Region of Waterloo out $13.7M after error in calculating development charges for Cambridge Amazon warehouse
Law says region can't ask for more money once invoice is paid by developer
The Region of Waterloo is out $13.7 million after an error was made in calculating development charges for a project in Cambridge where an Amazon fulfilment centre was later built.
A decision released by the Ontario Land Tribunal on Nov. 27 found the region was not allowed to ask for more money from the developer after finding out the warehouse being built would be used as a fulfilment centre by Amazon.
When the region tried to reassess the charges, the developer disagreed with the reassessment and took their case to the Ontario Land Tribunal. The developer argued they had already paid the development charges and under the law they should not be expected to pay additional charges.
The tribunal agreed.
Details of case
Documents from the tribunal show that in July 2022, the region asked developers of the property at 140 Old Mill Road in Cambridge to pay $9,082,948.59 in development charges to build an industrial building, in this case, a warehouse.
The developer — identified as 140 Old Mill Road Limited Partnership and 140 Old Mill Road Coinvest Limited Partnership but often referred to as Old Mill in the tribunal documents — paid that bill in August 2022.
In November 2022, the region realized the original amount was incorrect and they should have charged $22,802,521 — a difference of just over $13.7 million.
The tribunal documents showed the developer argued the region had already issued a building permit, collected the money and the invoice had been certified by the regional treasurer.
The developers also noted they received site plan approval for the project from the region on Aug. 30, 2022, then there were two more building permits issued for the Old Mill industrial building between Aug. 30, 2022 and Oct. 18, 2022.
The developer argued the building is a "warehouse" and therefore qualified for the lower development charges.
Region argues fulfilment centre not a warehouse
Shane Fedy, the region's manager of infrastructure financing, argued a fulfilment centre does not qualify for the same discounted development charges as a warehouse, and therefore the developer should have been charged more.
He said being an Amazon facility and being used by an online retailer means the building didn't meet the definition of an "industrial building" and therefore "does not qualify for the industrial [development charge] rate," the tribunal documents show.
The tribunal found the law "does not permit a municipality to impose an additional development charge or a corrected amount after a development charge has already been assessed, collected, and certified, and a building permit issued for the development."
Therefore, the tribunal ruled the developer does not owe the region any more money.
CBC K-W has reached out to a regional spokesperson about whether the region plans to appeal the tribunal's decision but did not immediately receive a response.
Controversial project
The tribunal decision is the latest news in what has been a controversial project. Before the fulfilment centre was built, a group of residents called Blair Engaged called on the City of Cambridge and Region of Waterloo not to permit the warehouse. An online petition opposing the warehouse reached 25,000 signatures.
Cambridge city council approved the ministerial zoning order, also known as an MZO, for the project in April 2021. But in March 2022, council briefly halted the project over two reports looking at heritage impact and a transportation impact of the warehouse. Council then moved forward with approving a motion to allow the project to move forward in May 2022.
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