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12. BROWNFIELDS GRANT APPLICATION-LE ST. DENIS
LIMITED-345 ST. DENIS STREET (FILE NO.F18-04-07-DENI) Demande de subvention pour
la remise en valeur des friches industrielles - entreprise le
saint-denis limitée - 345, rue saint-denis (fichier no f18‑04‑07‑deni) |
Committee RecommendationS
That Council:
1.
Approve the
Brownfields Rehabilitation Grant Application submitted by
Le St. Denis Limited, owner of the property at 345 St. Denis Street,
for a Brownfields Rehabilitation Grant not to exceed $1,760,048,
payable to Le St. Denis Limited over a maximum of ten (10) years, subject to
the establishment of, and in accordance with, the terms and conditions of the
Brownfields Rehabilitation Grant Agreement;
2.
Direct staff to
enter into a Brownfields Rehabilitation Grant Agreement with Le St. Denis
Limited establishing the terms and conditions governing the payment of the
Brownfields Rehabilitation Grant, for, and redevelopment of, 345 St. Denis
Street, satisfactory to the Deputy City Manager, Planning, Transit and the
Environment, the City Solicitor and, the City Treasurer; and
3.
Resolve to exempt
the proposed redevelopment at 345 St. Denis Street by Le St. Denis
Limited from paying future municipal development charges under Section 7(t) of
the Development Charges By-law 298-2004, and under the Guideline for the
Development Charge Reduction Program due to Site Contamination, approved by
Council March 28, 2007.
RecommandationS du comité
Que le Conseil :
1.
Donne
son aval ŕ la demande de subvention pour la remise en valeur des friches
industrielles présentée par l’entreprise Le Saint-Denis Limitée (ci‑aprčs
« l’entreprise »), propriétaire du 345, rue Saint-Denis, en vue d’une
subvention pour la remise en valeur des friches industrielles d’au plus
1 760 048 $, payable ŕ l’entreprise pendant au plus dix
(10) ans, sous réserve de l’adoption des modalités de cette demande de
subvention et conformément ŕ celles‑ci;
2. Confie au personnel la tâche de conclure avec
l’entreprise une entente de subvention pour la remise en valeur des friches
industrielles, dans laquelle seront stipulées les modalités du versement d’une
subvention pour la remise en valeur des friches industrielles, en vue de la
remise en valeur du 345, rue Saint-Denis, ŕ la satisfaction de la directrice
municipale adjointe, Urbanisme, Transport en commun et Environnement, du chef
du Contentieux et de la trésoričre municipale; et
3. Veille ŕ dispenser
l’entreprise du versement de redevances d’aménagement ultérieures dans le
réaménagement proposé au 345, rue Saint-Denis, en vertu de l’article 7t)
du Rčglement sur les redevances d’aménagement 2004‑298 et des lignes
directrices du Programme de dispense des redevances d’aménagement en cas de
contamination, avalisées par le Conseil le 28 mars 2007.
Documentation
1. DCM’s report (Planning, Transit and the
Environment) dated 29 February 2008 (ACS2008-PTE-ECO-0008).
Report to/Rapport au :
Corporate Services and Economic Development
Committee
Comité des services organisationnels et du développement économique
and Council / et au Conseil
29 February 2008 / le 29 févričr 2008
Submitted by/Soumis par : Nancy Schepers, Deputy City Manager/
Directrice municipale adjointe,
Planning, Transit and the
Environment/
Urbanisme, Transport en commun et
Environnement
Contact Person/Personne ressource : Rob Mackay, A/Director
Economic
and Environmental Sustainability/
Direction
de la viabilité économique et de la durabilité de l’environnement
(613)
580-2424 x22632, Rob.Mackay@ottawa.ca
REPORT RECOMMENDATIONS
That the Corporate Services and Economic Development Committee
recommend Council:
1. Approve the Brownfields Rehabilitation
Grant Application submitted by Le St. Denis Limited, owner of the
property at 345 St. Denis Street, for a Brownfields Rehabilitation Grant not to
exceed $1,760,048, payable to Le St.
Denis Limited over a maximum of ten (10) years, subject to the establishment
of, and in accordance with, the terms and conditions of the Brownfields
Rehabilitation Grant Agreement;
2. Direct
staff to enter into a Brownfields Rehabilitation Grant Agreement with Le St.
Denis Limited establishing the terms and conditions governing the payment of the
Brownfields Rehabilitation Grant, for, and redevelopment of, 345 St. Denis
Street, satisfactory to the Deputy City Manager, Planning, Transit and the
Environment, the City Solicitor and, the City Treasurer; and
3. Resolve
to exempt the proposed redevelopment at 345 St. Denis Street by
Le St. Denis Limited from paying future municipal development charges
under Section 7(t) of the Development Charges By-law 298-2004, and under the
Guideline for the Development Charge Reduction Program due to Site Contamination,
approved by Council March 28, 2007.
