11. AMENDMENTS TO THE BROWNFIELDS REDEVELOPMENT COMMUNITY
IMPROVEMENT PLAN
modifications du Plan d'amélioration communautaire
pour le réaménagement des friches
industrielles
COMMITTEE RECOMMENDATIONS
That Council
direct staff to prepare the necessary amendments to the list of eligible costs
under the Rehabilitation Grant Program contained within the Brownfields
Redevelopment Community Improvement Plan and in the Brownfields Redevelopment
Strategy, as well as in all supporting documents, as described in this report,
and specifically, that the list of eligible costs be revised as follows:
1.
Maximum of 50 per cent of upgrading costs for on-site
infrastructure including water services, sanitary services and stormwater
management facilities; and
2.
Elimination of all costs associated with constructing
or upgrading off-site infrastructure
including roads, water services, sanitary sewers, stormwater management
facilities and electrical and gas utilities.
RECOMMANDATIONS
DU COMITÉ
Que le Conseil demande au personnel de préparer les
modifications nécessaires de la liste des coûts admissibles en vertu du
Programme de subvention pour la remise en valeur de sites, contenu dans le Plan
d'amélioration communautaire pour le réaménagement des friches industrielles et
dans la Stratégie de réaménagement des friches industrielles, ainsi que dans
tous les documents connexes, selon ce qui est prévu dans le présent rapport, et
expressément de manière à ce que la liste des coûts admissibles soit révisée
dans le sens suivant :
1.
un maximum de
50 % des coûts d'amélioration de l'infrastructure sur le site, y compris
les conduites d'eau, les égouts sanitaires et les installations de gestion des
eaux pluviales;
2.
la suppression de
tous les coûts associés à la construction ou à l'amélioration de
l'infrastructure hors site, y compris les routes, les conduites d'eau, les
égouts sanitaires, les installations de gestion des eaux pluviales et les
services d'approvisionnement d'électricité et de gaz.
Documentation
1. Deputy
City Manager, Infrastructure Services and Community Sustainability, report
dated 26 April 2010 (ACS2010-ICS-CSS-0007).
2. Extract
of Draft Minute, 4 May 2010.
Report to/Rapport au :
Corporate Services and Economic Development Committee
Comité des services
organisationnels et du développement économique
and Council / et au
Conseil
19 April 2010 / le 19 avril 2010
Submitted by/Soumis par : Nancy Schepers, Deputy City Manager/Directrice
municipale adjointe, Infrastructure Services and Community
Sustainability/Services d 'infrastructure et Viabilité des collectivités
Contact Person/Personne ressource : Johanne Levesque, Director/Directrice
Community Sustainability
Services/Services de viabilité des collectivités
(613) 580-2424 x12257,
Johanne.Levesque@ottawa.ca
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Ref
N°:
ACS2010-ICS-CSS-0003
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SUBJECT:
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AMENDMENTS TO
THE BROWNFIELDS REDEVELOPMENT COMMUNITY IMPROVEMENT PLAN
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OBJET :
|
modifications du Plan d'amélioration
communautaire pour le réaménagement des friches industrielles
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REPORT RECOMMENDATIONS
That Corporate Services and Economic Development Committee recommend
Council direct staff to prepare the necessary amendments to the list of
eligible costs under the Rehabilitation Grant Program contained within the
Brownfields Redevelopment Community Improvement Plan and in the Brownfields
Redevelopment Strategy, as well as in all supporting documents, as described in
this report, and specifically, that the list of eligible costs be revised as
follows:
1.
Maximum of
50 per cent of upgrading costs for on-site infrastructure including water
services, sanitary services and stormwater management facilities; and
2.
Elimination
of all costs associated with constructing or upgrading off-site
infrastructure including roads, water
services, sanitary sewers, stormwater management facilities and electrical and
gas utilities.
RECOMMANDATIONS DU RAPPORT
Que le Comité des
services organisationnels et du développement économique recommande au Conseil
demander au personnel de préparer les modifications nécessaires de la liste des
coûts admissibles en vertu du Programme de subvention pour la remise en valeur
de sites, contenu dans le Plan d'amélioration communautaire pour le
réaménagement des friches industrielles et dans la Stratégie de réaménagement
des friches industrielles, ainsi que dans tous les documents connexes, selon ce
qui est prévu dans le présent rapport, et expressément de manière à ce que la
liste des coûts admissibles soit révisée dans le sens suivant :
1.
un maximum de 50 % des coûts
d'amélioration de l'infrastructure sur le site, y compris les conduites d'eau,
les égouts sanitaires et les installations de gestion des eaux pluviales;
2.
la suppression de tous les coûts
associés à la construction ou à l'amélioration de l'infrastructure hors site, y
compris les routes, les conduites d'eau, les égouts sanitaires, les
installations de gestion des eaux pluviales et les services d'approvisionnement
d'électricité et de gaz.
EXECUTIVE SUMMARY
Assumptions and Analysis:
Council adopted the Brownfields
Redevelopment Community Improvement Plan (BRCIP) on April 27, 2007. Brownfields are properties where past actions
have resulted in actual environmental contamination and/or derelict or
deteriorated buildings. They may be vacant, abandoned or underused.
The BRCIP presents
the rationale behind the redevelopment of brownfields in Ottawa and the actions
and strategies that will promote brownfield redevelopment. The BRCIP contains a
comprehensive framework of incentive programs including the Brownfields Rehabilitation
Grant Program.
On December 1, 2009 the Corporate
Services and Economic Development Committee, while considering a Brownfields
Rehabilitation Grant application (reference ACS2009-ICS-0004 -Clydsdale
Shopping Centres Limited) carried the following motion:
"That Staff bring forward to Corporate Services and Economic Development
committee and Council recommendations for amendments to the policy in Q1 2010
that insure the policy is used to achieve its intent; and that a moratorium be
placed on the use of the policy until amendments to the policy are approved by
Council."
In addition was a direction to
staff: “That Community and Sustainability
Services staff ensure that the policy is applied to land, not buildings."
Implicit in the motion was a
deferral of the Clydsdale Shopping Centres Limited Rehabilitation Grant
application until amendments to the BRCIP are approved by Council.
A number of questions have arisen
around the current BRCIP as a result of experience with the first few
Rehabilitation Grant applications.
A review of the approved
brownfields program was undertaken in order to address the motion and the key
questions, with the objective to make recommendations for incentive program
revisions as part of the update to the BRCIP to ensure its continued
acceptability, accountability and financial sustainability. Implicit within this
review was the notion that the status quo was not appropriate and that modifications
need to be considered to refocus the scope of the program.
RCI Consulting of Stoney Creek, Ontario was retained to conduct
this review and provide recommendations for updating the BRCIP.
The work program of the consultant
included a best practices review of Brownfield CIP programs in seven Ontario
Municipalities in comparison to the programs contained in the Ottawa
BRCIP. Particular attention was focused
on eligible costs in those municipalities that have a brownfields rehabilitation
(tax increment based) grant program.
Based on the Best Practices
Review, interviews with municipal Brownfield CIP coordinators, a detailed
analysis of the eligible costs, both on-site and off-site of the three Ottawa
Rehabilitation Grant applications submitted to date and, based on the
comprehensive experience of the consultant, a report was prepared and submitted
to the City with recommendations for change, or where appropriate, no change to
the Brownfields program.
Based on a review of these findings
staff are recommending that revisions to the Rehabilitation Grant Program be
considered; namely, the reduction of eligible costs of on-site infrastructure
upgrading for water services, sanitary services and stormwater management
facilities from 100 per cent to 50 per cent as well as the elimination of off-site
infrastructure upgrading/construction including roads, water services, sanitary
services, stormwater management facilities and electrical and gas utilities, as an eligible cost.
No change is being recommended to
the definition of eligibility for funding or to the type of end land use that
would be eligible for funding under the Rehabilitation Grant Program or to the
scope of the program which supports remediation of land, but also building
rehabilitation, redevelopment and adaptive reuse of brownfield properties.
