Banff’s hotel industry plans to fight the Town of Banff’s proposal to go to a merit-based review system for handing out the remaining commercial development space.
As part of Phase 2 of the Land Use Bylaw review, there’s a proposal to move away from the lottery system of handing out commercial space to a merit-based scheme that rewards development excellence.
In addition, the land use bylaw review team also proposes to allow space to be transferred from property to property, to be either sold or moved, based on a merit checklist.
But officials with the Banff Lake Louise Hotel Motel Association (BLLHMA) say the merit-based approach for commercial development will be too subjective and create even more uncertainty for businesses.
“We view the merit-based commercial development allotment (CDAs) selection criteria as an interesting and expensive experiment, nothing more,” said Darren Reeder, the group’s executive director.
“It will result in the creation of low value properties that pay less tax. The best use of the existing CDAs is to allocate them to the highest and best use lands so they can create maximum tax revenues.”
Reeder said the primary objective should be to maximize economic value of CDAs, noting the free market is very efficient in determining where dollars are best spent to get the highest return.
“Banff is a bit of an anomaly. We are a one-industry economy with a finite amount of space remaining for development,” he said.
“So it’s important to the BLLHMA that this space is strategically utilized to achieve maximum economic value.”
In 1998, the federal government set a commercial growth cap for the Banff townsite of an additional 350,000 square feet on top of what was already in place, to protect the town from rampant development.
Since then, Banff has handed out that space through a random draw, with an annual growth rate limited to no more than 1.5 per cent a year.
Typically, the number of applicants entering the lottery has suggested there is double to triple the demand for floor space than what is available under the cap.
On the other hand, applicants may simply be throwing their hats in the ring, rather than seriously bidding for floor space, which may be reflected in the number of expired or returned allotments.
Of the 350,000 square feet of additional commercial growth legislated by the federal government, there’s about 155,582 square feet remaining that still hasn’t been built.
The BLLHMA commercial growth working group has come up with its own options for distributing the remaining commercial space, including keeping the existing lottery system.
Other options include a refreshing pool or a proportional allocation.
A proportional allocation would see the existing space allotments divided proportionately among commercial properties that are below the maximum site coverage and below the maximum floor area ratio.
As for a refreshing pool, commercial space would be available for existing projects that undertake renovations and re-fresh their properties.
“I think there’s no clear consensus on options among our group, but it’s got to be something different than merit-based,” said Reeder.
“A simple and straightforward distribution system is all that is required.”
The land use bylaw review team, which had the understanding there was support for a merit-based system, believes it’s time to revamp the commercial development allotment process.
They believe moving from a lottery system to a merit-based system, based on certain criteria, will encourage serious applicants only and will mean projects will actually get built.
The criteria could include quality of architecture, urban design, environmental performance, enhancement of Banff as an authentic mountain community and community and visitor benefits.
It is suggested the proposed program would closely mirror the existing system in place for development permits, including a panel review by the municipal planning commission.
Banff Mayor Karen Sorensen said the proposed merit-based concept, along with the criteria, is not finalized and is still open for further discussion.
“Whether we’re talking about new development or transferability of square footage, this is about the fact we have a limited amount of square footage left,” she said.
“Is the merit system the way to go? I don’t know. I have to wait for the feedback. My job at this point is to listen to feedback from everybody, from all sectors.”
Sorensen said she is in the middle of reviewing a report from the BLLHMA, which was presented to council at an in-camera meeting on March 23.
“I’m interested to read their options and try and understand what those would look like,” she said.
The Land Use Bylaw review team has also considered other options.
They include a hybrid lottery merit-based system, where applicants would have to demonstrate the ability to proceed with their proposal before entering a lottery.
An applicant’s ability to proceed could be linked to a reduced time horizon for building, or could be demonstrated through posting a performance bond to be released at construction.
Meanwhile, BLLHMA is not opposed to transferability, but says it needs to be clarified and a merit-based system for this process simply will not work.
“The BLLHMA believes transferability between private parties will not occur, and re-investment will not occur, if the transfer is ‘clouded’ with a host of subjective criteria imposed by the municipality,” said Reeder.
