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Developer behind Amazon warehouse says region overcharged $13.7 million

Region of Waterloo billed company $9 million in development charges at the industrial rate, then asked for $13.7 million more once it found out the warehouse was an Amazon fulfillment centre, claims lawyer representing the developer
amazon
Work continues on the Amazon fulfillment centre on Old Mill and Dickie Settlement roads in Blair.

The company building the one million square foot Amazon warehouse in Blair says it was asked to pay $13.7 million in development charges by the Region of Waterloo in excess of what is laid out in the region's own bylaw.

It suggests the charge amounts to discrimination based on the tenant.

The company, identified as 140 Old Mill Road Limited Partnership, is disputing the charge and what it calls an error in the application of the bylaw in an appeal to the Ontario Land Tribunal.

That appeal was filed last week, citing the region's failure to respond to its complaint about the charge within 60 days.  

Loopstra Nixon, LLP is the law firm representing the developer and says its client paid over $9 million in assessed development charges in July of last year according to the industrial rate set out in the region's development charges bylaw.

That amount was transferred to the region shortly after the assessment and between August and October of 2022, building permits were issued for the warehouse's foundation, servicing, underground plumbing and structural steel.

Then on Nov. 8, 2022, the appellant claims it was issued an additional assessment notice for more than $13.7 million in development charges "despite no material changes being made to the industrial building."

"As far as we are aware, the only new information is the name of the initial tenant of the industrial building," the appeal states.

Amazon had been rumoured to be the tenant of the warehouse since the project was proposed in spring 2021, but that detail was kept under wraps by the City of Cambridge until late September of last year.

"According to very recent case law involving the region, it has been made abundantly clear that the Development Charges Act does not permit development charge bylaws to discriminate based upon the user," writes Loopstra Nixon in a cover letter of the appeal.

The lawyers penned that letter in February of this year, demanding relief from the charges.

When the region didn't reply, another demand was sent in late March detailing the reasons for seeking relief and laying out grounds for a potential OLT appeal.

It claims that when the industrial warehouse was identified as an Amazon fulfillment centre, the region sought to change the classification for the development charges believing an industrial rate didn't apply even though the city and region had known all along the purpose of the facility.

In a letter from Broccolini Real Estate Group to former Cambridge Mayor Kathryn McGarry in April 2022 it was stated that the warehouse at 140 Old Mill Rd. will serve as an Amazon Traditional Non-sortable (TNS) fulfillment centre.

TNS fulfillment centres are described by Amazon as "first-mile package handling facilities" where associates pick, pack and ship bulky or larger-sized customer items such as patio furniture, outdoor equipment or rugs.

Loopstra Nixon calls any assertion by the region that it was not aware of the proposed use of the building in Blair at the time DC charges were issued last July "patently false" and blames the city for not advising the region to make the appropriate determination.

"Our client submits that the company-specific nomenclature used to describe the warehouse as an Amazon fulfilment centre does not in any way impact its industrial classification or its use as a warehouse facility."

Further evidence of the region's "error" is detailed in the claim by stating building permits are only ever issued once development charges are paid in full.

The builder had its first required building permit in August 2022 after paying the development charges back in July.

It means the additional assessment, which came after building permits were issued, "violates the DC bylaw and the Act," according to the claim.

A date for the first hearing of the appeal at the OLT has not been set.



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