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HomeMy WebLinkAboutDTS-07-092 - Withdrawl of notice of intent to designate 72 Victoria St SREPORT Report To: Heritage Kitchener Committee Date of Meeting: June 5, 2007 Submitted By: Leon Bensason, Heritage Planner (519-741-2306} Prepared By: Leon Bensason, Heritage Planner (519-741-2306} Ward(s~ Involved: Ward 6 West -Victoria Park Date of Report: May 30, 2007 Report No.: DTS 07-092 Subject: WITHDRAWAL OF NOTICE OF INTENT TO DESIGNATE 72 VICTORIA STREET SOUTH RECOMMENDATIONS: 1. That the notice of intent to designate 72 Victoria Street South under Part IV of the Ontario Heritage Act be withdrawn; and further 2. That staff initiate proceedings to consider listing 72 Victoria Street South as a non-designated property of cultural heritage value or interest on the Municipal Heritage Register, and report back to Heritage Kitchener by October 2007. BACKGROUND: In 2001, the owner of 72 Victoria Street South (the former Interior Hardwood Company building, which had been the subject of a large scale adaptive re-use and converted into commercial office space}, approached the City of Kitchener requesting that the City consider establishing a Heritage Tax Refund Program, in accordance with amendments made to The Municipal Act scheduled to take effect January 1, 2002. In November 2002, in anticipation of the establishment of a local Heritage Tax Refund Program in Kitchener, the owner of 72 Victoria Street South requested that the City designate his property under Part IV of the Ontario Heritage Act and that the property be subject to a heritage conservation easement in compliance with the eligibility criteria for a heritage tax refund. On January 13, 2003 Council directed the City Clerk to publish a notice of intent to designate 72 Victoria Street South under Part IV of the Ontario Heritage Act. Two weeks later on January 27, 2003 Council passed By-law 2003-20, establishing the City's Heritage Tax Refund Program, enabling owners of property designated under the Ontario Heritage Act and subject to a heritage conservation easement agreement or a preservation and maintenance agreement, to be eligible for up to a 40% refund of taxes for municipal and school purposes levied on the eligible property. The owner of 72 Victoria Street South was made aware of the eligibility criteria for a heritage tax refund, and initially expressed his support for the heritage designation. City staff provided the owner of 72 Victoria Street South with a draft of the heritage conservation easement agreement he would have to enter into to be eligible for a tax refund. The agreement followed the standard template the City has used in entering into heritage conservation easement agreements with other private property owners. The owner of 72 Victoria Street South advised City staff that he could not agree to the terms of the proposed heritage conservation easement agreement; and with the 30 day appeal period for the heritage designation due to expire and the issue of whether he would be eligible for a heritage tax refund unresolved, the owner decided to appeal the heritage designation of 72 Victoria Street South to the Conservation Review Board. Both the City and the owner expressed a willingness and desire to work toward a resolution, and jointly requested that the Conservation Review Board postpone its hearing. The Conservation Review Board agreed. In the months following the appeal of the heritage designation, City staff attempted to negotiate a resolution with the owner of 72 Victoria Street South. REPORT: The City had always used the Ontario Heritage Foundation know known as the Ontario Heritage Trust) template when entering into heritage conservation easement agreements with private property owners. In reviewing the agreement, the owner of 72 Victoria Street South cited that the agreement was commercially enviable and unrealistic, not acceptable to the mortgagee, and would conflict with agreements already entered into with his commercial tenants. In 2004, City staff canvassed over 100 individuals and businesses working in the financial mortgage and lending} industry soliciting comments regarding the Ontario Heritage Foundation easement agreement template. The comments received centred mostly around concerns relating to the type of insurance required and the scope to which the rights of the mortgagee were compromised, and were consistent with some of the concerns expressed by the owner of 72 Victoria Street South. The eligibility criteria for a heritage tax refund as defined in the Municipal Act and By-law 2003- 20 which established the heritage tax refund program in Kitchener, also identifies the owner entering into a "maintenance and preservation agreement" as qualifying a property (in addition to heritage designation} for a heritage tax refund. Although the "maintenance and preservation agreement" terminology comes directly from the Municipal Act, 2001, there did not appear to be a provincial standard for that type of agreement. Consequently, City Staff drafted a maintenance and preservation agreement template for Council's consideration, with the goal of adding an increased layer of protection above heritage designation, but to a lesser standard than in