HomeMy WebLinkAboutDSD-20-008 - Brownfield Remediation Application Program 471-481 King Street EastREPORT TO:Special Council
DATE OF MEETING:May 11, 2020
SUBMITTED BY:Brian Bennett, Manager, Business Development, 519-741-2200 X 7230
PREPARED BY:Rob Morgan, Capital Investment Advisor, 519-741-2200 X7734
WARD (S) INVOLVED:Ward 9
DATE OF REPORT:April 24, 2020
REPORT NO.:DSD-20-008
SUBJECT:Brownfield Remediation Application Program 471-481King Street East
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RECOMMENDATION:
That the Brownfield Remediation Program Application for 471-481King Street East,
received from Drewlo Holdings Inc. dated June,2018 be approved subject to the Region
That in exchange for a completed and filed Record of Site Condition for the subject
property, the owner will be provided a tax increment grant on the redevelopment ofthe
property in the form of a rebate issued on a proportionate basis, annually for a period not
to exceed 10 years 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 2018 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 City
grant shall not exceed$260,056.00, payable in the first yearfollowing re-assessment by
MPAC; and,
That the Region of Waterloo Brownfield Coordinator be circulated a copy of any
decision made by Kitchener City Council regarding this Application; and further,
That the Mayor and Clerk be authorized to execute an Agreement, subject to the
satisfaction of the City Solicitor, with the Region of Waterloo and Drewlo Holdings Inc.,
to implement the provisions of the Brownfield Remediation Program Application for
471-481King Street East, asoutlined in the DevelopmentServices Department Report
DSD-20-008.
***This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994for assistance.
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BACKGROUND:
In June of 2018, the City of Kitchener and Region of Waterloo received a joint Tax Increment
Grant (TIG) application from Drewlo Holdings Inc. relating to the remediation and redevelopment
of the property municipally known as 471-481King Street East.The site encompasses the entire
block bounded by King Street East, Cameron Street South, Charles StreetEastand Madison
Avenue South (see Map,Attachment 1).The sitewas a commercial property with primarily
automotive related uses such as a gas service station, car rental and used car sales. The
property will be redeveloped as a high-densitymixed-use development comprised of two
residential towers (14 and 18 storeys each) situated on top of a four/ five story podium spanning
the entire city block. In total, 488 one and two bedroom rental units, 1255 square metres of
commercial/retail space, and 530 parking spaces will be constructed on the site.
REPORT:
Contamination and Remediation
The Environmental Consultants for thisproject are Peritus Environmental Consultants Inc.They
completed a Remedial Action Plan for the subject property dated October 12, 2018as well as
Phase One and Two Environmental Site Assessments. Within the scope of the Phase Two they
completed a soil and groundwater investigation which determined the extent of soil
contamination.
in the soil that include the following:
Metals: boron, lead
Site remediation activities included a combination of Risk Assessment to develop property
specific standards and remediation of remaining exceedances in the soil.
Eligible Environmental Remediation Costs
The applicant has submitted eligible environmental remediation costs for the 2.6 acre (1.04ha)
site of $639,690.00. This amount, plus a 10% allowance for indirect costs afforded under the
joint TIG program of $63,969.00 results in a maximumeligible joint TIG of $703,659. The TIG
would be cost-shared between the Region of Waterloo and the City of Kitchener. Grant
the year the application was submitted (2018) with approximately 63% (maximum $443,604.00)
provided by the Region and the remaining 37.0% (maximum $260,056.00) provided by the City
of Kitchener.
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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(Table
1).
Table 1: Estimated Assessment Increase
AssessmentAssessmentAssessment
Increment*
$2,976,722.00(2018)$80,344,000.00(est.)$77,367,278.00(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(Table 2).
Table 2: Anticipated Tax Increment
MunicipalMunicipalTotal
Area Municipality
Tax Increment*
City $17,919.42$296,238.14$278,318.72
Region$30,567.03$505,323.70$474,756.67
Total$48,486.45$801,561.83$753,075.39
*Tax amounts do not include the education portion of annual taxes levied as the School Boards
do not participate in the program.
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 supportings 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 $80,344,000.00compared to $2,976,722.00 in 2018.
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ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
the delivery of core service.
FINANCIAL IMPLICATIONS:
The approval of this application will obligate the City of Kitchener to provide aone time municipal
property tax rebate estimated to be $260,056.00 once theproperty has been redeveloped and
reassessment by MPAC.Funding for this has been allocated in the Brownfield Capital Account.
COMMUNITY ENGAGEMENT:
INFORM This report has been posted to the City
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 consider its portion of this application at a future date.
CONCLUSION:
Regional Staff and The Brownfield Steering Committee, (
Investment Advisor, Director of Revenue, City Solicitor, and Acting Director of Planning),
reviewed the 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 ofKitchener Brownfield Remediation Program.
ACKNOWLEDGED BY: Justin Readman, General Manager, Development Services
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Attachment 1, Map
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