This week, Edmonton’s Urban Planning Committee will discuss a report in response to a motion I made regarding unpermitted surface parking lots in the core.
Motion: That Administration provide a report that outlines options and analysis for accelerating the redevelopment of surface parking lots in Centre City, including the option of phasing out surface parking lots that do not contain a development permit and return to Committee in Second Quarter 2023.
In part, this was a scoping exercise to determine how prevalent the issue is, and how much land is being occupied by owners operating without permits. The report shows that 89% of surface parking lots in Downtown are operating without permits.
This land is considered vacant, and taxed as vacant. Operating without a permit also means these businesses have not implemented the necessary accessibility, drainage, and landscaping requirements associated with legal surface parking lots. Furthermore, surface parking lots do not contribute to the vibrancy, safety, or success of our downtown.
Affordable, private parking is something that many people use, and our downtown has plenty of it. The City conducted a parking utilization study which found that the highest parking utilization rate in the central core was 53.5%, while optimal usage should land around 85-90%.
In recognition of the oversupply of surface parking lots downtown, and the fact that they detract from vibrancy, the City’s current plans and policies do not support the creation of new surface parking lots Downtown. This has translated into Zoning Bylaw regulations that make it difficult for development permits to be granted for downtown surface parking lots. Allowing unpermitted lots to exist without recourse is not in line with this goal.
The Quarters CRL and corresponding unpermitted lots in blue.
One area of particular note is the Quarters, which has seen nearly $100M in public investment, and is replete with unpermitted lots. The City funded investments in infrastructure upgrades, streetscaping, park space, and more through the Community Revitalization Levy in The Quarters, which is a debt instrument that needs to be fully repaid by localized taxes by 2031 or we will need to fund it via other sources, the most likely being tax dollars.
As of March 2023, projections have us losing between $24M and $69M. Unfortunately, a significant part of that $24M projection depends on the 80 storey Alldritt tower being built. You can listen to me ask administration about our projections on February 22, 2022 here. I have little confidence that the Alldritt tower is about to be developed. In my view, we are looking at something very close to a $69M loss on the investments previous councils have directed.
The bottom line is that if we do not try something different to spur the development of vacant, surface lots in the Quarters, we are going to have to dig into the tax levy to pay for this.
These property owners have made profits through appreciation and operations, while operating unpermitted businesses, and avoiding paying their fair share in taxes for many years.
Despite knowing about this problem for over a decade, we have taken virtually no action, and unsurprisingly we have achieved little in the way of results. While the market is an important factor in the timing of development, the City should be looking at implementing all the tools it has in its toolbox for encouraging the development of these parcels into higher and better uses.
I would like to see the City fine these businesses appropriately, ensure they pay their fair share, and use those revenues to reinvest into Downtown. Fining these businesses does not necessarily mean they will shut down, but they would be charged a greater amount for their unpermitted operations.
Out of anyone, these businesses should know that if you are located somewhere, doing something you shouldn’t be without paying the appropriate fees, you can receive a ticket on your dash. It's concerning to me that we have knowingly not enforced our bylaw for years, which risks delegitimizing the system, and alienates compliant businesses. Furthermore, in some cases, compliant landowners have been made non-competitive because they are taxed and made to invest in their land. By not acting, we are in effect allowing unpermitted lots to exist at a competitive advantage.
While fining may not be a silver bullet, and won't result in the immediate development of Edmonton's vast swaths of surface parking lots, it will help build pressure to redevelop, and in the meantime, raise funds which can be used to support other priorities in the core.