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HomeMy WebLinkAboutCAO-08-023 - Downtown Community Improvement Plan - Draft Modifications to the Facade/Interior Loan Program~hiefAdministrator's Office 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." ~~~ ~~, ~~,11 ~r ~ °' fi ~ fi ~"' t.; ,:~.~ ~~t. 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