Derelict buildings too expensive to demolish: developer

A local developer says the City of Whitehorse would have fewer vacant buildings on its hands in the downtown core if it were cheaper to demolish them.

A local developer says the City of Whitehorse would have fewer vacant buildings on its hands in the downtown core if it were cheaper to demolish them.

Kirn Dhillon’s family owns the building that formerly housed the Dairy Queen on the corner of Second Avenue and Elliott Street, among others.

He said one of the reasons why older buildings are still standing is because it’s too expensive to tear them down.

“We’ve taken down a few places in the past, like some houses in 1985 when we built an apartment building,” he said.

“Since then, tipping fees have gone up. The other issue is that the city requires greater sorting of its waste than before, that’s also an additional cost.

“If those fees were discounted or waived – it wouldn’t fix your problem of having underdeveloped buildings, but it would get rid of some unsightly buildings.”

Earlier this year, the City of Whitehorse hired consultants to complete an assessment on the potential for new development incentives for downtown properties.

Through their research, the consultants determined that approximately 88 lots – or eight per cent of downtown properties – were considered “underdeveloped,” meaning they have an assessment value of under $10,000.

Later this month, members of council will examine the possibility of waiving development cost charges for developers who build living suites in Whitehorse.

As for tipping fees at the landfill, they increased on Feb. 1 this year, from $87 to $94 a tonne.

Kirn said if those fees were lowered, he could probably afford to tear the former Dairy Queen building down.

As it stands, the building has leakage problems that prevents it from being rented or sold, Dhillon said.

“The building itself is of little value,” he said, “to the point where it would require major work to get it inhabitable again.”

“Right now the site’s not being totally utilized. It’s providing parking spots for businesses in the area, but if we could demolish the building, we’d have more spots and I know that’s an issue for the city.”

He said it was never his family’s intention to simply purchase the building and let it sit empty.

In July 2011, suggestions were made to members of city council about potentially waiving tipping fees at the dump, or lowering permit fees, in order to spur development in the city.

But ultimately, city officials decided to go with tax incentives to avoid any loss in revenue, such as the one it recently offered to the developer of a four-storey building on Alexander Street – up to $500,000 over 10 years.

Mike Gau, director of development services, said it’s not easy for the city to simply waive fees at whim. That’s because the city’s landfill operates on a cost-recovery basis.

“If we allow a large building to go in there, we have to cover the cost through increases to everybody else that uses the dump,” he said.

“We’d show a deficit so the rates next year would have to go up because a private developer got a pass. That’s not fair to people who have to pay themselves.”

Dhillon said he’d like to see more partnerships between the private sector and the city to address the fate of downtown vacant lots.

The Yukon government, he said, does this on a regular basis when they need space for a new building.

“They’ll put out a request for proposal and the private sector will respond with a potential lot they can build on,” he said.

“I just wonder to myself why the city doesn’t want to utilize a similar approach when there are all these vacant lots downtown and they have a need for office space.

“They’d be supporting local businesses and developing downtown.”

Dhillon gave the example of the city’s plan to build itself two new headquarters – a city services building erected where the fire hall now stands on Second Avenue, along with a new operations building to be located near Range Road and Two Mile Hill.

Gau said that by building on land that it already owns, the city is saving taxpayers a lot of money.

And when it builds on Yukon government land, the lease is usually just one dollar, he said.

If the city were to build on private land, it would have to pay the owner in addition to the cost of building, he added.

“And it’s not in the best interest of the public to do that.”

Contact Myles Dolphin at

myles@yukon-news.com

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