The proposed program revisions will somewhat reduce the overall
competitive attractiveness of the total brownfield redevelopment incentive
program as compared to the other municipalities in the Best Practices
Review. However, on balance, the package
still provides a viable incentive to promote brownfield redevelopment in
Ottawa. The proposed revisions to the eligible costs for the Rehabilitation
Grant Program achieves improved financial sustainability of the program, while
maintaining the intent of the Brownfields Redevelopment CIP.
Staff are of the opinion that the revisions proposed will satisfy the
intent of the motion and, if approved by Council, will allow the lifting of the
moratorium on the use of the brownfields program as contained in the
BRCIP. This will then allow grant
applications that are either deferred or pending to be brought forward by staff
for Committee and Council consideration as part of the continued implementation
of the City’s Brownfields Redevelopment Strategy.
Legal/Risk Management
Implications:
There are no legal/risk
management impediments to implementing the recommendations of this report.
Technical Implications:
N/A
Financial Implications
If the recommended changes to the
on-site and off-site eligible costs under the Rehabilitation Grant program are
approved by Council the total eligible cost envelop would be reduced for all
new grant applications which would reduce the total maximum amount of the
Rehabilitation Grant that could be paid under the revised program.
Public Consultation/Input:
The Brownfields Redevelopment
Strategy and CIP was the subject of extensive stakeholder consultations which
lead to Council approval in April 2007.
Staff consulted informally with the two brownfield applicants with
approved grants on the recommended changes to the brownfields program. Under the general program requirements and
program adjustment sections of the approved Brownfields Redevelopment Community
Improvement Plan the City may periodically review and adjust the terms and requirements of any
of the financial programs contained in this Plan, or discontinue any of the
programs at any time, at the discretion of Council, without a formal amendment
to the Plan. Given that the recommended program changes represent a reduction or discontinuation of
an existing program in the approved CIP no additional consultation was undertaken.
RÉSUMÉ
Hypothèses et analyse :
Le Conseil a adopté le Plan d'amélioration
communautaire pour le réaménagement des friches industrielles (PACRFI) le 27
avril 2007. Les friches industrielles sont des propriétés dont les utilisations
antérieures ont mené à une contamination environnementale réelle, ou à la
détérioration ou au délabrement des bâtiments. Il peut s'agir de propriétés
vacantes, abandonnées ou sous-utilisées.
Le PACRFI explique le bien-fondé du réaménagement des
friches industrielles à Ottawa et décrit les mesures et stratégies pour le
promouvoir. Il comprend un cadre général pour les programmes d'encouragement, y
compris le Programme de subvention pour la remise en valeur de sites.
Le 1er décembre 2009, le Comité des
services organisationnels et du développement économique, lors de l'examen
d'une demande de subvention pour la remise en valeur d'une friche industrielle
(référence : ACS2009-ICS-0004 – Clydesdale Shopping Centres Limited), a
adopté la motion suivante :
« Que le personnel propose au
Comité des services organisationnels et du développement économique et au
Conseil des recommandations de modification à la politique durant le 1er trimestre
2010 afin de veiller à ce que la politique soit appliquée conformément aux
intentions de départ; […] qu'un moratoire soit imposé sur l'application de la
politique jusqu'à ce que les modifications proposées à cette dernière soient
approuvées par le Conseil. »
De plus, l'instruction a été donnée au
personnel des Services de viabilité des collectivités de s'assurer que la
politique s'applique aux terrains, non aux bâtiments.
Cette motion entraînait le report de la demande
de subvention pour la remise en valeur d'une friche industrielle présentée par
Clydesdale Shopping Centres Limited jusqu'à l'approbation des modifications du
PACRFI par le Conseil.
Un certain nombre de questions ont été
soulevées au sujet de l'actuel PACRFI à la suite des quelques premières
demandes de subvention.
L'examen du programme approuvé de réaménagement
des friches industrielles a été entrepris en pour donner suite à cette motion
et répondre aux principales questions soulevées, dans le but de formuler des
recommandations de révision du programme d'encouragement dans le cadre d'une
mise à jour du PACRFI visant à maintenir l'acceptabilité, l'obligation
redditionnelle et la viabilité financière du Plan. Cet examen reposait
implicitement sur l'idée que le statu quo n'était pas acceptable et que des
modifications devaient être envisagées pour recibler le programme.
Les firme RCI
Consulting, de Stoney
Creek (Ontario), a été retenue pour mener cet examen et formuler des
recommandations de mise à jour du PACRFI.
Le consultant a passé en revue les pratiques
exemplaires des programmes de PAC pour le réaménagement des friches
industrielles dans sept municipalités ontariennes et les a comparées aux
programmes contenus dans le PACRFI d'Ottawa. Une attention particulière a été
accordée aux coûts admissibles dans les municipalités qui ont un programme de
subvention (basé sur l'augmentation de la valeur taxable) pour la remise en
valeur des friches industrielles.
À la suite de l'étude des pratiques
exemplaires, des entrevues ont été menées auprès de coordonnateurs municipaux
de PAC pour le réaménagement de friches industrielles, une analyse détaillée a
été faite des coûts admissibles, tant sur le site que hors site, des trois
demandes de subvention présentées jusqu'à ce jour à Ottawa et un rapport, basé
sur l'expérience approfondie du consultant, a été rédigé et présenté à la
Ville, assorti de recommandations de modification ou de maintien des éléments
du programme de réaménagement des friches industrielles
Se fondant sur les conclusions de ce rapport,
le personnel recommande que des modifications du Programme de subvention pour
la remise en valeur de sites soient envisagées, notamment de réduire de 100 à
50 % la part admissible des coûts d'amélioration de l'infrastructure sur le
site, y compris les conduites d'eau, les égouts sanitaires et les installations
de gestion des eaux pluviales, ainsi que d'éliminer l'admissibilité des coûts
d'amélioration de l'infrastructure hors site, y compris les routes, les
conduites d'eau, les égouts sanitaires, les installations de gestion des eaux
pluviales et les services d'approvisionnement d'électricité et de gaz.
Il n'est pas recommandé de modifier la
définition de l'admissibilité au financement, ni du type d'utilisation finale
du terrain ouvrant droit à un financement en vertu du Programme de subvention
pour la remise en valeur de sites, pas plus que de la portée du programme quant
au soutien qu'il apporte à la remise en valeur des terrains, mais aussi à la
remise en état des bâtiments, au réaménagement et à la réutilisation adaptative
des friches industrielles.
Les révisions
proposées réduiront quelque peu l'attrait compétitif général du programme
d'encouragement au réaménagement des friches industrielles par rapport à celui
d'autres municipalités incluses dans l'examen des pratiques exemplaires. Dans
l'ensemble cependant, il constitue quand même une incitation certaine au
réaménagement des friches industrielles à Ottawa. Les révisions proposées quant
aux coûts admissibles en vertu du Programme de subvention pour la remise en
valeur de sites améliorent sa viabilité financière, tout en maintenant
l'intention du PAC pour le réaménagement des friches industrielles.
Le personnel est
d'avis que les révisions proposées répondent à l'objet de la motion et que, si
elles sont approuvées par le Conseil, elles permettront de lever le moratoire
sur le recours au programme de remise en valeur des friches industrielles
contenu dans le PACRFI. Le personnel pourra alors soumettre les demandes de
subvention reportées ou en instance à l'examen du Comité et du Conseil dans le
cadre de la mise en œuvre de la Stratégie de réaménagement des friches
industrielles de la Ville.
Incidences juridiques / concernant
la gestion des risques :
Le rapport ne soulève aucune conséquence
juridique ni de conséquence pour la gestion des risques découlant de la mise en
œuvre des recommandations.
Incidences techniques :
s.o.
Répercussions financières :
Si les recommandations de modifier
l'admissibilité des coûts sur le site et hors site en vertu du Programme de
subvention pour la remise en valeur des friches industrielles devaient être approuvées par le
Conseil, l'enveloppe totale des coûts admissibles serait réduite pour
l'ensemble des nouvelles demandes de subvention, ce qui aurait pour effet de
diminuer le montant maximal de la subvention de remise en valeur pouvant être
versé en vertu du programme révisé.
