City of Chilliwack
ALC Economic Impact Study
Report
Date: January 28, 2000
USL File: 1103627.1
File Name: y:\anwelch\chilliwack\report
104A-1815 Kirschner Road
Kelowna, B.C., V1Y 4N7
Telephone: (250) 762-2517
Fax: (250) 763-5266
Table of Contents
Executive Summary iv
1. Introduction 1
1.1 Background and Purpose 1
1.2 Approach 1
1.3 Format 2
2. Economic Impact ¾ Past 3
2.1 Models of Development 3
2.1.1 Model 1a: Chilliwack Today 3
2.1.2 Model 1b: Valley Focus (past) 3
2.2 Differences in Capital Costs 5
2.2.1 Water 5
2.2.1.1 Model 1a: Chilliwack Today 6
2.2.1.2 Model 1b: Valley Focus (past) 6
2.2.2 Sewer 6
2.2.2.1 Model 1a: Chilliwack Today 7
2.2.2.2 Model 1b: Valley Focus (past) 7
2.2.3 Drainage 8
2.2.3.1 Model 1a: Chilliwack Today 8
2.2.3.2 Model 1b: Valley Focus (past) 8
2.2.4 Roads 9
2.2.4.1 Model 1a: Chilliwack Today 9
2.2.4.2 Model 1b: Valley Focus (past) 9
2.2.5 Parks, Recreation and Libraries 9
2.2.5.1 Model 1a: Chilliwack Today 10
2.2.5.2 Model 1b: Valley Focus (past) 10
2.2.6 Fire Department 11
2.2.7 Other 11
2.3 Differences in Non-residential Assessment 11
2.3.1 Past Economic Development Opportunities 12
2.3.2 Assessed Values of Past Opportunities 12
2.3.3 Property Tax Revenues 14
2.4 Conclusion 14
3. Economic Impact ¾ Future 16
3.1 Models of Development 16
3.1.1 Model 2a: New OCP with Upland Expansion (future) 16
3.1.2 Model 2b: Valley Focus (future) 18
3.1.3 Model 2c: Favoured Direction (future) 20
3.2 Differences in Capital Costs 22
3.2.1 Water 22
3.2.1.1 Model 2a: New OCP with Upland Expansion (future) 22
3.2.1.2 Model 2b: Valley Focus (future) 23
3.2.1.3 Model 2c: Favoured Direction (future) 24
3.2.2 Sewer 25
3.2.2.1 Model 2a: New OCP with Upland Expansion (future) 25
3.2.2.2 Model 2b: Valley Focus (future) 26
3.2.2.3 Model 2c: Favoured Direction (future) 27
3.2.3 Drainage 28
3.2.3.1 Model 2a: New OCP with Upland Expansion (future) 28
3.2.3.2 Model 2b: Valley Focus (future) 29
3.2.3.3 Model 2c: Favoured Direction (future) 30
3.2.4 Roads 30
3.2.4.1 Model 2a: New OCP with Upland Expansion (future) 31
3.2.4.2 Model 2b: Valley Focus (future) 32
3.2.4.3 Model 2c: Favoured Direction (future) 33
3.2.5 Parks, Recreation and Libraries 34
3.2.5.1 Model 2a: New OCP with Upland Expansion (future) 34
3.2.5.2 Model 2b: Valley Focus (future) 36
3.2.5.3 Model 2c: Favoured Direction (future) 37
3.2.6 Fire Department 39
3.2.6.1 Model 2a: New OCP with Upland Expansion (future) 40
3.2.6.2 Model 2b: Valley Focus (future) 41
3.2.6.3 Model 2c: Favoured Direction (future) 41
3.2.7 Other 42
3.2.7.1 R.C.M.P. 42
3.2.7.2 Urban Transit. 43
3.3 Differences in Non-residential Assessment 44
3.3.1 Value of Business Park Developments 45
3.4 Conclusion 46
4. Conclusion 48
Appendices
Appendix 1: Forgone Tax Revenues from Past Economic Development Opportunities ¾
Spreadsheet
Appendix 2: Differences in Future Capital Costs ¾ Spreadsheets
Appendix 3: Value of Future Business Park Developments ¾ Spreadsheet
Executive Summary
This study was commissioned on the premise that the ALC's continued refusal to release ALR lands for new valley development has had – and will continue to have – a negative economic impact on the municipality. Urban Systems Ltd. was asked to quantify, to the extent possible, both the past and future economic impacts of the ALC's position.
