HomeMy WebLinkAboutCAO-08-023 - Downtown Community Improvement Plan - Draft Modifications to the Facade/Interior Loan Program~hiefAdministrator's
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REPORT
Report To: Finance and Corporate Services Committee
Date of Meeting: September 8, 2008
Submitted By: Rod Regier, Executive Director, Economic Development
Prepared By: Cory Bluhm, Urban Investment Advisor
Wards) Involved: Wards 1 and 6
Date of Report: September 2, 2008
Report No.: CAO-08-023
Subject: Downtown Community Improvement Plan -
Draft Modifications to the Fagade/Interior Loan Program
RECOMMENDATION:
That staff be directed to advertise a public meeting before the Finances and Corporate Services
Committee to consider the attached draft by-law to modify section 9.4 of the Downtown
Community Improvement Plan and a revised Council Policy I-535, proposing to modify the
existing Downtown Fagade Improvement Loan Program to a grant program.
BACKGROUND:
At the special meeting of the Finance and Corporate Services Committee, on December 10,
2007, a request was made that staff review the current fagade loan program, prior to completion
of the streetscape enhancements associated with the King Street Master Plan, and to
recommend any changes that might be needed to encourage private sector enhancements to
buildings and storefronts.
Under "Strategies for Implementation", of the downtown design policies of the Official Plan,
strategy 1(iii} recommends a review of financial incentives to ensure coordination between
incentives and design guidelines.
In 2005, Council combined funding for the Upper-Storey and Fagade Improvement programs.
The City's Downtown Financial Incentives Team has reviewed the existing fagade loan program
and is recommending modifications as outlined in this report. The team includes:
- Dan Chapman, Finance
- Jennifer Young, Building Services
- Alain Pinard, Planning
- Silvia Wright, Economic Development
- Sandy Curzon, Economic Development
- Rod Regier, Economic Development
- Cory Bluhm, Economic Development
REPORT:
Section 9.4 of the Downtown Community Improvement Plan, entitled `Fagadellnterior
Improvement Loan Program' is no longer stimulating the type and magnitude of investment that
is desired. In light of the impending implementation of the King Street Master Plan streetscape
enhancements, it is appropriate to review the effectiveness and application of this program.
Currently, property owners can receive loans of up to $15,000 per municipal address, of which
$2,250 (or 15%) is forgivable. Properties with multiple storefronts can receive a maximum loan
of up to $45,000. Since January 2006, 13 fagade loan applications have been approved. Of
these, only five resulted in cosmetic improvements to street facing facades. The remainder
were for interior improvements or exterior maintenance. Only two resulted in improved
storefronts and signage. Reasons for the lack of private sector interest include:
- $15,000 loan not sufficient to cover the cost of significant fagade improvements;
- $2,250 forgivable portion not sufficient to entice private sector participation;
- Inability for merchants (non-landowners) to access the loan program; and,
- Loan program can be onerous on both applicants and staff resources.
Why Make Chan_.es Now
The City of Kitchener recently completed streetscape improvements along King Street in the
Market District. The King Street Master Plan, if approved, will result in a significant public
investment along King Street in the City Centre District over the next few years. The intent of
the Master Plan is to encourage private sector improvements to King Street, such as improved
signage, modernized storefronts, etc. Financial incentives are one method for further
stimulating improvements. Based on feedback from recent applicants, it is apparent that the
current program will not help to stimulate investment, and the program needs to be reviewed.
Scan of Other Fagade Programs in Ontario
A review of 16 fagade programs from municipalities of comparable size to Kitchener was
performed, with the following findings:
- Clarington, Hamilton, Thorold, Newmarket and North Bay offer straight grants, ranging in
maximum value of $5,000 to $15,000, all limited to 50% of the value of work done;
- Brantford offers grants ranging from 10-25% of the value of the overall project costs;
- Barrie offers a fully forgivable loan of up to $20,000, repaid at $1,000 per year;
- Cambridge offer loans up to $20,000, of which $7,000 is forgivable; and,
- The remaining eight municipalities offer loan programs only -most are interest free.
Proposed Changes
The Downtown Financial Incentives Review Team has reviewed the current program, as well as
others offered by Ontario municipalities, and proposes the following changes:
- Modify the program from agrant/loan program to straight grant program;
- Offer grants of up to $10,000 per fagade, not to exceed 50% of project costs;
- Make grants available to merchantslbusinesses as well as land owners;
- Limit grants to street fronting facades and signage only, and exclude interior, roof or
rearlside facade repairs;
- Reserve at least 70% of the available annual grant funding for King Street facades;
- Require any fagade improvements to meet the general intent of the City's downtown design
policies and the future King Street Fagade Guidelines; and,
- Commence the new grant program on January 1, 2009.
