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Home My WebLink AboutDSD-2021-43 - Kitchener's Economic Recovery Framework REPORT TO: Finance and Corporate Services Committee DATE OF MEETING: April 19, 2021 SUBMITTED BY: Cory Blum, Executive Director Economic Development, 519-741- 2200 ext 7065 PREPARED BY: Cory Bluhm, Executive Director, Economic Development, 519-741-2200 ext. 7065 Saleh Saleh, Director of Revenue, 519-741-2200 ext. 7346 Brian Bennett, Manager Business Development 517-741-2200 ext 7230 WARD(S) INVOLVED: All DATE OF REPORT: April 8, 2021 REPORT NO.: DSD-2021-43 SUBJECT: RECOMMENDATION: That Economic Recovery Framework, as attached to report DSD-2021-43 as Appendix A, be approved; and, That the following support measures be approved, providing additional relief and support to businesses, as outlined in report DSD-2021-43: a) suburban business areas to support customer development, including the provision of $100,000 to provide up to $10,000 in grant funding per business area, to engage in collaborative marketing efforts; b) Develop an application-based property tax installment deferral program to extend 2021 property tax installment due dates by 60 days for residents and businesses; c) In partnership with the Waterloo Region Tourism & Marketing Corporation, provide $125,000 to be used towards the provision of additional grant funding to the Tourism Adaptation & Recovery Program, specifically for Kitchener- based businesses; and, *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. d) That the Mayor and Clerk be authorized to execute a partnership agreement with Communitech to deliver business recovery supports over a 3-year period, its Innovation Lab, at a cost of $500,000 per year, for a total contribution of $1,500,000; and further, That staff be directed to return to Council with additional support measures and Recovery Framework, as outlined in report DSD-2021-43; REPORT HIGHLIGHTS The proposed Economic Recovery Framework is contained in Appendix A In 2020, the City provided $2 million worth of financial supports to impacted businesses and residents. business recovery: o Opportunity #1: Unleash Our Community Spirit & Spending Power o Opportunity #2: Accelerate a New Wave of Entrepreneurship & Innovation City Council allocated up to $5 million to support an agile approach to business recovery (in 2021 and beyond). Within the $5 million allocations, staff anticipate up to $1 million could be used to support a new seed fund for providing grants/supports to impacted businesses and organizations. The initiatives proposed to be approved in this report total $2,300,000, including the -day property tax deferral, grant funding to support tourism adaptation and creative professionals, and a partnership with Communitech. Where funding required exceeds Operating Budgets, funding will be allocated from the Make It Kitchener 2.0 reserve. Staff have undertaken significant business community engagement and industry analysis leading up to the formulation of the proposed framework. This report supports A Vibrant Economy by implementing Area of Focus #1 of the Make it Kitchener 2.0 Strategy. BACKGROUND: For municipal supports provided during the pandemic to date, refer to reports DSD-20-064, DSD-20-067 and DSD-21-020. Make It Kitchener 2.0 provides a framework for supporting a full and comprehensive long-term economic recovery. The initiatives outlined in this report focus on short and medium-term interventions. As part of report DSD-21-021, City Council supported an agile approach to supporting business recovery, whereby staff will present Council with a series of recommendations over time as clarity of needs emerge while complementing other funding programs. The Federal and Provincial governments continue to play the lead role in providing substantial supports to businesses. Municipalities simply do not have the financial means to provide supports at a scale tha business. Rather, the City can play an effective support role by complementing and leveraging these programs. In 2020, the City provided approximately $2.0 million worth of economic supports to impacted business and residents. In addition, new services have been created to support the business community, such as the Digital Main Street services offered by the Small Business Centre, and the Patio Expansion Program. As part of Make It Kitchener 2.0, City Council allocated up to $5 million to support economic recovery in 2021 and beyond. Engagement with Businesses & Organizations Since the onset of the pandemic, the City of Kitchener has broadly engaged the business community, stakeholders and industry representatives to understand how the City can best support local economic recovery. This has included, but not limited to, the following: More than 1,500 interactions with small businesses through the Digital Main Street program; More than 100 in-depth consultations with impacted small businesses during the summer of 2020; In-depth consultations with a wide range of businesses, including: o Retail/restaurant/food/service industry operators o Commercial landlords/property owners o Performing arts organizations o Festival and event organizations o Professional artists/musicians o Manufacturers o Real estate professionals E Committee; and, Engagement with the Downtown Action & Advisory Committee, Arts & Culture Advisory Committee, Downtown Kitchener BIA and Belmont Village BIA. Key Challenges & Opportunities