98011-9901

Report

To: Development Services Committee Item: Date of Report:

DS-06-217 June 14, 2006 From: Commissioner, Department of File: Date of Meeting:

Development Services B3100-0078

Z-16/2004 June 19, 2006

Subject: Applications to Amend the Oshawa Official Plan and Zoning By-law No. 60-94 Northwest quadrant of Stevenson Road South and Highway 401 Oshawa South Developments Inc. (Smart Centres)

Ward 2

PUBLIC MEETING 1.0 BACKGROUND 1.1 General Revised applications have been submitted to amend the Oshawa Official Plan and Zoning By-law No. 60-94 by 1310645 Ontario Limited, Oshawa South Developments Inc. (now Smart Centres), to permit a commercial development at the northwest quadrant of the Champlain East Sector between Stevenson Road South and Fox Street and Highway 401. The site is 23.5 hectares (58.0 ac.) in size and is proposed for 48,355 square metres (520,500 sq. ft.) of floor area. The purpose of the application to amend the Oshawa Official Plan is to: 1. Re-designate the Smart Centres lands from Special Purpose Commercial to Planned

Commercial Centre. 2. Change and add policies to emphasize the development of larger format retail stores and

prohibit supermarkets within the proposed Planned Commercial Centre designation. The purpose of the application to amend Zoning By-law No. 60-94 is to: 1. Rezone the subject site from SPC-A (9) “h-44” (Special Purpose Commercial) and UR

(Urban Reserve) to PCC-A (Planned Commercial Centre) to permit a commercial development with a floor area of 48,355 square metres (520,500 sq. ft.).

The original applications were submitted in 2005 to amend the Oshawa Official Plan and Zoning By-law No. 60-94 to permit a commercial development with 47,500 square metres (511,300 sq. ft.) of floor space. The applications were amended by the applicant to transfer 1,858 square metres (20,000 sq. ft.) from other retail and service commercial space to the proposed department store and to build the department store in one phase as opposed to a two-phase approach. Details are provided in Section 1.2 of this report.

Report to the Development Item: DS-06-217 Services Committee (Continued) - 2 - Meeting Date: June 19, 2006

The major implications of the amended applications for the Smart Centre lands would be to: • Broaden the range of permitted uses on the subject site to include the full range of Planned

Commercial Centre uses, including “retail store” which would permit a Department Store. In this instance, a department store of 20,392 square metres (219,500 sq. ft.) is proposed with a food retailing component of 4,181 square metres (45,000 sq. ft.) in addition to the 6,039 square metres (65,000 sq. ft.) of food retailing space possible in the retail warehouse approved as part of the Phase 1 application in 2003;

• Increase the total permissible commercial floor space from the initial Phase I site by 9,615

square metres (103,500 sq. ft.) from 38,740 square metres (417,000 sq. ft.) to 48,355 square metres (520,500 sq. ft.); and

• Increase the total size of the proposed commercial development from 18 hectares (44 ac.)

to 23.5 hectares (58.0 ac.). A significant portion of the subject site (Phase 1, 18 ha/44 ac.) is approved for commercial development and is zoned SPC-A(9) “h-44”. A public meeting concerning the original applications was held on July 11, 2005. A copy of the minutes of the public meeting on the original applications appear as Attachment No. 1 to this report. Given the revisions to the applications, this second public meeting is necessary. Exhibit No. 1 to this report is a map showing the location of the subject site and the existing zoning for the area. Exhibit No. 2 is a copy of the site plan for the proposed commercial development. Exhibit No. 3 shows the subject site in relation to the entire Main Central Area and its major commercial centre components. Attachment No. 1 is a copy of the proposed Official Plan Amendment (proposed OPA) submitted by the applicant. 1.2 Proposed Development Details The following is background information concerning the subject application: Oshawa Official Plan Designation: Existing - Special Purpose Commercial and Collector

Road Proposed - Planned Commercial Centre within an

expanded Main Central Area and Collector Road

Report to the Development Item: DS-06-217 Services Committee (Continued) - 3 - Meeting Date: June 19, 2006

Zoning: Existing - SPC-A(9) “h-44” (Special Purpose

Commercial) and UR (Urban Reserve) Requested - PCC-A (Planned Commercial Centre)

subject to a special condition which would add all of the uses permitted in a SPC-A Zone, limit the total permitted gross leasable floor area on the site to 48,355 square metres (520,500 sq. ft.), prohibit a supermarket on the site and limit the aggregate gross leasable floor area of all retail stores having a floor area of less than 300 square metres (3,230 sq. ft.) to 5% of the total permitted floor area.

Use: Existing - Vacant land, single detached dwellings Proposed - Shopping Centre and Collector Road Proposed Development Details:

Phase I Site Approved by Oshawa City Council, October 29, 2003

Subject Applications Public Meeting, July 11, 2005

Revised Applications Public Meeting, June 19, 2006

Lot Frontage

Stevenson Road South

400 metres (1,312 ft.) 400 metres (1,312 ft.) 400 metres (1,312 ft.)

Fox Street 456 metres (1,496 ft.) Approx. 565 metres (1,854 ft.)

Approx. 565 metres (1,854 ft.)

Lot Area 18 hectares (44.0 ac.) 22.2 hectares (54.9 ac) 23.5 hectares (58 ac.)

Required Parking

1,845 spaces 2,262 spaces 2,303 spaces

Proposed Parking

1,908 spaces 2,594 spaces 2,784 spaces

Proposed Floor Space GFA

38,740 sq. m. (417,000 sq. ft.)

47,500 square metres (511,500 sq. ft.)

48,355 sq. m. (520,500 sq. ft.)

A notice advertising the public meeting was mailed to all assessed property owners within 120 metres (400 ft.) of the subject site and all required public bodies. In addition, a notice was

Report to the Development Item: DS-06-217 Services Committee (Continued) - 4 - Meeting Date: June 19, 2006

published in the Oshawa This Week newspaper and signs giving notice of the application have been posted on the site. 2.0 INPUT FROM OTHER SOURCES 2.1 Other Departments and Agencies The subject applications have been circulated for comment and the identification of issues to a number of departments and agencies. No department or agency that provided comments has any objection to the subject applications. Certain technical issues and requirements have been identified and can be addressed either through the site plan approval process or through an “h” holding symbol in the event the applications are approved. The Region of Durham Planning Department has advised that the proposed Official Plan Amendment is not exempt from Regional approval. 2.2 Public Comments A public meeting concerning the original applications was held on July 11, 2005. A number of comments and submissions were made at that meeting concerning the applications. A copy of the minutes of the July 11, 2005 public meeting forms Attachment No. 2 to this report. A copy of the written submissions from the previous public meeting appear as Attachment No. 3 to this report. 3.0 ANALYSIS 3.1 Land Use Considerations The subject site is located on the west side of Stevenson Road South, north of Highway 401 and east of Fox Street, generally in the east portion of the Champlain East Sector. The subject site is largely vacant and is relatively flat. There are two single detached dwelling lots and vacant lands fronting onto the east side of Fox Street and the north side of Champlain Avenue East. To the north of the subject site are lands owned and used by Oshawa PUC Networks Inc. as a storage yard. To the east is Stevenson Road South beyond which is a residential neighbourhood bisected by Laval Street. To the west is Fox Street beyond which is a single detached dwelling lot, a body shop and vacant lands. The subject site represents the majority of the lands within the Champlain East Sector area and is in immediate proximity to Highway 401, the future Stevenson Road/Highway 401 interchange and the future alignment of the GO Transit line into Oshawa. The subject site and adjacent lands will form one of the most visually prominent entrance points into Oshawa from Highway 401 once the Stevenson Road interchange is constructed.

