A Flamborough private school is off the hook for paying almost half a million dollars in development charges (DCs) to the City of Hamilton.
One School Global filed a Development Charges Complaint with the city's Finance and Audit committee after receiving notice this spring that they owed $455,943.12 in development charges for renovations carried out in 2023. The submission was heard by the committee Wednesday.
Jennifer Meader of TMA Law presented on behalf of Claireville Christian Education Trust, which operates the non-profit Christian private school on the site of the former Spencer Valley Public School on Old Brock Road in Greensville. She argued the city’s development charges bylaw had been improperly applied based on three criteria: that DCs cannot be retroactively applied, that the upgrades to the site did not constitute “development” and that the city was not applying the development charges consistently and fairly.
According to evidence presented at the Aug. 21 hearing, One School Global purchased the site just south of Hwy 5 West in August, 2022 for $6 million. In January of 2023, the school submitted applications for a permit to complete $1.7 million in renovations within the existing building that included reconfiguring interior walls and creating modern, open-concept learning spaces.
When they applied for the permit, One School was not advised that development charges would be applied. The school was granted an occupancy permit in April 2023 and began operating. Between January 24, 2023 and March 5, 2024 the city did not inform One School Global that DCs were payable.
Building inspection triggers revised permit application
The bill for development charges was triggered after a Sept. 5, 2023, building inspection that asked One School to apply for a revised permit to reflect a change on a section of the building. The city issued an order to comply on Sept. 20, 2023, requiring the description of the rear portion of the building be changed to reflect that it would be used as a tuck shop. It had previously been labeled as a “future admin area”.
The school submitted its revised plan on Feb. 5, 2024. The store is a permitted use on the property, noted Meader.
“It was a labeling change,” she stressed.
On March 15, 2024, the city’s finance department advised One School that DCs were supposed to have been collected before the original permit was issued.
“A year later, and well more than a year after the building permit had been issued, the city came to my client insisting that it pay almost half a million dollars in development charges,” Meader told committee members.
One School emailed the city clerk on June 7 asking to discuss the charges, noting it was a “massive shock” to receive the bill and that they would be disputing the charge. The revised building permit had not been issued and the DCs had not been paid.
Citing the Development Charges Act, the city’s Development Charges bylaw and case law, Meader said it was clear the city was not permitted to impose development charges after a building permit has been issued, and that development charges cannot be imposed retroactively.
Meader also maintained that the work done by One School on the property did not meet the formal definition of "development" and therefore the city didn’t have the authority to impose development charges.
Meader also referenced other properties purchased from the Hamilton-Wentworth District School Board (HWDSB) at around the time One School bought the Greensville site - namely, Elizabeth Bagshaw and Queen’s Rangers. The new owners went on to make similar renovations without paying development charges.
“It would be wholly unfair to require One School to pay DCs in these circumstances,” she said.
Charges would have been a 'game-changer'
Dave Baird, a partner with WDI Group, gave oral testimony at the hearing. His team worked as the lead on the design phase of the renovation project, including the construction budgeting. Baird worked in a volunteer role on the project management team.
“All of the construction during that time was mostly completed through volunteer labour,” he explained.
Baird outlined the difficulty the group had finding a site for One School and the bidding process to acquire the Spencer Valley property. He also noted the group was “extremely disciplined” in managing their construction budget and costs. He added that the school has outstanding loans of about $2.5 million, and that One School would not have undertaken the permit for the large renovation if they had been advised of the development charges when they applied for the permit.
“This would have been a game-changer,” he said. “Obviously, the budget was a stretch for us to start with. We were doing everything we could to bring in value at that point, at close to $1.7 million.”
He said the scope of the upgrades would have been scaled down to a general “refresh” on items such as the paint and flooring. “We looked at that as an option,” said Baird. "The school had been operating until 2020… we could have moved in and operated as normal, no permit required.”
According to Baird, current enrollment at the One School Greensville campus is 47 students; when it was a public school it accommodated as many as 300 students while the new Greensville Public School was being built on Harvest Road. He noted the school is on a well and septic system, and due to power issues they are currently using a generator, which reduces their reliance on municipal services.
Baird said the local community was very interested in the outcome of the hearing.
“I think the group feels they’ve been unfairly treated," he said. "They feel the city has done a lot to stand in the way of what they’ve been working to do…they’re just looking to move forward. It’s been a massive, massive challenge going on for years.”
City arguments
City solicitor Bruce Engell confirmed that the school site remained the same size and that the capacity of the school is 100 students. He questioned whether the One School team did their due diligence on the costs associated with obtaining the original building permit.
Engell pointed out that the site was previously a DC-exempt use and therefore the development charges would not have been paid when the building was constructed, meaning any subsequent renovation project would not be eligible for a DC credit.
He argued that the fact that city staff failed to impose DCs on the original application did not mean they could not go back and apply them once the error, if one was made, was discovered.
“Staff do their best to administer these bylaws, follow the processes that they have and that can lead to mistakes in one of two directions,” said Engell, disagreeing with Meader’s interpretation that the city does not have the authority to go back and reverse an error and collect the development charges that should have been applied.
Engell also clarified the various definitions and how the request to relabel the plan fit into the sequence of events that led to the issuance of the DC bill in April. When the new application was submitted, “...it caught the previous error; it came to staff’s attention that the previous…oversight, whatever it was, wasn’t right. DCs should have been paid at the original time, they should have been asked for,” he said.
“It’s not retroactivity…You’re not suddenly excused from any responsibility for your development charges simply because it wasn’t properly required by staff at the time of that building permit.”
The city’s solicitor stressed that the private school doesn’t meet the definition of “board of education” under the Education Act. He also questioned the reliability of Baird’s information regarding whether other properties purchased from the school board were required to pay DCs on their renovations.
“Staff have not had the opportunity to do an investigation. Like the response from the police officer when you say ‘other people were speeding as well,’ that doesn’t get you that far if you were speeding. If the bylaw says that a DC was payable, if the other schools were not asked for them by some oversight by staff then that should certainly be looked into and it might result in them being asked to pay DCs. But that is not a reason for this committee…to grant this complaint.”
Engell noted that if the One School complaint were dismissed, One School would have an opportunity to appeal at the OLT; if the board were to grant the complaint, there would be no opportunity for the city to appeal. He also cautioned that the outcome of the complaint hearing could have “ramifications for the city’s application of its bylaw going forward.”
Engell also argued that the bylaw was in force and available to the public, and stressed that there was no “retroactivity” in its application in this case.
“Yes the city’s position is, staff should have asked for the DCs when the original permit was issued and it failed to do that but that’s not a permanent loss of the ability to ask for it afterwards.”
Following clarification questions from members, the committee went in camera with independent counsel John Hart to review and reach a decision. The deliberations took about 90 minutes.
City of Hamilton Ward 9 Coun. Brad Clark chaired the committee proceedings. He announced the decision.
“Upon review of all the evidence presented today and a review of the Development Charges Act and the City of Hamilton DC Bylaw, this committee rules on behalf of the complainant that an error was made in the application of the bylaw and no DC charges are applicable as a result.”