It is the opinion of staff that these changes will enable the Fagade Program to become a catalyst
for private sector investment in fagade improvements, focusing much of the activity on King
Street. A grant program will be more appealing to existing and future businesses, with a less
onerous process for both staff and applicants. Tying the grant program to urban design
guidelines will help to ensure fagade improvements will be of a high quality.
These changes support the recent infrastructure improvements within the Market District and
the proposed improvements within the City Centre District. The changes also support the City's
Municipal Plan, Downtown Strategic Plan, Economic Development Strategy and the Economic
Development Investment Fund. While a grant program will result in depletion of the existing
program budget, it should result in quicker improvements, focused largely along King Street.
FINANCIAL IMPLICATIONS:
The existing Facade/Interior Loan program currently has access to approximately $230,000
of funds which will increase to approximately $600,000 as existing outstanding loans are repaid.
This does not include any uncommitted funds under the Upper Storey Grant/Loan. Under the
proposed program, a maximum of $200,000 worth of grants would be issued in 2009. A
maximum of $100,000 would be issued each year in 2010-2013. Any unallocated funds would
be transferred to the subsequent year. Allocation of all funding would result in at least 60
fagade improvements, 42 of which would be on King Street, leveraging construction values of at
least $1,200,000.
If all funding is allocated over the next five years, the program would either cease to exist, or
new funding would have to be allocated. For example $500,000 of upper-storey loan
repayments could be made available for fagade improvements.
Tax revenues are based on tax assessments which are derived, in part, by property values,
revenue streams and lease rates. Significant fagade improvements can increase all three, thus
increasing municipal tax revenues.
COMMUNICATIONS:
The draft bylaw would be advertised in the Record. Later this Fall, the Downtown Advisory
Committee, the Economic Development Advisory Committee and the Kitchener Downtown
Business Association would be engaged in discussions on the proposed program changes.
CONCLUSION:
The current Fagade/Interior Improvement Loan Program is producing limited results. The
proposed program changes could act as a catalyst to accelerate private sector investment,
focusing enhancements along King Street. As such, the draft bylaw and draft revised Council
Policy warrant public discussion, with consideration at a future committee meeting.
Cory Bluhm MCIP RPP Rod Regier
Urban Investment Advisor Executive Director
Alain Pinard MCIP RPP
Manager of Long Range Planning
AttarhmPnt~•
Draft Bylaw
Draft Revised Council Policy I-535
DRAFT BY-LAW
Date, 2008
BY-LAW NUMBER
OF THE
CORPORATION OF THE CITY OF KITCHENER
(Being a by-law to amend the Downtown
Kitchener Community Improvement Plan)
WHEREAS Sections 28 and 17 of the Planning Act, R.S.O. 1990, Chapter P.13 as
amended, provide for the adoption of a Community Improvement Plan, there for;
AND WHEREAS the Council of The Corporation of the City of Kitchener designated the
downtown area of the City as a Community Improvement Project Area by By-law Number 97-12,
passed on January 20, 1997; and subsequently amended by By-law 2001-73, passed on April
23, 2001, and by By-law 2004-151 passed on June 29, 2004;
AND WHEREAS a Community Improvement Plan, known as the Downtown Kitchener
Community Improvement Plan, was adopted for the said area by By-law Number 97-13, passed
on January 20, 1997 and approved by the Minister of Municipal Affairs and Housing on April 2,
1997;
AND WHEREAS The Downtown Kitchener Community Improvement Plan was amended
by By-law 2001-74, passed on April 23, 2001 and approved by the Minister of Municipal Affairs
and Housing on November 1, 2001; further amended by By-law 2004-152, passed on June 29,
2004 and approved by the Minister of Municipal Affairs and Housing on July 29, 2004; and
further amended by By-law 2005-112, passed on June 13, 2005 and approved by the Minister of
Municipal Affairs and Housing on July 6, 2005;
AND WHEREAS The Downtown Kitchener Community Improvement Plan, as amended,
was applied to The Downtown Kitchener Community Improvement Project Area;
AND WHEREAS it is deemed desirable to further amend The Downtown Kitchener
Community Improvement Plan and to apply the plan as amended to The Downtown Kitchener
Community Improvement Project Area;
follows:
NOW THEREFORE the Council of The Corporation of the City of Kitchener enacts as
1. That "The Downtown Kitchener Community Improvement Plan" be amended by replacing
Program 9.4 Fagade/Interior Improvement Loan Program, in its entirety, with the following:
"9.4 Fagade Improvement Grant Program
A. Back. rq ound
In 1995, Kitchener City Council approved the Downtown Fagade/Interior Loan Program. The
program has operated since, offering loans up to $15,000 per property, l5% of which are
offered in the form of a forgivable loan/grant. Between 2005 and 2008, the program failed to
produce the desired results of significant fagade improvements and private sector investments
throughout the downtown. As such, modifications to the program are proposed
The City of Kitchener has recently completed streetscape enhancements to King Street within
the Market District. streetscape enhancements are currently planned for King Street within the
City Centre District. These investments, in combination with financial incentives, are intended to
stimulate private sector investment in commercial facades.