Report to the Development Item: DS-06-217 Services Committee (Continued) - 5 - Meeting Date: June 19, 2006

3.2 Oshawa Official Plan The subject site is designated as Special Purpose Commercial in the Oshawa Official Plan. Areas designated as Special Purpose Commercial are intended to serve the specialized needs of residents on an occasional basis with services and facilities which generally require large parcels of land and exposure to traffic. The Special Purpose Commercial designation permits commercial uses such as recreational clubs, automotive sales and services, drive-in restaurants, motels, hotels, building supply yards, furniture and major appliance sales, and other similar types of uses. As an exception, financial establishments, professional offices and other personal service uses may be permitted in association with Special Purpose Commercial uses provided that such uses do not detract from the function of the Special Purpose Commercial area and subject to the inclusion of appropriate provisions in the zoning by-law. Supermarkets and department stores are not permitted within the Special Purpose Commercial land use designation. The following Official Plan policies are directly applicable to the subject application and the Champlain East Sector Area: 2.2.9.9.1 The Champlain East Sector, located in proximity to Highway 401, the future

Stevenson Road/Highway 401 interchange and the Oshawa Main Central Area represents one of the most significant development areas and gateways to the City of Oshawa. It is intended that the lands within the Champlain East Sector area shall be developed in accordance with good urban design principles to achieve a functional and aesthetically pleasing community gateway image. This will be achieved by specific attention to building siting, massing, landscape and streetscape design. In order to achieve this, the City shall require the preparation of a comprehensive urban design study and implementing guidelines prior to the passage of any zoning by-law for Special Purpose Commercial uses.

2.2.9.9.2 Prior to any development in the Champlain East Sector area, the City of Oshawa

shall require written verification from the Ministry of Transportation that such development does not conflict with or hinder the achievement and functioning of the interim or ultimate Stevenson Road/Highway 401 interchange design.

2.2.9.9.3 Prior to any development in the Champlain East Sector area, the City shall require

that written verification be received from GO Transit that such development does not conflict with or hinder the extension of GO Transit service to Oshawa. Prior to the development of lands in proximity to the future GO Transit right-of-way, the City shall ensure that appropriate measures such as building setbacks, buffering and noise mitigation are employed in consultation with GO Transit to ensure land use compatibility.

2.2.9.9.4 Notwithstanding any provisions of this Plan to the contrary, the lands designated

as Special Purpose Commercial and located west of Fox Street shall be used for service commercial uses and shall be complementary to the Special Purpose Commercial uses located east of Fox Street. Service commercial uses shall serve the occasional needs of residents for service and recreational uses and shall

Report to the Development Item: DS-06-217 Services Committee (Continued) - 6 - Meeting Date: June 19, 2006

generally include uses such as restaurants, automobile service stations, recreational uses, clubs, hotels, motels, cinemas, theatres, personal services, institutional uses, professional offices and other service uses. Specific uses for these lands shall be established in the zoning by-law.

2.2.9.9.5 Prior to the submission of any site specific development application for the

Champlain East Sector area, a transportation study shall be completed to the satisfaction of the City of Oshawa and the Region of Durham.

2.2.9.9.6 Prior to the submission of any development application for the Champlain East

Sector area, where there is a demonstrated potential that a site may be contaminated due to previous use of the property, Council shall require that an Environmental Site Assessment(s), be prepared in accordance with Provincial Guidelines for site assessment and restoration.

The subject application proposes to re-designate approximately 23.5 hectares (58 ac.) of land from Special Purpose Commercial to Planned Commercial Centre. It does not include the Oshawa PUC Networks site or the Fraser Ford site immediately at the northwest corner of Champlain Avenue and Stevenson Road South (see Exhibit No. 1). The subject application also proposes to extend the boundary of Oshawa’s Main Central Area to include the entire Champlain East Sector area [an additional area of approximately 42 hectares (104 ac.)]. The expansion of the Main Central Area is intended by the applicant to enable the designation of most of the Champlain East Sector to Planned Commercial Centre, subject to a policy to exclude a supermarket and clothing warehouse. This would permit the development of shopping centre type uses, including a department store. Planned Commercial Centres that are 12 to 20 hectares (29.7 - 49.4 ac.) or more in size are intended to be developed as Regional Shopping Centres within Central Areas. The commercial uses permitted include such uses as full-line department stores, one or more junior department stores, large supermarkets, specialty stores, retail and personal service stores, and offices. Section 2.2.3.5 of the Oshawa Official Plan states that when an existing Planned Commercial Centre is established at a given location, preference shall be given to its expansion rather than to the development of a new Planned Commercial Centre in the same general vicinity. The Oshawa Official Plan establishes a hierarchical structure of Central Areas within the Major Urban Area to serve as central focal points of activity, interest and identity for residents. Such Central Areas shall be planned and developed as the main concentrations of activities within the City, providing an integrated array of shopping, personal and business service, office, industrial, institutional, community recreational and residential uses and transportation facilities. The Oshawa Official Plan further establishes a maximum gross leasable floor space for the retailing of goods and services as a general guideline within each respective Central Area. In this regard, 600,000 square metres (6,459,000 sq. ft) of floor space is allocated to the Main Central Area by the Oshawa Official Plan. The Planning Rationale Report submitted by the applicant with the subject applications notes that the Main Central Area currently contains approximately 224,000 square metres (2,410,850 sq. ft.) of floor space.

Report to the Development Item: DS-06-217 Services Committee (Continued) - 7 - Meeting Date: June 19, 2006

Exhibit No. 3 shows the subject site in relation to the entire Main Central Area and its major commercial centre components. 3.3 Zoning Considerations As stated, much (44 ac. of 58 ac.) of the subject site is zoned SPA-A(9) “h-44” (Special Purpose Commercial). A copy of the regulations that apply to this zoning is provided in Attachment No. 4 to this report. The existing SPA-A(9) “h-44” zoning contains special conditions which: (a) Restrict the maximum gross floor area of the site to 38,740 square metres (417,000 sq. ft.); (b) Restrict the size of any individual Retail Warehouse to 12,260 square metres (132,000 sq.

ft.); (c) Prohibits “Clothing Warehouse” as a permitted use in the SPA-A zone; (d) Established the full extent of the lands zoned SPA-A(9) as a “lot” for the purposes of

applying regulations related to lot area, lot frontage, yard depths, gross floor area, paving, loading and general provisions.

