Business owners reject cost-sharing plan with city for water, sewer upgrades

In a surprise to no one, owners of land in the Lasalle-Elisabella industrial park have rejected a city proposal that would have had them pay a portion of the costs to upgrade water and sewer systems in the area.

The owners had been pushing hard for the city to pay the full costs – about $8.8 million, less a $1 million provincial grant -- arguing they have been paying taxes for services they don’t receive for decades.

“My tax bill says full service,” said Rob Brouillette, general manager of City Welding and spokesperson for some of the dozens of businesses located at the park. “We’ve been paying our full taxes all the way through.”

The owners have lobbied hard for the city to come up with a proposal that wouldn’t force them to help pay for the upgrades upfront, about $660,000, under the city’s last plan. Instead, they argue the city should recover its money through the fees it charges for new growth.

Growth is stalled in the area because poor water pressure not only leaves the stench of sewage in the area, but also makes fighting fires next to impossible.

The businesses owners argue that they already pay the highest industrial taxes in Ontario, paying for services they don’t receive.

Brouillette said the owners are considering legal action, and have retained a lawyer to review their options. It’s his understanding that the city must inspect and maintain its infrastructure, something he says wasn’t done in the Elisabella park, where he says the water and sewer pipes are damaged and functioning well below capacity.

There are many empty buildings and undeveloped areas in the park because, among other reasons, any new construction larger than 6,000 square feet in the park is too expensive because the city requires businesses to build a firewall – which cost about $100,000 -- and an underground water tank capable of holding 90,000 U.S. gallons, which cost $425,000.

The city has made upgrading industrial land a priority, and identified upgrading Elisabella as an area that urgently needs improvements. After initially proposing costs be split 50-50, the city came up with a formula in which the business owners would have to pay a fraction of the cost, with the rest recovered through building permits.

Brouillette said two years ago, the owners offered to pay part of the costs upfront, as long as they were reimbursed the money at the building permit stage. The city rejected that plan, he said.

When the issue came up at city council, most councillors said that taxpayers can’t afford to pay for upgrades that will allow businesses to expand. And getting the money back when building permits are sold was too risky a proposition.

“We’re not a bank,” Ward 6 Coun. Andre Rivest said at the June meeting.

Despite pleas from Ward 8 Coun. Fabio Belli that business owners would never go along with the proposal, most of council voted for it. But to impose the plan, the city needed the support of two-thirds of the business owners.

In a news release issued late in the day Aug. 10, the city announced it had failed to get sufficient support in a vote amongst the Elisabella owners. Of the 58 properties eligible for the cost sharing agreement, owners of 32 properties rejected the plan, 20 owners didn’t respond and six owners voted in favour.

“We are obviously disappointed with the response, but we will respect the wishes of the majority,” said a press release from Greater Sudbury Mayor Marianne Matichuk, who supported the business owners when the matter came before council in June.

“While we currently have an adequate supply of serviced industrial land, our city remains committed to future economic potential by increasing the number of shovel-ready properties in our industrial parks. We look forward to a review of additional partnership opportunities and strategies over the coming months.”

The city will still replace of sections of water main along Lapointe Street and Foundry Street in the area to correct frequency and severity of breaks. The work will not, however, increase water or wastewater capacity, as was the case with the cost sharing agreement.

“The expansion of water and wastewater capacity in the Lasalle-Elisabella industrial area was always intended to be a partnership between the public and private sectors,” said Greater Sudbury economic development director Ian Wood, in a press release. “The municipality does not have the means to pay one hundred per cent for economic development potential. Our development cost sharing policy helps to ensure that all commercial projects are assessed in a fair and equitable manner.”

But Brouillette rejects the city’s argument that they’re just trying to be fair. Where’s the fairness in charging for services you don’t provide, he asks.

“To me, that’s criminal. That’s white collar fraud.”

And while his family and their business have deep roots in Sudbury, Brouillette said they will look to other communities when it comes time to expand.

“My future growth will be in North Bay,” he said.