RECOMMANDATIONS DU RAPPORT
Que le Comité des services organisationnels et du développement économique recommande au Conseil :
1. de donner son aval ŕ la demande de subvention pour la remise en valeur des friches industrielles présentée par l’entreprise Le Saint-Denis Limitée (ci‑aprčs « l’entreprise »), propriétaire du 345, rue Saint-Denis, en vue d’une subvention pour la remise en valeur des friches industrielles d’au plus 1 760 048 $, payable ŕ l’entreprise pendant au plus dix (10) ans, sous réserve de l’adoption des modalités de cette demande de subvention et conformément ŕ celles‑ci;
2. de confier au personnel la tâche de conclure avec l’entreprise une entente de subvention pour la remise en valeur des friches industrielles, dans laquelle seront stipulées les modalités du versement d’une subvention pour la remise en valeur des friches industrielles, en vue de la remise en valeur du 345, rue Saint-Denis, ŕ la satisfaction de la directrice municipale adjointe, Urbanisme, Transport en commun et Environnement, du chef du Contentieux et de la trésoričre municipale; et
3. de veiller ŕ dispenser l’entreprise du versement de redevances d’aménagement ultérieures dans le réaménagement proposé au 345, rue Saint-Denis, en vertu de l’article 7t) du Rčglement sur les redevances d’aménagement 2004‑298 et des lignes directrices du Programme de dispense des redevances d’aménagement en cas de contamination, avalisées par le Conseil le 28 mars 2007.
EXECUTIVE SUMMARY
Assumptions
and Analysis:
Le St. Denis Limited has filed an application for a Brownfields Rehabilitation Grant for the clean-up and adaptive building restoration of 345 St. Denis Street, a 7,500 square metre property that contains a vacant 3,325 square metre two-storey building. The property was formerly occupied by École Cadieux, a junior elementary school built in 1957.
The Phase II Environmental Site Assessment verified that the site (subsoil and groundwater) is contaminated with hydrocarbons from underground furnace oil storage tanks located immediately north of the building. This contamination is also suspected to be under the northeast portion of the building. Soil impacted with heavy metals in excess of Ministry of the Environment (MOE) standards was also discovered.
The existing building contains asbestos on pipe wrap, in floor tiles and in plaster on the masonry.
The quantity and severity of these contaminants is such that the property cannot be used for residential purposes without remediation and cleanup or encapsulation of the contaminated areas.
The site qualifies as an eligible "brownfield" under the City's Brownfields Community Improvement Plan (CIP).
The Rehabilitation Grant Program is a tax-increment based grant funded through the tax increase that results from redevelopment of the property.
Grants will equal 50 per cent of the City portion of the increase in property taxes that results from the redevelopment, payable annually for up to 10 years, or up to the time when the total grant payments equal the total eligible costs, whichever comes first. The City will only pay the annual grant after property taxes have been paid in full each year.
The environmental site assessment, remediation, risk management and LEED[1] program components costs of an approved Rehabilitation Grant may be applied against development charges payable, subject to Council approval. The maximum reduction of development charges is 50 per cent of these cost components.
This application for assistance is based on a remediation plan which is a combination of site cleanup; the encapsulation of the interior asbestos contaminants and; the adaptive restoration and upgrade of the existing structure both to meet current code requirements, and to improve its environmental footprint to meet LEED requirements for renovated buildings.
The City approved a zoning by-law amendment for this property on January 9, 2008. It involves the restoration and reconstruction of the former school building to contain 49 condominium residential apartments. It also includes 19 freehold townhouses.
The total costs eligible for a Brownfields Rehabilitation Grant are $3,786,249, of which $535,404 is the costs eligible for reduction in development charges due to site contamination.
The Brownfields CIP specifies that the total of all grants and development charge reduction shall not exceed 50 per cent of the cost of rehabilitating said lands and buildings, the cap on eligible costs is $1,893,125.
Based on the formulas contained within the approved CIP, the municipal development charges are reduced to 0 and the Rehabilitation Grant is $1,760,048.
Over $17.3 million in new residential assessment would be added to the property tax assessment roll at full development. Staff estimates that over $68,000 per year in increased municipal property taxes, net of the Brownfields Rehabilitation Grant, can be expected at project completion. This is an increase over the current municipal taxes of $10,787 per year.
The project will earn the City over $100,000 in present value dollars in building permit fees and other development fees.
Without remediation and clean up, this site would have been left idle for an indefinite period of time, generating limited tax revenue and being a target for vandalism and impacting neighbouring property values.
Financial
Implications:
If this Rehabilitation Grant application is approved, the City would provide the owner with a grant equivalent to 50 per cent of the increase in municipal taxes. In this case, the total maximum grant is $1,760,048. The grant payment would be calculated annually and would be paid per year until the total eligible costs are repaid, or a maximum of 10 years, whichever comes first. At that time the City will begin to collect and retain the full municipal portion of the tax increment.
