Region gets $10.3M from Amazon warehouse developers in charges dispute

The Region of Waterloo and the developers behind the Amazon Fulfillment Centre in Cambridge reached a surprise agreement after a dispute over millions of dollars in development charges.

Broccolini Real Estate Group, the developers behind the Amazon warehouse on Old Mill Road, agreed to pay the region $10.3 million, 75 per cent of a $13.7 million discount the region claims it mistakenly received in development charges.

The saga began in July 2022 when the region assessed the building and applied a 60 per cent “industrial development” discount to development charges that Broccolini Group would have to pay. Then, in August of that same year, the developers paid approximately $9 million in development charges.

At that time, the region claimed to be unaware of who the tenant of the building would be.

In November 2022, the Region of Waterloo realized a mistake was made when applying the discount to the development charges after learning the tenant of the building would be the multinational tech giant Amazon.

Staff went to Broccolini Group looking to correct the amount paid by billing them an additional $13.7 million, the original discounted rate.

At the time, the region’s counsel noted that if the developer failed to correct the error, then it would be the taxpayers who would be held accountable to make up for the shortfall.

Broccolini Group refused to correct the amount paid, and its lawyer contested that the region should be blocked from retroactively applying charges after the original fee had already been paid, adding that it would be an “absurd result” benefiting nobody.

The issue was brought before the Ontario Land Tribunal, which sided with the developers and decided they wouldn’t have to pay the corrected amount.

Then, on Tuesday, the Region of Waterloo announced that a deal had been reached with Broccolini Group, which would see the developers pay 75 per cent of the charges originally sought after by the region.

That means the region will end up with about $10.3 million of the $13.7 million it was looking for, leaving Broccolini Group with a more-than $3 million discount in development charges.

“The region is pleased that the developer will pay the majority of the development charges,” said Regional Councillor Michael Harris in a statement on Tuesday. “This is a good deal for residents and for the Region of Waterloo.”

Harris added that the funds received from Broccolini Group will help fund major infrastructure. The region has also withdrawn its motion for leave to appeal to the Ontario Divisional Court.