The “h-44” holding symbol restricts development on the site prior to satisfying a number of conditions including confirmation from the Ministry of Transportation, GO Transit, the Region of Durham and Oshawa PUC Networks Inc. that the proposed development is acceptable. The balance of the applicant’s holdings (14 ac.) are zoned UR. The subject applications propose to rezone the entire 23.5 hectare (58 ac.) site under the ownership of the applicant from SPC-A(9) “h-44” (Special Purpose Commercial) and UR (Urban Reserve) to PCC-A (Planned Commercial Centre) with a special condition that would: (a) Add all of the uses permitted in an SPC-A zone; (b) Limit the total permitted gross leasable floor area on the site to 48,355 square metres

(520,500 sq. ft.); (c) Prohibit a supermarket on the site; and (d) Limit the aggregate gross leasable floor area of all retail stores having a floor area of less

than 300 square metres (3,230 sq. ft.) to 5% of the total permitted floor area [approximately 2,418 square metres (26,028 sq. ft.)].

Attachment No. 5 provides an overview of the existing uses permitted on the Phase I site and the proposed uses for the expanded site.

Report to the Development Item: DS-06-217 Services Committee (Continued) - 8 - Meeting Date: June 19, 2006

3.4 Applicant’s Planning Studies Two Planning Reports have been prepared and submitted in support of the subject applications: 1. Planning Rationale Proposed Commercial Development Stevenson Road/Highway 401,

City of Oshawa – Bousfields Inc – undated 2. Supplemental Planning Rationale Report Proposed Commercial Developments –

Stevenson Road/Highway 401, City of Oshawa – Bousfields Inc. – May, 2005 These reports support the proposed applications with the following arguments: (a) The proposed redesignation and rezoning of the site to Planned Commercial Centre is

intended to better recognize the opportunity that is offered by the site to create a high quality commercial development that will enhance the site as a gateway into the City.

(b) As a result of emerging trends within the retail industry, the Special Purpose Commercial

category in the Oshawa Official Plan is outdated. It no longer reflects the range of uses that are typical in new large format retail developments.

(c) The proposed development illustrates the “bluring” that has occurred between shopping

centres and special purpose commercial uses as a result of the emergence of new retail formats. The proposed development is similar to other commercial centres that are being developed within Central Area designations (e.g. Harwood/Highway 2 in Ajax, Brock Street/Taunton Road in Whitby and Brock Road/Highway No. 2 in Pickering).

(d) The proposed development will be complementary to the Oshawa Centre, the Central

Business District and the other elements of the Main Central Area. (e) The Main Central Area contains 224,000 sq. metres (2,410,850 sq. ft.) of floor space. The

Main Central Area permits up to 600,000 square metres (6,459,000 sq. ft.) of gross leaseable floor space for the retailing of goods and services. The report suggests that with the proposed extension of the Oshawa Main Central Area to include the Champlain East Sector with a development capacity of 65,030 square metres (700,000 sq. ft.) there will be ample floor space to address floor space allocations to other properties in the Main Central Area.

(f) The requested broadening of retail permissions is reflective of the evolution in retailing

trends and is consistent with the emerging commercial policy directions at both the Regional and City levels.

(g) The supplementary report provides information concerning the tests of retail impact

contained in the Durham Regional Official Plan and the Oshawa Official Plan.

Report to the Development Item: DS-06-217 Services Committee (Continued) - 9 - Meeting Date: June 19, 2006

3.5 Applicant’s Retail Market Studies The applicant has submitted two retail impact studies: 1. “Retail Impact Study: Northwest Quadrant of Highway 401 and Stevenson Road, Oshawa

Ontario” was submitted in April 2005 in support of the original application. 2. “Retail Impact Update Report Northwest Quadrant of Highway 401 and Stevenson Road”

from the Climans Group Inc (Climans Report) in support of the revised applications. The Climans Report concludes that: (a) There is market support and demand for the proposed department store including its food

component, and the net addition of floor space beyond what is currently approved on the subject lands;

(b) The nature of the proposed uses on the subject property does not duplicate in a material way other developments in south Oshawa or in the Oshawa Main Central Area.

(c) The following three areas can expect to be significantly impacted:

(i) The Sub-Central Area centred on the intersection of King Street East and Townline Road

This Sub-Central Area contains the Kingsway Village plaza and two anchor tenants located on this site – a department store and supermarket. The Climans Report concludes that a department store on the Smart Centres site, could cause the closure of the department store in the Kingsway Village plaza. The Climans Report notes that this department store is currently experiencing low sales levels and its closure would not unduly affect the role of the Kingsway Village Plaza which does not have a sufficient breath or depth of tenancies to qualify as a higher order commercial centre. The Climans Report notes that the retail and service-commercial businesses that occupy Kingsway Village could be properly classified as a Community Shopping Centre. The Climans Report does not predict the closure of the supermarket at the Kingsway Village plaza despite the relatively low performance of this store as evidenced by sales estimates. (ii) The Oshawa Main Central Area - Zellers Plaza, located at the southeast corner of

Simcoe Street South and First Street The Climans Report concludes that a department store on the Smart Centre site may cause the closure of the Zellers store at Simcoe Street and First Street. The Climans Report opines that the potential loss of the department store at the Zellers Plaza: • Would not represent an undue affect as the plaza is becoming a service commercial

entity providing recurring convenient services to local residents; • Is not expected to create a significant vacancy that detracts from the appearance of

this plaza and is not likely to create a cascade effect for the other retailers or service commercial tenants;

Report to the Development Item: DS-06-217 Services Committee (Continued) - 10 - Meeting Date: June 19, 2006

• The remaining retail and service commercial uses will constitute a form of strip centre development that may be sufficient to maintain the Planned Commercial Centre designation, with or without some form of redevelopment of the department store; and

• Would not unduly affect the viability of the Main Central Area because the department store in the Zellers Plaza does not make any meaningful contribution to the viability of the Main Central Area and that the other tenants are not likely dependent on the customer draw of the department store for their customers.

(iii) Oshawa Main Central Area - The Midtown Mall The Climans Report notes that the supermarket at the Midtown Mall is currently under-performing industry standards. With the proposed development of the new food store space within the department store at the Smart Centres site, projected sales for the supermarket at the Midtown Mall are expected to diminish further. The Climans Report argues that any loss of the food store use at the Midtown Mall would be further evidence of the obsolete nature of this shopping centre and the relatively insignificant contribution that it makes to the retail function of the Oshawa Main Central Area. The Climans Report states that the Main Central Area will continue to perform its designated retail functions without the presence of a supermarket at the Midtown Mall.