The City will retain 15 per cent of the municipal tax increment per year to coincide with the grant period until the total eligible costs are repaid. These monies will be deposited into the Municipal Leadership Account. This account would function as a revolving fund (capital account) to be used to support the Brownfields Redevelopment Strategy. The remaining 35 per cent of the municipal tax increment will be applied to the general City budget. No taxes will likely be rebated in 2008. As approved components of this project come forward in 2009 the Revenue Division will review rebated tax calculations.
A municipal development charge discount is a significant economic incentive for promoting brownfield redevelopment and revitalization. The approval of this report may result in a reduction of an estimated $133,077 in development charge revenues (net of development charge credit, see Document 4) that will not be payable at the time building permits are issued.
Public
Consultation/Input:
N/A
RÉSUMÉ
Hypothčses et analyse :
L’entreprise a présenté une demande
de subvention pour la remise en valeur des friches industrielles en vue du
nettoyage et de la remise en état adaptée du 345, rue Saint-Denis, propriété de
7 500 m2 oů se trouve un immeuble vacant de deux étages
d’une superficie de 3 325 m2. Construit en 1957, cet
immeuble abritait jadis l’école primaire Cadieux.
Ŕ l’évaluation environnementale de
sites de phase II, on a décelé que ce site (le sous-sol et les eaux
souterraines) était contaminé par des hydrocarbures provenant de réservoirs
souterrains de mazout de chauffage, situés tout juste au nord de l’immeuble.
Cette contamination, soupçonne‑t‑on, s’étendrait également ŕ la
partie nord-est de l’immeuble. En outre, il appert que la teneur en métaux
lourds dans le sol dépasse les normes du ministčre de l’Environnement (MDE).
De l’amiante se trouve sur l’isolant
ŕ tuyau, dans le carrelage et dans le plâtre de maçonnerie de l’immeuble.
La teneur de ces contaminants est
telle que la propriété ne peut servir ŕ des fins résidentielles sans qu’il n’y
ait remise en état de męme que nettoyage ou encapsulation des zones
contaminées.
Le site répond aux critčres de
« friche industrielle », aux termes du Plan d’amélioration
communautaire (PAC) pour le réaménagement des friches industrielles de la
Ville.
Le Programme de subvention pour la
remise en valeur de sites consiste en une subvention axée sur la hausse des
taxes foncičres, laquelle résulte du réaménagement de la propriété.
Les subventions correspondront ŕ
50 % de la portion municipale de la hausse des taxes foncičres qui
résulteront du réaménagement. Ces subventions seront versées chaque année
pendant au plus dix ans ou jusqu’ŕ ce que le total des versements de subvention
corresponde au total des coűts admissibles, la période la plus courte étant
retenue. La Ville ne versera la subvention annuelle qu’une fois les taxes
foncičres acquittées intégralement chaque année.
Les éléments de coűt que sont
l’évaluation environnementale du site, l’assainissement, la gestion des risques
et le programme LEED[2]
dans une subvention approuvée en vue de la remise en valeur du site peuvent
s’appliquer aux redevances d’aménagement ŕ verser, sous réserve de
l’approbation du Conseil. La réduction maximale des redevances d’aménagement
correspond ŕ 50 % de ces éléments de coűt.
La présente demande d’aide se fonde
sur un plan d’assainissement dans lequel interviennent le nettoyage du site,
l’encapsulation des contaminants intérieurs d’amiante de męme que la remise en
état adaptée et la mise ŕ niveau de la structure actuelle. Il s’agit ainsi de
répondre aux exigences actuelles du Code du bâtiment et de réduire
l’empičtement sur l’environnement, aux termes des exigences du programme LEED
ayant trait aux immeubles rénovés.
Le 9 janvier 2008, la
Ville a adopté une modification au rčglement du zonage du 345, rue Saint-Denis.
Conformément ŕ cette modification, l’immeuble qui abritait autrefois l’école
sera remis en état ou reconstruit pour y aménager 49 logements résidentiels
en copropriété. Le site comportera également 19 maisons en rangée.
Le montant total des coűts
admissibles ŕ la subvention pour la remise en valeur des friches industrielles
s’établit ŕ 3 786 249 $. De ce montant, la somme de
535 404 $ est admissible aux fins de la réduction des redevances
d’aménagement pour cause de contamination du site.
Compte tenu qu’il est précisé dans
le PAC pour le réaménagement des friches industrielles que le total de
l’ensemble des subventions et dispenses de redevances d’aménagement ne doit pas
dépasser 50 % du coűt de remise en valeur des terrains et immeubles en
question, le plafond des coűts admissibles s’établit ŕ
1 893 125 $.
En fonction des formules que
comporte le PAC approuvé, la dispense des redevances d’aménagement est ramenée
ŕ 0 et la subvention en vue de la remise en valeur du site s’établit ŕ
1 760 048 $.
