District Municipality of Muskoka Planning and Economic Development Committee

Transcription

1 Interim Options Report Presentation Monday, March 4, 2013 District Municipality of Muskoka Planning and Economic Development Committee

2 Muskoka Economic Strategy o Tourism sector consultations LOBA submission Fractional research Tourist commercial accommodations inventory Development proposals Muskoka Lakes Symposium Photo Credit: Muskoka Tourism 2

3 What are current and emerging trends impacting tourism industry in Muskoka? What is needed for successful resort development? What are potential official plan policy directions and what would the implications be? Other Considerations Taxation issues Private cottage rentals Small business re-capitalization Camps and campgrounds Photo Credit: Larry Wright 3

4 4 Overview

5 Muskoka Resort and Tourism Market Overview Summary of Key Factors Impacting Alternative Policy Options Framework for Alternative Policy Options Policy Considerations for Other Resort and Tourism Related Issues Next Steps Photo Credits: Larry Wi Wright 5

6 Background research i.e. tourism supply and demand, development and ownership trends, lending environment Interviews with Municipal and Industry Stakeholders Stakeholder Workshop Surveys of resorts, campgrounds and camps Review of Official Plan Policies Photo Credits:scoregolf.com Development of a Framework for Alternative Policy Options Additional Considerations: o Property Taxation, Private Cottage Rentals, Trailer Parks & Campgrounds, Camps, Accommodation Sector Financing 6

7 Muskoka Resort & Tourism Market Overview 7

8 Profitability of the Accommodation Sector Canada vs. Ontario me ) erating Incom oom ($000's) sted Net Ope Available Ro Adjus Per $14 $12 $10 $8 $6 $4 $2 $0 $11.1 $12.0 $ $9.3 $8.4 $7.5 Canada Ontario Source: Annual Trends in the Hotel Industry 2012, PKF Consulting Inc. 8

9 Actual Actual Actual Actual Forecast Canada 63% 58% 60% 61% 62% Ontario 61% 57% 60% 61% 62% Ontario Resorts 51% 46% 49% 49% 52% Muskoka Hotels 48% 46% 49% 45% 45% Muskoka Resorts 47% 43% 45% 45% 47% NOTE: PKF s Muskoka Resort sample includes 11 properties / 1,100 rooms ; Hotel sample includes 10 properties / 600 rooms Source: Annual Trends in the Hotel Industry 2012 and Ontario Resort Trends 2012, PKF Consulting Inc.; Muskoka Tourism Marketing Agency 9

10 Source: Annual Trends in the Hotel Industry 2012 and Ontario Resort Trends 2012, PKF Consulting Inc. Season Occupancy % Spring (Apr-May) 30% Summer (Jun-Aug) 67% Fall (Sep-Oct) 56% Winter (Jan-Mar, Nov- 29% Dec) 10

11 Summary of Key Factors Impacting Alternative Policy Options 11

12 Muskoka s Accommodation Sector: 111 Resorts and Hotels with 4,100 units 30 Trailer Parks & Campgrounds offering 3,000 sites 35 Camps offering an average of 350 beds Resort $400 Million in direct expenditures annually in the District ($50,000 per rental unit) Muskoka s Cottage Sector: o o 20,000 dwellings and 76,000 seasonal residents $600 Million in direct expenditures annually in the District ($30,000 per cottage) Source: Annual Trends in the Hotel Industry 2012 and Ontario Resort Trends 2012, PKF Consulting Inc.; 2004 Second Home Study, Muskoka District 12

13 Poor performance levels Challenges in economic sustainability of existing operations Restrictions on the ability to generate alternative forms of income through expansion and/or complementary development Increased competition from private cottage rentals and new resort ownership/development models (i.e. fractionals) The need for additional regional and provincial marketing High levels l of property taxes for commercial waterfront t properties Challenges in realizing the value of their asset 13

14 Without some form of unit sales, developers are concerned that it is not economically viable to build a resort in Muskoka Other concerns are that existing policies are too restrictive: Official Plan Amendment requirements Servicing policies are financially restrictive The requirement for transient rental of units impacts marketability of selling units The requirement to meet the range of commercial tests impacts the viability of operations Photo Credit: Marriott.com 14

