Chair and Members Planning and Economic Development Committee. Samantha Hastings Director of Policy and Programs. DATE: May 10, 2013

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1 TO: FROM: Chair and Members Planning and Economic Development Committee Samantha Hastings Director of Policy and Programs DATE: May 10, 2013 SUBJECT: Resort and Tourist Commercial Policy Review Project Update REPORT NO: PED RECOMMENDATION None. For information. ORIGIN The firm of PKF Consulting Inc., (PKF) was engaged in August, 2012, to work with District staff to undertake a review of the resort and tourist commercial policies in the Muskoka Official Plan in accordance with the Project Requirements as endorsed by Council on June 18, ANALYSIS Project Requirements The Project Requirements focused on the following questions: 1. What are current and emerging trends that will impact the tourism industry in Muskoka? 2. Given these trends, what is needed for the successful development and redevelopment of resorts in Muskoka? 3. Based on the outcomes to the preceding two questions, what would be the operational and economic impacts on resorts of alternative official plan policy options developed in conjunction with District staff? 4. Other considerations to be explored included municipal property assessment impacts, small resort business re-capitalization opportunities and children s and other institutional (e.g. schools and churches) camps as a potential growth area. Stakeholder Engagement Since the project was awarded, staff have been working with the consultant to compile an inventory of resorts and campgrounds, identify tourism trends, understand stakeholder perspectives and identify official plan policy options. A wide variety of stakeholders provided input throughout this process through a variety of discussions and meetings as listed in the following table. The results of the November 1 st workshop and other individual discussions and surveys were summarized in the Interim Options Report. Detailed summaries of the more recent meetings and workshop are attached as Appendix A. Copies of written submissions are attached as Appendix B. Page 1

2 DATE October, 2012 DATE October - November, 2012 November 1, 2012 November 6, 2012 March 4, 2013 CONSULTATION One-on-one discussions between PKF and District Chair, PED Committee Chair, Area Municipal mayors, Area Municipal planning and economic development staff, RTO 12, MTMA CONSULTATION Surveys sent to resorts using non-traditional models (fractional, condominium), camps and campgrounds Stakeholder workshop Port Carling Community Centre Staff attendance at North Muskoka Resorts Group meeting PED Committee meeting at Turner Centre March April, 2013 Presentations and discussions at Area Municipal Councils / Committees April 12, 2013 May 6, 2013 Meeting with Area Municipal Planners Stakeholder workshop Rotary Centre Prior to the workshop held on May 6 th, most of the discussion that occurred at the Planning and Economic Development Committee and the Area Municipal Councils and Committees focused on the following themes: Potential impacts of private cottage rentals on resorts and concerns related to any attempts to regulate this The need to relax downzoning policies to address properties that are considered non-viable for a successful resort / the need to retain, in particular, large resort properties Criticism that the report is too development oriented / not development oriented enough Need for more marketing and branding of Muskoka Desire to retain local (Area Municipal) ability to address unique circumstances one size does not fit all Need to talk about residential uses and servicing challenges Concerns that we already have too much product, more permissive policies would exacerbate this Need to be able to respond to market conditions and ensure planning policies do not create unnecessary road blocks Need to understand what people want Concern about sample size for resort surveys Need for municipalities to support small businesses in their communities At the workshop on May 6 th, a discussion was facilitated that focused on some of the bigger official plan policy issues, in order to obtain feedback necessary for PKF to prepare a final recommendations report. Although a wide variety of views were expressed on some issues (summarized in Appendix A ), there did appear to be a consensus amongst those who spoke on other items. In particular, those who spoke on behalf of lake associations as well as a representative of the development community indicated that there is no desire or need for multiple residential development to be considered as part of a resort development concept. Some desire to relax the current downzoning policies was also expressed. There was agreement on the retention of the current requirement to require a local official plan amendment for a new resort where one does not exist today and there appeared to be recognition that while District policies should provide a framework, they should continue to allow the Area Municipalities to address local circumstances. Page 2