Aux termes de la nouvelle évaluation
résidentielle, plus de 17,3 millions de dollars s’ajouteront au relevé
d’évaluation des impôts fonciers, une fois le projet ŕ maturité. Selon le
personnel, une fois le projet mené ŕ terme, une hausse de plus de
68 000 $ par année aux impôts fonciers municipaux est ŕ prévoir,
aprčs déduction de la subvention pour la remise en valeur de sites. Il s’agit
d’une hausse par rapport aux impôts municipaux actuels de l’ordre de
10 787 $ par année.
En outre, ce projet rapportera ŕ la
Ville plus de 100 000 $ en valeur actuelle sous forme de droits
d’aménagement, notamment les droits de permis de construire.
Faute de travaux d’assainissement ou
de nettoyage, le site serait demeuré indéfiniment dans son état actuel, ce qui
aurait nui aux recettes fiscales de la Ville, entraîné un risque de vandalisme
et abaissé la valeur des propriétés avoisinantes.
Répercussions
financičres :
Si la présente demande de subvention
pour la remise en valeur du site est approuvée, la Ville fournira au
propriétaire une subvention correspondant ŕ 50 % de la hausse des taxes
municipales. Dans ce cas‑ci, la subvention maximale s’établira au total ŕ
1 760 048 $. Le versement de cette subvention serait calculé
annuellement puis versé chaque année jusqu’ŕ ce que le total des coűts
admissibles soit repayé, ou au plus pendant dix ans, la période la plus courte
étant retenue. La Ville se mettrait alors ŕ recueillir et ŕ retenir la partie
municipale complčte de la hausse de taxe.
La Ville retiendra 15 % de la
hausse de taxe municipale par année en concomitance avec la période visée par
la subvention, jusqu’au remboursement intégral des coűts admissibles. Les fonds
qui en résultent seront déposés dans un compte de leadership municipal. Ŕ
l’exemple d’un fonds renouvelable (compte de capital), celui‑ci servira ŕ
appuyer la Stratégie de remise en valeur des friches industrielles. La
proportion restante – 35 % – de la hausse de taxe municipale ira
au budget général de la Ville. Aucune taxe ne fera l’objet d’un remboursement
en 2008. Puisque les éléments approuvés dans le présent projet seront mis de
l’avant en 2009, la Division des recettes passera en revue les calculs des impôts
ayant fait l’objet d’un remboursement.
La diminution des redevances
d’aménagement ŕ l’administration municipale constitue un incitatif économique
considérable dans la promotion du réaménagement et de la revitalisation des
friches industrielles. L’approbation du présent rapport pourrait se traduire
par une réduction des recettes des redevances d’aménagement évaluée ŕ
133 077 $ (nette des crédits des redevances d’aménagement, voir
Document 4) qui ne seront pas payables au moment de la délivrance des permis de
construire.
Consultation
publique / commentaires :
s.o.
BACKGROUND
On April 25, 2007 City Council adopted the Brownfields Redevelopment CIP. Brownfields are abandoned, vacant, or underutilized properties where past actions have resulted in actual or perceived environmental contamination and/or derelict or deteriorated buildings. The Brownfields Redevelopment CIP contains a comprehensive framework of incentive programs including the Rehabilitation Grant Program and the Building Permit Fee Grant Program.
Le St. Denis Limited has filed an application for a Brownfields Rehabilitation Grant for the clean-up and adaptive building restoration of 345 St. Denis Street, a 7,500 square metre property that contains a vacant 3,325 square metre two-storey building. The property was formerly occupied by École Cadieux, a junior elementary school built in 1957. The property was declared surplus by the French Catholic School Board. It was acquired by Le St Denis Limited in June 2007.
The Phase II Environmental Site Assessment prepared by PatersonGroup Inc. verified that the site (subsoil and groundwater) is contaminated with hydrocarbons from underground furnace oil storage tanks located immediately north of the building. This contamination is also suspected to be under the northeast portion of the building. Soil impacted with heavy metals in excess of Ministry of the Environment (MOE) standards was also discovered. Metals, such as lead, are found in a layer of miscellaneous fill, which are the result of historical land-filling activities. The impacted fill is located over a large portion of the site and extends to a depth ranging from between 0.5 and two metres below ground surface.
The existing building, according to a report prepared by Dessau Soprin, ingénierie et construction, contains asbestos on pipe wrap, in floor tiles and in plaster on the masonry.
The quantity and severity of these contaminants is such that the property cannot be used for residential purposes without remediation and cleanup or encapsulation of the contaminated areas.
The site qualifies as an eligible "brownfield" under the City's Brownfields CIP.
The purpose of this report is to bring the Rehabilitation Grant application for 345 St. Denis Street before Committee and Council for approval.
DISCUSSION
The Rehabilitation Grant Program is a tax-increment based grant funded through the tax increase that results from redevelopment of the property.
Grants will equal 50 per cent of the City portion of the increase in property taxes that results from the redevelopment, payable annually for up to 10 years, or up to the time when the total grant payments equal the total eligible costs, whichever comes first. The City will only pay the annual grant after property taxes have been paid in full each year.