15 Poor performance levels l Overall challenges in economic sustainability of existing operations Restrictions on the ability to generate alternative forms of income through expansion and/or complementary development Challenges meeting local policy and planning requirements The need for additional regional and provincial marketing A significant number of properties are interested in expansion, but are challenged by planning policies and approvals 15

16 Poor performance levels Overall challenges in economic sustainability Restrictions on the ability to generate alternative forms of income through expansion and/or complementary development Challenges meeting planning policy and requirements Need for additional regional and provincial marketing Ever increasing competition from private cottage rentals Maintenance and upgrade of existing facilities 16

17 Noise, safety and security issues Potential environmental impacts resulting from intensity of use at lakeside resorts and other tourism product developments Implication of capital losses of resorts becoming a burden to local tax-payers Photo Credits: Muskoka Tourism and Larry Wright 17

18 Concerns include: General health of the resort and tourism sector Potential impacts of existing and expanded operations on other stakeholders Perceived over-supply of fractional resort products Mixed opinions regarding supporting the retention of the resort commercial land base versus allowing the downzoning of resorts to residential uses Existing official plan policies vague and subject to interpretation 18

19 Need to clarify the definition of a resort and tourist commercial uses Need to develop criteria for: o o o An appropriate level/nature of resort development/re-development The level of unit availability for rental (i.e. percent of units, specific time of year) Assessing the impact of down-zoning on the commercial land base Need to establish more specific tests t for resort operations and development, including definitions for: o o o Travelling public Central management on location Services and recreational facilities normally provided in a commercial setting Need to consider available options for monitoring or enforcement 19

20 Framework for Alternative Policy Options 20

21 Level of encouragement for new resort and tourism development is influenced by level of restrictions imposed by MOP policies Alternative options for MOP policy revisions should be considered under varying levels of restriction: Permissive which would provide a minimal level of restrictions Non-Restrictive which would provide a moderate level of restrictions Restrictive which would provide a higher level of restriction 21

22 Report provides a detailed framework of alternative policy options, based on: A spectrum of permissive to restrictive approaches Challenges with existing policy sets Addressing gaps and inconsistencies Implications of applying different policy options Photo Credits: Deerhurst Resort 22

23 Does Muskoka need more or less resort and tourism product in the short to mid-term? District should consider the following factors: Current industry yperformance levels suggest excess supply in all seasons The development community would require fewer restrictions and requirements to recognize opportunities in the short term 23

24 Considerations: Short-term development could have a negative impact on existing resort properties, which are already suffering poor performance levels More permissive policies don t guarantee development; however, existing policies may limit resort development in the short to midterm There is no way to guarantee that resorts will be built, however, it is possible to lessen restrictions on developments, which may enhance the opportunities for short to mid-term development Should the focus be on short-term development opportunities (i.e. 3 to 5 years), or should a more long-term approach be considered? 24

25 Framework organized into 6 sections, based on existing policy sets: Definition of Resort Four Tests for Resort Commercial Development Ownership and Land Use Considerations Photo Credits: Muskoka Tourism and Larry Wright Servicing Requirements for Multi-Unit Resort Condominium Developments p Planning Requirements for New Resorts / Redevelopments Downzoning Considerations 25

26 26 Definition of A Resort

27 Existing Policy: C.29 - In the Waterfront, Rural and Community designations: A. All forms of tenure will be considered for new, expanded or redeveloped resorts within the principles, goals and objectives of this plan. A resort is defined as lodging or other accommodation other than tent and trailer parks. Suggests that all forms of tenure at resorts will be considered Allows other potential revenue-generating commercial aspects of the resort to be left to the discretion of the developer Falls short of providing a detailed definition from a product perspective 27