3.6 Peer Review of Retail Market Study – Clayton Research Associates Clayton Research Associates Limited was retained by the City to conduct a peer review of the Climans Report. The Clayton Peer Review is being finalized and will be discussed in the subsequent recommendations report. 3.7 Champlain East Sector Urban Design Study and Implementing Guidelines Development permitted on the applicant’s lands at this time is governed by an Urban Design Study (Concept and Guidelines) prepared by Bousfield, Dale-Harris Cutler and Smith Inc., Kohn Architects Inc and Terraplan Landscape Architects. The Urban Design Concept (Exhibit No. 4) illustrates how the subject site and adjacent lands within the Champlain East Sector area could be comprehensively developed and ensures that the proposed development does not compromise the development of other properties in this area. The Urban Design Concept is based upon a structure anchored by larger buildings along the east side of Fox Street and smaller buildings at the periphery of the area and along the east-west collector road. Specific attention has been given to views into the area from outside, particularly from Highway 401. The most prominent views from Highway 401 will be to the western portion of the subject site which is proposed to be developed with larger anchor stores. The applicant has submitted a letter dated May 23, 2006 outlining the changes to the proposal in the context of the approved Urban Design Concept Plan. The letter opines that the revised site

Report to the Development Item: DS-06-217 Services Committee (Continued) - 11 - Meeting Date: June 19, 2006

layout generally respects the overall intent of the Urban Design Concept Plan and related guidelines (see Attachment No. 6). 3.8 Traffic Impact Study iTrans Consulting Inc. prepared a traffic study in 2002 on behalf of the applicant for the proposed retail development and updated the study in 2003 and 2004. iTrans prepared a traffic report in November 2005 as well in support of the original Phase II applications. Attachment No. 7 to this report is a copy of the Executive Summary of the November 2005 report outlining the key road infrastructure improvements that are required to support the proposed development, growth and planned background developments. iTrans has recently advised that the approval of the subject revised applications and related plans can be accommodated with minor amendments to the previously recommended road network and can be addressed during any site plan approval stage in the event the subject applications are approved. 3.9 Site Design Considerations The site plan submitted with the revised applications differs from the Urban Design Concept Plan approved as part of the Phase I development. These differences include the layout of the internal driveways and the exclusion of one internal east-west roadway south of Laval Road. The revised site plan shows a 12,077 square metre (130,000 sq. ft.) building (Bldg B) instead of two smaller retail buildings shown on the Urban Design Concept submitted for the Phase I application. Similarly, the plan shows an east-west driveway north of Laval Drive. The revised site plan shows parking between the buildings and streetline and smaller buildings are not shown close to the street edge. Specific building location and orientation, road and driveway issues will need to be resolved during the site plan agreement process in accordance with the Urban Design Study should these applications be approved. The existing trees located at the north end of Fox Street are located on CN and GO Transit lands, not necessarily on the Smart Centres site. An updated Noise Study will be required if the subject applications are approved and noise related to the site and Highway 401 will be dealt with. 4.0 FINANCIAL IMPLICATIONS N/A 5.0 COMMUNITY STRATEGIC PLAN The subject applications have relevance to Goal A (A Vibrant, Strong and Progressive Community) and its objectives to revitalize the downtown area, leverage and promote Oshawa’s key economic strengths and assets and promote business friendly strategies.

Report to the Development Item: DS-06-217 Services Committee (Continued) - 12 - Meeting Date: June 19, 2006

6.0 RECOMMENDED ACTION It is recommended that the report of the Acting Commissioner of Development Services, dated June 14, 2006, Item No. DS-06-217, concerning the applications to amend the Oshawa Official Plan (File B-3100-0078) and Zoning By-law No. 60-94 (File No. Z-16/04) submitted by Oshawa South Developments Inc. (Smart Centres), be referred back to the Department of Development Services for the preparation of a subsequent report and recommendation. This referral does not constitute or imply any form or degree of approval. Bruce Hunt, MCIP, RPP, Director, Planning Services Department of Development Services Thomas B. Hodgins, B.E.S., M.A., RPP, Acting Commissioner Department of Development Services AD/PN/c Attachments

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- 27 -

DEVELOPMENT SERVICES COMMITTEE MEETING – July 11, 2005

DS-05-243 Application to Amend the Oshawa Official Plan and Zoning By-law 60-94,

northwest quadrant of Stevenson Road South and Highway 401, First Pro Shopping Centres (Ward 2)

The Committee reviewed Report DS-05-243 dated July 6, 2005, from the

Commissioner of Development Services concerning an application to amend the Oshawa Official Plan and Zoning By-law 60-94 by First Pro Shopping Centres to permit a commercial development at the northwest quadrant of the Champlain East Sector between Stevenson Road South and Fox Street and Highway 401.

Report DS-05-243 indicated a significant portion of the subject site was the subject

of earlier applications and approvals for a commercial development by the applicant (Phase I) on an 18 hectare site which was approved in principle by City Council in 2003 and zoned SPC-A(9) ‘h-44’. City Council conditions of approval remain unfulfilled for the Phase I site and no site plan agreement application has been submitted for the development of the Phase I site.

Peter Smith, Bousfields Inc., Land Use Planners for First Pro Shopping Centres

addressed the Committee advising he was in agreement with comments in the staff report. He indicated the purpose of the application was due to their client acquiring additional land in the Champlain Sector and requesting expansion of the site concurrent with an increase in gross floor area to 511,300 square feet and to broaden the range of use from Special Purpose Commercial to Planned Commercial Centre (PCC). He noted the applicant was not seeking an unrestricted range of PCC use and proposed two specific restrictions - that a supermarket would not be permitted; and that emphasis would be on larger format retail stores with a general minimum unit size of 300 square metres with stores having a floor area of less than 300 square metres being limited to 5% of the total permitted floor area.

Councillor Clarke entered the meeting. Peter Smith provided clarification on the proposed Site Plan. He stated his client

would be filing an application for Site Plan approval for north of Laval Drive extension north of Stevenson Road.

Councillors questioned Peter Smith concerning the status of properties on

Fox Street, and the types of operations at the site. Peter Smith advised that one of the properties on the northeast corner of Fox Street

and Champlain Avenue is owned by the Province of Ontario and will be used for the Stevenson Road interchange and that as the project develops driveway systems will ensure no areas are left as undevelopable blocks.

Peter Smith advised the format would be similar to the Harmony Shopping Centre.

He noted basic elements would be large buildings to the back with smaller buildings on the Stevenson Road and Champlain Avenue frontages.

- 28 -

DEVELOPMENT SERVICES COMMITTEE MEETING – July 11, 2005

The Committee also reviewed correspondence from Ron Wilson and Laura Vaillancourt, Doug Wilson Men’s Wear Ltd.; Anna Visconti, Brushstrokes; Ivanhoe Cambridge; CDP Capital Real Estate Group; Osler, Hoskin & Harcourt, LLP; providing comments on the development proposal.

Moved by Councillor Marimpietri, “That correspondence from Ron Wilson and Laura Vaillancourt, Doug Wilson

Men’s Wear Ltd., Anna Visconti, Brushstrokes, Ivanhoe Cambridge, CDP Capital Real Estate Group, Osler, Hoskin & Harcourt, LLP providing comments on the proposal be received for information.” CARRIED.

The Chair asked if anyone wished to speak on this item. David Baffa, Director, Development, Ivanhoe Cambridge addressed the Committee

advising Ivanhoe Cambridge and OMERS Realty Corporation were the owners of the Oshawa Centre and expressed concern the current proposal for the subject lands was inconsistent with Council’s established objectives for the Champlain East Sector lands and would impact the Main Central Area and the Oshawa Centre. David Baffa submitted correspondence dated July 11, 2005, outlining their concerns in writing.

Anna Visconti, Brushstrokes addressed the Committee in opposition to the

application to extend the Main Central Area to included the development for small retail format use.

Reinhard Mantzel expressed concern regarding the west side of Fox Street and

questioned if it would be the loading dock area and which way the stores would be facing. He requested the developer take into consideration the people on the west side of Fox Street. He was also concerned with the cul-de-sac on Fox Street.