Based on the input gathered to date, staff offer the following observations: The impacts of the pandemic have not been uniform across all sectors. Even within specific sectors, such as retail, certain businesses have experienced growth while others have experienced significant loss. Those businesses, workforce and entrepreneurs who are most dependant on in- person interaction have been disproportionately impacted. For many, the only viable path to recovery is an end to the pandemic and return to social interactions. Many businesses have pivoted (ex: e-commerce, virtual services, curbside pickup), however, this is not viable for every business for a variety of reasons, such as applicability, capabilities, etc. High potential, late stage start-ups and early scaling businesses have also been disrupted by the pandemic. Downtown businesses have encountered additional impacts due to i) the conversion to remote work by a large majority of downtown office companies; and, ii) curbside pickup is less convenient compared to suburban locations surrounded by easily accessible parking. Office space leasing, particularly in Downtown Kitchener, has been impacted significantly as companies re-evaluate their future space needs, including the potential to scale back the size of space needed in favour of a more virtual workforce. While the Provincial and Federal Governments have the financial means to lead broad economic recovery, municipalities can still play a key role. Small business owners have consistently identified the following key opportunities for the City to support business recovery: Minimize and eliminate barriers when able to return to full operations; Provide training and resources which support pivoting and the adoption of new sales models (ex: curbside pickup, e-commerce, marketing); Support businesses in re-engaging customers and attracting new customers; and, Support commercial landlords in attracting new businesses to vacant space. ent Advisory Committee (EDAC) has identified the following opportunities for the City to support business recovery: marketing and media reach to promote local businesses; Support restaurants through an effective patio expansion program; Support resident health and well-being by providing a one-stop online platform of all programming and recreational opportunities; and, Support community wide animation. Through the EDAC discussions, City Councillor media outlets) to appropriately promote local businesses. This concept aligns well with feedback received by the committee and other discussions with impacted businesses. Analysis of the Impacts of the Pandemic Staff have reviewed numerous research and analytical reports on the economic impacts of recovery path, whereby the large majority of the economy experiences a gradual or steep downturn followed up a gradual or steep recovery typically measured through indicators such as gross domestic product (GDP), employment, sales, etc. As demonstrated in the following graph, the initial lockdown in the Spring of 2020 produced most businesses shuttered or halted production, only to return to full or modified operations as society better understood how to implement public health measures, like physical distancing. Kitchener CMA -2000-2001 Employment Total (in 1,000s) 340 330 320 310 300 290 280 270 260 250 Source Stats Canada Labour Force Survey Data winners (businesses experiencing upward growth) and losers (businesses experiencing downward growth and/or significant revenue losses). Most notably, overall consumer spending has not decreased to the levels most expect. Rather, consumers have shifted their spending away from experiences (travel, concerts, etc.) to consumption of goods. Analyzing Canadian retail transaction data, the following chart shows the comparative impacts between sectors. Overall, retail sales have rebounded to exceed 2019 sales, services have returned close to 2019 levels, while travel and entertainment remain well below 2019 levels. Year-Over-Year Canadian Sales Growth (2019 -2020) 40.00% 20.00% 0.00% 6-Jan6-Feb6-Mar6-Apr6-May6-Jun6-Jul6-Aug6-Sep6-Oct6-Nov -20.00% -40.00% -60.00% -80.00% -100.00% RetailTravel & EntertainmentService Source Moneris Solutions Corporation, National Consumer Spending Trends However,within specific sectors, impacts have not been uniform. For example, while casual restaurants have experienced significant losses, quick serve restaurants serving comfort foods (ex: pizza) have seen record growth. The following table shows significant differences within the US retail sector: US Retail Sales Growth 2020 vs 2019 Top Performers Growth E-commerce businesses 25% Beer, wine, and liquor stores 18% Sporting goods stores 17% Building & garden supplies 14% Lowest Performers Growth Used merchandise stores -28% Book stores -28% Gift, novelty and souvenir -29% Clothing stores -30% Shoe stores -31% Department stores -46% Source US Census, Estimates of Monthly Retail and Food Services Sales As a direct result of ton businesses, employees of downward growth businesses have experienced disproportionate losses. Economists suggest that these businesses will experience a much slower return to pre-pandemic revenues. -over- year), an increase of approximately 7,400 unemployed residents. This does not capture those who are still working but with significantly reduced hours. It is believed most of job losses have been experienced within the food, beverage, hospitality, service and retail