HomeMy WebLinkAboutFIN-05-036 - Property Tax Payment Deferral Agreement
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KITCHENER
Financial Services
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Report To:
Date of Meeting:
Submitted By:
Prepared By:
Ward(s) Involved:
Date of Report:
Report No.:
Subject:
Councillor B. Vrbanovic, Chair, and Members of
the Finance and Corporate Services Committee
October 17, 2005
Pauline Houston, General Manager of Financial Services
& City Treasurer
Pauline Houston (2646)
ALL
October 11 , 2005
FIN-05-036
RECOMMENDATION:
Property Tax Payment Deferral Agreement
That the Mayor and Clerk be authorized to execute the property tax payment deferral
agreement, as detailed in and attached to report FIN-05-036, with the owners of 300-400 King
Street West (save and except for 320-328 King S1. West), and 8-12 Water Street in Downtown
Kitchener; and further,
REPORT:
That the grant portion of the agreement be funded from the Economic Development Investment
Fund.
Part of the City's long term Economic Development Investment Strategy is to encourage
redevelopment and intensification of the Downtown. In addition to catalyst projects, such as
investment in the Wilfrid Laurier University and University of Waterloo downtown campuses, the
City looks for opportunities to provide incentives for private developers to invest, such as the
Upper Storey Renovation program. From time to time, partnership investment opportunities for
redevelopment in the Downtown, which are consistent with the City's overall goal for the
Downtown, such as the one outlined in this report will be considered.
The key points of the agreement are as follows:
· Deferral of payment of tax arrears accrued up to May 31, 2005.
· All taxes and utilities accruing after May 31, 2005 will be paid and kept current
· The property owner will demolish 400 King Street West and allow the City to develop public
parking on the site for a minimum of 3 years with any excess parking revenues to be applied
to the tax arrears balance
· The permanent redevelopment of the entire site must include a component for public use,
such as a parkette, courtyard, walkway, improvements to Bell Lane, development of public
parking, etc.
· In exchange for the public component on the redeveloped site, the City will grant back to the
property owners the amount of the interest and penalties which accrued on the principal
from May 31, 2005 until the time the properties are redeveloped or five years from date of
acquisition, whichever comes first
FINANCIAL IMPLICATIONS:
The grant outlined above is approximately $110,000 per year, for a maximum of 5 years, to be
funded from the Economic Development Investment Fund.
Pauline Houston, CA
General Manager of Financial
Services & City Treasurer
PH/mf
THIS AGREEMENT made as of the
day of October, 2005.
BETWEEN:
2040799 ONTARIO LIMITED
2071979 ONTARIO LIMITED
2071980 ONTARIO LIMITED
hereinafter called "the Companies"
of the FIRST PART,
-and -
THE CORPORATION OF THE CITY OF KITCHENER
hereinafter called "the City",
of the SECOND PART
WHEREAS the Companies have acquired the properties known as 300-400 King Street West
(save and except 320-328 King Street West) and 8-12 Water Street in downtown Kitchener ("the properties");
AND WHEREAS the Companies have approached the City to defer payment of the tax arrears, in
the amount of $806,650.49, which had accumulated on the properties up to the date the Companies, had acquired the
properties ("the tax arrears");
AND WHEREAS the City would like to advance the redevelopment of the downtown and is
prepared to defer payment of the tax arrears against the properties on the terms and conditions contained herein;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises
and of the covenants and agreements hereinafter made by the parties, to be observed, fulfilled and performed, and
the sum of One ($1.00) Dollar paid by the City to the Companies (receipt of which is hereby acknowledged), the
parties agree as follows:
1. The City agrees to defer payment of the tax arrears ( also referred to as the principal) which had
accumulated against the properties prior to the Companies acquiring the properties, however the City is not
prepared to defer payment of any taxes that become due and payable following the Companies' acquisition
of the properties.
2. The Companies agrees to keep all current taxes and utilities current from the date of acquisition,
specifically May 31, 2005.
3. The Companies agrees to demolish 400 King Street West ("the site") and grade the site to a flat surface, at
its expense, and acceptable to the City.
4. Upon the completion of the demolition and grading activities on the site, the Companies authorizes the City
to develop and operate a parking facility on the site for three (3) years; said three years ("the term") to
commence upon the completion of the parking facility. The City would retain all revenue from the parking
facility, with the revenue to be applied first to the cost to develop and operate the parking facility. At such
time as the cost to develop the parking facility has been fully recouped, the revenues over and above the
cost to operate the parking facility would be applied to the tax arrears owing on the properties. Three
months before the expiry of the term the Companies shall notify the City of its intentions with respect to the
site. If the Companies are not prepared to proceed with development immediately following the expiry of
the term, the City may continue to operate the parking beyond the initial term, on a month to month basis,
until such time as the Companies provides the City three months advance written notice of its intention to
commence the redevelopment of the site.
5. The Companies agrees to pay the City the tax arrears, minus any parking facility revenues applied against
the principal, at the time of redevelopment; said payment to be delivered to the City Treasurer prior to the
issuance of a building permit.
6. Provided the Companies agree to, and ultimately construct or incorporate, a public component such as a
parkette, courtyard, walkway, improvements to Bell lane, or the provision of publicly available parking, to
the satisfaction of the City, into the redevelopment of the properties, the City shall make a grant in the
amount of the interest and penalties which accrued on the principal from the date of acquisition of the
properties to the date of redevelopment or five (5) years whichever comes first and apply it to the
properties, the principal to be paid in accordance with section 5. above.
7. If for any reason the Companies fail to incorporate a public component into the redevelopment of the
properties, satisfactory to the City, then the principal plus the full amount of interest and penalties which
accrued on the principal become payable upon the redevelopment of the properties or five (5) years from
the date of acquisition which ever comes first.
IN WITNESS WHEREOF the Companies has hereunto affixed its hand and seal and the City has hereunto
set its corporate seal under the hands of its Mayor and Clerk.
SIGNED, SEALED & DELIVERED
in the presence of
2040799 ONTARIO LIMITED
Signature
Name:
Title:
Date
2071979 ONTARIO LIMITED
Signature
Name:
Title:
Date
2071980 ONTARIO LIMITED
Signature
Name:
Title:
) THE CORPORATION OF THE CITY OF
KITCHENER
Mayor
Clerk
Date
Date
Date