HomeMy WebLinkAboutDSD-2025-275 - Brownfield Remediation Program Application – 108 Garment St (2)Staff Report
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Development Services Department www.kitchener.ca
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: June 16, 2025
SUBMITTED BY: Rosa Bustamante, Director Planning, Housing Policy 519-783-8929
PREPARED BY: Scott Van Schyndel, Real Estate Specialist, 519-783-8950
WARD(S) INVOLVED: Ward 10
DATE OF REPORT: May 9, 2025
REPORT NO.: DSD -2025-275
SUBJECT: Brownfield Remediation Program Application — 108 Garment St
RECOMMENDATION:
That the Brownfield Remediation Program Application for 108 Garment St, received
from 114-120 Victoria Street South Inc. dated November, 2018, be approved; and,
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 a rebate issued on a proportionate basis, annually for a
period not to exceed 2 years, on City taxes in an amount equal to 100% of the City of
Kitchener's portion of the Tax Increment; and,
That the City Tax Increment be defined as the difference between the City of Kitchener
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 of Kitchener property tax grant is not to exceed 1404,778.00 based on
current estimated City tax increment; payable over a 2 -year period 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 114-120 Victoria Street South Inc., to implement
the provisions of the Brownfield Financial Incentive Program Application for 108
Garment Street, as outlined in the Development Services Department Report DSD -
2025 -275.
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REPORT HIGHLIGHTS:
• The purpose of this report is to recommend approval for the Tax Increment Grant
(TIG) for the City of Kitchener portion as detailed within this report.
• The financial implications relate to the obligation of the City of Kitchener to pay out the
Tax Increment Grant over a period of 2 years for a total payout not to exceed
$404,778.00.
• Community engagement included the report being posted to the City's website with
the agenda in advance of the committee meeting.
• This report supports the delivery of core services.
BACKGROUND:
In November of 2018, the City of Kitchener and Region of Waterloo received a joint Tax
Increment Grant (TIG) application from GHD on behalf of 114-120 Victoria Street South
Inc. regarding the remediation and redevelopment of the property municipally known as
108 Garment Street (See Map Attachment 1). The 0.53 -acre property located on the north
side of Garment Street Street and East side of Bramm Street was historically used for
industrial purposes. The land has been redeveloped into a 268,286 sq. ft. modern 27
storey residential building containing 319 condominium units.
Corresponding changes to the City's Brownfield Financial Incentive Program were
subsequently approved by Council on November 22, 2021. The review resulted in the
removal of the 10% allowance for indirect costs. This change in the program is effective for
complete applications received after the date of Council approval (November 22, 2021),
accordingly this application has been grandfathered.
Earlier in 2025 the Region of Waterloo notified area municipalities and applicants that they
were no longer participating in the Brownfield Program effective January 1, 2025 for
applications that had not been approved by Regional Council as of this date. This report is
only subject to the City of Kitchener's portion of the TIG.
REPORT:
Contamination and Remediation
The Environmental Consultant for this project conducted Phase One and Phase Two
Environmental Site Assessments (ESA) followed by a Risk Assessment. The
comprehensive testing on the property identified contamination in the soil and groundwater
All environmental assessments and remediation activities proceeded in accordance with
Ontario Regulation 153/04 (as amended), which concluded with a Record of Site Condition
(RSC) for the property.
The site remediation activities included a combination of Risk Assessment to develop
property specific standards and remediation of remaining exceedances in the soil and
groundwater. This work has been completed.
The City of Kitchener can continue to participate in the Joint Tax Incremental Grant without
needing to amend the Community Improvement Plan as section 4.6 states "the Region
may discontinue it's participation in the joint TIG program at anytime without an
amendment to this plan".
Eligible Environmental Remediation Costs
City and Regional staff are satisfied with the documentation submitted by the applicant
estimating eligible remediation costs for the site at $1,045,835.00. This amount plus a
grandfathered 10% allowance for indirect costs afforded under the joint TIG program of
$104,584.00 (which is eligible as the application was received prior to Council amending
the policy eliminating indirect costs on November 22, 2021), results in a maximum eligible
joint TIG of $1,150,419.00. The TIG will no longer be cost -shared between the Region and
the City of Kitchener. Grant proportions determined by the City of Kitchener's share of the
municipal taxes levied on the property in the year the application was submitted was
approximately 36.9°/x. The payment can be made as the property has been redeveloped
and has been reassessed by the Municipal Property Assessment Corporation (M PAC).
