By giving Joe Ramia’s Nova Centre project an exemption to the city’s planning laws, the province unfairly gave Ramia the ability to compete for tenants now housed in Thiel family properties, says a brief filed with the court.
The Thiels own several properties in the financial district, including the BMO building, the TD Centre, and the Royal Bank Tower. Collectively, the three buildings have over a half million square feet of leasable commercial space—over 10 percent of the office space downtown. The family has invested over $90 million downtown and pays over $2 million in property taxes, said Wolfgang Thiel in an affidavit accompanying the brief.
The family is currently renovating and expanding the TD Centre and has “had to comply with all municipal planning bylaws, approvals and permits in carrying out this work”—precisely the same set of regulations that the province issued exemptions for related to Nova Centre construction, which is a project of Ramia’s Argyle Developments. The Nova Centre will include the convention centre and hotel, but also a 15-storey office tower that will directly compete for tenants with the TD Centre.
The heart of the Thiels’ argument is that:
Argyle received a questionable, wholesale exemption to the rules that every other developer on every other project must follow. It requested the exemption over concerns it would not be otherwise be able to meet the “occupancy date requirements of its tenancies.” The province granted the exemption for no other discernible reason. Argyle then proceeded to fiercely compete with the [Thiels] for a number of significant tenancies. This competition has already had a significant costly effect on the [Thiels].
Specifically, wrote Wolfgang Thiel in the affidavit:
A number of significant tenancies held by the [Thiels] are expiring at the end of 2015. But for the Province’s decision to exempt the Nova Centre from certain municipal planning bylaws, Argyle would not have been able to provide occupancy by January 2016. Based on the correspondence by Argyle to the Halifax Regional Municipality in July last year, I verily believe that Argyle requested the exemption to expressly enable it to do so.
Moreover, based on my personal dealings with existing tenants’ representatives and information received from my own representatives, I verily believe that Argyle is offering occupancy at the Nova Centre by January 2016. This has significantly increased the cost and decreased the likelihood of the [Thiels] retaining the Tenancies.
The gist of the Thiels’ argument is that the exemptions given to Nova Centre allow Ramia to poach the Thiels’ existing tenants, and the exemptions were “premised not on the public good, but on Argyle’s private commercial interests.” I’ve asked the Thiels specifically which tenants Ramia is pursuing, but citing tenant privacy, they’ve declined to say.
The Thiels are asking the court to rule that by granting the exemptions to allow construction of the Nova Centre, the province violated both the provincial Municipal Government Act and the HRM Charter. The family has not as yet specified what, if any, damages they seek, and the allegations have not been tested in court.
More exemptions to come?
The brief raises two other issues of note.
First, the Thiels suggest that the province will likely grant still more exemptions to Nova Centre. The exemptions granted so far concern the below-ground construction of the project, and the brief claims that as of August 1, that work was still ongoing.
The brief goes on to say that “there is no evidence that Argyle has obtained the approvals and permits necessary for the above-ground construction to begin” and there is a “strong likelihood” that “Argyle will need a further exemption to maintain its ambitious construction schedule.” And the province will probably grant that exemption, says the brief, “even if the only reason for doing so is to protect Argyle’s private commercial interests.”
I’ve asked the city for the status of the Nova Centre construction and what permits have and have not been issued. I’ll update this post as soon as I get that information.
The Thiels also raise an interesting legal point. In terms of process, the exemptions to the city’s planning regulations were granted via what is known as an “Interim Planning Area” (IPA)—basically, the two-block area of the Nova Centre was carved out as a special zone, and the province said it has a special interest in that zone which overrides the city’s planning regulations. The province’s interest comes via a Statement of Provincial Interest (SPI).
But the Thiels are arguing that the province violated the laws around and purposes for SPIs and IPAs. “All other Statements of Provincial Interest are broad policy statements,” notes the brief, and concern things like protecting water supplies, property in flood plains, or agricultural land.
In fact, argues the brief, all other IPAs created by SPIs are restrictive—that is, they “are intended to prevent development that is otherwise permitted” by the municipality. “They are not intended to permit development that the municipality has prohibited or not yet approved.”
The issues laid out in the brief and in Wolfgang Thiel’s affidavit are the subject of a hearing this afternoon. A ruling will likely take a few weeks.
It should be possible for the Convention centre portion of the building to open before the commercial remora above it is ready.
Jeff, that is indeed possible. Ramia is required by the agreement with the city and province to have “substantial completion” of the convention centre and hotel by January 1, 2016, but not the office tower. That had a sort of logic to it, when the convention centre was underground, but with the revised plan, with the convention centre spanning the second and third floors of the office tower, I’m not sure how that works. Maybe there’s a way… but it seems odd. Still, if the Thiels are correct, in that Ramia is telling potential tenants that his office tower will be open in January, 2016, it seems immaterial.
This will be an interesting case. I was at the council session where Regional Council voted to ask the province to issue a statement of provincial interest. Staff and councillors were falling all over themselves to say that there was nothing unique about the request and that HRM is willing to work with all developers. Only Councillor Watts seemed to grasp the reality of the situation when she asked staff if HRM had ever requested a statement of provincial interest before? Staffs answer was when the development freeze that was put in place when the Regional Plan was initiated back in 2005. There is an obvious difference in scale in seeking provincial intervention to prevent a rush of development applications before the Regional Plan could come into effect and intervention to benefit a specific developer. No one on council was willing to come out and say that the only reason this extraordinary measure was being used is because of the government money at stake in the Nova Centre project, but that’s entirely what’s at play here.
Any idea how much government money?
Depends on how you count it. Here’s the breakdown:
http://www.thecoast.ca/RealityBites/archives/2010/10/16/why-the-convention-centre-sucks-part-3