The approach taken to determine the past economic impact involves a comparison of Chilliwack as it has developed in recent years, to Chilliwack as it would likely have developed had the ALC been more amenable to a compact, valley-focused pattern of development. The approach taken to determine the future economic impact involves a comparison of Chilliwack as it is forecasted to develop under the City's 1999 OCP, to Chilliwack as it could develop if the ALC were willing to release select valley lands for further urban growth.
Two models of development are presented for use in determining the past economic impact. Model 1a represents Chilliwack as it has actually developed since 1992. Model 1b represents Chilliwack as it would likely have developed from 1992 onward, had the ALC been more amenable to further development around the existing urban core in the valley.
Three models of development are presented to help determine the future economic impact. Model 2a, which represents Chilliwack as it is intended to develop under the 1999 OCP, is built around the ALC's refusal to allow future development on ALR lands in the valley. Model 2b accommodates all future growth on the valley floor, within a rational urban containment boundary. This model represents one plausible future development scenario that Chilliwack could pursue if the ALC were willing to release select ALR lands for future valley development. Model 2c is the (modified) favoured direction that the community developed during the recent Future Plan process. Each of the three future development models assumes an ultimate build-out population of 134,000 by year 2020.
The comparisons of the various models consider the following two indicators:
· the nature of the non-residential assessment base
· capital costs associated with the provision of off-site municipal infrastructure for new growth
The past economic impact is determined, in section 2 of the report, to be $20,516,897 (2000 dollars). This figure reflects both the extra servicing costs, and the forgone revenues, associated with Chilliwack's development between 1992 and 1999.
Two future economic impact estimates are provided in section 3 of the report. The estimate of $161,905,364 represents the net present value of the future cost to the City of developing under the new OCP (Model 2a), instead of under a more compact, valley-focused development pattern (Model 2b). The estimate of $81,119,909 represents the net present value of the future cost to the City of developing under the new OCP (Model 2a), instead of under the Future Plan Committee's (modified) favoured direction (Model 2c).
The estimates determined in this report are not considered to be precise, definitive measurements of the ALC's actual past and future economic impacts. The estimates are, instead, offered as order-of-magnitude, defensible measures of what the ALC's past economic impact has been, and what the ALC's future economic impact is likely to be.
1. Introduction
1.1 Background and Purpose
The City of Chilliwack is a growing municipality of 65,000 situated in British Columbia's Fraser Valley. Approximately 70% of the land within the City's boundary is included in the provincial Agricultural Land Reserve (ALR), which is administered by the Agricultural Land Commission (ALC). Over the years, the ALC has been very reluctant to release ALR lands for additional urban development on the valley floor in Chilliwack. Most recently, the ALC rejected three separate requests made by the City's Future Plan Committee to release select valley lands intended to accommodate future residential, industrial and commercial growth within a slightly-enlarged urban containment boundary.
The ALC's continued refusal to release lands for new valley development has forced – and will continue to force – the City to direct new growth southward into the upland regions, away from the existing urban areas. The City believes that this requirement to accommodate new growth outside of the valley has had – and will continue to have – a negative economic impact on the municipality.
In October, 1999, the City of Chilliwack commissioned Urban Systems Ltd. to study the actual impact on the municipality of the ALC's refusal to release valley lands for new urban development. More specifically, Urban Systems was asked to quantify, to the extent possible, both the past and future economic impacts of the ALC's position.
1.2 Approach
In simple terms, the approach taken to determine the past economic impact of the ALC's position involves a comparison of Chilliwack as it has developed in recent years, to Chilliwack as it would likely have developed had the ALC been more amenable to a compact, valley-focused pattern of development. The approach taken to determine the future economic impact involves a comparison of Chilliwack as it is forecasted to develop under the City's 1999 OCP, to Chilliwack as it could develop if the ALC were willing to release select valley lands for further urban growth.
Various models of past and future development are presented for purposes of comparison. The models were designed based on an extensive review of municipal planning documents and Future Plan Committee reports, as well as discussions with key City department heads.
To determine the past and future economic impacts, the comparisons of the models consider the following two indicators:
· the nature of the non-residential assessment base
· capital costs associated with the provision of off-site municipal infrastructure for new growth
The non-residential assessment base and capital cost data for each model were obtained from the City's various economic development reports, municipal finance documents and comprehensive development plans, as well as through interviews with City department heads and key staff.
It should be noted that the approach taken by the consultants is not designed to calculate the precise and definitive past and future economic impacts. The determination of precise and definitive impacts would involve the detailed study of many economic indicators and their interrelationships. Such an exercise is beyond the scope of this study. The approach taken on this project is, instead, intended to generate order-of-magnitude, defensible estimates of what the past economic impact has been, and what the future economic impact is likely to be.