The environmental site assessment, remediation, risk management and LEED[3] program components costs of an approved Rehabilitation Grant may be applied against development charges payable, subject to Council approval. The maximum reduction of development charges is 50 per cent of these cost components.
The Building Permit Fee Grant Program provides an additional incentive in the form of a grant equivalent to 30 per cent of building permit fees paid on a project that has been approved for a Rehabilitation Grant. This grant is paid as a component of the Rehabilitation Grant.
The St. Denis Grant Application
The required documents that are to be submitted to the City as part of a Rehabilitation Grant application are described in Document 2. Staff have reviewed the submissions and deemed the application to be complete.
This application for assistance is based on a remediation plan which is a combination of site cleanup; the encapsulation of the interior asbestos contaminants and; the adaptive restoration and upgrade of the existing structure both to meet current code requirements, and to improve its environmental footprint to meet LEED requirements for renovated buildings.
Proposed Remediation and Adaptive Reuse
All contaminated soil will be excavated from the site for off-site disposal at a Ministry of the Environment licensed landfill facility. All of the contaminated material on the site classifies as solid non-hazardous waste. PatersonGroup Inc. estimates that the amount of contaminated material to be removed from the site is 5,000 tonnes. Any contaminated groundwater will be either treated on site or will be pumped by an MOE licensed contractor and disposed off site.
The asbestos on the pipe wrap and tiles in the building will be removed while the inert plaster asbestos will be encapsulated with a new interior drywall and stud structure.
As part of the necessary upgrade, the existing masonry building must be brought up to seismic standards. This will require a substantial structural enhancement including steel reinforcing and bracing to allow the adaptive reuse of the building. Wherever possible existing structure and finishes will be reused in the building. Energy features will be incorporated and the building will be certified under the LEED program.
Proposed Redevelopment Scheme
The City approved a zoning by-law amendment for this property on January 9, 2008. It involves the restoration and reconstruction of the former school building to contain 49 condominium residential apartments. It also includes 19 freehold townhouses.
Rehabilitation Grant-Eligible
Costs
Under the Brownfields Rehabilitation Grant program guide the applicant is required to submit various technical documents to determine eligibility and costs eligible for the rehabilitation grant. Staff reviewed the submissions and have determined that the total costs eligible for a Brownfields Rehabilitation Grant are $3,786,249, of which $535,404 is the costs eligible for reduction in development charges due to site contamination.[4]
A breakdown of the eligible costs is shown in Document 3.
Calculating the Rehabilitation Grant and Development Charge Reduction
Because the Ottawa Brownfields CIP specifies that the total of all grants and development charge reduction shall not exceed 50 per cent of the cost of rehabilitating said lands and buildings, the cap on eligible costs is $1,893,125.
Based on the formulas contained within the approved CIP, the municipal development charges are reduced to 0 and the Rehabilitation Grant is $1,760,048. The detailed calculations are shown in Document 4.
For the purposes of estimating the possible future municipal tax increment and the estimated pay-out period it has been assumed that all of the development components would be completed by 2009. The actual development may see elements of each of the components completed and occupied after this period. The detailed assumptions and the calculations are shown in Document 5.
The program period is a maximum of 10 years from the first payment or until all eligible costs have been paid by the annual grant, whichever comes first. It is possible that the pay-out would not occur within 10 years of the first payment at which time the annual municipal payment would end even if the grant has not been paid in full.
Without remediation and clean up, this site would have been left idle for an indefinite period of time, generating limited tax revenue and being a target for vandalism and impacting neighbouring property values.
Benefits
to the Community
Economic Benefits
The overall economic impact of the proposed development is estimated at $16.2 million in direct construction value spread over 19 townhouses and 49 apartments. Both direct and indirect economic benefits to the local economy will be realized during the remediation and construction period through payroll, purchased material supplies and services and equipment rentals. The economic benefits would span over the estimated 10-month remediation and construction period. It is estimated that during the construction period approximately 130 person years of direct employment and 227 person years of indirect employment would be created by this project.
After occupancy, there would be an injection of new goods and service spending in the businesses in the immediate area along Montreal Road as well as Beechwood Avenue.
Over $17.3 million in new residential assessment would be added to the property tax assessment roll at full development. Staff estimates that over $68,000 per year in increased municipal property taxes, net of the Brownfields Rehabilitation Grant, can be expected at project completion. This is an increase over the current municipal taxes of $10,787 per year.
The project will earn the City over $100,000 in present value dollars in building permit fees and other development fees.
City Strategic Directions
One of the City’s strategic directions is to integrate new growth seamlessly with established communities.
In general, residential intensification assists the City’s overall smart-growth urban management objectives by placing less of an emphasis on the expansion of service boundary (into greenfields) and more of an emphasis on the utilization of existing municipal infrastructure investments. The proposed retrofit of the school building to contain 49 apartments, in combination with the 19 freehold townhouses, is an excellent example of urban infill that blends seamlessly with the surrounding community. The scale and massing of the project ensures that it strengthens and compliments the neighbourhood building fabric which is currently a mixture of single detached houses, converted dwellings containing multiple units and small walk-up apartments. The range of housing also matches well with the local demand for both family and empty nester housing. Renewal of older neighbourhoods is necessary to broaden the housing mix and ensure choice for all household types thereby reducing the need to move.
