Administrative responses will be required to manage and monitor the agreement throughout the period of development however this will be done in connection with the administration of the financial incentives. An additional amount of 1% is also received as interest which is considered to be compensation for this additional administrative work for monitoring compliance of the agreement.

Financial Matters:

As previously indicated, this development is eligible to receive a reduction of up to 60% of the DCs payable to offset eligible remediation and servicing costs. This reduction is available as part of the Brownfield CIP and was approved as part of the overall financial incentive program. Total DCs as it relates to the development is estimated to be $10,482,610 which would be reduced by 60% or $6,289,566 and provided at time of building permit issuance for each phase of the development. The actual amount of the rebate is subject to confirmation of actual site remediation costs incurred. The remaining 40% or $4,193,044 will be required to be paid to the City.

Alternative Payment Date

The DCs, included in the above total of $4,193,044, which relate to the residential rental development, and otherwise subject to the mandatory deferral are estimated to be $2,468,128. By authorizing an agreement under s 27 of the DCA the payment of these DCs, either in full or in part can be accelerated. In other words, rather than the DCs being paid over a period of 5 years beginning after the date of occupancy for each multiple dwelling building (the current mandatory requirement), the DCs would be paid, in full, on the date that has been agreed to by the parties as being either the date upon which occupancy levels reach 85% or the date that MPAC provides FHC with a Notice of Assessment for the building. Typically the trigger for MPAC to know that development is complete and that an assessment value is required is the completion of the building permit. It can be several months and up to two years following building permit completion before an assessment notice is provided to a property owner. Given the current need for residential rental units in the City it is anticipated that a minimum occupancy level of 85% will be achieved following building completion and that this will likely be the date upon which the DC would become due and payable. Should there be a need for the pre-rental or pre-sale of units as a result of market demand for housing units or sale of the property, the DCs related to that residential rental development would become due in full at the time that the units are offered for sale.

Interest Charges

S.27 of the DCA provides that interest may be charged on any part of the DC that is paid after it is required to be paid as set out in the agreement. As part of the report presented to City Council with regards to the changes in DC administration (C11/2020) it was recommended that, with the provision of Letter of Credit, the interest rate be equal to the greater of the Statistics Canada Building Construction Price Index Non-Residential (annual change as at 2nd Quarter) + 1% premium or the Bank of Canada Rate as at June 30th of each year plus one percent (1%) to cover the additional administrative oversight required to manage the programs. If in the event an Letter of