28 Forms of Tenure Accepted Sole Ownership Accommodation Units with Rental Component Sole Ownership Accommodation Units without Rental Component Sole Ownership and Multiple Shareholder Units with Rental Components (i.e. fractional) Sole Ownership and Multiple Shareholder Units without Rental Components (i.e. fractional) Multiple Ownership Accommodation Units with Rental Component (i.e. fractional) Multiple Ownership Accommodation Units without Rental Component (i.e. fractional) Alternative Ownership Accommodation Units with Rental Component (i.e. timeshare) Alternative Ownership Accommodation Units without Rental Component (i.e. timeshare) Commercial Accommodation Units Existing x x x x x 28

29 Exclusive use of resort units by sole owners should not be permitted District might adjust policy to include forms of tenure that do not conflict with the exclusive use criteria by generating a specified level of user turnover 29 Photo Credit: Corbettcove.com

30 Resort Product Definition Overnight Accommodation Units Required Hotel Guest Rooms Required Food & Beverage Required Meeting Space Required Existing x The definition of resort product would not require changes under an adjusted policy set A more restrictive approach could involve requirements for a standard resort hotel, including tradition hotel-style guest rooms, food and beverage facilities, and meeting space Allowing alternative forms of tenure and not restricting the nature of product types would be considered supportive of resort development 30

31 31 Tests for Commercial Use

32 Existing Policy: Regardless of the form of tenure, accommodation units within a resort development will be: 1) made available to the travelling public 2) operated under central management on location 3) for profit 4) will provide ongoing services & recreational facilities Documentation will require commercial use and maintenance of the commercial components Availability, travelling public and facilities are not defined Enforcement has been a challenge 32

33 Third-Party Rental Availability Criteria i Existing Optional No Defined Availability x Defined Minimum Availability Full Availability Resort operators are required to make accommodation units available to the travelling public, but there is no defined level of availability District might adjust policy to define a minimum level of availability on either an annual or seasonal basis 33 Photo Credits: blacklakecabins.com

34 Use Included in Definition of Travelling Public Exclusive Use by Sole Owner of Unit Exclusive Use by Multiple Owners/Users of Unit Exclusive Use by Alternative ti Owners/Users of Unit Travellers and Vacationers (Including Unit Owners) Travellers and Vacationers (Excluding Unit Owners) Existing x Existing policy indirectly defines the travelling public as only transient travellers and vacationers with no ownership or right to use in a resort Under an adjusted policy framework, the District might consider including unit owners within the concept of travelling public 34

35 Management Considerations Management Optional Off-site Management Required On-site Management Required Existing x There are effective models in the resort community that involve management services being provided from off-site locations Under an adjusted policy framework, the District might consider both on-site and off-site management options, providing minimum service levels are met 35 Photo Credit: thelandscapes.com

36 Element of Profit No Transaction or Profit Requirement Alternative Transactions Required (e.g. ownership exchange programs) Financial Transactions For Profit Required Existing x Existing policy implies a financial transaction will take place when a unit is rented Under an adjusted policy framework, the District might consider incorporating a requirement for transaction, be it financial or some alternative ti exchange Could help retain economic impact in the District from alternative forms of usage, but not necessarily guarantee direct profit to the resort itself 36

37 Ongoing Services Existing No Defined On-Going Services x Housekeeping Reservations Security Maintenance Photo Credit: Delawana.com and marina.com Marketing & Sales Existing policy suggests that management provide basic services that would appear essential to a resort, but services are not defined Under an adjusted policy framework, the District might consider more defined d services, which h could include housekeeping, reservation, security, maintenance Requirement for sales and marketing responsibilities could provide an assurance for transient rental availability 37

38 Facilities Provided in a Commercial Setting Existing No Defined Commercial Facilities x Defined Indoor Recreation Required (i.e. fitness centre, games room) Defined Outdoor Recreation Required (i.e. shoreline, hiking trails, play area) Existing policy suggests recreational facilities and amenities be included at a resort, yet these are not clearly defined in the MOP Under an adjusted policy framework, the District might consider more defined consider a more specific definition of these facilities, inclusive or specific indoor and outdoor recreation facilities 38