The location of the development puts it within easy walking distance of shopping and community facilities and recreation (Nault Park and Richelieu Park). The site is served by local transit along Granville Avenue and is within 340 metres of Montreal Road where express transit service is available. In addition, as part of this development provision is being made for VRTUCAR (a car sharing service) on the site with all new owners receiving their first year’s membership in VRTUCAR with the purchase of their unit along with a new bicycle as an inducement to reducing the project’s reliance on the private automobile.
In general, encouraging residential intensification of brownfield sites can also have many positive economic, social, and environmental benefits to the surrounding neighbourhood and local economy.
ENVIRONMENTAL ImPLICATIONS
From an environmental perspective, this project exemplifies the principles of sustainable development and addresses the policies of the Environmental Strategy. Its location within an established neighbourhood ensures immediate access to hard and soft services already in place and broadens the base for future support of these services. By striving to achieve a LEED standard, it is assured that the environmental footprint of the overall project will be minimized.
The approval of this rehabilitation grant will encourage the redevelopment of this brownfield property and ensure that this contaminated site is properly assessed and remediated prior to development. Brownfield redevelopment is identified as a key strategy for promoting reinvestment in existing urban areas and for reducing the need to expand into greenfield sites. The remediation and redevelopment of brownfield sites assists in meeting the Environmental Strategy’s goal of “clean air, water and earth”.
CONSULTATION
N/A
FINANCIAL IMPLICATIONS
As per the Brownfields Redevelopment CIP, if this Rehabilitation Grant application is approved, the City would provide the owner with a grant equivalent to 50 per cent of the increase in municipal taxes. In this case, the total maximum grant is $1,760,048. The grant payment would be calculated annually and would be paid per year until the total eligible costs are repaid, or a maximum of 10 years, whichever comes first. At that time the City will begin to collect and retain the full municipal portion of the tax increment.
The City will retain 15 per cent of the municipal tax increment per year to coincide with the grant period until the total eligible costs are repaid. These monies will be deposited into the Municipal Leadership Account. This account would function as a revolving fund (capital account) to be used to support the Brownfields Redevelopment Strategy. The remaining 35 per cent of the municipal tax increment will be applied to the general City budget. No taxes will likely be rebated in 2008. As approved components of this project come forward in 2009 the Revenue Division will review rebated tax calculations.
A municipal development charge discount is a significant economic incentive for promoting brownfield redevelopment and revitalization. The approval of this report may result in a reduction of an estimated $133,077 in development charge revenues (net of development charge credit, see Document 4) that will not be payable at the time building permits are issued.
The reduction may not be made up through an increase in fees for other categories (Development Charges Act, 1997, S.O. 1997, c. 27, s. 5(6) para. 3). Any reduction in the Development Charge collections arising from an exemption may result in a shortfall in funding to support growth-related projects. This shortfall will be addressed in the five-year review of the development charge by-law as required by legislation.
SUPPORTING DOCUMENTATION
Document 1 General
Location Map
Document 2 Rehabilitation
Grant Application Requirements
Document 3 Rehabilitation
Grant-Eligible Costs
Document 4 Calculating the Rehabilitation Grant and Development Charge Reduction
Document 5 Estimated Future City Property Tax Increment and Annual Municipal Grant Payable
DISPOSITION
Legal Services Branch, to prepare the Brownfields Rehabilitation Grant Agreement.
Planning, Transit and the Environment Department, Building Code Services Branch will be notified that the properties are not required to pay municipal development charges at the time of building permit issuance.
Planning, Transit and the Environment Department and City Manager’s Office, Financial Services Branch to develop a general administrative approach to implement the Brownfields Redevelopment financial incentive program and more specifically for this application.
Planning, Transit and the Environment Department to monitor the performance of this grant application and prepare a status report on this application as part of an annual Brownfields Redevelopment monitoring report to Council.
Planning, Transit and the Environment Department to notify the solicitor (Daniel C. Fernandes, 418 Preston Street, Ottawa, ON K1S 4N2) of Council’s decision.