sectors. REPORT: Without question, the pandemic has adversely impacted many businesses and residents. A number of businesses have been able to pivot and/or return to normal sales volumes, even thriving on altered consumer behaviors. Many others, however, have experienced significant hardships in the form of drastic revenue loss, layoffs, debt accumulation and even closure. For some businesses and their employees, the only true path to recovery is a post-vaccination return to in-person interactions. For others, their very business model may never return to pre- pandemic forms. As a result, recovery cannot be about returning to the old normal. Recovery needs to focus on how our community can emerge better than when we entered the pandemic. To do this, we need to help businesses become leaders of the new normal (ex: through innovation, becoming more resilient, etc.). Likewise, the question for our community is not if we will recover - the question is how fast can we all lead, embrace and support a new normal. As outlined in Appendix A staff propose a recovery framework centred around two major challenges with two key opportunities to provide recovery support. For each, a set of actions and initiatives have been identified to advance change: Major Challenge #2 Major Challenge #1 The unknown future of office Significant impacts to the in- person service economy Opportunity #2 Opportunity #1 Unleash our community spirit & Accelerate a new wave of spending power Entrepreneurship & Innovation Key Objectives Key Objectives 1. 1. Support Startups, Scale-Ups, Innovation & Workforce Adaptation 2. When Able, Bring the City to Life 2. City Wide Startup & Entrepreneurial Network 3. Make Reopening Easy 4. Incubate New Food, Retail & Service Businesses NOTE for each Opportunity, a comprehensive listing of all initiatives are contained in Appendix A. Detailed information on the initiative proposed for immediate Council approval is contained in Appendix B. Opportunity #1 Unleash Our Community Spirit & Spending Power For those most deeply affected, the City of Kitchener simply does not have the financial resources to make a meaningful direct difference in their ongoing viability. But the community of Kitchener does! In fact, the ultimate source of economic recovery lies in the spending potential of our residents. For many local residents, the pandemic has enabled significant savings. Many now possess higher levels of discretionary income than prior to the -war/post- pandemic spending and prosperity, due in part to deferred spending, the 2020s could see a similar post-pandemicresponse. The City can play a role in supporting local businesses to ensure they are able to capture this spending locally. This is, in fact, what staff have heard from businesses. Enable operators to get back to business as efficiently as possible, support them as they pivot and transition their business, help them develop the tools to attract and re-attract customers, and To accomplish this, staff recommend two areas of focus: 1. Commence a series of initiatives that encourage residents to aggressively support local businesses. This should include i) training for businesses to advance their marketing, brand and audience development capabilities; and, ii) opportunities for the City to leverage its reach to help promote local businesses. The City has already implemented a series of programs to support impacted businesses, such as the waiving of temporary sign permit fees and the implementation of services through the Small Business Centre, such as Digital Main Street. The following new initiatives are proposed as part of this report: A) where the City would retain a marketing expert on contract to work directly with suburban business areas to support customer development. Business areas could collectively apply for seed funding to support marketing efforts, similar to a BIA. The City would seek to find opportunities to utilize its broad community reach (ex: social media) to support the promotion of our various business areas. Anticipated Cost = $225,000 B) Offer a 60-day Property Tax deferral in 2021, to support impacted businesses and residents. A similar program was provided in 2020. The proposed deferral allows businesses and commercial property owners added flexibility to manage their cash flow. This will be of particular importance to businesses who are waiting to receive Provincial or Federal funding supports. Anticipated Cost = $375,000 As the pandemic continues, staff anticipate providing Council with additional initiatives. 2. When able, Bring the City to Life Commence a series of initiatives that enable businesses, event organizers, cultural producers, creative professionals, etc., to bring the city to life. Certain initiatives may be launched during the pandemic, subject to Public Health requirements, while others will be best suited when larger in-person interactions are permitted. The following new initiatives are proposed as part of this report: A) Support Tourism Adaptation and Restaurant Patio Expansions - In partnership with Waterloo Region Tourism & Marketing Corporation (WRTMC), provide additional grant funding to the Tourism Adaptation & Recovery Program specifically for Kitchener-based businesses. In the Winter of 2021, WRTMC facilitated a grant stream to support tourism industry businesses, where applications far exceeded available funding. WRTMC is willing to facilitate a second intake if municipalities