heritage conservation easement agreements. In May 2006, Council approved the use of "Preservation and Maintenance" agreements to qualify a property (in addition to heritage designation) for a heritage tax refund. Staff used the new template with the objective of drafting an agreement that would result in the owner of 72 Victoria Street South withdrawing his appeal of the heritage designation, agreeing to the terms of the maintenance and preservation agreement and becoming eligible for a heritage property tax refund. However, the owner rejected the terms and conditions of the Preservation and Maintenance agreement. In the grounds for the objection to the designation of 72 Victoria Street South, the solicitor representing the property owner cited that the owner would not have consented to the designation if he knew the conditions and terms of the heritage conservation easement 1 ~~ ~~ agreement. Staff note that property ~ ~ , ~~~ .. ..,~ ~~~ owner consent is not a prerequisite for heritage designation. That said, staff do acknowledge that Council understood that the owner was in agreement with the designation which he was) when Council passed the notice of intent to designate. As a result, and in the interest of good faith negotiation, staff are recommending that Council consider withdrawing the notice of intent to designate 72 Victoria Street South. Withdrawal of the notice of intent to designate should not be interpreted as dismissing the merits of the property for heritage designation. Rather, the decision to withdraw the notice of intent to designate should be considered within the context of these unique circumstances, and in consideration of the assumptions made by the owner regarding the heritage easement agreement. Though withdrawal of the notice of intent to designate would affect the City's legal ability to address certain conservation objectives including preventing inappropriate alteration; it is worth noting that the property has been well maintained; that work undertaken to date has generally followed good conservation practice; and that the property is not under the threat of demolition. The withdrawal of the notice of intent to designate does not change the fact that 72 Victoria Street South continues to be a property of cultural heritage value or significance to the community. Therefore, staff is of the opinion that it would be appropriate to continue to recognize the heritage significance of 72 Victoria Street South, by initiating proceedings to list the property as anon-designated property of cultural heritage value or interest on the Municipal Heritage Register, and to report back to Heritage Kitchener by October 2007 following notice and discussion with the property owner regarding the listing. Listing the property on the Municipal Heritage Register as a non designated property of cultural heritage value or interest, would have the effect of providing the City with 60 days (rather than 20 days) to process a demolition application; and to consider the conservation of the heritage attributes of the property within the context of a Planning Act application. Unlike when a property is formally designated, the owner would not be required to obtain Council approval when making alterations. Lastly, it should be noted that the withdrawal of the notice of intent would not prevent Council from initiating another designation in accordance with the Ontario Heritage Act at any point in the future. FINANCIAL IMPLICATIONS: No new or capital budget requests are associated with the recommendations made in this report. CONCLUSION: Over the past 3 years, the City has been working cooperatively with the owner of 72 Victoria Street South to address issues associated with meeting the eligibility criteria for a heritage tax refund. However, the owner has not accepted the terms and conditions imposed by the City in the preservation and maintenance agreement. With the appeal of the heritage designation of the subject property still outstanding, staff recommend that Council consider withdrawing its notice of intent to designate 72 Victoria Street South under Part IV of the Ontario Heritage Act. Council's withdrawal of the notice of intent to designate should not be based on the property lacking merit for designation or not meeting the criteria for designation, but rather on Council's assessment that the owner may not have fully understood the requirements associated with becoming eligible for a heritage tax refund when he initially agreed to the heritage designation. The withdrawal of the notice of intent would not prevent Council from initiating another designation in accordance with the Ontario Heritage Act at any point in the future. In recognition that 72 Victoria Street South continues to be of cultural heritage value or interest to the community, staff should be directed to initiate proceedings to consider listing the subject property on the Municipal Heritage Register, as anon-designated property of cultural heritage value or interest. Leon Bensason, MCIP, RPP, CAPHC Heritage Planner Attachment: Email correspondence between Leon Bensason, Heritage Planner and Manuel Martins, Solicitor representing the owner of 72 Victoria Street South; from September 2005 to November 2006.