Consultation publique / commentaires
:
La Stratégie de réaménagement des friches
industrielles et le PAC ont fait l'objet de consultations exhaustives avec les
parties concernées avant leur adoption par le Conseil en avril 2007. Le
personnel a consulté de façon informelle les deux demandeurs ayant une subvention
approuvée sur les modifications recommandées du programme de remise en
valeur des friches industrielles. D'après les exigences générales du programme
et les articles sur la révision du Plan d'amélioration communautaire approuvé pour le réaménagement des
friches industrielles, la Ville peut
périodiquement, à la discrétion du Conseil, réviser et rajuster les conditions
et exigences des programmes financiers contenus dans le Plan ou, en tout temps,
mettre fin à l'un ou l'autre des programmes sans avoir à procéder à une
modification officielle du Plan. Comme les changements recommandés représentent
une réduction ou une cessation de programme existant dans le PAC approuvé, aucune
consultation
supplémentaire n'a été menée.
BACKGROUND
On April 27, 2007 Council adopted
the Brownfields Redevelopment Community Improvement Plan (BRCIP). Brownfields are properties where past actions
have resulted in actual environmental contamination and/or derelict or
deteriorated buildings. They may be vacant, abandoned or underused.
The BRCIP presents the rationale
behind the redevelopment of brownfields in Ottawa and the actions and
strategies that will promote brownfield redevelopment. The BRCIP contains a
comprehensive framework of incentive programs including the Rehabilitation
Grant Program and the Building Permit Fee Grant Program.
Since the BRCIP was approved in
2007, three applications for a Brownfields Rehabilitation Grant have been
submitted. Two of these applications have been approved by Council.
On December 1, 2009 the Corporate
Services and Economic Development Committee, while considering a Brownfields
Rehabilitation Grant application (reference ACS2009-ICS-0004 -Clydsdale
Shopping Centres Limited) carried the following motion:
"That Staff bring forward to Corporate Services and Economic Development
committee and Council recommendations for amendments to the policy in Q1 2010
that insure the policy is used to achieve its intent; and that a moratorium be
placed on the use of the policy until amendments to the policy are approved by
Council".
In addition was a direction to
staff: “That Community and Sustainability
Services staff ensure that the policy is applied to land, not buildings"
Implicit in the motion was a
deferral of the Clydsdale Shopping Centres Limited Rehabilitation Grant
application until amendments to the BRCIP are approved by Council.
The purpose of this report is to
bring forward for Committee and Council consideration recommendations for
amendments to the Brownfields program.
DISCUSSION
A number of questions have arisen
around the current BRCIP as a result of experience with the first few Rehabilitation
Grant applications. These questions
include:
A review of the approved
brownfields program was undertaken in order to address the above-noted motion
and the key questions, with the objective to make recommendations for incentive
program revisions as part of the update to the BRCIP to ensure its continued
acceptability, accountability and financial sustainability. Implicit within the
review was the notion that the status quo was not appropriate and that
amendments need to be considered to refocus the scope of the program.
RCI Consulting of Stoney Creek, Ontario was retained to conduct
this review and provide recommendations for updating the BRCIP. RCI
Consulting was the lead consultant in the preparation of the Ottawa
Brownfields Redevelopment Strategy and Brownfields Redevelopment Community
Improvement Plan. The work was undertaken over the 2005 to 2007 period. RCI Consulting
has extensive experience with brownfields policy development and implementation
and has been the lead consultant on many of the successful municipal brownfield
programs in Ontario.
The work program of the
consultant for this assignment included a best practices review of Brownfield
CIP programs in seven Ontario Municipalities (Niagara Falls, Hamilton,
Chatham-Kent, Cornwall, Guelph, Kingston and Waterloo) in comparison to the
programs contained in the Ottawa BRCIP.
This was conducted to determine how these municipalities deal with
eligible costs and to address the five program policy questions that have been
raised. Particular attention was focused on eligible costs in those
municipalities that have a brownfields rehabilitation (tax increment based)
grant program.
In addition, the following key
Ottawa background documents were reviewed to provide context for the update:
a)
Approved (2) and deferred (1) Rehabilitation Grant
application reports;
b)
2007-2008
Brownfields Monitoring memorandum;
c)
The existing
Brownfields Redevelopment Strategy and Brownfields Redevelopment CIP; and
d)
Guideline for Development Charge Reduction Program due
to Site Contamination approved by Council on March 28, 2007 and the Development
Charges By-law (2009).
The consultant’s report, which
presents the results of his analysis, addresses the five program questions, and
proposes recommendations for updating the Ottawa BRCIP, is attached as Document
1.
Consultant’s Conclusions
on Program Issues
Based on the Best Practices
Review of seven Municipal Brownfield Redevelopment Incentive Programs, interviews
with four municipal Brownfield CIP coordinators, detailed analysis of the
eligible costs, both on-site and off-site of the three Ottawa applications
submitted to date and, based on the comprehensive experience of the brownfield
consultant, the following conclusions are provided in response to each of the
five program questions.
Staff have consulted with other
departments/branches within the corporation (Legal, Planning and Growth
Management, Finance and Economic Development) on the consultant’s findings and
concur with the conclusions as presented below.
Staff recommendations are noted under each of the five program
questions.
1)
Who
should be eligible to apply for and receive funding under the CIP programs?
This question arose out of some concern that large commercial
developers are being provided the same opportunity to apply for the
Rehabilitation Grant Program as any other applicant. In particular, concern was
expressed that in some cases applicants may have acquired a brownfield property
at fair market value (or higher) that was sold by a public institution, and
then in turn is requesting municipal financial assistance for remediation and
redevelopment of the property from the City of Ottawa under the Brownfields
program.
The definition of an “applicant” is clear in the Glossary of Terms
contained in the Ottawa Brownfields Redevelopment CIP. An applicant is an owner
or tenant within the community improvement project area and any person to whom
an owner or tenant has assigned the right to receive a grant. The only
restriction in the definition of applicant is that public sector owners of
property can apply only for the Feasibility Study Grant Program and the
Environmental Site Assessment Grant Program.
Once an applicant meets the definition of “applicant” in the CIP, then
the appropriate answer to the question of who should be eligible to receive
funding lies in focusing on the application, and not the applicant. If the
application meets all the general and program specific eligibility requirements,
and the applicant is not the polluter of the property, then staff should make
their recommendations to Committee and Council, and Council should make its
decision on the application based solely on the merits of the application,
without regard to the previous owner or previous land use.
The definition of “applicant” and the program eligibility requirements
in the CIP are clear and have been included in the CIP to establish who can
make application to the programs contained in the CIP. While staff and Council
may wish to consider the financial and project experience ability of the
applicant to complete the proposed project, the former land use and/or previous
owner of the site should not factor into the evaluation of the application. To
date, in the opinion of the consultant no other municipality has deviated from
this approach. To do so could be considered discriminatory could meet with
considerable criticism from applicants, undermine the integrity of the
Brownfields Redevelopment CIP, and ultimately have possible legal consequences.
Staff agree with these conclusions and would therefore recommend no
change to the definition of eligibility for funding under the Brownfields
program as described in the BRCIP.
2) What land uses should
be eligible for funding under the CIP programs?
This question is very similar to question 1). This question arose out
of the concern that commercial developments, and in particular large commercial
developments, should not be provided with municipal financial assistance
because they do not actually require the financial assistance. Due to the more
stringent standards for residential development, many brownfield sites simply
cannot be feasibly redeveloped for residential use even with financial
incentives. If brownfield sites that are zoned for commercial use or that could
be zoned for commercial use are not provided with financial assistance for
remediation and rehabilitation, and these sites cannot feasibly be redeveloped
for residential use due to costs, then these sites may simply sit idle across
Ottawa.
Similar to the response to question 1), for the municipality to begin
deciding which types of end land uses or even which projects require financial
assistance and which do not, is highly assumptive. Again, the program
requirements in the Brownfield CIP have been established to promote only
projects that require financial assistance with remediation and other
brownfield related expenses. It is also important to remember that the
determination of permitted land uses is made through the Official Plan and
Zoning By-law. The planning process is the appropriate process for determining
land use. While it may be appropriate to utilize financial incentive agreements
to help achieve certain site-specific planning goals such as project phasing,
these site specific goals should be established in planning documents such as
the Zoning By-law through the use of holding provisions, or in other City
policy guidelines or documents.