DOCUMENT 2
REHABILITATION
GRANT APPLICATION REQUIREMENTS
A Brownfields Rehabilitation Grant program guide was prepared as part of the administration of the Brownfields financial incentives program. This program guide provides the detailed requirements to an applicant in order to file a complete application with the City for consideration of financial assistance under this grant program. The applicant is required to submit various technical documents to determine eligibility and costs eligible for the rehabilitation grant. The following documents are required:
- All environmental studies (Phase I ESA, Phase II ESA, Remedial Action Plan and Risk Assessment);
- LEED (Leadership in Energy and Environmental Design) program estimated component costs: a) base plan review by certified LEED consultant; b) preparing new working drawings to the LEED standard; and c) submitting an administering the constructed element testing and certification used to determine the LEED designation;
- Detailed work plan and cost estimate prepared by a qualified person (as defined by the Environmental Protection Act and Ontario Regulation 153/04, as amended, for all eligible environmental remediation and risk assessment/risk management works;
- A cost estimate provided by a bona fide contractor for eligible rehabilitation/redevelopment and demolition costs;
- A set of detailed architectural/design and /or construction drawings; and
- An estimated post-project assessment value prepared by a private sector property tax consultant.
The applicant (registered owner) or agent acting on behalf of the registered owner is required to fully complete the application including all required signatures and complete the sworn declaration.
The costs eligible for a Brownfields Rehabilitation Grant for 345 St. Denis Street are estimated as follows:
|
|
Eligible
Costs
|
Actual/Estimated Cost |
|
1 |
Environmental studies |
$27,634[5] |
|
2 |
Environmental Remediation |
$396,970 |
|
3 |
Placing Clean fill and grading |
$14,600 |
|
4 |
Installing enviro/engineering controls as specified in work plan/risk assessment |
$0 |
|
5 |
Monitoring, maintaining, operating engineering works as specified in work plan/risk assessment |
$35,000 |
|
6 |
Environmental Insurance Premiums |
$0 |
|
7 |
The following Leadership in Energy and
Environmental Design (LEED) Program Components: a)
base
plan review by a certified LEED consultant; b)
preparing
new working drawings to the LEED standard c)
submitting
and administering the constructed element testing and certification used to
determine the LEED designation |
$61,200 |
|
|
Total Costs eligible for DC
reduction due to site contamination |
$535,404 |
|
8 |
Cost of Project Feasibility Study |
$10,000 |
|
9 |
30 per cent of the estimated Building Permit Fee to be paid |
$24,478 |
|
10 |
Building Demolition |
$125,500 |
|
11 |
Building Rehabilitation and Retrofit works |
$2,775,840 |
|
12 |
Upgrading on-site infrastructure including water services, sanitary sewers and stormwater management facilities |
$315,027 |
|
13 |
Constructing/upgrading off-site infrastructure where required to permit remediation, rehabilitation of the property |
$0 |
|
|
Total Costs Eligible for a
Rehabilitation Grant |
$3,786,249 |
From the above, the total costs eligible for a Brownfields Rehabilitation Grant are $3,786,249, of which $535,404 is the costs eligible for reduction in development charges due to site contamination.[6]
DOCUMENT
4
CALCULATING THE REHABILITATION
GRANT AND DEVELOPMENT CHARGE REDUCTION
The Ottawa Brownfields CIP specifies that, the total of all grants and development charge reduction shall not exceed 50 per cent of the cost of rehabilitating said lands and buildings.
|
1 |
Total eligible Costs- from Document 3 |
$3,786,249 |
|
2 |
Total capping at 50 per cent of line 1 |
$1,893,125 |
|
3 |
Estimated Development Charges (DC) |
$133,077[7] |
|
4 |
Total costs eligible for DC reduction from Document 3 –total of items
1to 7 |
$535,404 |
|
5 |
Capping at 50 per cent of line 4-development charge reduction* |
$267,770 |
|
6 |
Development charge is reduced by the amount in line 5 (line 3-line
5)** |
0 |
|
7 |
Eligible cost cap is reduced by DC reduction (line 2-line 3) |
$1,760,048 |
|
8 |
Total Rehabilitation Grant Payable |
$1,760,048 |
* The maximum reduction of development charges is 50 per cent of the cost components of line 4 if the site is located in the priority area. The site is located approximately 341 metres from Montreal Road, which is a “Transit Priority Corridor” and “Future Rapid Transit Corridor”. This location would qualify as being in the priority area under the Brownfields CIP and therefore is eligible for the 50 per cent maximum reduction.
**The environmental site assessment, remediation and risk management and LEED program certification cost components of an approved Rehabilitation Grant may be applied against development charges payable, subject to Council approval. Since the capped amount of eligible costs (from line 5) for the development charge reduction exceeds the estimated development charges (from line 3) to be paid the development charges would be reduced to 0.
The development charge is reduced to 0
(line 6 above).
The total Rehabilitation Grant
payable is $1,760,048
(line 8 above).
DOCUMENT
5
ESTIMATED FUTURE CITY
PROPERTYTAX
INCREMENT
AND ANNUAL
MUNICIPAL GRANT PAYABLE
Pre-Project Property Tax Rates and Property Taxes
Current Value Assessment (2007) on the property at 345 St. Dennis is $1,159,000, classed as Residential (RT). Current annualized property taxes are approximately $13,846.98[8] broken down as follows:
Table 1
|
Municipal Property Tax portion |
$10,787.13 |
|
Education Property Tax Portion |
$3,059.76 |
Total Pre-Project Property Taxes
|
$13,848.98 |
Property taxes are paid in full.