3 Next Steps In addition to one-on-one discussions and meetings with specific stakeholders, a total of nine meetings that were advertized and open to the public were held. Five of these included opportunities for public participation. PKF and District staff will now work towards the preparation of a final recommendations report that will be presented to the Planning and Economic Development Committee this summer. Following receipt of this report, the next steps will be to proceed with the preparation of a draft official plan amendment, which will include opportunities for additional public input. FINANCIAL CONSIDERATIONS This project (Capital No ) will be completed within the $60,000 budget ($30,000 District; $30,000 Tourism Development Fund grant). STRATEGIC PRIORITIES Strategic Priority 3.8 includes the review and update [of] the resort policies contained in the District Official Plan necessary for the future build out of existing and new resort properties. This initiative would address this priority. Respectfully submitted, Samantha Hastings, MCIP, RPP Director of Policy and Programs \\Sdmvfs02\ped\POLICY\Muskoka Official Plan\2011 OP Review\Tourism Policy Review\PEDC\May 2013\May10-13 update to cte.doc Page 3

4 APPENDIX A MEETING COMMENTS March 4, PEDC meeting at Turner Centre Committee and District Council Members Craig White Cottage Link Cottage Rental Management Brian McEwan Muskoka Lakes Association George Evelyn Muskoka Ridge Trailer Park Tina Gataveckas Elm Cove Cottages Anne McCauley Federation of Cottagers Association/Muskoka Lakes Association Margaret Walton Planscape Rob Wallace Foxwood Resort Need to strike a balance between ratepayer groups and resorts Need to recognize local circumstances in policy Cost of servicing appears to be main barrier to development Perhaps global economic issues, private cottage rentals, and other factors present more of a barrier to new resort development than official plan policies Private cottage rentals need to be discussed at the local level Downzoning for smaller properties should be a consideration Questioned how private cottage rentals are currently dealt with in policy and where the pressure to regulate these rentals is coming from Suggested occupancy rates are rising for cottage rentals People want a private cottage product, not a resort product, so they are not actually in competition Understands concerns from neighbours and is working on responsible rental agreement guidelines Difficult to use zoning as a regulatory tool for private cottage rentals because it will be difficult to draw the line between residential rentals and commercial rentals Changes to policy will not likely change occupancy rates Better marketing of Muskoka is needed Questioned whether the same policies that apply to resorts should also apply to campgrounds and trailer parks Lower water levels in Georgian Bay are a major challenge to resorts in that area and a case should be made to MPAC to reduce the value of waterfront lands to decrease taxes Would like to ensure any similar reports from elsewhere in Ontario are considered in this study Development approvals process is uncertain for developers and requires more transparency More definitions are needed in policy Policies should consider local circumstances Concerned about competition from private cottage rentals but does recognize their benefits as well Lake ratepayers are also concerned about cottage rentals With cottage rentals expanding to host weddings and other events, this is likely a contributor to low resort occupancy rates Official plan policies are inequitable because they do not apply to all accommodation types, only resorts Page 4

5 Brian Tapley Bondi Village Resort Laura Gustafsson Vacation Time Real Estate Dave Scott Cliffe House Rob Hurst Peninsula Lake Association Nancy Tapley Township of Lake of Bays Councillor Also has concerns about private cottage rentals More rural resorts struggle with occupancy because they do not benefit from events held in urban areas (e.g. triathlon, winter sports competitions, festivals, etc.) and it is difficult to attract or accommodate business travelers or conferences Fewer snowmobilers in winter and difficulty marketing shoulder seasons; could consider increasing length of the summer season by reducing the school year Occupancies may also be down for private cottage rentals Owners of private rental cottages should be contacted and included in consultation Need to distinguish between traditional/occasional private cottage rentals and cottages purchased to be run as rental businesses (e.g. listed on cottage rental websites), potentially through zoning Lake associations need a better understanding regarding the magnitude of the private cottage rental issue 2,000 private cottage rentals has a large impact on resorts, neighbouring landowners and the municipality (i.e. roads, garbage pick-up, etc.) Basically creating virtual resorts If private cottage rentals are operating as businesses, they should be regulated as businesses Private cottage rental websites should have to remit HST if they are collecting taxes on a number of private rentals March April, 2013 Presentations and discussions Area Municipal Councils / Committees March 18, 2013 Township of Muskoka Lakes Council Brock Napier Unknown attendee Report is biased towards resort developers Report does not provide additional clarity Liability concerns for municipalities that license private cottage rentals / concerns for those that don t Need to have better marketing and branding of Muskoka Need to be able to take an approach that addresses unique local circumstances Need to address the elephant in the room residential uses and private communal servicing Need to remember why existing policies are in place when criticizing them Concerns regarding over-use of septic systems and water quality impacts from private cottage rentals Page 5

