A lawyer for the city argued waiving development charges on a student housing project at the former Holiday Inn site on Scottsdale Drive would create a $16-to-$20 million "windfall" for a private developer "on the backs of the taxpayer."

That was the opinion a city legal representative Peter Gross during a city council tribunal Thursday night for a developer's request to drop development charges on a project for University of Guelph student housing planned on university-owned land.

City council, sitting as a tribunal, decided after an in-camera session that it would issue its decision in writing at a later date.

The developer had previously stated that if the city imposes development charges, it will file an appeal with the Ontario Land Tribunal, which has the authority to overrule council decisions.

"Waiving development charges would be a $16-to-$20 million windfall to a private developer at the expense of the city's taxpayers," lawyer Peter Gross said to the tribunal, which was basically city council acting as a different body.

Gross later said waiving the charges would equate to a "subsidy" to a private developer.

601 Scottsdale Dr. GP Inc. owns the existing student housing complex in the converted Holiday Inn, referred to as Phase 1. It wasn't charged development fees on that project, although that was a renovation, not a new build, and was done under a development charges bylaw that has since been updated.

It points to the fact the U of G is exempt from development charges.

The city argued it's not the U of G building the housing, it's a private developer, which will collect money from "above market" rental rates.

Phase 2 calls for two more private student housing buildings on what is currently the parking lot behind Phase 1 – one eight stories and the other nine – that would create a combined 496 units with 594 beds. Only students would be allowed to live there.

The project was intended to be finished in time for the 2027-28 school year, but work has been halted and that is now in jeopardy.

The developer says their deal with the U of G is based on no development charges and paying those charges would make the project "no longer viable."

"It's not fair that the exemption applied to Phase 1, and it didn't apply to Phase 2," said Joe Hoffman, the lawyer speaking on behalf of the developer. "If development charges are applied to Phase 2, this development isn't viable. Full stop."

He said the ownership of the land and the intended use clearly exempts it from development charges.

"If this is a student residence then how is it not being delivered for the purpose of the university?" Hoffman asked. "We're here today to say the exemption should apply."

Gross noted that other than revenue from the 99-year lease, the U of G won't collect any money from the project.

"The project is clearly in jeopardy today," Hoffman said, but added that there is still a chance, if approved, it could be ready for 2027-28.

"A decision today, we still have some hope," he said.

Councillor Carly Klassen (maternity leave), Dominique O'Rourke (resigning), Rodrigo Goller and Leanne Caron were absent from the meeting. Caron previously declared a conflict of interest anyway because she is a U of G employee.