B_ Intent
This grant program is intended to assist property owners and tenants with the financing of
street-oriented building fagade improvements in the Downtown Community Improvement Area,
to implement the City's urban design and heritage conservation policies, and support municipal
investments in streetscape infrastructure.
Eligible works include the following street fronting fagade improvements:
1. Repainting, cleaning or re-facing of fagades;
2. Repair or restoration of fagade masonry, brickwork or wood;
3. Replacement, repair or restoration of cornices, eaves, parapets and other architectural
features;
4. Replacement or repair of windows;
5. Entranceway modifications that improve the appearance and/or access to the
commercial units;
6. Redesign and reconstruction of the store front;
7. Installation of appropriate new signage or improvements to existing signage;
8. Installation or repair of canopies and awnings;
9. Installation or repair of exterior lighting; and,
10. Restoration of historic features.
C. Area of Application
The Facade Improvement Grant Program is available to all property owner(s) and commercial
tenant(s) within the Downtown Community Improvement Area for the City of Kitchener.
D. Eli_.ibility Requirements
1. All applications for grants under this program are subject to the availability of funding.
The provision of any Fagade Improvement Grant will be administered on a first come
first served basis to the limit of available funding in accordance with any administrative
rules governing this and other grant or loan programs.
2. Kitchener City Council may specify the amount of annual funding that will be made
available on January 1 St of each year the program is inexistence. If the total value of
funding requested, for all new applications received prior to January 1St, in any given
year, exceeds the total amount of funding available, all applications will be rated and
prioritized by the Downtown Financial Incentives Review Committee. Ratings will be
based on set criteria specified by Kitchener City Council. Only those applications which
are rated the highest will be eligible for funding.
3. Kitchener City Council may specify, through council policy, that portions of available
funding be directed to specific streets or areas within the Downtown Community
Improvement Area.
4. Only those buildings with commercial use(s) at ground floor shall be eligible for grants.
5. Tenant(s) must provide written authorization from the registered property owner(s).
6. Property owner(s) and tenant(s) who have defaulted under any previous City loan
program will not be eligible for a Facade Improvement Grant.
7. Facade Improvement Grants will not be issued for work on buildings in property tax or
utility arrears.
8. Facade Improvement Grants will not be issued to correct any Building Code, Fire Code
or Property Standards orders
9. The Facade Improvement Grant Program will not be applied retroactively to works
started prior to the commencement of this program. No grants will be issued for works
which have received grants under any other municipal incentive program.
10. The City of Kitchener reserves the right to deny or refuse any application.
E. Program Assistance and Requirements
1. The maximum amount of any grant that may be issued under this program shall be
$10,000 per municipal street address or storefront, subject to an overall maximum of
$30,000 per property owner for a building with multiple street addresses or storefronts.
A maximum grant of $20,000 may be issued for buildings on corner lots, where fagade
improvements are proposed on both street facing facades. The grant shall not exceed
50% of the costs of the eligible work per building. No municipal street addressor
storefront shall receive more than one grant within a five year period. Not more than 5
percent of the entire grant may be used for soft costs, such as consultant, design or
project management services;
2. The proposed fagade improvements must satisfy the City's downtown design policies
and the City's King Street Fagade Guidelines, if applicable, to the satisfaction of the
Downtown Financial Incentives Review Team;
3. Any proposed fagade improvements must meet the Ontario Building Code, to the
satisfaction of the Chief Building Official;
4. Any proposed sign improvements must meet the City's Sign Bylaw, to the satisfaction of
the City's Director of Planning or designate;
5. Any proposed modifications to buildings designated under the Heritage Act or identified
as being of historic interest by the City of Kitchener may be subject to additional
approvals;
6. No grant shall be issued until such time as the eligible works are deemed to be complete
by the Downtown Financial Incentives Review Team;
7. The City of Kitchener reserves the right to have a quantity surveyor inspect all completed
eligible works to ensure the monetary value of work completed coincides with the
monetary value of the work proposed as indicated on any approved grant application.
