The Infrastructure Problem Nobody's Talking About on Vancouver Island

Nanaimo's biggest developer just told council: fix the sewers or we can't build. What happened → Seacliff Properties warned that without $29M in sewer upgrades, provincial housing mandates can't be met. DCCs may spike too. What it means → The real constraint on Island growth isn't zoning, it's pipes. Every buyer looking at Island new builds needs to understand this. What to do → Ask about infrastructure before you fall in love with a floor plan.  

Developer cautions Nanaimo about not keeping up with necessary infrastructure work

The developer of the large Sandstone development in Nanaimo’s south end is cautioning the municipality about the consequences of not keeping up with infrastructure demands.

Georgia Desjardins is the vice president of development at Seacliff Properties, which is developing Sandstone, a 294-hectare property located at the junction of the Trans-Canada Highway and the Duke Point Highway where the company is planning a range of housing options, as well as retail and commercial development.

Desjardins told the city’s governance and priorities committee at its meeting on Monday, June 15 that the staff recommendation for the municipality to investigate the implications of borrowing approximately $29 million in a long-term loan to deal with five aging and overworked sewer catchments in the city should be supported.

Earlier in the meeting, Poul Rosen, the city’s director of engineering, told the committee that several large sewer catchments in Nanaimo are nearing their capacity

“Unfortunately, there’s insufficient funding within the sewer development-cost charge program to fund upgrades to those in the near future,” he said.

“We’re recommending that staff look into long-term borrowing and report back on the implications.”

The committee unanimously voted to recommend that option to council at the end of the meeting.

Desjardins said she wanted to emphasize that the issue extends far beyond engineering and infrastructure.

“It’s fundamentally, in our view, an economic-development issue, a housing-supply issue and an investment-confidence issue,” she said.

“Development projects require years of planning, significant capital investment and substantial financial risk. Before acquiring land and investing in detailed design and engineering, developers need confidence that basic municipal infrastructure will be available to service projects when they are ready to proceed.”

Desjardins said when a municipality identifies major sewer-capacity constraints that may delay or prevent development, that confidence is undermined.

She said the consequences extend well beyond the projects currently in the application process.

“The market reacts quickly to uncertainty, and not in a positive way,” Desjardins said.

“As a real estate developer who has spent years and millions of dollars to date to get our major project in Nanaimo ready for development, it would be devastating on many levels for me personally, for Seacliff and many other developers in the city to see major projects like ours stall because of a lack of sanitary capacity.”

Coun. Janice Perrino asked Desjardins if she had been told by the city that the Sandstone project wouldn’t be able to move forward without the major sanitary upgrades that are required for the area.

“My understanding, and I would defer to staff to confirm this, is if the Richards Lake sewer system was not upgraded, there would not be sufficient capacity to see the Sandstone development move forward,” Desjardins responded.

Coun. Paul Manly asked Desjardins what she thinks of the city considering raising its development-cost charges, which are one-time charges levied on new development to help recover the capital costs of providing infrastructure needed to service growth.

The City of Nanaimo is currently updating to its DDC bylaw that could see a substantial increase in fees.

“We hear from some folks in the development community that they wanted us to hold off longer, or not increase DCCs, so now we’re looking at long-term borrowing of $29 million for all of these projects and I’m curious about your views on the increase,” Manly said.

Desjardins said, undoubtedly, the development industry is in a very challenged economic time right now, and increasing DCCs in today’s market has significant challenges associated with it.

“As a developer, I do have significant concerns around increasing DCCs to the point where they are going to start impacting development viability,” she said.

“Projects such as these major sewer upgrades need to happen, regardless, because without those major improvements, there is no possibility of many developments moving ahead.”

Before the vote on having staff investigate long-term borrowing, Manly said he believes it’s the path that Nanaimo needs to take.

“Long-term borrowing is always difficult, but this is critical infrastructure,” he said.

“At the same time, we’re seeing the provincial government with legislation that says we need to be building more housing, but they need to be providing more funding for the infrastructure that we need for a growing community.”