InfraCycle Fiscal Impact Assessment of a Mixed Use Residential Development

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City of Nepean, Ontario, South Urban Community

Secondary Plan,

Planning Areas 9 and 10

A Fiscal Impact Assessment of a Business Park Designed to provide substantial revenues to support new development. The study identified improvements that would substantially increase revenues by $60-80 million. The City of Nepean designated an area of 800 acres as the South Urban Community (SUC), a rapidly growing suburban community. This area has been subdivided into a number of residential neigbourhoods and commercial areas. A Secondary Plan for Areas 9 and 10 was approved by the City in 1997. Areas 9 and 10 contain primarily commercial uses, planned to provide substantial revenues to support development in the SUC. InfraCycle Software Ltd. was retained to undertake a fiscal impact analysis of the life cycle costs for municipal infrastructure and revenues generated from the development in Areas 9 and 10.  Life cycle costs include the capital, replacement, operating and maintenance costs over 35 years, as well as the revenues from future development. The difference between costs and revenues for the study area was calculated and compared, the sources of major costs and revenues was highlighted, and possible areas for improvement were identified. The area includes a mix of uses, including: residential, retail, hotel/convention, a low-density business park, institutional and open space. Other land uses include transportation, a railway right-of-way and a vacant parcel that will be reserved for a regional snow disposal site.  A population of 4,847 is expected within the study area, with 1,745 dwelling units. 54.4% of the land will generate ongoing revenues. Only the costs that are the responsibility of the City of Nepean have been calculated. Over the study period, most revenues are generated by non-residential uses. Non-residential uses generate $34.6 million and residential uses generate $18.5 million. The planned Floor Area Ratio (FAR) of 0.2 of most commercial uses in this study area is low. In addition, non-residential uses generate more revenue per net hectare of land than residential because they place less demand on municipal services. The overall comparison of costs to revenues of this study area results in a surplus of only $2.3 million over 35 years. This surplus is lower than was expected. Most mature business parks for comparable areas have FAR of 0.6 to 0.8. If the planned density for the business park was increased to 0.6 or 0.8, and other improvements were made to the design, surplus revenues would increase to approximately $60-$80 million.