Waterloo Region mistakenly applied $13.7M discount to Amazon build in Blair

The Region of Waterloo says a $13.7 million discount was mistakenly applied to the Amazon fulfillment centre in Blair – and they won’t be able to ask the developer for the funds.

The matter went before the Ontario Land Tribunal after the region tried to collect the money, citing an error in the application of their development charge bylaw.

The charges are used to help cover the costs of necessary infrastructure upgrades for new developments and the region gives a 60 per cent discounted development charge rate for warehouses.

That discounted rate was used to calculate $9,082,948.59 in development charges for the property at 140 Old Mill Road in Blair in July 2022.

The developer paid the region that amount on Aug. 18, 2022.

At the time the charge was approved and paid for, the region claimed they were not aware the property would house an Amazon fulfilment centre.

In a sworn affidavit submitted to the tribunal, the region’s manager of infrastructure finances, Shane Fedy, said when the developer submitted their building permit application, it did not specifically identify the intended use as being a fulfilment centre. He said the fulfilment centre did not meet the definition of an “industrial building” and should not have qualified for the discounted rate.

When regional officials became aware of the issue, they sent a Notice of Re-assessment to the developer on Nov. 8, 2022 for the additional $13,719,572.

However, the developer went to the Ontario Land Tribunal, arguing they should not have to pay it since the development charge had already been assessed, issued and paid, and the building permit was approved.

The lawyer for the developer, Steven Ferri, argued the initial communication from the region “would lead a reasonable person to conclude that there were no further development charges outstanding.”

He added that allowing the region to collect the reassessed amount would “lead to an absurd result whereby the region is entitled to reassess development charges at any time in perpetuity and the region would be permitted to reassess development charges or correct ‘errors’ years after the initial certification of the development charge and issuance of the building permit, resulting in a profound lack of fairness and certainty for unsuspecting property owners.”

The tribunal sided with the developer.

In a summary of their findings, they said: “The tribunal finds the [Development Charge Act] or the [Development Charge] Bylaw 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.”