Special Report: Heritage

Demolitions, Illegal Parking Lots and Danegeld

Our leaders have the power to stand up to the property speculators threatening to sack our city, if only they will have the courage to exercise it.

By Nicholas Kevlahan
Published December 09, 2013

Last week, Wilson-Blanchard opened up a new surface parking lot at 20 Jackson Street West on the site where the company just demolished an occupied three-storey office building.

Cars parked on the footprint of the demolished building at 20 Jackson Street West (RTH file photo)
Cars parked on the footprint of the demolished building at 20 Jackson Street West (RTH file photo)

Company co-owner David Blanchard is quoted in a recent Spectator article saying he doesn't think the parking lot violates the by-law against demolishing a downtown building and putting parking in its place - a by-law that Council passed back when Blanchard demolished the Canada Permanent building across from the Pigott.

Blanchard said there is a provision in the bylaw that a former building site can be used for parking as long as the owner has other buildings within 300 metres of the lot.

It seems he is trying to rely on a section of the Zoning By-Law [PDF] that specifies where required parking for a building may be located:

Where the provision of parking on the same lot as the use requiring such parking is not possible, or not practical, such parking facilities may be located on another lot within 300.0 metres of the lot containing the use requiring the parking. Such alternate parking shall only be situated in a Commercial, Industrial or Downtown Zone or within the same zone as the use requiring such parking...

However, the following section is crystal clear and there are no exceptions in the text:

Within any Downtown Zone, no new surface parking lots shall be permitted except where the parking is accessory to the main use on the same lot.

Blanchard just demolished the "main use" of the 20 Jackson Street West lot, so there is nothing to which the new surface parking lot can be an accessory! As for his other buildings within 300 m, they have been in operation for years and do not suddenly have new parking requirements they need to meet.

This lot is illegal, end of story.

Aside from the audacity of demolishing a working three-storey building to make a surface lot in 2013, these proceedings give us a good idea of what Blanchard has in store for the heritage buildings at 18-28 King Street East, which sit under a demolition order with their facades stripped off.

Exposed fronts of Gore Park buildings under threat of demolition (RTH file photo)
Exposed fronts of Gore Park buildings under threat of demolition (RTH file photo)

Who doubts that they will simply serve as more surface parking until the company finds financing for their dream development?

Viking Raids and Danegeld

The other night we were watching a documentary about the history of Paris, which recounted the devastating Viking raids down the Seine in the Ninth Century.

The Vikings demanded tribute - Danegeld - from the residents of Paris to save the city from being attacked and sacked (the same thing happened many times in England).

The citizens had fought valiantly against the Vikings, but King Charles the Fat paid them 700 pounds to go away and fight the Burgundians instead.

The citizens were appalled that the King did not support them in their fight against the Viking invaders.

Speculators Demanding Tribute

Fast-forward to today. Blanchard is essentially demanding tribute from the City in order to stop him destroying more of it. His escapade on Jackson Street shows us what is in store for Gore Park if we don't cough up enough taxpayer gold.

Our leaders are desperately offering him money: first access to grants, and now up to $1 million in a desperate attempt to save the city core from being sacked.

Blanchard's response, like the vikings, is to threaten devastation and ask for more:

Buildings co-owner David Blanchard said he's "exploring the opportunities" associated with the grants, which would require provincial designation to access the full amount.

But he added it will cost at least $2 million to preserve the front of each of the five buildings. Removing historic façade elements and adding them to a new building would cost less, but likely would not qualify for heritage designation.

"If we preserve the façades, we would like it to be revenue neutral," Blanchard said. "If we spend an extra million dollars on that alone, I don't see how we'd ever get it back."

At least the Viking raiders left after sacking your city, and allowed you to rebuild. Blanchard has been sacking downtown Hamilton one building at a time, but he continues to occupy it and stop other citizens from ever rebuilding.

The Viking raids hold another lesson for us. Eventually, the leaders decided to support their citizens. They stopped paying the Danegeld and stood up to the invaders. Our leaders have the power to stand up to the property speculators threatening to sack our city, if only they will have the courage to exercise it.