Enza La Marca questioned whether the west side of Fox Street would be re-zoned

as well and questioned the frontage and depth of the development. Scott King, 656 Champlain Avenue, addressed the Committee advising no one has

approached them regarding the development. He stated he did not wish to be developed around however, they have had land expropriated from the front and do not want to be expropriated from the east as well.

George La Marca stated there should be commercial development on the east side

of Fox Street the same as on the west side. The Chair asked if any other members of the audience wished to speak on this

item. There were no further comments from the public on this matter.

- 29 -

DEVELOPMENT SERVICES COMMITTEE MEETING – July 11, 2005

Moved by Councillor Marimpietri, “That Report DS-05-243 dated July 11, 2005, from the Commissioner of

Development Services concerning the application to amend the Oshawa Official Plan (File No. B3100-0078) and to amend Zoning By-law 60-94 (File No. Z-16/04) submitted by First Pro Shopping Centres, be referred back to the Department of Development Services for the preparation of a subsequent report and recommendation. This referral does not constitute or imply any form or degree of approval.” CARRIED BY LATER VOTE.

Councillor Marimpietri stated concerns expressed by residents and business owners

were valid and should be considered in the development process. Councillor Lutczyk advised he was in support of commercial development but had

concerns with residents whose property may be orphaned. He was also opposed to enlarging the Main Central Area.

Councillor B. Nicholson stated Council needs to be cognizant of the effect on the

City as a whole. He stated this project was vital noting Oshawa has no plaza’s south of the CP Tracks and there were 45,000 residents that required services. He felt the marketplace was not established by municipal boundaries and that the development would attract shoppers from other municipalities. He stated it was imperative to ensure that the vision for this site worked with neighbouring properties.

Councillor Clarke stated she welcomed development but was concerned with the

extension of the Main Central Area. Councillor Parkes expressed excitement for the first major development on

Highway 401 but felt there needed to be a balanced interest and expressed concern with the small format stores. She encouraged First Pro to meet with residents and representatives of Cambridge.

The vote on the motion CARRIED. Moved by Councillor B. Nicholson, “That the meeting recess.” CARRIED. The meeting recessed at 6:35 p.m. and reconvened at 6:45 p.m. with the following in attendance: Councillors Clarke, Lutczyk, Marimpietri, B. Nicholson, Parkes and Pidwerbecki, the Commissioner of Development Services, the Director of Planning Services, the Director of Engineering Services and the Acting Committee Co-ordinator. DS-05-250 Melvin Culbert, 481 Central Park Boulevard North, drainage problem in his

backyard (Ward 5) This matter was discussed earlier in the meeting.

- 30 -

DEVELOPMENT SERVICES COMMITTEE MEETING – July 11, 2005

The Committee discussed financial and legal alternatives concerning the drainage problem at 481 Central Park Boulevard North.

Moved by Councillor B. Nicholson, “That Report DS-05-250 be tabled until a special Committee Meeting on Monday,

July 18, 2005, to obtain legal advice.” CARRIED.

Moved by Councillor Marimpietri, “That the meeting adjourn.” CARRIED The meeting adjourned at 6:55 p.m.

Smart Centres - Stevenson RoadCurrent Zoning and Types of Uses PermittedPrepared by IvanhoeCambridge: June 2006

SPC.A Zone

Permitted Uses

Animal HospitalAuction EstablishmentAutomobile Rental Establishment

Automobile Repair Garage

Clothing WarehouseClub

Commercal Recreation Establishment

Funeral HomeHardware StoreHome Appliance Store

Home and Auto Supply StoreHome Decorating Store

Home FurnishingStoreHome ImprovementStore

Hotel

Light Machineryor equipement rental, sales orserviceLiquor, Beer or Wine StoreMerchandiseService ShoNursery and Garden StoreOutside StorageAccesory to a permitted use inthe SPC-A ZonePrinting Establishment

Example I Retailer

Enterprise Rent-A-Car, Budget Car Rentals,Discount Car RentalsMidas Muffler, Speedy, Apple Auto Glass, Mr. Lube

Fairbank LumberLee Valley Tools, Sears CatalogueAMC, Famous Players, Galaxy,Cineplex Odeon,Rainbow Cinemas

Ballys, Goodllfe Fitess, Womens Only Gym,NightClubDooleys, Delta Bingo, Banquet Hall, Bowling Alley,Ice or Roller Rink, Putting Edge, Curling Rink,Indoor Raquet Club, Indoor Swimming Pool,Stadium or Auditorium

Home Hardware, TSC StoreMaytag Store, The Source, Radio Shack, 2001Audio Video, Apple Computer Store, EB Games,Black's, Henry's, Best Buy, Future Shop

CanadianTireHome Sense, Blinds To Go, Giant Carpet, Linen'sand ThingsBombay Store, BowringHome Depot, Rona, Home Hardware, Lowes,Colour Your World Paint and WallpaperMarriott Hotel, Hilton Garden Suite, MonteCarlo Inn

Stephenson Rental

LCBO, Beer Store, Wine Rack

Sheridan Nursery, Reeves Garden Centre ,I

Kinkos

Restaurant Kelseys, Canyon Creek, Swiss Chalet, Montana's,The Keg, Jack Astors, Alice Fazooli's, Milestones

RetailWarehouse Costco, Sam's ClubSale of Farm ImplementsSale or Service of Marine ProductsSale of Swimming pools or Swimming PoolSupplies --

Self Serve Storaqe BuildinqStudio Photqraphy Sudio, Dance StudioTaxi EstablishmentTavern Firkin Pub, Windy O'Neils Irish PubWholesale Establishment

KIR CHERResearch Associates Ltd.

20 Queen Street WestBox 11, Suite 3209Toronto, OntarioCanada M5H 3R3

Telephone (416) 867-3141Facsimile (416) 867-3127

May 31,2006

Mr. David A. Baffa

Director, DevelopmentIvanhoe Cambridge95 Wellington Street West, Suite 300Toronto, OntarioM5J 2R2

Dear Mr. Baffa:

RE: OSHAWA

Following your request, we have reviewed the report prepared by the Climans Group Inc. (CG),

dated May 2006 and entitled "Retail Impact Update Report, Oshawa South Development Inc.,

Highway 401 and Stevenson Road, Oshawa, Ontario". This report replaces a similar report

prepared by the same consultant dated April 2005. We provided comments on the earlier report

in our letter to you dated August 29, 2005. The updated report is as obfuscating as the initial

report.

In the current report, the consultant argues that zoning exists for 417,000 square feet of retail

space and that the requested land use and size change would result in 520,500 square feet.

Furthermore, the consultant argues that because the existing zoning already permits some

department store type merchandise (DSTM) space, the proposed Wal-Mart non-food space

would primarily displace a part of that permitted DSTM space. The impact assessment provided

deals only with the difference between the total permitted space and the total proposed space.

