The company behind a controversial proposal to build 10-storey towers in Riverview says its plans answer the region’s demand for more development.
Ron Lord, Cordova Realty’s vice-president of development, said the region is ready for more developments like this one.
He pointed to the vacancy rate. Canada Mortgage and Housing Corp. reported a 2.7 per cent rental unit vacancy rate in Greater Moncton in October, down from almost 10 per cent in 2013.
Moncton, Dieppe and Riverview are seeking more development around their downtown areas.
Staff in Moncton and Riverview brushed off the idea of competition among the communities to attract large projects like the Cordova towers.
“I wouldn’t say there’s really a competition,” said Kevin Silliker, Moncton’s director of economic development.
Ian Franklin, vice-president of commercial real estate firm Cushman & Wakefield Atlantic, said there’s “absolutely” competition for big developments.
But he said developers don’t really care about municipal boundaries.
“They put it where the opportunities are. If there’s a good piece of land that’s in Dieppe versus Moncton, the project might go to Dieppe.”
Franklin pointed to incentive programs all three communities now offer to attract development. Riverview launched its program last September.
“While there are no guarantees that financial incentives would spur more development in the town, the fact remains that economic development is a competitive landscape and that potential investors base their decisions mainly on the bottom line,” a staff report to Riverview council says.
The program’s launch followed three years of weaker-than-expected growth in the community’s tax base. That led town council to cut $28 million from its 10-year capital budget in 2018.
The incentive program, based in part on Moncton’s, provides a rebate over five or 10 years for significant projects based on a formula.
Shane Thomson, Riverview’s director of economic development, said the company proposing the 10-storey towers hasn’t formally applied for the town’s incentive, but he said the company has told him “the math starts to work.”
The towers proposed in Riverview are estimated to be worth more than $30 million, according to Cordova.
“A lot of communities have a similar approach, they want to develop their downtown and they want to increase density and development,” Lord said last week when asked about the incentive programs.
“Riverview has definitely stepped up. Riverview is really seen as, yes, a bedroom community and we’re adding bedrooms to their community.”
If the company applies, town council must still approve the application.
Franklin said that without the incentives, projects might be smaller, which would result in a lower property value. He said rising building and infrastructure costs, as well as stricter development standards, have increased the financial risks of the early years of large development projects.
“Because the incentives are there, the developers may be able to push their budgets or make the projects more grand because they’re getting help,” Franklin said.
‘City changing projects’
Moncton council approved changes to its development incentive program last year to attract developments worth $10 million or more, which staff described as “city changing projects.”
Silliker said the city knows of five projects in the works that could be eligible for the expanded program. Three are in a “high degree of readiness” to move ahead soon, he said last week.
Moncton has touted three years of elevated development permit values. The city issued permits worth $222.6 million last year, down from a record $243.4 million in 2017.
Franklin said despite weaker economic growth in parts of the province, the Greater Moncton area remains strong. He said the Avenir Centre is leading to “huge” development.
“We only see little bits of it now, but there’s lots of development coming,” he said.
Across the street from the arena, a Hyatt Place hotel is under construction. A block away, the V Hotel is set to be replaced by a four-storey Hilton Garden Inn hotel.
Two other hotels at either end of downtown Moncton have been proposed — one along Vaughan Harvey Boulevard as part of a larger development called the Junction, and another off Harper Street.
Franklin is involved with the Junction through Cushman & Wakefield. It has had false starts, but “we’ll have a project there this year,” he said.
“I believe we’ll be under construction with something.”
He sees the new RCMP station on Albert Street leading to changes to that side of the tracks in the coming years.
Elsewhere, property records show developers have purchased large portions of downtown blocks in recent years, including along Highfield Street and the east end of Main Street.