Nicholas Kevlahan was born and raised in Vancouver, and then spent eight years in England and France before returning to Canada in 1998. He has been a Hamiltonian since then, and is a strong believer in the potential of this city. Although he spends most of his time as a mathematician, he is also a passionate amateur urbanist and a fan of good design. You can often spot him strolling the streets of the downtown, shopping at the Market. Nicholas is the spokesperson for Hamilton Light Rail.

16 Comments

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By Noted (anonymous) | Posted December 09, 2013 at 09:27:50

"What other developer can you name that receives a $30 million handout from the city after sitting on a property and not maintaining it for seven years?"

http://www.raisethehammer.org/article/322

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By Henry and Joe (anonymous) | Posted December 09, 2013 at 11:23:08

I've noticed that the comment section has been removed from the original Spectator article on this illegal parking lot. Is this a natural timing out for the comment feature, or does is this an example of Wilson-Blanchard being allowed to operate with impunity as far as the mainstream media is concerned?

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By banned user (anonymous) | Posted December 09, 2013 at 11:56:24

comment from banned user deleted

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By Pxtl (registered) - website | Posted December 09, 2013 at 12:32:41 in reply to Comment 95738

In general any crime-blotter or deaths automatically get the "no-comments" treatment. This could be considered an extension thereof.

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By boyd (anonymous) | Posted December 09, 2013 at 16:43:12

This may seem overly simple, or poorly thought out..
However, could the city vote to adjust taxes on lands that sit empty longer than six months; more so at a very high rate to encourage useful construction (commercial/residential) on a site like this that a structure has been torn down? Further more.. To encourage growth on our many parking lots.. Could the percentage of tax not be adjusted once again to levels that would maybe encourage current owners to sell their property to someone who would like to potentially build on one of these many empty lots? i.e. corner of main and bay where it's quoted that the owner is going to sit a while longer to see what happens in the upcoming years with the new development that is currently taking place..
Personally thinking.. having all the empty lots, and now this new one, along with this preposterous and hurtful idea in the Gore, is seriously damaging Hamilton.. It's sickening really.. I'm glad to see both of you, Nicholas and Ryan have written the essays you have, and I hope the two of you and many more become a thorn in the side of these destructive individuals and council as well.. I see nothing in these decisions that have taken the time to give back to the neighbourhoods being destroyed, further more showing actions of pride in what is supposed to be their city too...

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By erskinec (registered) - website | Posted December 10, 2013 at 14:12:18 in reply to Comment 95752

Yes, taxes could change behaviours if people were acting in their best self interest.

In my opinion, destroying more buildings and creating more parking lots makes everyone worse off –developers, business owners and the city.

Parking lots generate less tax revenue than keeping a building in place a filling it with a successful business. As we lose more buildings, we lose more opportunities to fill those buildings with small and independent businesses.

Without those businesses, taxes will need to be increased, and this will discourage both existing and future economic activity.

With less tax revenue, the city’s ability to support existing services or to provide new services to attract people to the core further declines.

Without places to shop or activities to entertain, the people increasingly go elsewhere. This further strengthens a negative feedback cycle that will continue until we start looking like parts of Detroit.

Just ask yourself, how attractive does Gore Park look now compared to last year?

So, who wins in such a situation? Is it really in a developer's best financial interests to turn his properties into vacated wastelands?

I really don’t see how you get from point "A" (empty lands) to point "B" (profitable development).

Comment edited by erskinec on 2013-12-10 14:40:24

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By kevlahan (registered) | Posted December 10, 2013 at 14:43:30 in reply to Comment 95775

Well, the answer is that speculators (and rentiers in general) make their money by hoping that other people will make productive investments, and they can reap windfall profits when the property values rise without having to actually do anything themselves.

Of course, the problem is that if everyone did this no one would ever make any money and everyone would be worse off. One of the purposes of regulations and taxes is to incentivize good behaviour and penalize bad behaviour. Unfortunately, in this case the incentives are the wrong way around (taxes go down for demolition) and speculators call themselves developers to confuse the public (and some councillors).