provide additional funding. Most notably, a significant number of Kitchener restaurants applied for supports to help expand their patios. By targeting grants to permanent restaurant patio expansions, for example, the City can support the local restaurant industry while also stimulating an elevated patio culture for residents. Grants given previously were typically under $5,000. The proposed funding contribution could support as many as 25 restaurants. Anticipated Cost = $125,000 B) Support Arts & Culture Professionals In partnership with organizations such as the Kitchener-Waterloo Community Foundations or the Centre In The Square, provide additional grant funding to support creative professionals. To date, the City has partnered with both organizations to deliver successful grant-based recovery programs, both of which were over-subscribed. Funding would either be dedicated to additional rounds of funding for established programs, or could be allocated to new programs that may arise from similar partner organizations. Grants would typically average $2,500. The proposed contribution could support as many as 30 creative professionals. Anticipated Cost = $75,000 3. Make Reopening Easy Continue to actively support impacted businesses by providing efficient services, such as the Patio Expansion Program, a flexible Business License Renewal Program, and free evening and weekend parking in City-owned lots within the Downtown. As the pandemic continues, staff anticipate identifying additional service enhancements to support impacted businesses. 4. Incubate New Food, Retail & Service Businesses Service-based business have been disproportionately impacted by the pandemic, particularly businesses reliant on in-person interactions, casual restaurants and urban locations not well served by surface parking. As a result, a number of businesses have been forced to close, with more vacancies likely as the pandemic continues. To stimulate new businesses to fill these vacancies, staff will develop a business case for Council consideration, to launch a Food, Retail, Service & Hospitality incubation program utilizing vacant City-owned commercial spaces and the Small Business Centres service delivery model. Opportunity #2 Accelerate a New Wave of Entrepreneurship & Innovation One of the great biproducts of any major recession is accelerated innovation, entrepreneurship and an emergence of new companies. For example, following the 2008 financial crisis, North America saw a dramatic increase in new start ups. The viability of our local economy depends heavily on the creation of new jobs to replace those lost due to the pandemic. Unfortunately, the pandemic has caused, and will continue to cause, increasing commercial and office vacancies. However, our community has an opportunity to accelerate pace but bring forward new and innovative products and services. collective office space, currently challenged by the impacts of the pandemic, as an epicentre of post-pandemic innovation. If there is a community in Canada that can accelerate growth Kitchener. 1. Support Startups, Scaleup, Innovation and Workforce Adaptation is ideally positioned to deliver a series of recovery programs to advance new companies, entrepreneurship and job growth. Over the past 5 years, the City has maintained a funding partnership whereby Communitech has delivered a series of critical programs Lab. The following new initiatives are proposed as part of this report: A) Partner with Communitech to Deliver Recovery Supports - staff propose entering into a 3-year partnership agreement with Communitech to deliver a series of programs aimed at providing additional supports to startups and scaling companies, expanding Fierce Founders, supporting the Future of Work initiative, and continuing the Civic Innovation Lab (note - a more fulsome description of each program is contained in Appendix C). Anticipated Cost = $1,500,000 Staff anticipate similar partnership opportunities may arise with other local organizations who provide entrepreneurial services. 2. Expedite the Launch of a City-Wide Startup & Entrepreneurial Network (Make It Kitchener 2.0, Area of Focus #4) programs in the region, the City has an opportunity to develop a range of services to support their growth and success. In particular, focusing on entrepreneurs seeking to advance the UN Sustainability Goals. Staff will develop a business case for Council consideration, to launch an entrepreneurial network, including partnerships, the use of vacant City-owned space, grant programs, training models, etc., that is open to all and eliminates barriers for all entrepreneurs. Continued Business Attraction Efforts While the uncertainty of the future of office space and border restrictions have limited our ability to attract foreign investment, significant interest remains. In particular, interest remains high from US companies looking to establish Canadian headquarters. As such, staff will continue to work in partnership with organizations like Waterloo EDC to attract new companies to Kitchener. Launch a Seed Fund to Support Business Recovery For the above noted initiatives to be successful, and to provide direct supports to businesses, staff recommend the creation of a seed fund. Local needs may emerge which are not supported by the Provincial and Federal Government. Where possible, staff will look for opportunities to leverage other non-municipal grant programs, including applying for