Strategy

Vaughan: Out of the field

Vaughan shines bright, especially next to Toronto’s fading light.

It was a simple request: a few picnic tables for the park behind a tiny roadside restaurant. But Tim Stevens, manager and co-founder of Memphis BBQ & Wicked Wings in Vaughan, Ont., didn’t have high hopes. During his roughly 25 years in Ontario’s hospitality business, he’s worked in communities that fined restaurant owners for putting furniture on public property. After Stevens called city hall, officials visited his establishment, made an assessment and returned the next day with three picnic tables. “Maybe it’s the old-school mentality from the community’s cultural makeup, but, for whatever reason, things get done here,” Stevens says. “, Vaughan is very pro business,” Stevens says.

A growing number of companies seem to agree. Building permits have grown at an average annual rate of 19.5% over the past three years. And it’s not just small businesses moving to this community, a 30-minute drive north of Toronto. Cara Operations Ltd., the restaurant giant that owns brands such as Swiss Chalet, Milestones and Harvey’s, is close to completing its new 80,000-square-foot headquarters in Vaughan. When done, Cara will move from its current digs in nearby Mississauga. “Providing an open-space concept promotes innovation, teamwork and quick decision-making, and Vaughan allows us to do this in a great new building that’s customized for our requirements and showcases our leading Canadian restaurant brands,” says Peter Amirault, president of Swiss Chalet.

The convenience of being close to two major highways (the 400, which stretches north past Barrie, and the 407, which bypasses Toronto on the north side) also played a role. So, too, did the lifestyle. “Vaughan has this beautiful balance between family and business, and it’s a nice reflection on the kind of business we’re in,” says Anna Filipopoulos, senior vice-president of people development at Cara.

Indeed, Vaughan’s parks and recreation centres have been one of the city’s main selling features ever since it began advertising itself on radio as “the city above Toronto” in the early ’90s. But Vaughan also offers a posh lifestyle for high-paid execs, featuring million-dollar mansions on huge lots and private golf courses in the Woodbridge neighbourhood.

But the municipality, which also includes the communities of Maple, Thornhill, Kleinburg and Concord, also appeals to the practical side of business owners. Its commercial taxes are the lowest in the Greater Toronto Area (GTA), and it’s accessible by three major provincial highways, two airports (Pearson International Airport is a 15-minute drive from the city) and the Canadian National and Canadian Pacific railway lines. Sobeys is planning to build a 750,000-square-foot distribution centre in Vaughan next to Canadian Pacific Railway’s largest intermodal yard in the country.

Canada’s fastest-growing municipality, Vaughan in the past two decades has come a long way from being perhaps best known as the home to a theme park, Canada’s Wonderland. But the city is starting to show some signs of growing pains. “Sports and recreation are so overpriced in comparison to Brampton or Mississauga,” says a Woodbridge mother of twin boys, who wouldn’t give her name. “We are so backlogged on our infrastructure, it’s not even funny.” Some residents feel Vaughan has become a place only for rich people who live “behind the wall,” to use a local expression. Although the city boasts the GTA’s second-lowest residential property taxes, only about half of residents felt they were getting value for them, according to a 2007 survey. And just 37% would support a tax increase to maintain current service levels.

Despite the city’s issues, companies such as Miele, a German appliance manufacturer that set up its Canadian headquarters here in 2006, and consultant Deloitte & Touche, which recently opened a local branch, are moving in to take advantage of the area’s growth — and, no doubt, its healthy financial position.

The city has enjoyed a surplus for more than a decade — a far cry from Toronto, its deficit-ridden neighbour — and it boasts net financial resources (the city’s assets minus its liabilities) of $333 million. By comparison, Mississauga, which has nearly three times as many people as Vaughan, has net financial resources of $744 million. Vaughan has also amassed $204 million in reserves, because of a policy decision in 1995 to bank any yearly surpluses. Then again, a healthy financial position can be easier to maintain in an expanding city, since builder development fees fund the facilities. Indeed, such fees pay for 90% of the city’s new facilities.

But give Vaughan credit for focusing on sustainable growth. The city accounts for the cost of building big-ticket items, such as community centres, as well as the expense of maintaining them for the next 25 years. Whenever possible, the city also contracts services, giving it the flexibility to switch vendors for service or cost reasons. It also lets the city remain innovative. For example, Vaughan picked Dongara to help solve its garbage problem. The waste management company turns household trash into pellets that can be used as fuel. The process is common in Germany and Holland, but the facility will be the first of its kind in North America. Vaughan will use the facility to cut the amount of waste it sends to landfills to about 5% from about 40%.

Vaughan does other simple things to stretch its dollars. For example, it builds recreation centres beside high schools so they can share facilities. The city also puts money aside for capital equipment (for example, fire trucks) and services. “You take a bit of heat from the residents, because they don’t see the return on it every year, but then you can make decisions based on need and not just on whether you have the money,” says city councillor Peter Meffe.

Good policy is one thing, but maintaining good relations with builders is key if the city plans to continue growing. “I don’t think developers are just concerned about dollars. It’s time,” says Clayton Harris, the deputy city manager and commissioner of finance and corporate service. “We’ve got our approval process down to an art.” The city’s amicable relationship with builders is perhaps best demonstrated by a program that, for every residential unit built, requires builders to contribute $1,000 into a fund that preserves woodlots. Selling the idea was made easier since about half the builders that operate in Vaughan live in the city, too.

Developers, of course, need land to build. The city has set aside 607 hectares for the Vaughan Corporate Centre, which is slated to become a centre for offices, restaurants and shops, and 1,500 hectares for the Vaughan Enterprise Zone.

But there’s more to come. The city also hopes to be hooked up to Toronto’s subway network within six years. “When you see the subway complete,” says Greg Sorbara, the MPP for Vaughan, “you’ll see another generation of development.”