The City tried to stop this neglect/demolish/wait for decades speculation trap in downtown Hamilton by at least ensuring that speculators do not have a nice little income stream from parking while they wait for someone to offer them a windfall profit on their lot. But it has turned out to be hard to put real teeth in the regulation. The City could also insist that they will only grant a demolition permit if there is a solid plan (with financing) to rebuild within a short time on the lot.

Comment edited by kevlahan on 2013-12-10 14:44:37

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By kevlahan (registered) | Posted December 09, 2013 at 16:59:31 in reply to Comment 95752

Some other places do have such a tax regime, and it would be beneficial here. However, it seems that the City does not have the power to do this on its own. The province would have to agree.

The current system, combined with relatively carrying costs downtown, encourage speculators to demolish or leave their buildings vacant because the tax on vacant lots or vacant buildings is much lower than on occupied buildings. There are incentives that phase in tax increases due to investments downtown, but this doesn't interest those who are really only interested in long-term speculation.

A more reasonable policy would be to lower property tax for vacant buildings only for a period necessary to find new tenants (say six months to a year), after which the tax goes back to the occupied rate. Similarly, owners should not get a tax reduction for demolishing a building, except possibly temporarily to allow time to quickly re-build. The tax system should not incentivize neglect and demolition, or land speculation. McLeans had an article promoting this sort of tax reform a while ago.

Another option would be a land value tax:

http://en.wikipedia.org/wiki/Land_value_...

As a model of how Land Value Taxation affects incentives, take for example a vacant lot in the center of a vibrant and growing city. Any landowner that must pay a tax for such a lot will perceive holding it vacant as a financial liability instead of an investment that passively rises in value.

In other words, it discourages property speculation and rentier-ism.

Comment edited by kevlahan on 2013-12-09 17:02:17

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By Brandon (registered) | Posted December 09, 2013 at 18:38:59

The true tragedy of the Danegeld is that the Dane now sees you as a steady source of revenue and eventually leads to the Dane taking over.

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By Ms Me (anonymous) | Posted December 11, 2013 at 08:40:34

If I park there without paying will I receive a ticket from bylaw?

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By seancb (registered) - website | Posted December 11, 2013 at 10:05:52 in reply to Comment 95798

It's a good question - sadly a "parking on private property" ticket would probably stick regardless of whether it's actually a parking lot or not. But it sure would be a fun publicity stunt. Perhaps we should all start storing our cars there without paying....

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By Henry and Joe (anonymous) | Posted December 11, 2013 at 22:23:58

Is it true council voted to designate 18-28 King St. ??? Good on council if that is the case. Let's get this heritage war started!

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By Pxtl (registered) - website | Posted December 11, 2013 at 22:28:16 in reply to Comment 95820

Debate is happening right now. Apparently this is the straw that broke the camel's back - I think Farr is feeling like he got played, so he's pushing for Council to stop giving Blanchard any leeway.

edit: I just read the latest update - you were right, they voted to stop Blanchard. The brakes are on for Gore buildings. McHattie is tweeting that they've approved $1.1M grant for Blanchard to do restoration instead of demo. I expect we'll be hearing a lot of moaning that $1.1M is a drop in the bucket for buildings like this, and that's probably true, but I think Blanchard might just have to realize that he made his bed.

That said, it's hard to be optimistic. Blanchard will find a way to drag his feet and leave the buildings to rot into their foundations.

Comment edited by Pxtl on 2013-12-11 22:32:15

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By granny2 (anonymous) | Posted December 12, 2013 at 07:26:34

https://www.thespec.com/news-story/4266467-gore-park-buildings-now-protected/

YES!!!! :)

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By granny2 (anonymous) | Posted December 12, 2013 at 08:54:09

" But in a surprise motion at Wednesday’s council meeting, Coun. Jason Farr moved to designate the buildings and won unanimous support from fellow councillors.
...
But in the last week, he told councillors, he lost faith that the developer would do anything but demolish them. He walked away from the last meeting "completely deflated," he said. And the city hasn't seen a solid development plan for what would be built in place of the buildings."

http://www.cbc.ca/news/canada/hamilton/news/city-halts-demolition-of-gore-buildings-1.2460763

"Unanimous" !!

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By Ryan (registered) - website | Posted December 12, 2013 at 09:04:29 in reply to Comment 95838

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