6 March 19, 2013 Town of Gravenhurst Council Questions about comparison of restrictiveness of District official plan policy relative to other municipalities (Answer provided servicing policies are more restrictive, other policies more permissive) Need to take into account neighbouring properties when considering use (downzoning) Need to be more flexible regarding downzoning Marketing needs to be reviewed Market forces are changing; new development concepts are emerging (Park Ridge mobile home developments) Need to acknowledge positive economic impacts of private cottage rentals March 25, 2013 Town of Huntsville Council Rental of private cottages is a complex issue Need to be more flexible on downzoning policies / need to make sure we don t lose properties for the wrong reasons Need to let market drive resort development Need to explore on-site management requirement March 27, 2013 Town of Bracebridge Council Policies need to be more permissive Area Municipalities need to be able to respond to local circumstances Tourism over-supply (everywhere) - more permissive policies may exacerbate this Need to let market drive resort development Need to know what the future successful model for Muskoka involves Need to define a residential unit Need to consider permitting residential units as a component of a resort development April 8, 2013 Township of Georgian Bay Council No comments or questions April 16, 2013 Township of Lake of Bays Council Concern about two tier system of governance and lack of tools that enable the Area Municipality to manage its lands Need to figure out what people want Concerns that the report is biased and did not sample enough resorts through surveys Need for more flexibility in downzoning policies Sole ownership sole use is not commercial / concern about options that shut down a sole ownership option Page 6

7 Rob Hurst Peninsula Lake Association Brian Tapley Bondi Village Resort Bruce Howell Colonial Bay Cottage Resort Sheila Givens Ontario Cottage Rentals David Scott Clyffe House Resort Howard Rosenthal Sympathy for family cottage resorts in consideration of their history and importance and work ethic Concerned about suggestion that private cottage rentals should be regulated Real competition is Cancun Agrees that his competition is at the end of a plane ride Wants to grow his business Identified operational (marketing) and development (official plan policy) issues Would like Township to support small businesses in the community Cottage resorts should not regard private cottage rentals as the enemy they are part of the tourism industry Need better marketing for resorts Private cottage rentals serve a different market than resorts Private cottage rentals compete with cottage resorts because they are not subject to the same regulations and do not pay HST Private cottage rentals are in violation of the zoning by-law Asked about what Council would do if they received a complaint about another commercial use of a residential property Need a value system in Lake of Bays and District of Muskoka Expressed concern with any comparisons to Cancun or the Marriott Private cottage rentals are a concern Report uses a sample size of resorts that is not statistically significant or objective The report is poor overall, focuses on giving District what they want and objects to every part of it Andrew West Concerns about enforcement of the zoning by-law Tally Ho Inn May 6, 2013 Stakeholder workshop Rotary Centre Howard Rosenthal Need a value system or overall purpose before we can answer any of the policy questions being posed about resorts Need to understand all the underlying assumptions Need to understand which types of resorts contribute to the economy and which do not Concerned about taxpayer liability for larger resorts and private services If resorts are not economically viable, they should not be encouraged If we want lower densities around our lakes, then downzoning should be permitted Resorts create low quality seasonal jobs and we should be focusing on industries that create year-round jobs There is a trade-off between more rules and definitions and the loss of flexibility to deal with individual situations and apply common sense Small resorts should take responsibility to become more competitive rather than government regulation of private cottage rentals Higher taxes and aging population with lower incomes will lead to more propensity to rent cottages to cover these costs Higher taxes could lead to fewer people cottaging in Muskoka; need to look at municipal expenditures Page 7

8 Bob List List Planning Ltd. Barry Morrison Lake of Bays Association Anne Macaulay Muskoka Lakes Association Brian Simpson Lake of Bays Association Need to understand land use, tourism and ownership fundamentals Developers not looking for resort-related residential development but rather a commercial real estate component Private communal systems for commercial development do not have a taxpayer liability, should use MOE guidelines not policy Financing and servicing policies are the biggest barriers for resorts and tools are needed to address these More options exist than are presented in the Interim Options Report If properties are not designated and/or zoned for a resort commercial use, then an OPA should be required but not for properties that are already designated and/or zoned Character of Muskoka is clean lakes where shorelines are not dominated by development This environment attracts economic investment from tourists and cottagers Need a balance between protecting the environment and fostering a vibrant economy Large resorts and residential developments are a concern in general from an environmental and aesthetic perspective Most resorts do not seem to be economically viable in Muskoka There is a limit or threshold to the amount of character change that can occur in Muskoka without altering its desirability as a destination Cottage associations may prefer downzoning, even for larger resorts Do not want higher residential densities allocated to downzoned properties Need to identify which properties to maintain as the ones most likely to be successful in the future District role in planning is important for watershed planning and big picture thinking Policies at District level should provide guidance to Area Municipalities OPA is not a true barrier to a viable development proposal Cottage associations are concerned with changes to the environment or aesthetics Concerns about ratepayer liability for private communal systems and related enforcement Cannot shut down a residential community with private services but can close a commercial resort if services fail Retain the requirement for an OPA for new resorts to cover both District (e.g. roads and servicing) and Area Municipal issues Downzoning could be done at local level as long as there is no increase in residential density Need to clarify expectations of on-site management If private cottage rentals are actually a large problem for resorts, we need to define cottage rental businesses and regulate them through a business license system; also need to acknowledge the cost of enforcement Occupancy rates are low and we need to encourage resort development that is sustainable Larger resorts have less of an economic impact compared to smaller resorts (i.e. because they hire outside contractors) Larger resorts provide all services on-site and the surrounding communities do not benefit Page 8