additional funding with other organizations and upper levels of government where possible. ework, staff estimate the up to $1,000,000 of the $5,000,000 allocation could be dedicated to seed funding. As the pandemic continues, staff will provide recommendations on additional seed funding/grant opportunities for Council to consider. Proposed Seed Funding Allocations Up to $1,000,000 Current Initiatives Status/Timing Estimated Cost Digital Main Street Grants Underway (2021) Provincially funded Proposed Seed Funding/Grants Requiring Status/Timing Estimated Council Approval Cost -Proposed (2021) $100,000 market their area. Grant funding to support the Tourism Adaptation & Proposed (2021) $125,000 Recovery Program specifically for Kitchener-based businesses (ex: for permanent patio improvements) Grant funding to support Creative Professionals Proposed (2021) $75,000 Future Seed Funding/Grants Status/Timing Estimated Cost Estimated funds remaining for future seed funding Future - based on Up to determination of $700,000 need STRATEGIC PLAN ALIGNMENT: This report supports A Vibrant Economy by supporting businesses impacted by the pandemic and accelerating new economic growth. FINANCIAL IMPLICATIONS: Based on the framework outlined in this report, approximately $5,000,000 would be Operating and Capital budgets, funding would be allocated from the Make it Kitchener 2.0 Reserve. Funding is proposed to be allocated as follows: Opportunity #1 Unleash Our Previously Proposed Proposed Community Spirit & Spending Power Approved/ to be Total Funded Approved Allocation Through by this Operating Report $155,000 $600,000 $755,000 2. When able, Bring the City to Life $195,000 $200,000 $550,000 3. Make Reopening Easy $35,000 - $35,000 4.Develop & Launch an Incubation Program - - $750,000 for new Food, Retail, Service and Hospitality Businesses Total $385,000 $800,000 $2,090,000 (A) Opportunity #2 Accelerate a New Wave of Entrepreneurship & Innovation 1. Partner with Communitech to Support - $1,500,000 $1,500,000 Startup, Scaleup, Innovation and Workforce Adaptation 2. Expedite the Launch of a City-Wide - - To be Startup & Entrepreneurial Network determined Total - $1,500,000 $1,500,000 (B) Funding Remaining for Future Allocations $1,410,000 (C) Total - Opportunity #1 & #2 $350,000 $2,300,000 $5,000,000 (A+B+C) By allocating funding to the various opportunities, but not committing all funding until future business cases/reports are presented, Council can maintain an agile approach to business recovery. Should new, more pressing needs arise, Council would have the flexibility to reallocate uncommitted funding accordingly. In 2020, the City provided $2 million worth of financial supports to impacted businesses and residents. COMMUNITY ENGAGEMENT: INFORM the council / committee meeting. CONSULT Staff have engaged extensively with the business community, impacted organizations and the Economic Development Advisory Committee. Staff have also engaged the Downtown Action & Advisory Committee and the Arts & Culture Advisory Committee. PREVIOUS REPORTS/AUTHORITIES: DSD-20-064, DSD-20-067, DSD-21-020 APPROVED BY: Justin Readman, General Manager Development Services ATTACHMENTS: Appendix A Appendix B Detailed Information on the Initiatives Proposed for Approval Appendix C Background on the Proposed Communitech Partnership BQSJM!3132 BSFB!PG!GPDVT!$2!GSPN! NBLF!JU!LJUDIFOFS!3/1! LJUDIFOFSÉT!FDPOPNJD SFDPWFSZ!GSBNFXPSL SFDPWFSZ; MJGU!VQ!UIF!NPTU L NJ 3 Dpvodjmmps!Ebwf!TdiojefsDpvodjmmps!Disjtujof!NjdibveDpvodjmmps!Qbvm!TjohiDpvodjmmps!Nbshbsfu!KpiotupoDpvodjmmps!Tbsbi!Nbsti 3/1 !Nbzps!Cfssz!Wscbopwjd Dpvodjmmps!Tdpuu!EbwfzDpvodjmmps!Kpio!Hb{pmmbDpvodjmmps!Lfmmz!Hbmmpxbz.TfbmpdlDpvodjmmps!Cjm!JpboojejtDpvodjmmps!Efccjf!Dibqnbo -!xf!bsf!dpnnjuufe!up!xpsljoh!dpmmbcpsbujwfmz!xjui!pvs!cvtjoftt!dpnnvojuz-!pvs!qbsuofst-!pvs! 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Ljudifofs!ibt!cffo!uispvhi!b!mpu!evsjoh!uijt!qboefnjd!boe!cvtjofttft!ibwf!dbssjfe!b!ifbwz!cvsefo/!!Cvu!xf!bsf!cfhjoojoh!up!tff!b!ofx!tupsz!vogpme/!Xf!bsf!npwjoh!gpsxbse!uphfuifs!xjui!b!sfofxfe!tfotf! pg!ipqf!boe!pqujnjtn/!!Ljudifofs!jt!Ñoejoh!mjhiu!jo!uif!ebsloftt½sftibqjoh!uif!obssbujwf!pg!pvs!pxo!tupsz/!Uif!qboefnjd!ibt!cffo!b!efÑojoh!npnfou!jo!uif!dpmmfdujwf!ijtupsz!pg!Ljudifofs/!!Ju!ibt!cffo! ibse!gps!nboz-!cvu!ibt!sfnjoefe!vt!xibu!nblft!Ljudifofs!tp!tqfdjbm!.!jo!ujnft!pg!dibmmfohf-!xf!dpnf!uphfuifs!up!mjgu!fbdi!puifs!vq/!!Xf!bmxbzt!ibwf-!boe!xf!bmxbzt!xjmm/!!Xf!bsf!b!djuz!xjui!bo!vocsfbl bcmf!tqjsju!boe!sfmfoumftt!sftjmjfodf!jo!uif!gbdf!pg!bewfstjuz/Uif!qboefnjd!ibt!sfnjoefe!vt!pg!xibu!xf!uppl!gps!hsboufe!boe!xibu!xf!usvmz!difsjti/!!Ju!ibt!sfnjoefe!vt!pg!uif!jnqpsubodf!pg!uif!qfpqmf! xip!lffq!pvs!mpdbm!cvtjofttft!bmjwf!.!cvtjoftt!pxofst-!fnqmpzfft!boe!qbuspot/!!Uifz!csfbui!mjgf!boe!wjcsbodz!joup!pvs!dpnnvojuz!fwfsz!ebz/!!Uif!Djuz!pg!Ljudifofs!xjmm!mjgu!vq!cvtjofttft!jo!fwfsz!xbz! xf!dbo/!!Cvu!jo!usvui-!uif!sfbm!tpvsdf!pg!pvs!sfdpwfsz!mjft!xjuijo!fbdi!pg!vt/!!Bt!b!dpnnvojuz-!ipx!xf!dipptf!up!tqfoe!pvs!npofz!boe!xip!xf!dipptf!up!tvqqpsu!xjmm!efÑof!pvs!qbui!gpsxbse/!!XfÉwf!hpu!u ijt-!Ljudifofs" Appendix B Detailed Information on Each Proposed Initiative Opportunity #1 Unleash Our Community Spirit & Spending Power Initiative Owner: City of Kitchener Economic Development Timing: Commence Q2/3 of 2021 Description: The City would hire a contract marketing professional to work with suburban business areas to develop promotional campaigns to