HomeMy WebLinkAboutCAO-10-037 - Property Tax Deferral Agreement, 300-400 King St WREPORT
REPORT TO:
Councillor B. Vrbanovic, Chair and Members of Finance and
Corporate Services Committee
DATE OF MEETING:
November 8, 2010
SUBMITTED BY:
Carla Ladd, CAO
PREPARED BY:
Carla Ladd, CAO
WARD(S) INVOLVED:
All
DATE OF REPORT: November 4, 2010
REPORT NO.: CAO-10-037
SUBJECT:
Property Tax Deferral Agreement, 300 - 400 King Street West
RECOMMENDATION:
That the Mayor and Clerk be authorized to execute the amended property tax payment deferral
agreement with the owners of 300 – 400 King Street West (save and except for 320-328 King
Street West) and that the grant portion of the agreement be funded from the Economic
Development Investment Fund.
BACKGROUND:
In 2005, City Council approved the deferral of outstanding taxes, including accrued penalties
and interest, owed against property located at 300 – 400 King Street West. The property
owners approached the City with a potential partnership opportunity in the eventual
redevelopment of the property. Such partnership investment opportunities in the downtown
were consistent with the City’s overall goal for the downtown. As such, Council agreed to a five
year deferral on the following basis:
Deferral of payment of tax arrears accrued up to May 31, 2005
All taxes and utilities accruing after May 31, 2005 were to be paid and kept current
The property owner would demolish 400 King Street West and allow the City to develop
public parking on the site for a minimum of three years with any excess parking
revenues to be applied to the tax arrears balance
The permanent redevelopment of the entire site must include a component for public
use, such as a parkette, courtyard, walkway, improvement to Bell Lane, development of
public parking as examples
In exchange for the public component on the redevelopment site, the City will grant back
to the property owners the amount of the interest and penalties which accrued on the
principal from May 31, 2005 until the time the properties were redeveloped or five years
from date of acquisition, whichever came first.
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In this regard, all taxes and utilities have been paid and kept current and 400 King Street West
has been demolished and developed for interim public parking with the revenue from said
parking lot being first applied towards the capital cost of the parking lot which have been fully
recouped and additional revenue from that point forward has been applied to the tax arrears.
However, permanent redevelopment of this site has not yet proceeded and as such, the owners
have asked for an extension of the agreement. It is being recommended that the deferral
agreement be extended for another five years on the following conditions.
All outstanding taxes are to be paid in full by November, 2011 together with any interest
and penalties which will accrue between the date of the extended agreement and
November, 2011. In this regard, all outstanding taxes have been paid by the property
owner.
Interest and penalties which accrued on the principle to the date of this amended
agreement will be capped and applied, as a grant, toward the development of a public
component as specified in the original agreement. Should the value of the public
component be less that than the penalties and interest owing, the property owner shall
be responsible for paying the difference to the City.
In keeping with the City’s interest in the redevelopment of downtown properties, this partnership
opportunity remains of value to the goals set out in the strategic advancement of the downtown
and the grant is appropriately funded from EDIF.
ACKNOWLEDGED BY:
Carla Ladd, CAO
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