HomeMy WebLinkAboutCAO-06-061 - Brownfield Remediation Program Application 05-02 Arrow Lofts Inc - 112 Benton St1
K KR
Development&
Technical Services
REPORT
Report To: DTS Committee
Date of Meeting: October 2, 2006
Submitted By: Kathy Weiss, Director of Business Development
Prepared By: Terry Boutilier, Senior Business Development Officer and
Brownfield Co-ordinator
Ward(s) Involved: Ward 6 -West-Victoria Park
Councillor Christina Weylie
Date of Report: September 26, 2006
Report No.: CAO-06-061
Subject: Brownfield Remediation Program Application 05-02
Arrow Lofts Inc. -112 Benton Street
RECOMMENDATION:
1. That the City of Kitchener approve BRP Application 05-02, received from Arrow lofts Inc.
dated June 10, 2005. In exchange for a completed and filed Record of Site Condition for
112 Benton Street, the City of Kitchener will provide a grant in the form of an annual rebate
on City taxes in an amount equal to 100% of the City Tax Increment; where the City Tax
Increment is defined as the difference between the City portion of real property taxes for the
2006 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 or any phases thereof. The property tax grant, estimated annually
at $110,101.87, will continue for a maximum period of 10 years or until the total Eligible
Remediation Cost ($2,226,000.) has been reached, whichever comes first.
2. That the Mayor and Clerk be authorized to execute a Remediation and Redevelopment
Agreement with Arrow Lofts Inc., satisfactory to the City Solicitor.
BACKGROUND:
a) Location and description of property
This Application pertains to 112 Benton Street, the former Arrow Shirt factory located at the
corner of Benton and St. George Streets.
In 2004, this property was the subject of a Municipal Plan Amendment and Zoning Bylaw
Amendment to permit multiple residential use. An Ontario Municipal Board Hearing was held in
the fall of 2004, and the OMB decision dismissed the appeals against the development.
Further, Site Plan Approval has been granted for the proposed development, effective August
23, 2004 (SPA 04-046). (See Appendix C).
b) Contamination and Remediation
The investigation of soil and groundwater at the site revealed significant impact by Total
Petroleum Hydrocarbons (TPH). In the summer of 2001, a 45,400 litre underground heating
fuel oil storage tank was excavated and disposed of at a licensed landfill facility. At that time
approximately 1955 tonnes of petroleum impacted soils were excavated and transported off-site
for disposal. Test pits encountered further Bunker "C" impacted soils underneath and in the
vicinity of the existing building and in Clemens Lane at a depth of 17 feet to 26 feet in depth.
Removal of contaminants involves excavation and shoring to a depth of 9 metres, and this
process is currently underway.
c) Existing and Projected Assessment
There are no tax arrears outstanding on this property. The 2006 Assessment for the lands is
$1,371,000 (LT -Large Industrial Taxable Full), and the 2006 property taxes were $73,727.71,
split as follows:
City of Kitchener $14,911.13
Region $22,939.02
Education $35,877.56
Arrow Lofts Inc. has indicated that the construction value of the project at $40 million for the
development of 318 new residential units in two towers. The projected post-project Assessment
(under the NT -New Multi-Residential Taxable Full category) is estimated at $30 million (75%
of Construction Value). Applying the 2006 Final Tax Rates for the NT category, the projected
property taxes would be $396,531, split as follows:
City of Kitchener $125,013.00
Region $192,318.00
Education $79,200.00
Based upon this projection, the City Tax Increment (i.e. the difference between the existin City
tax level and the future City tax level following completion and re-assessment) would
approximate $110,101.87 annually. Over the 10 year maximum Program period an estimated
City of Kitchener TIF of $1,101,018.70 can be provided.
d) Environmental Expenses
Arrow Lofts Inc. and their Environmental Consultants, Trow Associates Inc. estimate the Eligible
Remediation Cost at $2,226,000.
FINANCIAL IMPLICATIONS:
The approval of this Application will obligate the City of Kitchener to provide an annual municipal
property tax rebate estimated to be $110,101.87 commencing in the year following successful
completion of the project and when a new assessment has been applied to the property by
2
MPAC. Under no circumstances will the level of municipal tax rebate exceed the Eligible
Remediation Cost, as defined by the Program.
COMMUNICATIONS:
This Application has not been circulated to the public.
CONCLUSION:
The Brownfield Steering Committee, consisting of the City's Brownfield Co-ordinator, City
Solicitor, Director of Planning and Director of Revenue, reviewed the revised application at its
meeting on September 21, 2006. Staff support acceptance within the terms and conditions of
Kitchener's Brownfield Remediation program for an estimated annual assistance level of
$110,101.87 fora 10 year period following completion of the project and new assessment.
Terry Boutilier, MCIP, RPP
Senior Business Development Officer
& Brownfield Co-ordinator
Joyce Evans, CMO, MPA, FCGA
Director of Revenue
AttarhmAntc•
Chart - Estimated TIF Calculation for 112 Benton street
Application
Approved Site Plan for Proposed Development
Kathy Weiss,
Director of Business Development
3