support impacted businesses. Where possible and appropriate, the City would utilize its audience reach (ex: social media) to provide added exposure. Each business area could apply for up to $10,000 worth of funding to put towards their campaign. Rationale: Impacted businesses have identified the need for supports reaching and re-engaging their customer would aid in recovery. While the City cannot directly promote the products and services of individual businesses, it can support the promotion of business areas. Estimated Cost: Source of funding: $125,000 in contracted salary costs and marketing/development expenses Kitchener 2.0 Reserve $100,000 in grant/seed funding to support business area campaigns. Operating Budget (Economic Development) Initiative Offer a 60-day Property Tax Deferral in 2021 Owner: City of Kitchener, Revenue Timing: Commence Q2/3 of 2021 for approximately 12 months Description: Property taxes are billed twice a year (interim and final) with four installment due dates. The Interim tax bills with due dates of March 1, 2021 and May 3, 2021 have previously been mailed out to residents and businesses. Final tax bills are expected to be sent out in mid June with due dates of July 2, 2021 and September 1, 2021 for residential customers and September 1, 2021 and October 1, 2021 for non-residential customers. Staff are recommending that a simple application-based property tax installment deferral program be developed to extend 2021 property tax installment due dates by 60 days as follows: CƚƩ ƩĻƭźķĻƓƷźğƌ ƦƩƚƦĻƩƷźĻƭʹ hƩźŭźƓğƌ 5ǒĻ 5ğƷĻ wĻǝźƭĻķ 5ǒĻ 5ğƷĻ ağǤ ЌͲ ЋЉЋЊ WǒƌǤ ЋͲ ЋЉЋЊ WǒƌǤ ЋͲ ЋЉЋЊ {ĻƦƷĻƒĬĻƩ ЊͲ ЋЉЋЊ {ĻƦƷĻƒĬĻƩ ЊͲ ЋЉЋЊ bƚǝĻƒĬĻƩ ЊͲ ЋЉЋЊ CƚƩ ĭƚƒƒĻƩĭźğƌͲ źƓķǒƭƷƩźğƌͲ ğƓķ ƒǒƌƷźΏƩĻƭźķĻƓƷźğƌ ƦƩƚƦĻƩƷźĻƭʹ hƩźŭźƓğƌ 5ǒĻ 5ğƷĻ wĻǝźƭĻķ 5ǒĻ 5ğƷĻ ağǤ ЌͲ ЋЉЋЊ WǒƌǤ ЋͲ ЋЉЋЊ {ĻƦƷĻƒĬĻƩ ЊͲ ЋЉЋЊ bƚǝĻƒĬĻƩ ЊͲ ЋЉЋЊ hĭƷƚĬĻƩ ЊͲ ЋЉЋЊ 5ĻĭĻƒĬĻƩ ЊͲ ЋЉЋЊ The proposed eligibility criteria is outlined below: Must have experienced financial hardship directly related to the COVID- 19 pandemic due to one of the following reasons: loss of employment, temporary suspension/reduction of pay, business loss revenue or temporary business closure. All property taxes must have been paid in full up to and including the March 2021 Interim Installment. The proposed property tax installment deferral program has been discussed with the area municipalities. Only the City of Waterloo will be implementing a similar program at this time. Residents can continue to make payments through a Pre-Authorized Payment Plan, online banking, by mail or by the payment box located at the Young St. entrance at City Hall. Rationale: The recommended program has a number of benefits for residents, businesses and the City. These benefits include: Provides relief that is targeted to the current economic challenges related to COVID-19. Provides valuable statistics at the local level to help develop future economic recovery plans. The application form will be relatively simple for customers to understand and complete. Further, the processing of applications by the City can be managed efficiently by staff. This program would be available as an additional measure for those who may still be struggling financially as a result of COVID-19. It is intended to give residents and businesses extra time to pay their tax bills if needed by extending installment due dates by 60 days. The program is available to both residential and non-residential customers. Although it is recognized that there are residents and businesses who will need this level of support, there are many customers who are able to pay their property taxes by the original due dates. The City continues to encourage residents and businesses who have the ability to do so, to make payments for their property taxes as this is also the main source of revenue to the City to fund operations, including critical services for the community. Estimated Cost: Source of funding: $375,000 in lost interest revenue. $375,000 from COVID relief funding Initiative Provide Additional Grant Funding to the Tourism Adaptation & Recovery Program Owner: City of Kitchener Economic Development in Timing: Spring & Summer 2021 partnership with Waterloo Region Tourism Marketing Corporation (WRTMC) Description: In the Winter of 2021, WRTMC facilitated a Tourism Adaptation & Recovery grant program, whereby any business associated with the tourism industry could apply for funding to support adaptations to the pandemic (ex: personal protective equipment, etc.). The program received more applications than what the funding could support. A large majority of applications were from restaurants seeking capital funding to expand their patios. Given the ongoing importance of expanded patios, there is a clear need and opportunity to support local restaurants with such improvements. While the first round of funding was provided by FedDev Ontario, the Cities of Cambridge, Waterloo and Kitchener, the Township of Woolwich, and the Region of Waterloo are all considering providing additional funding to establish a second round of funding. Most Cities are considering the use of their Municipal Accommodation Tax funding to support the initiative. Any funding provided by the City of Kitchener would be used to support Kitchener-based businesses. Businesses are required to match a minimum of 20% of the cost of improvements. While businesses can apply for up to $20,000, the majority of grants provided in round 1 were less than $5,000 