Aerotropolis costs higher than predicted
June 22, 2006

The predicted maximum of $100 million to service the aerotropolis won't even cover the sewer upgrades required for the proposed business park lands around the airport. A city document released last week forecasts spending of $105 million on new wastewater services for that area and an additional $25.5 million to provide water. The price of new roads and other city services are not included in the document.

The 2006 Development Charges Update Study lists the expected costs of some new city projects required to service growth between now and 2023. The listing is used to calculate the appropriate fees that should be charged to residential and commercial/industrial developers so that the burden of new growth is not borne by existing taxpayers.

The biggest sewer project is "upgrades downstream" of the Mount Hope lands that are expected to cost nearly $69 million. Another $9.3 million is earmarked for sewers for the existing airport industrial park; $13 million for the 3100 acre "Special Policy Area" that has been created for future industrial and commercial growth; and $12.5 million for the "Deferral 11" lands which lie immediately north of the airport between Upper James and Glancaster Road. The $9.3 million is scheduled for the next five years, with the remainder to be spent between 2011 and 2023.

The study also lists eight airport-area water improvement projects, five scheduled for the next five years and costing nearly $12 million, and the remainder for the period between 2011 and 2023 at an additional cost of $13.5 million.

The cost of servicing the aerotropolis area was bitterly debated last year when council moved to amend its official plan to establish the special policy area - 3100 acres of mostly prime farmland dubbed the aerotropolis.

While city staff said the servicing had not been calculated, media reports suggested they might hit $100 million. That was too much for several councillors, including Margaret McCarthy and Dave Braden, but now appears to have been an underestimate.

The higher than expected costs seem instead to confirm February 2004 predictions by Paul Mason, the city's director of long-range planning.

"Preliminary indications are that the costs will be formidable, and I mean TENS of millions of dollars before we can even begin to put a shovel in the ground," Mason told councillors. "We would have to find exceptional revenue sources, that's my personal judgment at this point in time, beyond the normal taxes and development charges."

He also hinted at downstream sewer upgrades as a significant factor. "The airport is pretty much at the limit of our current infrastructure service system," Mason noted. "In order to significantly expand urban developments around the airport, we're going to need a major new infrastructure solution."

On the other hand, some city staff argued last June that there would be no costs at all. The following exchange took place at the June 29 council meeting that approved the boundary expansion for the aerotropolis.

"How many tax dollars will be spent on this development?" asked Ancaster councillor Murray Ferguson. "The cost of the infrastructure will be paid for by development. So, the answer is zero," replied GRIDS manager Steve Robichaud.

That apparently referred to the imposition of development charges on new growth - a fee system that is supposed to ensure that existing taxpayers don't pay the costs of new development. Hamilton has such a system, but only collects 16% of eligible costs - preferring to use the fees as an incentive to attract new businesses.

That would leave the taxpayers to pick up the other 84% - about $110 million for the water and sewer work alone. The city's corporate administration committee decided yesterday to continue the steep discount for industrial development charges.