HomeMy WebLinkAboutCAO-07-029 - Combined Facade-Interior Loan / Upper Storey Renovation Prgrm Loan - Interest Rates
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Economic Development
REPORT
Report To: Finance & Corporate Services Committee
Date of Meeting: June 18.2007
Submitted By: Silvia Wright, Manager, Downtown and Community Development
Prepared By: Silvia Wright, Manager, Downtown and Community Development
Ward(s) Involved: 1 & 6
Date of Report: June 18.2007
Report No.: CA4-07-029
Subject: Combined Fagade/Interior Loan/Upper Storey
Renovation Program Loan Interest Rates
RECOMMENDATION:
That the interest rate for the Combined Fagade/Interior Loan/Upper Storey Renovation Program
be continued at 0% for 2007 and 2008.
REPORT:
Council Policy I-535, Combined Fagade/Interior Loan/Upper Storey Renovation Program was
approved by Council in November 2005. The policy set the interest rate at 0% for loans
approved in 2005 and 2006 and for the remainder of the life of the program, interest will be
Bank of Canada prime plus 0.5%, subject to staff review and Council approval.
As of June 2007 staff have received two applications for the Upper Storey and two applications
for Fagade/Interior programs. In comparison, there were 9 Fagade/Interior and 13 Upper Storey
applications for 2005 & 2006 combined. During this same period, building activity in the
downtown has increased dramatically. It is perceived that this reduction is a result of the
increased interest rate. Therefore, staff recommend that the program be continued at 0%
interest rate for all loans approved in 2007 and 2008.
No other changes have been made to the program or the manner in which the program has
been promoted.
FINANCIAL IMPLICATIONS:
None.
Current funding and accounts for Downtown Incentives exist to support Upper Storey, Facade & Interior,
as well as all permit and fee grants rebates provided as grants.
COMMUNICATIONS:
None
Silvia Wright, Manager
Downtown Community Development
Sandy Curzon
Downtown Service Administrator
Attachments:
Rod Regier, Executive Director
Economic Development
• Policy I-535 "Combined Fagade/Interior Loan and Upper Storey Renovation Program" dated
October 31, 2005
• Community Improvement Plan (CIP) Project Area map
COUNCIL POLICY RESOLUTION
POLICY NUMBER I-535
POLICY TYPE: COUNCIL
DATE: October 31, 2005
SUBJECT: COMBINED FACADE/INTERIOR LOAN/l1PPER STOREY RENOVATION PROGRAM
(Supersedes & Replaces Policy I-535 dated July 7,1997 and amended May 19, 2003
1. PURPOSE:
To promote Downtown economic sustainability through residential intensification, developing upper storey
underused space and the exterior Fagade or interior of Downtown commercial/mixed use buildings.
2. POLICY STATEMENT;
2.1. General
2.1.1. The Upper Storey Renovation Program and the Fagade/Interior Improvement Loan Program
funding are combined
2.1.2. An applicant can apply for either or both programs, as well as other available incentives, but
the total value of all forgivable loans/rebates under the City's Downtown Financial Incentives
Program shall not exceed the cost of rehabilitating the lands and buildings.
2.1.3. All applications for assistance are subject to availability of funding.
2.1.4. For each year of available funding, preference for financial assistance will be given to vacant
buildings fronting King Street.
2.1.5. All applications will be reviewed by a staff committee including representation from
Downtown Development, Finance, Legal and Building. Other departments may be required
to comment depending on unique circumstances as they arise.
2.1.6. The Executive Director of Economic Development will have final approval and refusal of all
loans and will be authorized to execute each agreement upon approval.
2.1.7. Financial assistance for the Fagade/Interior Improvement Incentive Program approved and
issued prior to June 1, 2005 are not covered under this policy.
2.1.8. The combined program will terminate on December 31, 2009 unless Council approves an
extension to the program.
2.1.9. For the subject property, an owner must provide, upon application, details of funding from
any other government sources.
2.1.10. In order to be considered, all applications must be fully completed and all required
supporting documentation must be provided.
3. Upper Storey Renovation Program
3.1. Eligibility
3.1.1. Any registered owner of a property within the "Downtown Kitchener Community
Improvement Project Area" may apply for assistance under the Program.
3.1.2. Eligible projects have vacant or underused space which is situated above commercial use
space.
3.1.3. The proposed project's total cost must be greater than $40,000 and create new self
contained apartment style residential units with a minimum of 650 square feet in size per
unit.
3.1.4. The proposed project consists of building renovation which, upon successful completion,
results in an increase in both the property's assessment and taxes.
3.1.5. Applicants must have credit in good standing, be current with municipal taxes and utility
accounts and not be in conflict or involved in litigation with the City of Kitchener.
3.1.6. All proposed improvements shall be made pursuant to an issued Building permit and
constructed in accordance with the Ontario Building and Fire Codes, all applicable Zoning
requirements and comply with all outstanding Orders issued against the property and any
other applicable requirements pursuant to the renting of the units in Ontario.
3.1.7. Upgrading existing substandard residential units may be considered where the proponent
demonstrates a major upgrading with high quality materials and design.
3.1.8. Application approval is required prior to commencement of work proposed in the application.
This work does not include demolition, boarding or other temporary preparation work.
3.1.9. All applicants must provide documentation from their financial institution for substantiation of
total debt service capacity.
3.2. Financial Assistance
3.2.1. The City of Kitchener will provide financial assistance for the building
renovation/upgrade/conversion up to $100,000 per municipal address based on 50% of
project renovation cost. 50% of the financial assistance will be in the form of a grant given as
a forgivable loan and 50% will be a loan.
3.2.2. Over the life of the program, the maximum financial assistance for any one owner is
$100,000.
