Politicians are working to appease a builder that warns the $80-million highrise it plans for downtown London could be cancelled if city hall levies charges it wasn't expecting.

So-called development charges, collected by cities to pay for services expanded because of growth, are waived for residential building in London's core -- but city hall is reviewing the program, which has Rygar Corp. issuing a stern warning about its mega-project at Talbot and Fullerton streets.

If the charges are added, the 33-storey building is dead, Rygar's lawyer warns. It would arguably be the city's tallest building.



“If (Rygar) has to play development charges, the development will not go ahead,” Patton said Monday. “Rygar has made it clear it will not build the building.”

In a letter going to city council Tuesday, Patton outlines his client’s concerns and warns it’s prepared to pull the plug on the building if development charges are levied.

“(The charges) will result in millions of dollars of unanticipated costs that bring into question the viability of the project.”

But Coun. Joni Baechler, chairperson of council’s planning committee, said she believes the city has done enough to ease Rygar’s concerns.

Tuesday, council is to receive a staff report that mulls a rejig of the program that waives development charges in the core and other areas. It potentially would be replaced with one that reimburses builders with grants for some, or all, development charges they pay.

Given Rygar’s concern, though, planning committee added a caveat that made it clear its downtown project — a mixed-use building that would include 248 apartments — would remain exempt from the charges.

“We’ve done that,” Baechler said of reassuring Rygar. “It shouldn’t be a problem.”

But one council colleague who’s considered more pro-development than Baechler disagrees.

Monday, Coun. Bud Polhill said he takes “very seriously” the warning from Patton and his big-ticket client.

“I’m concerned,” he said.

Patton said: “Council should be very aware and very cautious.”

His letter, dated March 24, makes clear that even a discussion on levying development fees downtown is unacceptable.

“Rygar requires certainty,” he wrote. “It cannot accept uncertainty.”

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WHAT HAPPENS NOW

Developers pay a fee called a development charge.

The charges are intended to pay for the expansion of services, such as roads and policing, caused by growth.

The city waives development charges on residential units downtown and in Old East to stimulate construction.

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PROPOSED CHANGE

Development charges would be replaced by grants for some or all development charges for residential units downtown and in Old East and SoHo neighbourhoods and for new industrial buildings.

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THE TOWER