each. Rationale: The sit-down restaurant industry has been significantly impacted by physical distancing requirements. Utilizing expanded outdoor patios has been a key measure for expanding their seating capacity. Increasing seating capacity enables the return of more restaurant staff. Kitchener residents have long aspired to see a stronger patio culture in our community. By prioritizing applications which seek permanent patio improvements, staff believe this initiative will support a patio culture beyond the pandemic. Estimated Cost: Source of funding: $125,000 in grant funding Make It Kitchener 2.0 Reserve Initiative Additional Grant Funding to support Arts & Culture Professionals Owner: City of Kitchener Economic Development in Timing: Summer 2021 partnership with organizations such as the Kitchener Waterloo Community Foundation (KWCF) and Centre In The Square Description: In the fall of 2020, KWCF established the COVID-19 Arts & Sustainability Recovery Fund. The purpose and criteria were established by a volunteer committee comprised of local representatives from the arts and culture sector. Small and medium-sized arts and culture organizations and collectives were invited to apply for funding to support their ongoing adaptations to the pandemic (e.g. PPE, virtual programming etc.). The program received more applications than the funding could support. The first round of funding ($250,000) was provided by KWCF through a partnership with Community Foundations of Canada, the Government of Canada and individual fund holders. In the winter of 2021, the City and Centre In the Square piloted Create + Connect Grant program, specifically for musicians creating music and connecting with their audience through producing a song, creating a livestream, creating a music video, etc. Performers, artists and arts organizations continue to be among the hardest hit entities in the creative arts sector by the pandemic. Funds would be awarded to projects and initiatives that support organizations to connect with their audiences, creating tangible community benefits. Staff would work with partner organizations to establish new grant programs or second streams of grant funding for the previously successful programs. Rationale: Performers and performance-based organizations continue to be among the hardest hit entities in the creative arts sector by the pandemic. As public gatherings in the near future are once again in doubt, these entities are in dire need of resources to develop new ways of serving the community with art. Not only have established revenue streams been fully disrupted (ticketed performances, teaching, paid performances), new capital-intensive approaches are needed to connect with audiences and deliver art to the community (e.g. equipment and expertise for digital programming, increased staffing and equipment to ensure public safety, new platforms for audience engagement). Kitchener residents have long aspired to see more local arts programming. By prioritizing application which seek to connect with local audiences in new ways, staff hope this initiative will support live performance and arts and culture beyond the pandemic. Estimated Cost: Source of funding: $75,000 in grant funding Make It Kitchener 2.0 Reserve Appendix C Background on Proposed Communitech Partnership BACKGROUND: The City of Kitchener has had a long- inception in 1997. In 2010 the City invested $500K in the Communitech Hub to assist with its relocation to the Tannery located at 151 Charles St W, Kitchener. In 2016, the City invested $1.5M in Communitech over 5 years to assist with their expansion, leasehold improvements and expanded programming. This investment enabled Communitech to significantly increase their economic impact in the community, based on a study completed by Deloitte. For every $1 of economic impact is as follows: Fiscal Year 2011 2018 2020 Economic Impact $12.90 $22.12 $28.23 Communitech was entrusted during the pandemic as a lead organization, to help form the Business and Economic Support Team (BESTWR) to reduce barriers, accelerate coordination and engagement for all businesses across Waterloo Region. As Communitech expects the need for increased collaboration space creating client rental opportunities, they have renewed their lease at the Tannery for an additional 5 years with Allied Reit. The pandemic has had an adverse impact across the business and technology community in Kitchener and Waterloo Region, including in the founder, startup and scaleup sectors. Given areas, supporting their increased service delivery provides a proven path to new company and job creation. As office-based companies reimagine their post-pandemic work space, it is expected that vacancies could persist in the office sector. Downtown Kitchener, for example, currently has one of the highest office vacancy rates in the region. Stimulating startup and scaleup growth would provide a prospectus of future office tenants. PROPOSED PARTNERSHIP: Staff propose the following partnership with Communitech to support business recovery: 1) $500K per annum from 2021-2023: Provide programming to accelerate the growth of startups and scaleups, talent attraction and retention, while supporting diversity, equity and inclusion through the expansion of the Fierce Founders Program. The City would continue to maintain and operate a Digital Kitchener Innovation Lab. This investment will be re-evaluated at the end of year 3. This