Based on the post-project assessment valuation prepared by Rheaume, Williams, Kalbfleish, chartered accounts[9], as submitted as part of the application, it has been estimated that once the entire project is complete, the property including all buildings will have a post-project assessment value of approximately $18,477,000 (2009$).
The breakdown is as follows:
|
19 townhomes (freehold) |
$5,961,000 |
|
Condo building 49 units |
$12,516,100 |
|
TOTAL
post construction assessment value |
$18,477,000 |
For the purposes of estimating the future municipal tax increment and the estimated pay-out period it has been assumed that all of the above components would be completed by 2009. The actual development may see elements of each of the components completed and occupied after this period but the table below would indicate the situation if the site were to be finished in 2009.
It is important to note that the tax increment is an estimate and provides guidance on the order of magnitude of the possible payment under the assumption of all buildings being completed, reassessed and taxes levied and paid in 2009. The tax rate (2007) and assessed values (2009) are held constant for illustration purposes. In practice the assessed value of the units would likely increase reflecting increasing property values to reflect the existing MPAC reassessment term. As well, there would likely be some increase in annual municipal taxes during the projection period.
The administration of the grant program would require that any grants to be paid be based on actual Municipal Property Assessment Corporation (MPAC) property assessment (including any resolution of appeals) of improved properties. The prevailing tax rate would be applied and only after taxes are paid in full for one year and only when the City is satisfied that all terms and conditions have been met as specified in the legal agreement between the City and the applicant would a tax rebate be issued. This rebate would be capped at 50 per cent of the municipal share of the increase in property taxes over the pre-project municipal property taxes paid.
The program period is a maximum of 10 years from the first payment or until all eligible costs have been paid by the annual grant, whichever comes first.
Annual Post-Project Property Tax Rates and Municipal Property Taxes
|
Dwelling Type |
Estimated assessment |
Municipal tax rate |
Estimated Municipal Tax |
|
19 townhomes * |
$5,961,000 |
0.9307% |
$55,479 |
|
49 apartments ** |
$12,516,100 |
0.9307% |
$116,486 |
|
TOTAL |
$18,477,000 |
|
$171,965 |
*Tax Class RT (Residential). **Tax Class NT (New Multi-Residential)
Note: New Multi-Residential (NT) and tax class RT have the same tax rates for 2007.
Estimated future Municipal Tax Increment = Estimated future municipal tax minus pre-project municipal share of taxes (2007). That is $171,965 (from Table 2) - $10,787 (from Table 1) = $161,178.
Once the future municipal tax increment has been determined based on the 50 per cent grant factor (as set by Council in the CIP) the annual grant could be $80,589. The possible payment schedule is shown in the following table.
In the administration of this grant each row would be calculated every year based on the new assessment, tax rate, taxes paid and actual municipal tax increment to establish the actual grant payment. It is possible that the pay-out would not occur within 10 years of the first payment at which time the annual municipal payment would end even if the grant has not been paid in full.
Table 4 Estimated Municipal Property Tax Changes
|
Year |
Existing Taxes |
New Taxes |
Municipal Tax Increment |
50% Grant |
15% to BMLRF* |
Revenue |
|
1 |
$10,787 |
$171,965 |
$161,178 |
$80,589 |
$12,008 |
$68,501 |
|
2 |
$10,787 |
$171,965 |
$161,178 |
$80,589 |
$12,008 |
$68,501 |
|
3 |
$10,787 |
$171,965 |
$161,178 |
$80,589 |
$12,008 |
$68,501 |
|
4 |
$10,787 |
$171,965 |
$161,178 |
$80,589 |
$12,008 |
$68,501 |
|
5 |
$10,787 |
$171,965 |
$161,178 |
$80,589 |
$12,008 |
$68,501 |
|
6 |
$10,787 |
$171,965 |
$161,178 |
$80,589 |
$12,008 |
$68,501 |
|
7 |
$10,787 |
$171,965 |
$161,178 |
$80,589 |
$12,008 |
$68,501 |
|
8 |
$10,787 |
$171,965 |
$161,178 |
$80,589 |
$12,008 |
$68,501 |
|
9 |
$10,787 |
$171,965 |
$161,178 |
$80,589 |
$12,008 |
$68,501 |
|
10 |
$10,787 |
$171,965 |
$161,178 |
$80,589 |
$12,008 |
$68,501 |
|
TOTAL |
$107,870 |
$1,719,650 |
$1,611,780 |
$805,890 |
$120,880 |
$685,010 |
*BMLRF-Brownfields Municipal Leadership Revolving
Fund
|
New municipal property tax portion (tax increment) for years one through 10 |
$1,611,780 |
|
Rehabilitation Grant value for years one through 10 |
$805,890 |
|
Contribution to BMLRF based on tax increment for years one through10 |
$120,880 |
|
Net new municipal portion of
property taxes for years one through 10 |
$685,010 |
|
|
|