Prior to 2025, this amount (TIG) would have normally been cost -shared between the
Region of Waterloo and the City of Kitchener, as shown in Table 1, however the Region of
Waterloo has asserted that it is no longer able to participate in the Brownfield program.
Further details regarding the Tax Increment calculation are provided in Tables 2 to 4.
Table 1: Remediation Cost Recovery
Max Eligible Remediation Cost
$1,150,419.00
Less Region of Waterloo DC Exemption
$0.00
Max Eligible TIG
$1,150,419.00
Less City of Kitchener TIG
$404,778.00
Less Region of Waterloo TIG
$0.00
Remaining remediation costs
paid by the Developer that cannot be recovered
through the Brownfield program
$745,641.00
As noted above, the maximum eligible TIG amount is $1,150,419.00. This amount, less
the City Tax Incremental Grant amounts result in approximately $745,641.00 in
remediation costs that the applicant is not eligible to recover from the Region of Waterloo
and must be absorbed by the developer.
As a condition of final approval of eligible costs, invoices are submitted by the applicant
and approved for eligibility by City of Kitchener and Regional Staff which has occurred.
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 the development as provided by
the Applicant (Table 2).
Table 2: Potential Assessment Increment
Assessment
Value "Pre"
Assessment
Value "Post"*
Assessment
Increment*
$388,685.00
$79,037,011.00 (est.)
$78,648,326.00 (est.)
*These values are based on estimates and will be confirmed by MPAC.
Secondly, 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, referred to as the `tax increment' (Table 3).
The City's Tax Increment represents the annual TIG payment amount.
Table 3: Anticipated Tax Increment
Area Municipality
Municipal
Taxes "Pre"*
Municipal
Taxes "Post"*
Total
Tax Increment*
City
$2,587.59
$297,273.13
$294,685.54
Region
$4,434.20
$547,273.94
$542,839.74
Total
$7,021.79
$844,547.07
$837,525.28
*Tax amounts do not include the education portion of annual taxes levied as the School
Boards do not participate in the program.
The annual Tax Increment Grant payments (City portion) would last 2 years, allowable
under the program as shown in Table 4
The total City portion of the Tax Increment Grant is $404,778.00
Table 4: TIG Payment Schedule
Year City
Region
Total TIG
1 $
294,686.00 $ 0
$ 294,686.00
2 $
110,092.00 $ 0
$ 110,092.00
Total TIG $
404,778.00 $ 0
$ 404,778.00
Note: if the Region continued their involvement in the program, the applicant would have received an
additional $745,641.
STRATEGIC PLAN ALIGNMENT:
The recommendation of this report supports the achievement of the city's strategic vision
through the delivery of core service.
FINANCIAL IMPLICATIONS:
Capital Budget — The recommendation has no impact on the Capital Budget.
Operating Budget — The recommendation has no impact on the Operating Budget.
The approval of this application will obligate The City of Kitchener to provide a municipal
property tax rebate up to $404,778.00 paid out over 2 years based upon the reassessment
of the completed project by MPAC which has occurred.
COMMUNITY ENGAGEMENT:
INFORM — This report has been posted to the City's website with the agenda in advance of
the 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. Should
the Region of Waterloo continue their participation, they would take a supplemental report
forward to their council.
CONCLUSION:
Regional Staff and The Brownfield Steering Committee (consisting of the City's Real Estate
Specialist, Director of Revenue, City Solicitor, and Director of Planning and Housing Policy)
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 of Kitchener Brownfield Remediation Program.
PREVIOUS REPORTS/AUTHORITIES:
There are no previous reports/authorities related to this matter.
APPROVED BY: Justin Readman, General Manager, Development Services
ATTACHMENTS: Appendix 1 - Locational Map
Appendix 1 - Locational Map