1.3 Format
This report presents the results of Urban Systems' study into the ALC's past and future economic impacts on Chilliwack. The report is divided into four sections:
· Section 2 focuses on the past economic impact. Two models of past development are presented and explained. Differences in capital costs for major infrastructure and services under each model are compared, as are differences in non-residential assessment bases. An overall estimate of the ALC's past economic impact is provided.
· Section 3 addresses the future economic impact. Three models of future development are outlined. Differences in capital costs for major infrastructure and services associated with each model are compared, along with differences in non-residential assessment base estimates. Two estimates of the overall future economic impact are provided and explained.
· Section 4 concludes the report with review of the report's key findings.
2. Economic Impact ¾ Past
2.1 Models of Development
Two models of development were created for use in determining the past economic impact of the ALC on the municipality. This section of the report outlines the key characteristics of each model.
2.1.1 Model 1a: Chilliwack Today
Model 1a (see figure 1) represents Chilliwack as it has actually developed since 1992. 1992 is important because it was the year in which the City, in response to the actions of the ALC, began to develop the upland area of Promontory. Prior to this time, most urban development had occurred on the valley floor, primarily in Chilliwack Proper and Sardis-Vedder.
Table 2.1.1a shows how Chilliwack's current population is distributed throughout the municipality.
Table 2.1.1a
Distribution of Current Population
Region within Chilliwack / Current PopulationChilliwack Proper / 31,434
Sardis-Vedder / 18,130
Chilliwack Mountain / 1,029
Promontory / 2,626
Ryder Lake / 797
Eastern Hillsides / 511
Other Rural / 7,417
Non-Private Households / 1,498
First Nations Reserve Population / 1,800
Total / 65,242
2.1.2 Model 1b: Valley Focus (past)
Model 1b (see figure 2) represents Chilliwack as it would likely have developed from 1992 onward, had the ALC been more amendable to further development around the existing urban core in the valley. The following points describe Model 1b in detail:
Ø Residential Growth ¾ The bulk of new residential development is situated on the valley floor. The model assumes that valley development from 1992 would have occurred only in accordance with accepted planning principles. For example, new development would have occurred:
- adjacent to existing urban areas only
- on the least productive agricultural lands available
- on lands with good service and transportation links to existing urban areas
- on lands near Chilliwack Proper
A 76 hectare parcel of valley land near Prest Road (see figure 2) is selected as the area in which most new residential growth would have occurred. As a development area, Prest Road conforms to the key planning principles listed earlier. For example:
- it is adjacent to an existing urban area (Chilliwack Proper)
- it consists primarily of Class 4 agricultural land, which is lower in terms of agricultural capability than other areas in the valley
- it has excellent links to existing transportation and servicing systems
At a relatively low density of 12 units per hectare, the Prest Road area would have accommodated the 2,626 people currently in Promontory. The model, with its valley focus, assumes that Promontory would not have been serviced or designated for urban development. Table 2.1.2a shows how Chilliwack's current population of 65,242 is accommodated under Model 1b.
Table 2.1.2a
Accommodation of Current Population
Region within Chilliwack / Current PopulationChilliwack Proper / 31,434
Sardis-Vedder / 18,130
Chilliwack Mountain / 1,029
Ryder Lake / 797
Eastern Hillsides / 511
Other Rural / 7,417
Non-Private Households / 1,498
First Nations Reserve Population / 1,800
Prest Road (76 ha) / 2,626
Total / 65,242
Ø Economic Development ¾ In recent years, a number of potential commercial and industrial ventures have been turned away from Chilliwack, in many cases because of the inability, or perceived inability, to access valley lands in the ALR. This model assumes that at least some of these potential ventures would have received access to the required lands and would have come to fruition.
2.2 Differences in Capital Costs
This section of the text explores key differences in off-site capital costs associated with the two past models of development. All major services are examined, including water, sewer, drainage, roads, parks and recreation, libraries, fire, police and transit. All costs have been converted to constant, year 2000 dollars using an annual inflation factor of 1.5%.
As explained in section 2.1, the distinguishing factor between Models 1a and 1b is Promontory. Model 1a accounts for the development of Promontory as has actually occurred since 1992, whereas 1b assumes that Promontory would not have been developed at all. Model 1b assumes, further, that the 2,626 people who live in Promontory under 1a would have been accommodated in the 76 ha section of land along Prest Road.