HomeMy WebLinkAboutDSD-19-065 - Brownfield Remediation Program Application - Tax Incremental Grant - 98-100 Victoria St SREPORT TO:Finance and Corporate Services Committee
DATE OF MEETING:April 15, 2019
SUBMITTED BY:Brian Bennett, Manager, Business Development, 519-741-2200 X 7230
PREPARED BY:Rob Morgan, Capital Investment Advisor/ Brownfield Co-ordinator,
519-741-2200 x7734
WARD (S) INVOLVED:Ward 9
DATE OF REPORT:March 11, 2019
REPORT NO.:DSD-19-065
SUBJECT:Brownfield Remediation Program Application Tax Incremental Grant
98-100 Victoria Street South
___________________________________________________________________________
That the Brownfield Remediation Program Application for 98-100 Victoria Street
South, received from 2373074 Ontario Inc. dated January 29, 2017 be approved
subject to the
That in exchange for a completed and filed Record of Site Condition for the subject
property, the owner will be provided a tax incremental grant on the redevelopment of
the property in the form of an annual rebate on City taxes in an amount equal to 100% of
the City Tax Increment; and,
That the City Tax Increment be defined as the difference between the City portion of real
property taxes for the 2017 taxation year and the new City portion of real property taxes
levied as a result of a new assessment by the Municipal Property
Assessment Corporation (MPAC) following completion of the project as
compensation for the remediation of the above subject lands; and,
That the Citypropertytaxgrantisestimated to be $327,815.00,payablein 1 year
following re-assessment byMPAC
and,
That the Regionof Waterloo Brownfield Coordinatorbecirculatedacopyof any decision
madebyKitchener City Councilregarding this Application;and further,
That the Mayorand Clerk beauthorizedto execute an Agreement, subject to the
satisfaction of theCitySolicitor,with the RegionofWaterlooand2373074OntarioInc.,to
implementtheprovisionsof the BrownfieldRemediation Program Application for
98-100VictoriaStreet South, asoutlinedintheDevelopmentServicesDepartmentReport
DSD19-065.
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BACKGROUND:
In January of 2017, the City of Kitchener and Region of Waterloo received ajoint Tax Increment
Grant (TIG) application from 2373074 Ontario Inc. relating to the remediation and redevelopment
of the property municipally known as 98-100 Victoria Street South (Map Attachment 1). The 0.92
acre property located on the north side of Victoria Street South,close to Bramm Street,was
historically usedfor a mixture of commercial and residential purposes as well as vehicle storage.
The land is being redeveloped into a mixed-use development consisting of two condominium
towerscontaining 348 residential units and 450 square metres of commercial use.The project
is being constructed in two phases,with the first phase nearing completion this summer.
In order to facilitate the proposed development,the City sold to2373074 Ontario Inc.a 0.30 acre
parcel of landfrom its Bramm Street holdingsfor $1,200,000.00 which allowed for the property
to be squared offcreating a more developable lot.
REPORT:
Contamination and Remediation
The Environmental Consultants for this project are Pinchin Environmental. Referring to the
Remedial Work Plan dated January 23, 2017and the Phase II Environmental Site Assessment
(ESA), several boreholes and groundwater monitoring wells were installed throughout the site.
At the conclusion of the test period it was determined that there wereimpacts primarily of sodium,
chlorideand some metalsin the soils and/or groundwater that exceed TheMinistry of the
Environment, Conservation and ParksTable 2 standards. The sources of the contaminants
appear to be related primarily to the municipal bulk salt storage and handling operations that
historically occurred approximately 60 metres upgradient from the property.
Eligible Remediation Cost
City and Regional staff are satisfied with the documentation submitted by the applicant
estimating eligible remediation costs for the site at $801,241.00. This amount plus a 10%
allowance for indirect costs afforded under the joint TIG program ($80,124.10), results in a
maximum eligible joint TIG of $881,365.10. The TIG would be cost-shared between the Region
and the City of Kitchener with grant proportions determined by each
municipal taxes levied on the property in the year the application was submitted (2017) with
approximately 62.8% (a maximum of $553,551) being provided by the Region and the remaining
37.2% (maximum $327,815.00)provided by the City of Kitchener. Given the relatively small
amount of remediation costs and the significant tax increment the TIG will be paid out in one
year. The payment will be made after the property is redeveloped and ultimately reassessed by
the Municipal Property Assessment Corporation (MPAC), likely not before 2021.
As a condition of final approval of eligiblecosts, invoices must be submitted by the applicant
and must be approved for eligibility by City of Kitchener and Regional staff.
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Pre-remediation assessment and taxes vs post redevelopment assessment and taxes
The anticipated joint Tax Increment Grant payments and schedule are determined for each
application based on the following steps:
The first step includes a calculation of the anticipated assessment increment. This is based on
the pre-remediation MPAC assessment value(s) and the estimated post-remediation and
redevelopment assessment value(s) for thedevelopment as provided by the Applicant.
AssessmentAssessmentAssessment
Increment*
$965,171.00(2017)$94,994,000.00(est.)$94,028,829.00(est.)
*These values are based on estimates and will be confirmed by MPAC upon project completion.
The anticipated assessment increment is then used to calculate the expected annual increase
in municipal taxes (Region and City) that would be generated by the remediation and
redevelopment of the property
MunicipalMunicipalTotal
Area Municipality
Tax Increment*
City $4,495.71$346,547.91$342,052.20
Region$7,591.49$585,183.59$577,592.10
Total$12,087.20$931,731.50$919,644.30
*Tax amounts do not include the education portionof annual taxes levied as the School Boards
do not participate in the program and are rounded to the nearest dollar.
Impact of the Joint TIG Program in Kitchener
The infusion of private investment in the redevelopment of brownfield properties which is
supported by the Brownfield Financial Incentive Program (BFIP) is helping to ensure the efficient
use of existing infrastructure, as well as supportingthe Municipalis broader
economic development and land use planning objectives.
Once the redevelopment of this property is complete, MPAC estimates it will have a total
assessed value of $94,994,000.00compared to $965,171.00 in 2017.
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ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
the delivery of core service.
FINANCIAL IMPLICATIONS:
With the approval of this application the City of Kitchener will provide a total municipal property
tax rebate estimated to be a maximum of $327,815payable in one installment not expected to
be sooner than 2021.
Funding for this application has been accounted for in the Brownfield Capital Account.The
source of funding for these grants is ultimately the new tax assessment growth that will result
from redevelopment.
COMMUNITY ENGAGEMENT:
INFORM
council / committee meeting.
This Application has not been circulated to the public. Staff would note that this approval applies
only to the City of Kitchener portion of the proposed Tax Incremental Grant. The Region of
Waterloo Council will considerits portion of this application at their Planning and Works
Committee.
CONCLUSION:
Investment Advisor, Director of Revenue, City Solicitor, and Director of Planning), reviewed the
Brownfield application and are satisfied that the application meets the eligibility and application
requirements. Staff support acceptance within the terms and conditions of the Region of
Waterloo City of Kitchener Brownfield Remediation Program.
ACKNOWLEDGED BY: Justin Readman, General Manager Development Services
Department
Attachments:
A)Property Location
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Attachment A: 98 100 Victoria Street South
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