The financial incentive programs in a CIP should not be used to promote
certain end land uses over others unless the CIP itself has identified a need
to promote certain end land uses within a specific community improvement
project area, or part thereof. In this
regard, the Ottawa Brownfields Redevelopment CIP does provide greater incentive
program benefits for applications on brownfield sites in the Central Area,
Mixed Use Centres, along Mainstreets and within 600 metres of existing or
planned rapid transit stations to support the sustainable growth management objectives
of the Official Plan, but it does not differentiate incentive
program benefits based on end land use.
Staff agree with these conclusions and would therefore recommend no
change to the type of end land uses that would be eligible for funding under
the brownfields program as described in the BRCIP.
3) How
should integration between the Brownfields CIP programs approval process and the
planning approvals process (if any) take place?
Again, while it is not appropriate to use the
Brownfields CIP programs approval process to determine end land use, it is
appropriate to utilize financial incentive agreements to help achieve certain
site-specific planning goals such as project phasing. The recommendation in the
staff report on the 1357 Baseline Road application is a good example of this
approach. Construction and completion of two street edged buildings was tied to
commencement of construction of the large format retail store through a holding
provision in the Zoning By-law amendment. Enforcement of this condition by
withholding of the Rehabilitation Grant until the condition is met is an
appropriate and progressive use of the Brownfields Rehabilitation Grant
Agreement in that it protects the municipality’s planning and financial
interests. However, the City of Ottawa should ensure that any future
integration between the Brownfields CIP programs approval process and the
planning approvals process in this manner, that is, use of the grant agreement
to enforce planning conditions, is:
a)
solely
for the purpose of enforcing a planning condition that is explicitly specified
within an origin planning document, e.g., holding provision in the zoning
by-law; and,
b)
used
judiciously and appropriately.
Staff
note that there are no changes required to implement this conclusion as this is
the current best practice that is used judiciously and in the appropriate
planning context by the City.
4) Should the Brownfields CIP programs apply only to land, or to land
and buildings?
The
answer to this question lies in a review of the purpose of the Ottawa
Brownfields Redevelopment CIP, that is, was it designed solely to address
contaminated sites, or was it designed to address contaminated properties that
also have obsolete/derelict buildings? The stated purpose of the Ottawa Brownfields
Redevelopment CIP is to “act as the primary vehicle for implementing the Ottawa
Brownfields Redevelopment Strategy by providing a framework containing
financial incentive programs and a municipal leadership strategy that will
encourage the remediation, rehabilitation and adaptive reuse of brownfield
properties in Ottawa. Furthermore, implementation of this CIP will help the
City to meet its growth management goals.”
It
is clear from the Purpose statement in the Brownfields Redevelopment CIP that
the incentive programs contained in the CIP are purposely designed to promote
not only remediation of brownfield properties, but also rehabilitation of those
properties and adaptive reuse of the buildings on those properties. The
Brownfields Redevelopment Strategy is also intended to help the City achieve
its growth management goals through promoting and directing infill and
intensification to identified priority areas as specified in Ottawa 20/20 and the
Official Plan and contributes overall to a sustainable community.
These goals of the Brownfields Redevelopment
Strategy are as follows:
i)
Promote
Smart Growth, including the reduction of urban sprawl and its related costs,
and the construction of energy efficient buildings;
ii)
Improve
the physical and visual quality of brownfield sites and the urban area;
iii)
Improve
environmental health and public safety;
iv)
Retain
and increase employment opportunities;
v)
Increase
tax assessment and property tax revenues for the City of Ottawa and the
Province of Ontario;
vi)
awareness
of the economic, environmental and social benefits of brownfield redevelopment;
and
vii)
Utilize
public sector investment to leverage significant private sector investment in
brownfield remediation, rehabilitation, adaptive re-use, and redevelopment.
Goal i) includes the construction of energy efficient buildings. Goal
ii) refers to improving both the physical and visual quality of brownfield
sites. Goal v) seeks to increase assessment and property tax revenues. Goal
vii) includes not only remediation, but also rehabilitation, adaptive re-use,
and redevelopment. Therefore, it is clear that the goals of the Ottawa
Brownfields Redevelopment Strategy (and therefore the Brownfields Redevelopment
CIP) focus not only on remediation of land, but also on building rehabilitation,
redevelopment and adaptive reuse.
The Ottawa Brownfields Redevelopment CIP takes a holistic program
approach to promoting brownfield redevelopment that seeks to achieve the City’s
growth management and sustainability goals. Therefore, restricting the eligible
costs of the Rehabilitation Grant Program to remediation (land) costs only is
not consistent with the goals of the approved Ottawa Brownfields Redevelopment
Strategy and does not reflect the purpose or intent of the Ottawa Brownfields
Redevelopment CIP.
Staff agree with these conclusions and would recommend no change to the
current brownfields program which supports remediation of land, but also
building rehabilitation, redevelopment and adaptive reuse of brownfield
properties.
5) What should be included
as eligible costs in the Rehabilitation Grant Program?
This is a broader and more relevant version of question 4. Question 5
asks which specific costs should be included as eligible costs in the
Rehabilitation Grant Program. Furthermore, it is important to ensure that the
answer to this policy question (and any resulting recommendations for
amendments to the program eligible costs in the CIP) in fact continue to allow
the CIP to achieve its intent. Based on the response to question 4 and the
review of the stated goals of the Brownfield Redevelopment Strategy, it is
clear that the currently eligible costs associated with both the land
(environmental remediation and associated costs) and buildings (demolition,
rehabilitation/ retrofit, and LEED
program component) within the Rehabilitation Grant Program should remain as
eligible costs.
At issue are the upgrading of on-site infrastructure and the
construction/upgrading of off-site infrastructure as eligible costs. Based on comparison to brownfields tax
increment based grant applications in several other Ontario municipalities,
on-site and off-site infrastructure costs as an issue appears to be somewhat
unique to the applications received to date in Ottawa.
Notwithstanding that the impact of these eligible on-site and off-site
infrastructure costs is mitigated by the 50 per cent eligible cost cap for all
grants, tax assistance and development charge reduction in the City of Ottawa, and its 50 per cent tax increment grant level
for its Rehabilitation Grant Program (as compared to 80 per cent to 100 per
cent in most other municipalities), what appears to be the key concern is the
size of these costs in two of the three applications received to date.
It is not anticipated that the City of Ottawa will receive numerous
applications similar to the 1357 Baseline Road (large share of total eligible
costs in on-site and especially off-site infrastructure upgrading) in the
future. However, the issue around eligibility of on-site and off-site infrastructure
costs does need to be addressed. In order to address this issue, the approach
taken was to once again review the goals of the Brownfields Redevelopment
Strategy and CIP, and also to review how other municipalities deal with these
eligible costs.
The goals of the Brownfields Redevelopment Strategy include promoting
Smart Growth, the reduction of urban sprawl and utilizing public sector
investment to leverage significant private sector investment in brownfield
remediation, rehabilitation, adaptive re-use, and redevelopment.
The reference to promoting Smart Growth, reducing urban sprawl and
promoting adaptive building reuse implies that brownfield redevelopment
projects re-use existing infrastructure. However, existing on-site
infrastructure cannot always be reused in its current condition and capacity.
It sometimes needs to be upgraded, or removed and replaced. Similarly, off-site
infrastructure must often be upgraded or constructed to support the proposed
development. Therefore, there is certainly policy support for expenditures
required to reuse existing infrastructure as an eligible cost in the
Brownfields Rehabilitation Grant Program. The question then becomes to what
extent should on-site infrastructure upgrading and off-site infrastructure upgrading/construction
be included as eligible costs in the Brownfields Rehabilitation Grant Program?