In our opinion, this is not a valid approach to a realistic current impact assessment. Since the

impact of the approved space, which has not been built, has not taken place, it must be

recognized in a current impact assessment, in order to arrive at a full understanding of the total

development's implications. The existing land-use zoning is very limited, primarily focussed on

automotive, a bulk beverage store, liquor beer wine store, nursery and a retail warehouse. As

such, it is a quasi-warehouse/semi-industrial type development. The requested change would

result in a standard retail power centre with the full range of uses, including apparel stores and a

department store. Furthermore, the non-food component of the Wal-Mart department store

would generate dramatically higher sales per square foot, and total sales, than the type of very

limited DSTM stores currently permitted. It is simply wrong to substitute the two uses for each

Land Use & Retail Economists

Mr. David A. Baffa

May 31, 2006Page 2

other, because they are dramatically different and do not perform the same functions within the

retail structure. The requested rezoning would likely increase the initial DSTM sales

productivity of the total development by $60-75 million, a large part of which would betransferred from Oshawa Centre and the balance of the Central Area. To this must be added the

new component proposed in the update report, i.e. 45,000 square feet of supermarket space to be

located within the Wal-Mart store, creating an even more powerful retail attraction, generally

known as a Wal-Mart Supercentre, and adding a further, previously unplanned $25-30 million of

sales to the proposed development.

It should be noted that the consultant has rather liberally interpreted the permitted use regarding

the retail warehouse. CG makes the assumption that that use entitles the owners to 65,000 square

feet of non-department store DSTM space within the warehouse club and 65,000 square feet of

food store space. The fact of the matter is that a retail warehouse such as a warehouse

membership club (WMC) carries a very limited selection of merchandise, usually about 3,500

SKU's (Stock Keeping Units) compared to a typical department store or supermarket that may

carry 40,000-60,000 SKU's. To suggest that WMC space can be equated to other retail space is

wrong and does not reflect the intention of the zoning which was to limit the retail offering atthis location.

Function of the Proposed Development

With a size exceeding 520,000 square feet of retail space, the proposed development would be

the second largest retail centre in Oshawa. It would be comprised of about half the size of

Oshawa Centre and would include many store types similar to those found in adjacent Oshawa

Centre, and in the balance of the Central Area. As such, it would be directly competitive with

the existing stores in the Central Area of Oshawa.

Expected Future Changes

If the Costco WMC locates in Whitby, as is generally expected at this time, it is unlikely that the

same tenant will locate in Oshawa. The only other WMC operating in Canada, on a very limited

basis, is Sam's Club, a company owned by Wal-Mart. However, Sam's Club does not appear to

be in an expansion mode. Therefore, if this continues, we would expect that at some near future

date, the developer may request to use that approved retail warehouse space for general retail

Mr. David A. BaffaMay 31, 2006Page 3

purposes. Such an approach would be facilitated by accepting the consultant's opinion that the

WMC space can be equated with general DSTM and food store space operated by other

companies. We do not agree with that characterization for the reasons noted above.

Other Proposed Retail Developments

CO has not recognized the volume implications of other competing retail developments in

Oshawa. Neither has he fully considered the implications of retail developments at the boundary

of his trade area that may have an impact within it. An example of this is the potential market

implication of the proposed Wal-Mart store in Clarington, on the Clarington portion of the CO

trade area. In Table 2c, CO argues that the Oshawa capture of the Clarington sector discount

department store sales would only decline by 5.0% if a Wal-Mart discount department store were

located in Clarington. In our opinion, this is significantly understated resulting in the need for

the Wal-Mart store to derive more of its sales from the City of Oshawa in order to achieve its

sales targets.

Awroved vs. Alternative Scenario

On Pages 8 and 9 of the report, CO provides a comparison between the assumed approved

scenario and the proposed scenario. As noted above, under the "approved" scenario, CO refers

to "non-department store DSTM space of 232,500 square feet", without recognizing the strict

limitations of use within such space. It is incorrect to substitute such limited DSTM use with

Wal-Mart space as suggested in the proposed scenario. On Page 15 of the initial report prepared

by CO, the consultant stated "The alternative scenario assumes the substitution of a discount

department store (Wal-Mart) on the subject property for an equivalent amount of permitted non-

department store space. The aggregate amount of additional space to be introduced into the trade

area in this scenario, in the year 2006 and 2008, is the same as in the approved scenarios". This

still reflects the approach taken by CO. In our opinion, this is a wrong interpretation of the

currently permitted uses within the DSTM category.

Mr. David A. BaffaMay 31,2006Page 4

Restricting Store Sizes

The requested zoning would limit the space for stores smaller than 3,230 square feet (300 m2) to

5% of the total proposed gross floor area which, in this case, would total 26,025 square feet.

This type of restriction is usually argued to be beneficial to existing shopping centres and CBD

stores by power centre developers and their consultants. The theory on which this is based

assumes that large stores do not compete with small stores. Although this has never been

proven, to our knowledge, and is largely illogical, (with very few exceptions) it has frequently

been used with great success by power centre applicants to gain zoning approval.

To suggest that a 10,000 square foot family shoe store does not compete with a 2,000 squarefoot

in-line mall family shoe store or a similar CBD store is false. Similarly, to suggest that a, say

25,000 square foot Winners apparel store, does not compete with a variety of Central Area or

mall apparel stores of a smaller size is false as well.

Based on our experience, the limit of store sizes does not provide protection to existing small

retailers. If that were the goal, then a limit on store ~ should be employed.

Total Sales vs. Per Sguare Foot Sales

CO shows a really inventive thought process by stating (P.15) "We prefer to consider the

estimate or projection of total annual store sales when assessing current and projected economic

performance. This figure is a more meaningful indicator of economic viability than sales per

square foot, reflecting the contribution made by a chain-operated store to corporate sales

volumes.". This has not been our experience. Sales per square foot is the single most relevant

ratio in any market analysis. Certain other ratios can also be important but total sales cannot

replace sales per square foot as a ratio tool on which market judgement is based.

We suspect that CO emphasizes this novel approach because his resultant impacts, under the per

square foot ratio, is very high (see Table 2D).

Mr. David A. BaffaMay 31,2006Page 5

Wal-Mart Sales

In the initial report, CG indicated Wal-Mart sales at Taunton/Harmony to average $582 per

squarefoot in 2004. Since CG was the consultant on that development, we accept these volumes

as being correct. The updated report suggests that the same Wal-Mart store averages $681 per

squarefoot in 2005 (Table 2D), one year later, a volume increase of 17.0%.

Although the proposed Wal-Mart store at StevensonlHighway 401 is slightly larger than the

existing Oshawa Wal-Mart (128,000 vs. 165,000 square feet), we question the assumed sales

projection of the new store at $487 per square foot in 2008, some three years later than the

quoted volume for 2005 and about 30.0% below the performance of the existing store in 2005.

The very low volume assumption for the new Wal-Mart store obviously moderates the estimated

impacts but raises the question of the reliability of the estimates provided by the consultant.

Closure of Zellers Stores

CO appears to expect the closure of at least two Zellers stores in Oshawa. With regard to

Kingsway Village, he states (P.18) "We conclude that the possible closure of the Zellers store at

Kingsway Village, if it were to occur, would not unduly affect the viability of that shoppingcentre".

Similar findings relate to Zellers Plaza (P.19). The consultant states "We conclude that the

possible closure of the Zellers store at Zellers Plaza, with or without the corresponding loss of a

planned commercial centre designation being attached to Zellers Plaza, will not unduly affect the

future viability of the overall retail commercial function of the Oshawa Main Central Area".