9 Mixed use will not solve these issues Bob Young, Mayor Township of Lake of Bays Brian Tapley Bondi Village Resort Rick Hunter Planscape Dave Scott Cliffe House Jeremy Fleming Cedar Grove Lodge Should be more flexibility to downzone all resort properties where future development is unlikely Need to know what product people want to determine what types of properties to protect Policies should be at the Area Municipal level Seasonality and competition from other areas will always be an issue for resorts in Muskoka Downzoning resort properties may be a better option than letting the properties fall into disrepair Smaller resorts may not have the frontage necessary to make downzoning worthwhile Resorts attract new visitors and potential cottagers to the area Resort owners may wish to sell one or two units rather than downzone the entire property There is such a thing as too much help (from municipalities) District Plan should contain strategic directions but the planning process should be at the Area Municipal level Important that rules and processes be clear in order to obtain financing Cannot encourage resorts and then create policy roadblocks Smaller resorts are often more in tune with local values than private cottage rentals, yet they are subject to more regulations such as requirements for on-site management Concerned with online cottage rental businesses rather than traditional/occasional cottage rentals Is seeking a compromise approach to regulation which has worked in other municipalities Some resorts may want to have live-in on-site management but cannot because more than one accessory dwelling unit is not permitted WRITTEN CORRESPONDENCE RECEIVED Brian McElwain Muskoka Lakes Association Brian Tapley Bondi Village Resort (4 submissions) Concern about the health of existing resorts Sees a role for both District planning policies and improved local marketing to support existing resort operations Concerned with competition from private cottage rentals and seasonality of resort operations in Muskoka Private cottage rentals (i.e. virtual resorts rather than traditional rentals ) should be regulated through enforcement of the zoning by-laws and the duplication in marketing efforts should be reduced Lobbying for a shortened school year may help to address seasonality issues Concerned about interpretations of general District policies at the Area Municipal level Outlines taxation inequities and regulations (e.g. building permitting, MOE guidelines) facing small housekeeping resorts Concerned with new incompatible uses near resorts, e.g. quarries Small resorts seem to be more successful than larger resorts in Muskoka, policies should recognize this Page 9

10 Resorts are not only a business but part of Muskoka s traditional character, too much resort growth would change this character Stan Stein South Muskoka Lake Community Association Gordon Bell Beauview Cottage Resort Paul Priest Tina Gataveckas Elm Cove Cottages Resorts of Northern Muskoka (Represents 15 resorts in the Huntsville and Lake of Bays area) Greg Knight Knight Developments (3 submissions) Peter Bain (2 submissions) Howard Rosenthal Concerned about compatibility of new or redeveloping resorts with surrounding seasonal residential uses (i.e. noise and pollution) Concerned about ongoing enforcement of development agreements and other documentation related to resorts More stringent criteria for new resorts in District policy including scale, phasing, location of amenities, environmental impacts, and monitoring are required Design criteria should also be addressed such as buffering, setbacks, height, lighting and fencing District should support existing resorts with tax incentives, lower mill rates, or reduced development fees MTMA is underfunded More information is needed to understand the relative contribution of seasonal residents and tourists, especially in tax revenue Care in regulation and taxation is required to ensure Muskoka remains attractive to these groups Reductions in water levels are impacting the success of resorts in Georgian Bay Township This challenge needs to be acknowledged in the review of the resort policies and municipal action may be required (e.g. lobbying, working with other levels of government) Concerned about negative impacts on resorts from private cottage rentals and potential contraventions of zoning by-laws having cottage rental businesses operating on residentially zoned lands Suggests a permitting system to regulate short-term rentals, similar to the business license system used by Wasaga Beach Wants to ensure occupancy rates, performance levels, and policies from other municipalities have been considered in the determination of policy implications on resort performance, particularly with respect to whole ownership condominiums Implications of a restrictive and permissive policy approach should be more clearly outlined Suggests there may also be a role for reduced development charges to support the resort industry Supportive of downzoning of smaller resorts and a transition to other, perhaps more intensive, uses Supports traditional private cottage rentals to help offset costs of cottage ownership (i.e. taxes, maintenance, etc.) and does not support regulation of these rentals Notes that resorts and private cottage rentals offer different products, are taxed differently, and do not have access to the same funding opportunities Should broaden focus to include not only accommodation but also attractions/activities Concerned with reported statistics, comparisons, surveys, and identified Page 10