Notionally, on-site infrastructure upgrading is much closer to the
concept of land rehabilitation or building rehabilitation/retrofitting than is
off-site infrastructure upgrading/construction. The water, sanitary and storm
sewers that service a building from the property line inward can be considered
a part of, or extension of, the building’s systems. This is not necessarily the
case with off-site infrastructure upgrades such as road and traffic system
upgrades. Also, because of the age and condition of existing on-site
infrastructure, the upgrading of on-site infrastructure may be required even if
the proposed reuse or redevelopment of the site is the same intensity or only
marginally more intensive than the existing use. The upgrading of off-site
infrastructure is almost always directly tied to the type and density of the
proposed development. Therefore, an argument can be made that based on the
goals of the Brownfields Redevelopment CIP, on-site infrastructure costs merit
inclusion as eligible costs in the Rehabilitation Grant Program, while off-site
infrastructure costs do not, or at the very least that off-site infrastructure
costs do not merit the same level of incentivization as on-site infrastructure
costs.
In reviewing how other municipalities handle on-site and off-site
infrastructure costs (Figure 1), it would appear that a number of these
municipalities may have reached the same conclusion. Five of the seven other
municipalities in the comparison include on-site infrastructure costs as an
eligible cost in their tax increment based grant programs, but only two of the
other municipalities include off-site infrastructure costs as an eligible cost.
Figure
1 Summary of Municipal Brownfield Redevelopment Incentives- Inclusion of
off-site and on-site infrastructure costs and overall grant support
|
Municipality
|
Kingston
|
Cornwall
|
Hamilton
|
Niagara Falls
|
Guelph
|
Chatham-Kent
|
Waterloo
|
Ottawa
|
|
On-site infrastructure % support
|
Yes-50%
|
Yes-100%
|
Yes-25%
|
Yes-100%
|
No
|
Yes-100%
|
No
|
Yes-100%
|
|
Off-site infrastructure
% support
|
No
|
No
|
No
|
Yes-100%
|
No
|
Yes-
100%
|
No
|
Yes-100%
|
|
Overall grant % support
|
80%
|
80%
|
80%
|
80%
|
80%
|
80%
|
100%
|
50%
|
|
Maximum duration
in Years
|
10
|
10
|
10
|
10
|
10
|
5 and 5*
|
10
|
10
|
*
tied to two different tax-based financial incentive programs
Niagara Falls, Chatham-Kent and Cornwall include 100 per cent of the
on-site infrastructure upgrading costs as eligible costs in their tax increment
based grants. Kingston includes 50 per cent, while Hamilton includes 25 per
cent of on-site infrastructure upgrading costs as eligible costs in their tax
increment based grant. Presumably, this reduction in Kingston and Hamilton was
done to reflect that only some of the on-site infrastructure upgrading costs
would be for removal of existing obsolete on-site services or improvement of
existing services.
Therefore, based on the goals of its Brownfields Redevelopment CIP and
best practices in other municipalities, staff are recommending that the City of
Ottawa should consider reducing the eligibility of on-site infrastructure costs
from 100 per cent to 50 per cent. This would match the
current practice in Kingston, while still helping achieve the intent of the
Brownfields Redevelopment CIP to promote efficient use of existing services,
adaptive reuse and redevelopment of brownfield sites.
In the municipal comparison, other than the City of Ottawa, only
Niagara Falls and Chatham-Kent allow off-site infrastructure costs (100 per
cent) as an eligible cost in their tax increment based grant programs.
Therefore, based on the goals of its Brownfields Redevelopment CIP and
best practices in other municipalities, and because off-site costs appear to be
an order of magnitude removed from the concept of land rehabilitation or
building rehabilitation/retrofitting when compared to on-site infrastructure
costs, it is recommended that the City of Ottawa should consider eliminating
off-site infrastructure costs as an eligible cost in the Rehabilitation Grant
Program.
One test of the impact of the above noted suggestions regarding on-site
and off-site infrastructure eligibility would be to apply the reduction of
on-site site infrastructure costs to 50 per cent and elimination of off-site
infrastructure costs to the two approved and one pending Rehabilitation Grant
applications (Document 1 refers).
The impacts on the three applications are quite different and display
clearly how the proposed revisions to the Rehabilitation Grant Program would
impact different types of applications. It is important to note that these
changes, if approved by Council, would not be applicable retroactively to any
grants already approved by Council as the terms and conditions for tax
increment grant payments are contained within registered legal agreements.
Because the 345 St. Denis Street application contained only $315,000 in
on-site infrastructure upgrading costs and no off-site infrastructure upgrading
costs, the impact on the eligible costs of the proposed changes is nominal.
Eligible costs would have decreased by only $78,757 or 4.2 per cent.
The 100 Landry Street application which contained $1.46 million in
on-site infrastructure upgrading costs and almost $600,000 in off-site
infrastructure costs would be more significantly impacted. This application
would have lost $662,625 in eligible costs for a 17.5 per cent reduction.
Because the application at 1357 Baseline Road has well over half of its
eligible costs in on-site and off-site infrastructure upgrading (an estimated
$1.5 million in on-site infrastructure costs and $2.34 million in off-site
infrastructure costs), it is the most significantly impacted by the proposed
revision to eligible program costs. The application at 1357 Baseline Road could
expect to see a $1.5 million reduction in eligible costs representing a 44.9
per cent reduction.
The results (Document 1) indicate that the proposed revisions to the
Rehabilitation Grant Program, namely the reduction of on-site infrastructure
upgrading to a 50 per cent eligible cost and the elimination of off-site
infrastructure upgrading/construction as an eligible cost, would only
significantly reduce eligible costs for those applications that have a higher
proportion of their costs in on-site, but especially off-site infrastructure
costs. These changes to eligible costs would have little or no impact on
brownfield redevelopment projects where most of the eligible costs are in the
environmental remediation, building demolition, or building rehabilitation.
To some extent, what this proposed program revision does is reflect
that the goals the Brownfields Redevelopment Strategy and CIP consider on-site
infrastructure upgrading costs, and certainly off-site infrastructure upgrading
and construction costs as being of secondary importance when compared to
on-site remediation, building demolition, rehabilitation and energy efficiency
costs.
Recommendations for Program
Revisions
The consultant is recommending that the City
of Ottawa revise the eligible costs for the Rehabilitation Grant Program in the
Brownfields Redevelopment CIP as follows:
a)
Revise
item j) in Section 6.6.2 (Description) and item f) x) in Section 6.6.3
(requirements) to read: “50% of upgrading costs for on-site infrastructure
including water services, sanitary sewers and stormwater management
facilities;”
b)
Delete
item k) in Section 6.6.2 (Description) and item f) xi) under Section 6.6.3.
These revisions do not require formal amendment to the Brownfields
Redevelopment CIP because they represent the reduction or discontinuation
of an existing program in the CIP.
Staff agree with these recommendations for changes to the scope of the
Rehabilitation Grant program and would recommend that the BRCIP, the
Brownfields Redevelopment Strategy and all application forms, program guides
and the City’s website be modified accordingly.
Impact of Proposed Revisions
The proposed program revisions will somewhat reduce the overall
competitive attractiveness of the total brownfield redevelopment incentive
program as compared to the other municipalities in the Best Practices
Review. However, on balance, staff
believe the package still provides a viable incentive to promote brownfield
redevelopment in Ottawa. The proposed revisions to the eligible costs for the
Rehabilitation Grant Program achieves improved financial sustainability of the
program, while maintaining the intent of the Brownfields Redevelopment CIP.
Staff are of the opinion that the revisions proposed in this report
will satisfy the intent of the motion and, if approved by Council, will allow
the lifting of the moratorium on the use of the brownfields program as
contained in the BRCIP. This will then
allow grant applications that are either deferred or pending to be brought
forward by staff for Committee and Council consideration as part of the continued
implementation of the City’s Brownfields Redevelopment Strategy.
As is shown in Document 2 the current program is already
achieving significant results. The two approved brownfield rehabilitation
projects are well underway. Construction
on these former brownfield sites has already led to new uses being established
on under-utilized former industrial land and in a former surplus school
property. The construction permit value
to date (2009) is estimated at over $38.68 million, with 393 residential units
built or under construction. Both
applications have signed legal agreements that specify the terms and conditions
of any grant payments to be made. No
rehabilitation grants have been paid to date though the first request for
payments could occur later this year.