investment is designed to preserve and grow our technology ecosystem, provide coaching, mentorship, collaboration, networking and advocacy. Proposed Programs i) Increased Startup Services: History has demonstrated that economic disruptions and challenges result in new companies entering the ecosystem. During the 2010 economic recession and Blackberry layoffs, startup intake grew by 230%. Communitech will be supporting and nurturing this sector through programming and advisory services both virtually and in-person at the appropriate time. Activities will include: Virtual advisory services which include mentorship, peer learning as well as market intelligence for respective sectors Access to digital learning through on-demand, scalable and customized learning with a focus on customer, market and investment readiness. Collaboration with the Waterloo Region Small Business Centre to support and Communitech onboarded 300 new startups in 2020 with the average increasing from 25 per month in 2020 to 36 per month in Q1, 2021. ii) Support Scaling Companies The pandemic has significantly impacted the growth of many scaling firms especially those within the initial stage. Impacts to their sales, marketing, and research and development has necessitated companies to re-evaluate their current path and explore new opportunities and markets. Supports would target scaling companies that have been interrupted by the pandemic to restore their growth prospects over the next 18-36 months, recognizing that scaling takes more initiative and time. The intent is to create more local jobs while expanding the local ecosystem, attracting both domestic and foreign investor capital and reinvigorating the Downtown office market. Activities include: Digital and in person delivery of roundtables, workshops, tailored programs and advisory services. These will include managing remote and hybrid teams, while maintaining culture, onboarding, enhancing digital marketing and workplace health, including supporting mental health initiatives investment and partnership with the University of Waterloo in the Health Innovation Strengthening partnerships with Velocity, Accelerator Centre, Laurier Launchpad and MaRS Reviewing and strengthening the local supply chain Attract more late stage capital investment with both domestic and global capital which includes more direct consultation with investors regarding Waterloo Region and specific investment opportunities iii) Expand Fierce Founders The Fierce Founders Program was established in 2014 to help women-led companies grow their businesses. Since its inception, 240 companies have graduated from this program. Communitech proposes to expand Fierce Founders by providing additional programming through the Fierce Founders Uplift Program to women founders who have faced barriers due to equity and anti-racism. Ongoing support will be provided through the addition of 4 new advisors/growth coaches from underrepresented groups to provide hands on support to new founders. Included in the programming could be grants for early stage businesses. iv) Support Co Future of Work Initiative Companies have been required to pivot to a virtual or hybrid work environment. Communitech has moved its talent recruitment, development and training services to a digital delivery model, resulting in adapting the programs to support the new requirements of startup and scaleup firms. New content and services are required to support companies in a new mobile, global talent landscape. Programming is to be established to manage borderless talent attraction and recruiting, while migrating to remote and hybrid work. Activities include: Enhance training through the Communitech Academy, preparing teams for an increasing virtual and remote work environment Through the Future of Work, review the strengths, weaknesses, and gaps that exist between workforce skills and employer needs including the responsiveness to private and public workplace dynamics Support local talent acquisition through Communitech as a referral partner for the v) Digital Kitchener Innovation Lab The Kitchener Innovation an innovative and visionary community. presence in the Communitech hub offers the City the opportunity to actively engage with other corporate innovation labs sharing learnings, problem-solving and identifying opportunities for collaboration. Connecting with startups enables the lab to explore how their early stage technologies could be applied to the City. Through direct engagement in the Communitech ecosystem the City is able to attract top co- -op onboarding programs, academic partnerships, and exposure to new trends in technology and innovation. The highly visible space allows the City to showcase lab initiatives and City priorities, facilitate vision and achievements as an agile, forward-thinking municipality. Economic Impact: In 2020 Deloitte conducted an economic impact assessment based on the following factors: Financial: Wages created, taxes owed, capital raised Human Capital: Jobs Created, employees at Communitech companies Brand: Social Media following, event attendance, mentoring from $250M in 2018, or $28.23 for every dollar of public funding an increase from $22.12 in 2018. Communitech clients raised $1.4 Billion in venture capital in 2020. Reporting Annual reporting is to be provided to Council by Communitech, sharing outcomes of the initiatives outlined in this report as well as their Annual General Meeting report.