Should the quantity surveyor deem the monetary value of work completed not to
coincide with the monetary value of the work proposed, the City of Kitchener reserves
the right to reduce the amount of the grant accordingly.
8. Approval of a grant and its amount shall be subject to the availability of funding as
determined on an annual basis; and,
9. The City of Kitchener reserves the right to discontinue this program at any time.
F. Procedures
1. The applicant is required to submit a complete Fagade Improvement Grant application
form to the Manager of Downtown Community Development prior to the submission of
any sign or building permit application. The City may specify additional submission
requirements, such as but not limited to plans, elevations and quotations.
2. Complete applications will be reviewed, and only those applications which meet the
City's Urban Design Policies and King Street Fagade Guidelines (if applicable), and are
capable of satisfying the City's Sign By-law and the Ontario Building Code, will be
considered.
3. Applicants will be notified in writing if their proposed application has been accepted.
4. The final decision as to how much of the proposed work, if any, is eligible for funding
under the Fagade Improvement Grant Program will be made by the Downtown Financial
Incentives Review Team.
5. Prior to approving a Fagade Improvement Grant, City staff may inspect the building to
review the condition of the fagade and the proposed improvements.
6. Upon completion of the eligible works, the applicant must provide the Manager of
Downtown Community Development with copies of actual invoices and proof of
payment. City Staff will conduct an inspection of the completed work, and do what is
necessary to verify the accuracy of all invoices.
7. Upon verification that the eligible works are complete, and invoices and proof of payment
have been verified to be accurate, the grant shall be issued.
8. Where construction or renovations are, in the opinion of the City's Chief Building Official,
substantially suspended or discontinued for more than six months, the City may revoke
any approved grant applications. "
PROPOSED MODIFICATIONS TO COUNCIL POLICY I-535
That Council Policy I-535 be amended as follows:
1. That Section 4 `Fagade/Interior Improvement Loan Program -Loans issued after June 1,
2005', be deleted in its entirety and replaced with the following:
"4. Facade Imarovement Grant Proaram
Whereas section 9.4 of the Downtown Community Improvement Plan outlines the Fagade
Improvement Grant Program, as approved by the Ministry of Municipal Affairs and Housing,
the following additional policies also apply. Those policies listed herein are not subject to
Ministry approval, and maybe modified from time to time through Council resolution:
4.1 Allocation of Funding
As enabled through policy 9.4.D.2 and 9.4.D.3 of the Downtown Community Improvement
Plan:
4.1.1 Funding will generally be allocated as follows, with any unallocated funds
transferred to the subsequent year:
2009 - $200,000
2010 - $100,000
2011 - $100,000
2012 - $100,000
2013 - $100,000
4.1.2 A minimum of 70% of available annual funding will be allocated to properties that
front onto King Street.
4.1.3 A maximum of 30% of available annual funding will be allocated to properties that
do not front onto King Street.
4.2 Termination of Program
As enabled through policy 9.4.E.9 of the Downtown Community Improvement Plan:
4.2.1 This program, unless otherwise extended by City of Kitchener Council, will expire
December 31St, 2013.
4.3 Submission Requirements
As enabled through policy 9.4.F.1 of the Downtown Community Improvement Plan:
4.3.1 A complete application shall consist of:
- Completed application from:
- 2 copies of the final elevation plan, identifying dimensions, materials and
colours of the entire street-oriented fagade;
- 2 copies of the proposed sign plan, identifying dimensions, materials and
colours; and,
- 2 separate estimates from a qualified architect or contractor.
4.4 Downtown Financial Incentives Review Team
The Downtown Financial Incentives Review Team shall be comprised of the following:
- At least 1 staff member of the City's Economic Development Division.
- At least 1 staff member of the City's Planning Division.
- At least 1 staff member of the City's Building Division.
- At least 1 staff member of the City's Finance Department.
- Legal, Heritage Planning and Urban Design staff as necessary."
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