HomeMy WebLinkAboutFCS-17-179 - 152 Shanley Street - Tax Sale
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: October 30, 2017
SUBMITTED BY: Joyce Evans, Director of Revenue & Deputy City Treasurer
519-741-2200 ext. 7895
PREPARED BY: Joyce Evans, Director of Revenue & Deputy City Treasurer
519-741-2200 ext. 7895
WARD(S) INVOLVED: All
DATE OF REPORT: October 19, 2017
REPORT NO.: FCS-17-179
SUBJECT: 152 Shanley Street Tax Sale
RECOMMENDATION:
That, upon the recommendation of the Treasurer, Council directs the following
with respect to 152 Shanley Street :
1.A Planning Division initiated neighbourhood charrette to be undertaken in the
first half of 2018 to develop a vision/criteria to be used as the foundation for a
City facilitated zone change and other possible planning approvals AFTER the
successful sale of the property and upon receipt of a bona fide redevelopment
proposal that meets the vision criteria;
2.Following the completion of the charrette Council authorizesthe write-off of
the interestthat has and will accrue on the outstanding property taxes with
respect to 152 Shanley Street up to the date the Noticeof the advertisement of
the property a second time under the tax sale processisto be sentto the
persons with a registered interest in the property;
3.Advertisement of the property a second time under the tax sale process
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BACKGROUND:
In April and May this year, the City advertised the tax sale of 152 Shanley Street and it
was unsuccessful. The City received only one tender in the amount of $200,000 but this
was deemed non-compliant as it did not meet the minimum tender amount or
cancellation price per legislative requirements as at May 2017 which equaled
$1,086,116.41.
REPORT:
With a minimum 30 days notice to all persons with a registered interest in the property
as per the legislation, the City is permitted to offer the property for public sale by auction
or tender a second time within two years after the date of an unsuccessful public sale
(May 3, 2017).
Outstanding Taxes
One of the limited opportunities for Council of the local municipality to write-off all or a
portion of the taxes as uncollectible is following an unsuccessful tax sale, upon the
recommendation of the Treasurer.
As of October 2017 the current taxes, interest and principal, outstanding for 152
Shanley Street is $1,135,599 with the breakdown between interest and principal as
follows:
Arrears (Principal)$422,791
Interest Charges712,808
Balance Outstanding1,135,599
Writing off of the interest portion of the taxes, would make this property more appealing
for purchase. There has been renewed interest in this property expressed since the tax
sale failed so with a reduced minimum bid there is a greater potential that a second
advertisement of the property under the tax sale process may be successful. Staff
believes this is the best chance for redevelopment. There is the potential for a
Brownfield Tax Increment Equivalent Grant as well.
It is being recommended that the interest ($712,808),which has accrued and will
continue to accrue with respect to 152 Shanley Street, up to and including the date
Notice is to be sent to parties with a registered interest in the property, be written off.
There is a risk that property will be seen as a precedent for
dealing with other compromised sites with expectations for similar treatment. However,
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this is not the case as similar sites will be considered on a one off or individualized basis
as there may be different considerations that need to be assessed.
Site Constraints
In addition to the tax arrears and the fact that this property is contaminated, there are a
number of site constraints that impact the potential for redevelopment of this property
including Official Plan height restrictions, zoning and potential for heritage designation.
Staff feels a comprehensive approach is needed to address as many issues as possible
if this property is to be redeveloped.
The Planning Division has offered to conduct a neighbourhood charrette/workshop in
the community to brainstorm future uses that improve the potential for redevelopment
and establish a new community vision for the property, before this property is advertised
for tax sale a second time. The City would then release as part of the tax sale
advertisement, a copy of the new vision established through the charrette. Using the
vision then as the foundation the City would be receptive to any development proposal
that aligns with the vision and would facilitate a zone change and other possible
planning approvals if it receives a proposal that meets specified criteria.
Action
The Planning Division to undertake the charrette in the first half of 2018 as staff
are fully committed to other Council priorities at this time.
Following the charrette, all interest that accrued on the property up to the date of
notification being sent to those parties with a registered interest to be written off.
Notice to be sent out with at least 30 days notice.
Property to be advertised for sale, a second time under the tax sale process.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
The recommendation in this report is an effective and efficient provision of city services
as it will ensure the responsible stewardship of public funds within a supportive policy
framework.
FINANCIAL IMPLICATIONS:
Under the Municipal Act, the City has the authority to write-off all or portions of the
principal and/or interest on a property after an unsuccessful tax sale. The recommended
write-off amount of approximately $712,808 plus any interest up to the date of
notification will be written off to the Allowance for Doubtful Accounts. There is sufficient
funding within the allowance for doubtful accounts to cover this write-off.
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COMMUNITY ENGAGEMENT:
INFORM h the agenda in
advance of the Standing Committee.
ACKNOWLEDGED BY: Michael Goldrup,Acting Deputy CAO, Finance and Corporate
Services
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