ENVIRONMENTAL IMPLICATIONS
The various programs, actions and
policies identified in the Brownfields Redevelopment Strategy and BRCIP
encourages the redevelopment of brownfield properties, support the sustainable growth
management principles of Ottawa 20/20 and assist in responsibly managing
aspects of the City’s environment as established in the Environmental Strategy.
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 will
help to promote an environment that is cleaner and a city that is more
environmentally sensitive which will assist in the meeting of one of the
Environmental Strategy’s goals of “clean air, water and earth.”
RURAL IMPLICATIONS
The Community Improvement project
area for the BRCIP includes all 26 villages as designated in the Official
Plan. Any changes to the scope of eligible
costs for on-site and off-site infrastructure up-grading, as part of the
Rehabilitation Grant Program, would also apply to brownfield sites in villages.
There have been no grant applications
submitted or pending in any of the designated villages.
CONSULTATION
The Brownfields Redevelopment
Strategy and CIP was the subject of extensive stakeholder consultations which
lead to Council approval in April 2007.
Staff consulted informally with the two brownfield applicants with approved
grants on the proposed changes to the brownfields program. Under the general program requirements and
program adjustment sections of the approved Brownfields Redevelopment Community
Improvement Plan the City may periodically review and adjust the terms and requirements of any
of the financial programs contained in this Plan, or discontinue any of the
programs at any time, at the discretion of Council, without a formal amendment
to the Plan. Given that the recommended
program changes represent a reduction
or discontinuation of an existing program in the approved CIP no additional consultation
was undertaken.
Increases in funding provided by
existing financial incentives, the addition of any new program to this Plan, or
an expansion of the Community Improvement Project Area would require a formal
amendment to the BRCIP in accordance with Section 28 of the Planning Act.
COMMENTS BY THE WARD COUNCILLOR(S)
This report is in response to a
motion from Corporate Services and Economic Development Committee. The
implications of this report are city-wide.
LEGAL/RISK MANAGEMENT IMPLICATIONS
There are no legal/risk
management impediments to implementing the recommendations of this report.
CITY STRATEGIC PLAN
One of the City’s priorities, as
a strategic direction, is in planning and growth management. An important
objective is to respect the existing
urban fabric, neighbourhood form and the limits of existing hard services, so
that new growth is integrated seamlessly with established communities.
Redevelopment of brownfield
properties can have positive economic, social and environmental benefits to the
surrounding neighbourhood and local economy especially if the redevelopment
incorporates sustainable development principles.
FINANCIAL IMPLICATIONS
If the recommended changes to the
on-site and off-site eligible costs under the Rehabilitation Grant program are
approved by Council the total eligible cost envelop would be reduced for all
new grant applications (especially for those applications that have a higher
proportion of off-site costs) which would reduce the total maximum amount of
the Rehabilitation Grant that could be paid under the revised program.
SUPPORTING DOCUMENTATION
Document 1 Review and update of
the Ottawa Brownfields Redevelopment Community Improvement Plan, RCI Consulting, March 31, 2010.
Document 2 Summary of 2008-2009 Brownfields Program Outcomes
DISPOSITION
Community Sustainability
Department to make the necessary text modifications to the Brownfields
Redevelopment Community Improvement Plan,
Brownfields Redevelopment Strategy, all application forms, program guides and to the program description
on Ottawa.ca.
Community Sustainability Department to advise the Ministry of Municipal
Affairs and Housing of Council’s decision regarding the reduction of and discontinuation
of elements of existing programs offered under the BRCIP.
Community Sustainability Department to continue to implement the Brownfields
Redevelopment Strategy and BFCIP.
REVIEW AND UPDATE OF THE OTTAWA BROWNFIELDS
REDEVELOPMENT COMMUNITY IMPROVEMENT PLAN,
RCI CONSULTING,
MARCH 31, 2010.
DOCUMENT
1
Review and Update
of the
Ottawa Brownfields Redevelopment
Community Improvement Plan
Submitted To:
Submitted By
March 31, 2010
1.0 INTRODUCTION
A telephone interview was also conducted with the City’s Brownfields
Redevelopment CIP Coordinator in the Community Sustainability Department, and
the City’s Program Manager, Assessment, Deputy City Treasurer in the
Revenue Branch. This interview further probed the nature of the key issues
identified during the review of background
documents and staff experiences with brownfield incentive program applications
and enquiries to date in Ottawa.
Next, a best practices review of Brownfield CIP programs in seven other
municipalities in comparison to the programs contained in the Ottawa Brownfield
Redevelopment CIP was conducted to determine how these municipalities deal with
eligible programs costs and the program questions in Section 1.2. Particular
attention was focused on the eligible costs in these municipalities for their
brownfields rehabilitation (tax increment based) grant programs.
The above noted best practices review
included a review of:
i)
Brownfield CIPs,
including any and all recent revisions to their CIPs;
ii)
Any publicly
available monitoring reports and/or reports on program results; and,
iii)
Review/discussion
of any applications that have issues similar to the application that triggered
review of the Ottawa Brownfields Redevelopment CIP.
Telephone interviews were conducted with the Brownfield CIP
coordinators in four of the seven municipalities to determine if program
eligibility issues similar to those in Ottawa have arisen in their communities,
and if so, how these issues were dealt with by their staff and Council.
Finally, this report was prepared to
summarize the results of the above noted analysis, answer the questions
outlined in Section 1.2 above, and make corresponding recommendations for
updating of the Ottawa Brownfields Redevelopment CIP.
1.4 Report
Content
Section 2.0 contains a summary of findings resulting from the review of
key background documents.
Section 3.0 presents the results of the best practices review of
brownfield redevelopment incentive programs in other municipalities.
Section 4.0 summarizes the results of the CIP, answers the questions in
Section 1.2, and provides recommendations for the updating of the Ottawa
Brownfields Redevelopment CIP.
2.0 BACKGROUND
REVIEW
2.1 Corporate Services and
Economic Development Committee Motion
Consideration of the report on the Rehabilitation Grant application
submitted by Clydesdale Shopping Centres Limited for 1357 Baseline Road
resulted in the recommendations made by Corporate Services and Economic
Development Committee to Council on December 1, 2009 (see Appendix A). The
first three recommendations deal directly with the Rehabilitation Grant
application and were taken directly from the staff report. These recommendations
will be further reviewed in Section 2.4. The fourth recommendation directed
staff to bring forward to Corporate Services and Economic Development Committee
and Council recommendations for amendments to the policy (the Brownfields
Redevelopment CIP) in Q1 2010 that ensure the policy is used to achieve its
intent. The fifth recommendation merely places a moratorium on the use of the
policy (including presumably for the Clydesdale Shopping Centres Limited
application) until amendments to the policy are approved by Council.
The motion also contains a direction that City staff ensure the policy
is applied to land, not buildings. While the impetus for the fourth
recommendation is further reviewed later in Section 2.0, the intent or purpose
of the Brownfields Redevelopment CIP is outlined in the next section to provide
a framework and context for the discussion and analysis that follows. A clear
understanding of the purpose of the Brownfields Redevelopment Strategy and CIP
will help to ensure that any recommendations for amendments to the CIP will in
fact continue to allow the CIP to achieve its intent.
2.2 Brownfields Redevelopment
CIP
The purpose of the Ottawa Brownfields
Redevelopment CIP is to “act
as the primary vehicle for implementing the Ottawa Brownfields Redevelopment
Strategy by providing a framework containing financial incentive programs and a
municipal leadership strategy that will encourage the remediation,
rehabilitation and adaptive reuse of brownfield properties in Ottawa. Furthermore,
implementation of this CIP will help the City to meet its growth management
goals.”
It
is clear from the above noted purpose statement in the Brownfields Redevelopment CIP that the incentive
programs contained in the CIP are purposely designed to promote not only
remediation of brownfield properties, but also rehabilitation of those
properties and adaptive reuse of the buildings on those properties. The
Brownfields Redevelopment CIP is also intended to help the City achieve its
growth management goals through promoting and directing infill and
intensification to identified priority areas as specified in Ottawa 20/20 and
the Official Plan.
