elmira Road. However, Petch predicted this won't happen if a big commercial development goes ahead on the 54-acre Silvercreek site.

Armel has been holding onto blocks of land designated for high-density residential development in the West Hills area, but these apartment blocks can be built only if there's a lot of commercial development in the area. If there isn't, Armel could end up approaching the city to rezone these high-density sites and also to rezone some commercial land for housing, he said.

Armel, which has full party status at the OMB in the Silvercreek case, took part in the talks led by an OMB mediator last fall that led eventually to a tentative deal. However, "there was a point where we heard nothing more. We were out of the loop," Petch said.

"I've been told I cannot see those documents (the Minutes of Settlement detailing the tentative deal) until after the Howitt Park residents see them and approve them," which was supposed to happen Thursday evening, he said.

Late Monday evening, city council discussed the issue behind closed doors and then returned to open session to pass a resolution supporting the Minutes of Settlement on a 9-2 vote.

"It's a complete screw-up in the process," Petch said of his lack of timely access to the documents. "I find it really offensive, and so does my client."

As a result of not having seen the Minutes of Settlement, Petch said he didn't know all the details of the tentative deal. However, he said he understands that while it contains a "significant residential component," the deal also calls for a "large retail power centre" that would draw potential anchor tenants away from Armel's West Hills site.

Petch accused city council, which voted unanimously last June against Silvercreek's proposal for a 400,000-sq.-ft. commercial development, of a "complete flip-flop" on the issue.

"It's sure isn't planning. It's making a deal," he charged.

He said he plans to call city hall planners as witnesses at the OMB hearing to see how "they are going to justify the flip" in the city’s position.

The OMB hearing, now scheduled to start Feb. 4, likely will be delayed until the early spring because so much has changed, Petch said.

He questioned why council didn't seek public input about its new stance on development of the Silvercreek site before voting Monday to back the mediated deal. However, he said, "it's too late now –9 to 2, and nobody knows why."

Petch said the prospect of being alone at the OMB doesn’t bother him. "I’ve been there before. It doesn't bother me one bit."

He also said he thinks Armel can win at the OMB. "Certainly it helps if the municipality is on your side," he said, but the OMB will want to know what the "planning basis" was for council's change of position. "They’ll assess that."

6&7 Developments, the developer of the north end site anchored by Wal-Mart, was originally also a party to the Silvercreek case. However, 6&7 withdrew from the case after city council okayed an expansion of the Wal- Mart site in September, Petch said.

Petch represented Armel in the multiyear OMB fight over development of 6&7’s Wal-Mart site, which Armel opposed. He said that in that case, Armel had to "cut a deal and withdraw" after a new council was elected along with former mayor Kate Quarrie in 2003. That council quickly reversed the city's previous opposition to a Wal-Mart being built at the corner of Woodlawn and Woolwich, contrary to the city's Official Plan.

The new commercial policy adopted by council in 2005 was "supposed to end all these unplanned sites," Petch said.