3.2.3. Eligible costs will be cost of materials, equipment and contracted labor based on two
quotations. Labor provided by the applicant will not be considered eligible expenses.
Professional fees including architects, designers, accountants, engineers and lawyers which
relate to the eligible improvements will be considered an eligible expense.
3.2.4. For loans approved in 2005 and 2006, the interest rate will be 0%. Interest rates for the
remainder of the life of the program will be Bank of Canada prime plus 0.5%, subject to staff
review and Council approval.
3.2.5. The loan will have a maximum 10 year repayment period.
3.2.6. The loan and forgivable loan portion of the funding will be advanced in three stages: l0% on
approval of the application, 80% at substantial completion and the final 10% after the 45 day
lien period has expired, pursuant to the construction lien act.
3.2.7. Copies of actual invoices and proof of payment must be submitted by the applicant prior to
final payment.
3.2.8. The forgivable loan will be amortized over the loan repayment period or 5 years, whichever
is greater.
3.2.9. Successful applicants will be required to enter into an Agreement with the City of Kitchener
and loans will be secured through the registration of a lien on title to the subject property for
the total amount of the loan. To ensure repayment of the loan, the City reserves the right to
evaluate the applicant's equity and ability to repay the loan.
3.2.10. If the property is to be sold prior to the repayment of the loan or prior to the forgivable loan
being written off, the outstanding loan balance and/or the outstanding forgivable loan on the
books will become due and payable in full upon closing.
3.2.11. The outstanding loan balance can be paid off in full at any time during the term of the loan.
The outstanding forgivable loan will continue to remain on the books and be amortized
during the remaining term of the loan.
4. Fa~adellnterior Improvement Loan Program- Loans issued after June 1, 2005
4.1. Eligibility
4.1.1. Any registered owner of a property within the "Downtown Kitchener Community
Improvement Project Area" may apply for assistance under the Program.
4.1.2. The following is a list of eligible improvements:
Exterior
^ Fagade restoration of brickwork, masonry wood etc.
^ Replacement or repair of entablature, eaves, parapets and other architectural design
^ Window and door repair or replacement
^ Signage in accordance with the City of Kitchener by-law respecting signs
^ Painting or cleaning of the Fagade exterior; sandblasting is not eligible
^ Exterior lighting
^ Repair, replacement or addition of awnings, marquees and canopies
^ Replacement of Fagade elements originally in place during the initial construction of
the building
^ Entrance way modifications including provisions to improve accessibility for the
handicapped
^ Redesigned shop fronts
^ Roofing work where there is structural or flood damage
^ Other improvements to the building exterior as may be approved by the Director if
Building or his designate
Interior
^ Fire safety related work
^ Improvements to electrical, plumbing, heating and ventilation systems
^ Wheelchair access
^ Finishes ie painting, decorating, flooring, ceilings etc.
4.1.3. landscaping and chattels are not considered eligible under this program. All eligible work
must be of a permanent, built in nature. Items such as decorating and painting will be given
low priority.
4.1.4. Applicants must have credit in good standing, be current with municipal taxes and utility
accounts and not be in conflict or involved in litigation with the City of Kitchener.
4.1.5. All proposed improvements shall be made pursuant to an issued Building permit and
constructed in accordance with the Ontario Building and Fire Codes, all applicable Zoning
requirements and comply with all outstanding Orders.
4.1.6. The proposed project's total cost must be greater than $2,500
4.1.7. Application approval is required prior to commencement of work proposed in the application.
Does not include demolition, boarding or other temporary preparation work.
4.1.8. All applicants must provide documentation from their financial institution for substantiation of
total debt service capacity.
4.2. Financial Assistance
4.2.1. The City of Kitchener may provide financial assistance for the fagade and interior
improvement of the building up to $15,000 per municipal address, $7,500 for interior work
and $7,500 for exterior work, based on estimates provided for the project renovation cost.
15% of the financial assistance will be in the form of a grant given as a forgivable loan and
85% will be a loan.
4.2.2. urger buildings with more than one tenant maybe assessed on an individual basis
4.2.3. The maximum combined loan/forgivable loan for any one owner is $45,000
4.2.4. Eligible costs will be cost of materials, equipment and contracted labor based on two
quotations. labor provided by the applicant will not be considered an eligible expense.
Professional fees including architects, designers, accountants, engineers and lawyers which
relate to the eligible improvements will be considered eligible expenses.
4.2.5. For loans approved in 2005 and 2006, the interest rate will be 0%. Interest rates for the
remainder of the program will be Bank of Canada prime plus 0.5%, subject to staff review
and Council approval.
4.2.6. The loan will have a maximum five (5~ year repayment period.
4.2.7. The loan portion of the funding will be advanced in three stages: 10% on approval of the
application, 80% at substantial completion and the final 10% after the 45 day lien period has
expired pursuant to the construction lien act.
4.2.8. Copies of actual invoices and proof of payment must be submitted by the applicant prior to
final payment.
4.2.9. The forgivable loan will be amortized over the loan repayment period or 5 years, whichever
is greater.
4.2.10. Successful applicants will be required to enter into an Agreement with the City of Kitchener
and loans will be secured through the registration of a lien on title to the subject property for
the total amount of the loan. To ensure repayment of the loan, the City reserves the right to
evaluate the applicant's equity and ability to repay the loan.
4.2.11. If the property is to be sold prior to the repayment of the loan or prior to the forgivable loan
being written off, the outstanding loan balance and/or the outstanding forgivable loan on the
books will become due and payable in full upon closing.
4.2.12. The outstanding loan balance can be paid off in full at any time during the term of the loan.
The outstanding forgivable loan will continue to remain on the books and be amortized
during the remaining term of the loan.
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