11 economic impacts of resorts Cottage rentals do not compete with resorts and should not be regulated Lack of resort competitiveness is tied to lack of structured activities Concerned with monitoring and enforcement as well as District liability and interference with private investment District should not lobby for changes to taxation for resorts Lake of Bays Association Township of Lake of Bays (Staff report) Town of Gravenhurst (Staff report) Generally concerned with inherent seasonality of Muskoka, economic viability of resorts, competition from other areas, environmental and character impacts of resort development, and taxpayer liability for private communal services In that context the following comments are offered: - Supports downzoning of resort properties that are no longer economically viable provided no additional residential density is allocated - Does not support a permissive policy approach to resort development, which could lead to over-building - Does not support regulation of private cottage rentals - Does not support a mixed use concept of resort and resort-related residential units - Does not support private communal systems for any residential developments - Supports policies that balance economic growth and development with protection of the natural environment Offers the following comments and suggestions: - Include flexible, permissive or non-restrictive policies at the District level that considers both short and long-term impacts - Provide a clear policy distinction between waterfront, community and rural resorts - Creation of a Muskoka-wide resort inventory - Discourage downzoning of large tourist commercial land holdings on larger lakes - Provide a further review of tests for commercial resorts and include additional tests or more flexible tests if needed - Remove the OPA requirement for new resorts, ZBA process provides a sufficient planning review - Investigate a tax or surcharge to support monitoring programs - The District and Area Municipalities should lobby MPAC to address tax inequities for resorts once potential tax implications are better understood - Revisit financial requirements for private communal systems servicing new resorts - Does not support regulation of private cottage rentals - Would like recommendations from PKF on the options provided in their report Offers the following comments and suggestions: - Include flexible, permissive or non-restrictive policies at the District level, allowing Area Municipalities to be more restrictive if desired - Provide a clear policy distinction between waterfront and rural resorts - Need to create a Muskoka-wide resort inventory - Discourage downzoning of large tourist commercial land holdings on larger lakes - Policies should consider both short and long-term approaches Page 11

12 - Provide a further review of tests for commercial resorts and include additional tests or more flexible tests if needed - Remove the OPA requirement for new resorts, ZBA process provides a sufficient planning review - Provide an analysis of cost recovery options for enforcement and monitoring of the zoning by-law and agreements - The District and Area Municipalities should approach MPAC to address tax inequities for resorts once potential tax implications are better understood - Revisit financial requirements for private communal systems servicing new resorts and consider using other legislation - Would like recommendations from PKF on the options provided in their report Peninsula Lake Association Recognizes the contribution resorts make to the local economy and the harmonious relationship that has historically existed between resort owners and cottagers Opposed to any general relaxing of zoning or other regulations on resorts, if resorts are not competitive, this is an industry issue to improve their product offerings Concerned about environmental and aesthetic impacts of more resorts, preserving the environment should take precedence Does not support multiple mixed-use development in the waterfront Opposed to exposing taxpayers to any liability for private communal systems Supports downzoning of heritage resorts without the need to show documentation, regardless of scale or size, potentially with a modest increase in density for residential development Supports flexibility for Area Municipalities to determine appropriate land uses for downzoned resorts Opposed to large waterfront subdivisions on existing resort lands Does not support removing the OPA requirement for new resorts Does not support a ban or restriction on traditional private cottage rentals, these rentals also have an economic impact and regulation would be costly Supports regulation of income properties where cottage rentals are a full-time business, through a licensing program Page 12

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