39 Documentation Enforceable by Municipalities No Documentation Requirement Requiring Commercial Use and Maintenance of Commercial Components Defined Documentation ti Requiring i Commercial luse and Maintenance of Commercial Components Other Considerations - Documentation Provide Guidelines to Define Documentation Requirements for Use Provide Guidelines to Define Documentation Requirements for Management and Operations Existing x 39 Photo Credit: Pattersonkayeresort.com

40 Existing policy requires documentation to ensure that the tests for resort commercial use are met, but there is no list of documents Under an adjusted policy framework, the District might consider providing a more detailed list of documentation relating to the four testst However, providing more details in terms of documentation ti may lead to further challenges with enforcement Photo Credit: Larry Wright 40

41 Other Considerations - Operational Monitoring No Requirement Periodic Monitoring Detailed Usage/Availability Compliance x If more definitive commercial test criteria are going g to be put in place, a monitoring element should be established Under an adjusted policy framework, periodic monitoring may need to be considered at the Area Municipality level, to ensure criteria are being met This would involve a financial cost and additional resource allocation 41

42 Current policy could be reorganized and categorized around the following 4 key elements of resort commercial use: Planning Considerations Consumer Needs #1 Availability to Travelling Public #1 Availability to Travelling Public #2 Management Services #2 Product Type and Facilities #3 Guest Services #3 Guest Services #4 Product Type and Facilities #4 Management Services These components do not directly address the element of profit, but it would be implicitly included in the test for availability to the travelling public Ultimately the test for availability of resort units for the travelling public outweighs all other concerns from a resort commercial perspective. 42

43 Ownership and Land Use Considerations 43

44 Potential Alternatives: Sole, multiple or alternative ownership accommodation units with rental component Sole, multiple or alternative ownership accommodation units without rental component Mix of resort commercial and resort related residential units in conjunction with traditional hotel in first phase Photo Credit: Larry Wright 44

45 Multiple residential development is not currently permitted in waterfront areas Muskoka Official Plan prohibits the use of private communal services for any type of residential development Any ypolicy option involving a mix of resort commercial and resort related residential uses would require community and Council acceptance of: a) multiple l residential uses in the waterfront t b) potential District responsibility and liability for small, remote, private communal systems 45

46 Servicing and Planning Considerations 46

47 Existing policy includes requirement for a reserve fund that provides for 100% of replacements costs for private communal systems for resort commercial uses Under an adjusted policy framework, District might consider: 1) leaving the policy as is 2) eliminating the requirements for a reserve in the Muskoka Official Plan, and relying entirely on the legislative requirements under the Condominium Act for resort commercial uses If resort commercial / resort related residential uses are contemplated, the requirements of the SDWA would apply, which requires municipal consent to the construction of a private communal system for residential development 47

48 Planning Requirements for New Resorts / Redevelopments 48

49 Establishment of a new resort in the Waterfront designation on a property where development rights do not already exist is required to proceed by a local official plan amendment (OPA): C28 C.28 - New resort development may only be established in the Waterfront Designation by amendment to the Local Official Plan Existing policy was intended to ensure that a comprehensive planning process is undertaken and that new facilities are appropriately located and compatible with surrounding use No criteria or definitions provided to outline this planning process and evaluation of facilities Photo Credit: Muskoka Tourism 49

50 Under an adjusted policy framework, District might consider: 1) Eliminating need for a local Official Plan amendment It would remain the responsibility of the Area Municipalities to ensure comprehensive planning processes were being carried out, and that new developments were either compliant with or require zoning by-law amendments 2) Requiring an amendment to the Muskoka OP in addition to the local OP This would extend current timelines for developers, and could further limit new development 50

51 Downzoning Considerations 51

52 Existing Policy discourages downzoning of resorts with significant landholdings and frontage on water, unless it is demonstrated that the loss of the property would not negatively impact the tourism land base in Muskoka The intent of the policy is good, but the lack of criteria implies that every waterfront resort owner could be impacted regardless of size and nature of existing operations In general, size is considered significant, as larger properties provide greater opportunity for larger and potentially more viable projects 52