CO suggests that the loss of the major tenant in a community type shopping centre is of no

importance or relevance and does not influence the planned function of such centres. We do not

share that opinion. Furthermore, there is no research provided to back up that opinion.

Mr. David A. Baffa

May 31, 2006Page 6

License Plate Surveys

When Wal-Mart chose to include a supermarket component in their proposed second store in

Oshawa, CO, in the updated report, decided that it was necessary to conduct license plate surveysat four similar retailers located in the trade area "to understand the draw of different store sizes

and formats" (P.lO).

Even though the market study was focussed on Wal-Mart, CO did not consider it necessary to

conduct updated surveys at the two Wal-Mart stores serving his trade area or, in fact, at any other

department stores located in the trade area. This is unfortunate. We conducted such surveys on

behalf of Ivanhoe Cambridge in October 2005. CO, in the initial report, stated that the Wal-Mart

store at Taunton and Harmony had an inflow from non trade area residents of 32.5% (P.20).

This appears to have declined to 30.0% (P.15) in the updated report. This adjustment was made

without the benefit of an updated customer survey. Our empirical research indicated that some

39.0% of Wal-Mart customers at the Taunton Harmony store came from outside the CO trade

area, rather than 30.0%. If CO's inflow adjustment is not reliable, then this would have

implications for the study as a whole. Similarly, CO has provided no license plate survey for the

Whitby Wal-Mart store located in his trade area which, according to our research findings, has a

similar market penetration in the CO trade area as the Oshawa store itself, i.e. 58.0% vs. 61.0%.

The appendix of the update report indicates that license plate surveys were undertaken at the

Wal-Mart store in Oshawa in May 2004 (This was not disclosed in the original market study) but

it is qualified with a note that it was done before the Real Canadian Superstore opened.Therefore it does not reflect current conditions.

A license plate survey referred to at the Harmony/Taunton centre in January 2006 showed an

inflow of about 45.0%. At that time both the Wal-Mart store and the Real Canadian Superstore

were in operation.

In Appendix C-1, the consultant lists a number of previous license plate surveys including

several at supermarkets which were updated for the current study. Apparently this was not found

to be necessary with regard to the Wal-Mart stores.

Mr. David A. BaffaMay 31, 2006Page 7

Inflow vs. Outflow

Our survey at the Wal-Mart stores serving the trade area indicates that the current inflow

generated by the Wal-Mart stores located in the City of Oshawa, from outside ,the city limits,

generates 48.1% of its customers. A similar sized Wal-Mart store located in Whitby (the nearest

to Oshawa) generates only 11.6% of its customers from the City of Oshawa. Thus, since inflow

already exceeds outflow by a wide margin, the "recapture" of outflow is not an issue in Oshawa.

ExQenditureCalculations

The approach used by CG to convert the current NAICS retail expenditure reporting by Statistics

Canada into the outdated DSTM classification creates significant reliability questions. Several

partial adjustments are included in the CG expenditure estimates that cannot be tested

empirically.

If a full inter-category volume transfer were contemplated,then the adjustments in the warehouse

membership club category and the supermarket category alone, as is the case with the CG

estimates, is clearly inadequate. The simple fact of the matter is that DSTM is no longer

published by Statistics Canada and any attempt to reconstitute it can lead to significant dataconflicts.

This is further compounded by relying on a regression equation to adjust per capita expenditure

, estimatesthat are basedon datedproduct categories(as of 2001) rather than store types, even

though the market analysis itself is based on store types. We appreciate the fact that some other

consultants used a similar methodology but the fact of the matter is that product categories and

store types entail significant differences. Our conclusion drawn from the CG per capita

expenditure estimates is the fact that they are of unknownreliability.

Discount Store Share

As indicated in our initial review of the 2005 report, the in-home consumer survey data collected

by CG can be used to demonstrate that the discount department store share of the defined

DSTM(HASS is substantially different between the three Sectors of the trade area. On Table 2C,

Mr. David A. Baffa

May 31, 2006Page 8

CG assumes that they are identical at 15.4% in 2005 for all sectors. In our opinion, CO's own

data does not support that conclusion.

Furthermore, we question the judgement that the discount department store share.in each of the

three sectorswill be identical throughout the future studyperiod, despite the competitive changes

that are consideredthroughout the analysis.

Wal-Mart VolumeDerivation

As indicated on Table C2 of the updated report, out of a total increase of $47.7 million of

additional trade area discount department store volume by 2008, some $27.2 million or 57.0% is

derived from the Whitby Sector where there is already an established Wal-Mart store. Such

volume transfer would be primarily derived from the existing Wal-Mart store and result in a

potential sales decline of that store, ranging between an estimated one-third and one-half of its

total sales. We consider this to be a highly unlikely scenario. If less of the volume of the second

Wal-Mart store in Oshawa is sourced from Whitby, it may have to generate more from the

Oshawa Sector in order to achieve its projected sales resulting in greater impacts on Oshawa

retailers.

The Wal-Mart Supermarket Component

The 45,000 square feet of food component within the Wal-Mart store qualifies as a full

supermarket as it will likely carryall of the relevant supermarket categories. This fact is also

reflected by CO's approach in the justification of this space which was focussed solely on

competing supermarkets. In our opinion, the assumption that 20.0% of the Wal-Mart

supermarket component is derived from beyond the delineated trade area is substantially

overstated due to the fact that supermarket merchandise is primarily shopped on a conveniencebasis.

Mr. David A. Baffa

May 31, 2006Page 9

Discount Department Store Survey Results

The new telephone survey results indicate that Wal-Mart currently accounts for about 68.0% of

all discount department store sales in the trade area. Thus, it is clearly already by far the

dominant retailer in that store category.

The same survey also shows that nearly 90.0% of all discount department store sales generated in

the Oshawa City Sector are captured by stores located in Oshawa. Thus, "outflow" is of no

significancein this case as noted earlier.

Summary

1. The requested changes in the First Pro application would change the total

development from quasi-warehouse/serni-industrial uses to a full power centre

development. This would generate significant negative financial consequences for

Oshawa Centre. It may also lead to store closures and major impacts on other Central

Area stores and other planned retail developments in Oshawa.

2. In Appendix F, the consultant provides a listing of additional retail space in Oshawa

and Whitby (the major applications in Clarington are not included, although it is

acknowledged in the analysis). We cannot determine where approved retail space,

particularly that for Oshawa Centre, is recognized in the impact analysis, due to the

lack of a directional impact assessment.

3. There are a number of significant questions about the reliability of the statistical

projections used in the report. Some of these were noted above. However, there are

many others, simply too many to discuss in detail in this relatively brief response to

the report, which is not a full peer review.

4. The updated CO market report cannot be relied upon to provide a clear indication of

the market implications generated by converting a limited use quasi warehouse/semi-

industrial site to an expanded fully competitive power centre.

Mr. David A. BaffaMay 31, 2006Page 10

We appreciate the opportunity to provide these comments to you and look forward to discuss

them with you.

Yours very truly,KIRCHER RESEARCH ASSOCIATES LTD.

LA VV-~~

Hermann J. KircherPresident

..