As the Brownfields Redevelopment CIP is the
primary vehicle for implementing the Brownfields Redevelopment Strategy, the
goals of the Brownfields Redevelopment Strategy were reviewed. These goals are
as follows:
i)
Promote
Smart Growth, including the reduction of urban sprawl and its related costs,
and the construction of energy efficient buildings;
ii)
Improve
the physical and visual quality of brownfield sites and the urban area;
iii)
Improve
environmental health and public safety;
iv)
Retain
and increase employment opportunities;
v)
Increase
tax assessment and property tax revenues for the City of Ottawa and the
Province of Ontario;
vi)
awareness
of the economic, environmental and social benefits of brownfield redevelopment;
vii)
Utilize
public sector investment to leverage significant private sector investment in
brownfield remediation, rehabilitation, adaptive re-use, and redevelopment.
Goal i) includes the construction of energy efficient buildings. Goal
ii) refers to improving both the physical and visual quality of brownfield
sites. Goal v) seeks to increase assessment and property tax revenues. Goal
vii) includes not only remediation, but also rehabilitation, adaptive re-use,
and redevelopment. Therefore, it is clear that the goals of the Ottawa
Brownfields Redevelopment Strategy (and therefore the Brownfields Redevelopment
CIP) focus not only on the remediation of land, but also on building
rehabilitation, redevelopment and adaptive reuse. The Ottawa Brownfields
Redevelopment CIP takes a holistic program approach to promoting brownfield
redevelopment that seeks to achieve the City’s growth management and
sustainability goals. Therefore, restricting the eligible costs of the
Rehabilitation Grant Program to remediation (land) costs only is not consistent
with the goals of the approved Ottawa Brownfields Redevelopment Strategy and
does not reflect the purpose or intent of the Ottawa Brownfields Redevelopment
CIP.
2.3 2007-2008 Brownfields
Monitoring Report
A memorandum dated October 27, 2008 was produced to provide a status
report on the performance of the Brownfields Redevelopment Strategy to the
Corporate Services and Economic Development Committee. The Brownfields
Redevelopment CIP specifies that a monitoring report be provided to Council at
least annually. The monitoring report was also prepared in part to respond to a
Councilor enquiry requesting that staff monitor eligible costs in grant
applications and report to Corporate Services and Economic Development
Committee regarding which costs are being incurred because the site is a
“brownfield” site and which costs would be normal developments costs, and make
any recommendations arising from this review for modification to the brownfield
policy, i.e., the Brownfields Redevelopment CIP.
The Monitoring Report noted that interest in the Brownfield CIP
programs was strong. Two approved applications to the Rehabilitation Grant
Program were under construction at the time of preparation of the Monitoring
Report. One of these applications (100 Landry Street) is a very large (714
unit) residential development project on a 3.17 ha (7.8 acre) site. The
Monitoring Report notes that it was the on-site and off-site infrastructure
upgrading costs on this application that resulted in the Councilor enquiry.
Remediation related eligible costs in the 100 Landry Street application
represent 67.6% of the total costs eligible for the Rehabilitation Grant, while
on-site infrastructure costs represent 19.2% and off-site infrastructure
upgrading represents 7.9%.
The 345 St. Denis Street application was for the remediation and
rehabilitation of an existing building and site to allow the construction of 67
residential units on a 0.75 ha (1.9 acre) site. In this case, the on-site
infrastructure upgrading costs represent only 8.3% of the total grant eligible
costs and there are no off-site infrastructure upgrading costs included in the
application.
The Monitoring Report notes that the allowance for on-site and off-site
infrastructure upgrading costs as eligible costs for the Rehabilitation Grant
Program stems from the fact that brownfield properties are often located in
older areas where upgrading of on-site and off-site infrastructure is required.
The breakdown of eligible costs in the applications received to date in Ottawa
and the significant amount of on-site and off-site infrastructure upgrading
costs in two of the three applications (100 Landry Street and 1357 Baseline
Road) seem to confirm this. However, in the case of the 100 Landry Street
application, and especially the 1357 Baseline Road application, the on-site and
off-site infrastructure costs represent a much larger relative share of the
total eligible costs as compared to the 345 St. Denis Street application, where
they represent a small relative share of total eligible costs. A comparison of
the three applications in this regard is provided in Section 2.4 below.
The Monitoring Report does acknowledge that some of the costs for
on-site and off-site infrastructure would be the same regardless of location in
the city. However, the report notes that the on-site and off-site eligible
costs are an important incentive to encourage the redevelopment of contaminated
sites in Ottawa, especially in light of the reduced grant level and cap on
eligible costs in Ottawa as compared to other municipalities.
Finally, the Monitoring Report notes that the Ottawa Brownfields
Redevelopment CIP provides only a 50% tax increment based grant annually
(reduced from 70% as originally recommended in the CIP), while most other
municipalities provide between an 80% and 100% tax increment grant.
Furthermore, the Ottawa Brownfields Redevelopment CIP caps the total of all
grants, tax assistance and development charge reduction at 50% of eligible
costs. As will be shown in the Best Practices Review in Section 3.0, the impact
of this capping on total eligible costs is significant. No other municipality
in the comparison reduces total eligible costs in this fashion, i.e., by
capping the total of all grants, tax assistance and development charge
reduction at 50% of eligible costs.
2.4 Brownfields Rehabilitation
Grant Application- Clydesdale Shopping Centres
Limited – 1357 Baseline Road
The details of an application for a Brownfields Rehabilitation Grant
submitted by Clydesdale Shopping Centres Limited for the redevelopment project
at 1357 Baseline Road are contained in the Staff Report dated November 3, 2009
to the Corporate Services and Economic Development Committee. The 6.22 ha (15.4
acre) property at 1357 Baseline Road is the location of the former Laurentian
High School. This vacant two-storey building is approximately 207,000 sq.ft. in
size.
The breakdown of the eligible costs in the Rehabilitation Grant
Application shows a number of eligible costs including building demolition,
soil and groundwater remediation, on-site and off-site infrastructure
upgrading, and LEED program costs. The totals costs eligible for a Brownfields
Rehabilitation Grant on this site are $6,884,368 with that being reduced to
$3,442,184 via the 50% cap.
The proposed redevelopment of the site will take place in three phases
with the first phase to include a large format retail store and two retail use
buildings comprising approximately 15,189 square metres. The second phase would
be comprised of a retail and office component of approximately 8,488 square
metres. The third and final phase would be comprised of an additional 4,849
square metres of retail and office uses. This project will generate over $47
million in new commercial assessment.
The Staff Report notes that the application meets all of the
Rehabilitation Grant Program eligibility requirements, and therefore the
application was recommended for approval by staff. However, the Council
approved amendment to the zoning by-law to permit the development contains a
holding provision which requires that in addition to the large format retail
store, at least two of the six buildings shown on the concept plan shall also
be constructed as part of the first phase, along either the Baseline Road or
Clyde Avenue frontages. The holding provision goes on to specify that these two
buildings be completed for occupancy within three years of the commencement of
construction of the large format retail store. The holding provision goes on to
state that the City will retain brownfields grant funding until the street edge
buildings required by the holding provision have been completed.
As a result of the above noted wording in the holding provision of the
zoning by-law amendment, the Staff Report on the Rehabilitation Grant
Application recommends that the Rehabilitation Grant Agreement with Clydesdale
Shopping Centres Limited contain terms and conditions that enforce the grant
holdback provision outlined in the holding provision of the zoning by-law
amendment. Essentially, the Rehabilitation Grant Agreement (a financial tool)
is being used as the mechanism to implement the holding provision, which is a Planning Act tool.
Based
on a review of tax increment based brownfield redevelopment grant applications
in several of the municipalities in the Best Practices Review, and the author’s
knowledge of such applications in numerous municipalities across Ontario, the
City of Ottawa is the first, or one of the first municipalities in Ontario, to
use a tax increment based brownfield rehabilitation grant agreement in such a
manner, i.e., to enforce a condition of approval on a planning application.