53 Under an adjusted policy framework, the District might consider permitting downzoning on smaller scale properties Would create a need to define small-scale, as compared to mid or large-scale, which may be best defined at the Area Municipality level Loss of large-scale properties on the waterfront could present limitations for future resort development Photo Credit: bondi-cottage-resport.com 53

54 Under an adjusted policy framework, the District might consider providing tests to measure applications for downzoning based on scale: 1) Permitting owner rationale and business case documentation for smaller-scale properties, if they include consideration for longterm potential of other commercial operations on-site 2) Requiring third-party prepared business case and land base tests on mid-scale and large-scale properties 54

55 Regardless of which level of documentation is required, definitions will be required for the scale of property under consideration for downzoning District might consider identifying the significance of particular resort properties to Muskoka s tourism sector Intent would be to identify lands that would be restricted from downzoning, while allowing others to potentially be considered for downzoning if business case tests were met 55

56 Summary of Implications for Alternative Policy Options 56

57 There are many possible alternatives for the District to consider that either encourage or limit resort development in the short to mid-term The level of encouragement of new resort and tourism development is directly related to the level of restrictions imposed by MOP policies Regardless of which perspective is adopted, further criteria and definitions need to be identified and enforcement will be needed 57

58 Considerations for Other Resort and Tourism Related Issues 58

59 Generally commercial property tax rates are higher than residential tax rates, therefore commercial properties generally pay more taxes than similarly valued residential properties MPAC developed a specific Resort Condominium Property Class, which still sees the property assessed at a residential value, but few Muskoka resorts would qualify District may need to consider: 1) Lobbying the Province and MPAC to reconsider the inequities impacting the housekeeping sector 2) Lobbying for MPAC to loosen restrictions within the Resort Condominium Property Class Photo Credits: pinelake.net 59

60 3,200 resort units in Muskoka are competing with a minimum of 2,000 cottage rental units There are currently no policies or regulations restricting private cottage rentals Alternative options regarding regulation of rentals involve zoning restrictions or licensing and enforcement at the Area Municipality level There are a number of options that the Area Municipalities may consider: Defining residential use in the Zoning By-Law Enforcing Zoning By-Laws that ensure unit rental is not permitted Introducing a licensing system that is required for all private cottage short-term t rentals 60

61 Restricting all forms of cottage rental would limit the level of economic impact that is currently being generated by these rentals If the Area Municipalities consider regulating cottage rentals through licensing or zoning, enforcement would be required Looking to HST remittance requirements as a control mechanism has been suggested through the consultation process $30,000 revenue threshold would seldom be reached 61

62 No MOP definition of other Tourist Commercial properties and no policies to guide development of trailer parks, campgrounds and camps Many Area Municipalities created their own local policies In almost all cases, new tent and trailer parks require an Official Plan Amendment Tourist Commercial lands are valued based on potential ti future use, and particularly on the waterfront, land values often far exceed the commercial value of the businesses It is unlikely that many camp, campground or trailer park projects would be economically viable since land value would likely exceed business value, particularly for waterfront properties p 62

63 Regardless of whether District policy is introduced, the economic viability of and development potential for new camps, trailer parks and campgrounds on higher valued waterfront properties will be limited Photo Credit: santasvillage.ca 63

64 Economic sustainability of existing operations and challenges in obtaining financing for upgrades and expansions = challenge Opportunities for small resort recapitalization are highly dependent on access to financing, which is market-driven Financing challenges are being faced by the resort industry throughout Ontario, and until market dynamics change, there is little that can be done to change this situation Few government programs address the capital financing needs of operators, so there is little that the District can do from a policy perspective Photo Credits: thestar.com 64

65 65 Next Steps

66 Obtain input on Interim Options Report from Area Municipalities and other stakeholders o o o o Area Councils Stakeholder workshop District web site comment form District Planning and Economic Development Department Incorporation of stakeholder input into a Recommendations Report Official plan amendment process o Further opportunities to input Photo Credits: muskokanclub.com and hotels.ca 66