2

The current Stevenson and Champlain proposal seeks to reopen uses for lands that were considered anddetermined by City Council only recently in 2004. The same issues of impact on planned function, urbanform, established Council commitments and competing uses have been reintroduced for Council'sconsideration within months of Council having already determined the planned functionand expectationsfor theselands. .

Specifically, we highlight the following comments for your consideration:

(1) The planned commercial structure of the Durham Region Official Plan and the Oshawa OfficialPlan specifically anticipate and permit the expansion of the Oshawa Centre as an integral part ofthe Oshawa Main Central Area. The Oshawa Centre is designated as 'Planned CommercialCentre' within the 'Main Central Area' in the Oshawa Official Plan. The dominance of this MainCentral Area is to be encouraged as part of any redevelopment scheme with the Central BusinessDistrict to "be the preferred location for the highest order of commercial uses such as full-lineandjunior department stores, highly specialized shopping goods establishment and offices".

The current Stevenson/Champlain proposal would dilute and diffuse these objectives.

(2) The Oshawa Centre expansion consideration (approved by Council in 1997) was described bystaff as an example where the "evolution of well located and established regional shoppingcentres into larger mixed use centres is a prevalent North American trend". Staff also identified atthat time that the Oshawa Centre expansion proposal served to capitalize upon its strategiclocation to better position the Oshawa Centre to ensure its long-term dominance in the Region ofDurham.

ill confirming the 1997 Oshawa Centre expansion, Council determined that while it wasimportant to ensure the future development of the Oshawa Centre did not adversely impact theCentral Business District, it was equally important to ensure that the Oshawa Centre waspermitted to develop in a manner that achieved its planned function within the City and theRegion.

Council also determined that while the Oshawa Centre and the downtown performed distinctiveand complementaryroles in the retailing system and while the respective uses were frequentlynotdirectly competitive in the market place, there could be situations where individual retailers mightbe impacted.

ill considering the expansion programme in 1997, Council therefore required the Oshawa Centreto:

(a) undertake and complete a full range of retail and office impact assessments as related tothe Main Central Area; and

(b) incorporate such conditions and considerations as development phasing, master site plan(to ensure various objectives), urban design and complementary support of all elementsof the Main Central Area.

3

The current Stevenson/Champlain proposal, together with its department store type power centrestructure, would however:

(a)

(b)

inappropriately provide a different and a lower impact standard for impact than hasotherwise been applied by the City for Main Central Area retail and office considerations;and

inappropriately expand the Main Central Area west of the Oshawa Centre, thus impactingand undermining the retail and office planned function of the Oshawa Centre.

In this regard we requested Kircher Research Associates Ltd. to independently review andcomment on the market studies submitted in support of the Stevenson/Champlain proposal.Attachedfor your consideration,is a copy of the May 31, 2006KircherResearchreport,whichincluded the following observations.and conclusions:

(a)

(3)

(4)

the requested changes in the application would change the total development from quasi-warehouse/semi-industrial uses to a full power centre development. This would generatesignificant negative impacts on the Oshawa Centre tenants and the ability of the OshawaCentre to maintain its planned function.. It may also lead to store closures and majorimpacts on other Central Area stores and other planned retail developments in Oshawa.

(b) the updated market report cannot be relied upon to provide a clear indication of themarket implications generated by converting a limited use quasi warehouse/semi-industrial site to an expanded power centre.

Council has consistently sought to make the downtown a more attractive and desirable place toinvest in, work, shop and live. Council has identified the need to position the downtown to beable to more effectively compete for investment. Council has also set downtown redevelopmentand upgrading as a strategic priority, including the Community Strategic Plan Objective Al inrespect of "Revitalizing the Downtown". The Oshawa Centre has been pleased to participate inthe Community Leaders Roundtable and supports the detailed action plans being pursued by CityCouncil.

The current Stevenson/Champlain proposal would directly compete with the planning objectivesfor the downtown, thus diluting that priority and commitment.

In considering and approving the Oshawa Centre expansion, Council sought to effect the"reurbanization" of the Oshawa Centre consistent with its Official Plan objectives, by advancinga greater mix of uses, a greater intensity of development and a more compact urban form. In thisregard, Council required and secured:

(a) an enhanced urban pedestrian orientation, urban design and streetscape treatment for theOshawa Centre expansion;

(b) a more compact, transit-supportive and urban form of development for the OshawaCentre expansion, increasing the resulting built form on a Main Central Area site from adensity of 38% to 80% times the area of the lot;

4

(c) a broader range of uses, consistent with the Main Central Area objectives, includingretail, services, office towers, residential units, hotel, parking decks; and

(d) an appropriate phasing of development to the year 2011 to ensure appropriate integrationwith the existing Main Central Area uses.

The current Stevenson/Champlain proposal is inconsistent with the objectives that Councilotherwise determined was required for an urban commercial centre within its Main Central Areacontext. Specifically the Stevenson/Champlain proposal:

(a) seeks to introduce a suburban, lower intensity (with a density of only 25% times the areaof the lot in order to accommodate its suburban 'Power Centre' configuration andrequirements) built form within the Main Central Area, contrary to the City's establishedobjectives and commitments; and

(b) seeks to introduce a broad range of uses, including department store and office uses,without quantum or impact considerations and without integration considerations(phasing) in respect of the Main Central Area, which are contrary to the objectives andcommitments that are normally applied by the City for such applications.

(5) The proposal to introduce additional department store, as well as other DSTM type uses, and tointroduce a suburban built form into the Main Central Area context are contrary to theconclusions of the City's recent Commercial Opportunities Study and are also contrary to theestablished objectives and commitments that are otherwise appliedby the City.

(6) The Champlain East Sector "gateway" objectives can be achieved without introduction ofadditional department store type uses or a Main Central Area designation. The objectives for theChamplain East Sector lands were just recently reviewed, critiqued and re-established in 2004,including Council's limitation of Stevenson/Champlain 'uses' to ensure no adverse impact to theMain Central Area or to the Oshawa Centre. Despite this recent determination, the currentStevenson/Champlain proposal seeks to re-open and expand that Council direction only a fewmonthsafter Councilhadmadeits decision. .

The Stevenson/Champlain "uses" previously considered and approved by City Council as beingcompatible with the Main Central Area, already permit a wide array of potential trade name users,providing a wide range of retail opportunities. Attached, for your consideration is a sample list oftrade names that would be permitted use references for your consideration.

We wish to have an opportunity to review and comment on any final staff recommendations (includingany conditions and implementing instruments that might be considered), and look forward to receiving acopy of staff's Final Recommendations Report.

We also confirm our desire to be notified of any meetings scheduled and to be provided with copies ofany Notices or reports prepared in respect of the City's consideration of this application.

Thank you for your attention to our comments. Should you require anything further please do not hesitateto contact the undersigned.

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Yours truly,

David A. Baffa, MCIPDirector, Development

Attach:

cc: Mr. Ted Goodchild, Commissioner of Development Services, City of Oshaw aMr. Bruce Hunt, Director of Planning Services, City of Oshaw aMr. Bill Thompson, Oshawa CentreMr. Paul Gleeson, Senior Vice President Development, Ivanhoe CambridgeMr. Tom Falls, VP Portfolio Management, Oxford Properties Group