While
such use of the Brownfields Rehabilitation Grant and Agreement may not be
common among Ontario municipalities, it is permitted by the Ottawa Brownfields
Redevelopment CIP. Specifically, one of the general program requirements in the
CIP requires that all proposed works approved under the incentive programs and
associated improvements to buildings and/or land shall conform to all municipal
by-laws, policies, procedures, standards and guidelines, including applicable
Official Plan and zoning requirements and approvals. Also, the requirements of
the Brownfields Rehabilitation Grant Program specify that applicants
participating in this program will be required to enter into an agreement with
the City which will specify the terms of the grant. Therefore, the City’s use
of the Brownfields Rehabilitation Grant Agreement to enforce a condition of
planning approval is permissible and appropriate.
The proposed commercial development project at 1357 Baseline Road is
quite different than the previous two projects approved under the
Rehabilitation Grant Program. The project at 1357 Baseline Road is a large
scale commercial redevelopment of a brownfield site involving demolition of the
existing building. The residential redevelopment project at 100 Landry Street
is a large scale mixed density residential development on a vacant brownfield
site, while the residential redevelopment project at 345 St. Denis Street is an
adaptive reuse of an existing building on a brownfield site and construction of
new townhouses. These three applications are very different from a brownfield
redevelopment perspective, and it is only natural that these applications would
generate a wide range and variety of eligible costs for the City’s
Rehabilitation Grant Program.
The eligible costs of all three Rehabilitation Grant applications received
to date are fairly significant, ranging from approximately $1.9 million for 345
St. Denis Street, to $3.8 million for 100 Landry Street and $3.4 million for
1357 Baseline Road. The St. Denis and Landry Street applications are certainly
at the higher end of total eligible costs one would expect to see with this
type of application (residential redevelopment). To gain a better understanding
of the nature of the eligible costs contained in these three applications and
how this may impact the Rehabilitation Grant Program, a breakdown of the
estimated eligible costs for each of the three applications is shown in Figure
1 below.
Figure 1 Rehabilitation
Grant Eligible Cost Comparison of Applications Submitted to Date
|
Eligible Cost
|
345 St. Denis Street
|
100 Landry Street
|
1357 Baseline Road
|
|
|
Amount
($)
|
% of Total
Eligible Costs
|
Amount
($)
|
% of Total
Eligible Costs
|
Amount
($)
|
% of Total
Eligible Costs
|
|
Environmental Remediation
|
484,204
|
12.8
|
5,120,000
|
67.6
|
1,010,100
|
14.7
|
|
LEED Program Component
|
61,200
|
1.6
|
0
|
0.0
|
74,081
|
1.1
|
|
30% of Building Permit Fee
|
24,478
|
0.6
|
400,000
|
5.3
|
137,210
|
2.0
|
|
Building Demolition
|
125,500
|
3.3
|
0
|
0.0
|
1,820,498
|
26.4
|
|
Building Rehabilitation/
Retrofit
|
2,775,840
|
73.3
|
0
|
0.0
|
0
|
0.0
|
|
Upgrading On-Site
Infrastructure
|
315,027
|
8.3
|
1,456,000
|
19.2
|
1,503,479
|
21.8
|
|
Constructing/Upgrading
Off-Site Infrastructure
|
0
|
0.0
|
597,250
|
7.9
|
2,339,000
|
34.0
|
|
TOTAL Eligible Cost
|
3,786,249
|
100
|
7,573,250
|
100
|
6,884,368
|
|
|
TOTAL Eligible Cost
with 50% cap applied
|
1,893,125
|
|
3,786,625
|
|
3,442,184
|
|
Figure 1 clearly shows how different the three Rehabilitation Grant
applications received by the City of Ottawa have been to date in terms of the
types of eligible costs. The 345 St. Denis Street application is a typical
adaptive reuse type application with rehabilitation and retrofit of the
existing building making up a majority (73.3%) of the eligible costs, and
environmental remediation at 12.8% of eligible costs. Onsite infrastructure
upgrading accounts for only 8.3% of total estimated eligible costs. With reuse
of the existing building for 48 apartment units and addition of only 19
townhouse units, there is little demand for on-site infrastructure upgrading
and no requirement for off-site infrastructure upgrading with this application
because it is not a large scale residential redevelopment application.
The 100 Landry Street application is a much larger scale residential
development on a vacant site with 714 units proposed, split between apartment
units, seniors units, stacked townhouses, and townhouses. Environmental
remediation costs (at 67.6%) make up the bulk of the eligible costs. However,
on-site infrastructure costs are fairly substantial at 19.2%. At 7.9%, off-site
infrastructure costs represent a smaller proportion of total eligible costs.
Except for the larger share of eligible costs for upgrading on-site
infrastructure, 100 Landry Street appears typical of a large scale residential
redevelopment project on a vacant brownfield site. The off-site costs for 100
Landry Street are made up of road widening/reconstruction and traffic signals
necessitated by the development. Presumably, if this development had been
constructed in a greenfield area, adequate road capacity and signalization
would have already been in place through the planning process, and these
off-site infrastructure upgrading expenses would not have been incurred by the
developer, or they would have been much less.
The 1357 Baseline Road application is a large scale commercial
redevelopment project. This particular project is somewhat atypical in that it
combines remediation, building demolition, on-site infrastructure upgrading and
the construction of off-site infrastructure. Furthermore, the eligible on-site
(21.8%) and off-site (34.0%) infrastructure costs together represent over 55%
of the total eligible costs. In this regard, the application is quite different
than the first two applications. The $1.50 million in eligible on-site
infrastructure upgrading is attributable to the requirement to remove and
replace the existing water, sanitary and storm sewer mains on the site because
these services were deteriorated due to age, and lacked the capacity to service
the proposed large scale commercial development. The $2.34 million in off-site
infrastructure upgrading consists of $1 million for electrical plant and
network upgrading, and $1.34 million in transportation infrastructure upgrades
including roads, turning lanes, and traffic signalization.
One would not expect to see these high off-site infrastructure costs
with the redevelopment of a brownfield site, but the nature of the proposed
redevelopment (large scale commercial redevelopment) will generate electrical
demands and traffic levels that necessitate these upgrades. While it is not
anticipated that the City of Ottawa will receive numerous applications similar
to the 1357 Baseline Road (large share of total eligible costs in on-site and
especially off-site infrastructure upgrading) in the future, the issue of
eligibility of these costs in light of the intent of the CIP needs to be
addressed. Discussions and recommendations regarding the eligibility of on-site
and off-site infrastructure costs are presented in Section 4.0 of this report.
2.5 Guideline for Development
Charge Reduction Program due to Site Contamination
The
Development Charge Reduction Program Due to Site Contamination is an existing
program of Council. Development Charges By-law No. 2009-216, passed by City
Council on June 24, 2009 (and its predecessor) provides for an exemption from
development charges, where specifically authorized by a resolution of Council,
for development on contaminated land in accordance with the Guideline for
Development Charge Reduction Program due to Site Contamination as approved by
Council on March 28, 2007. The purpose of the Development Charge Reduction
Program is to encourage the remediation, rehabilitation and adaptive re-use of
brownfield sites by providing a reduction in development charges that would
normally be paid at the time that a building permit is issued. This reduction would help to pay for
additional site-related rehabilitation costs normally associated with
brownfield sites.
The
Development Charge Reduction Program is fully integrated with the
Rehabilitation Grant Program contained in the CIP. Therefore, an application
for a Development Charge Reduction Due to Site Contamination (brownfields)
requires that an application for a Rehabilitation Grant be submitted and
approved. Applicants with an approved application and agreement for a property
under the Rehabilitation Grant Program then have the option of reducing their
development charges payable at the time of building permit issuance. The
maximum amount of reduction of development charges is up to 50% of the eligible
costs as defined in the Guideline in priority areas for infill and
intensification, and up to a 25% reduction in eligible costs outside of these
priority areas, but within the Community Improvement Project Area. “Eligible
costs” are defined as the costs of any action taken to reduce the concentration
of contaminants on, in or under the property to permit a record of site
condition (RSC) to be filed in the Environmental Site Registry under Section
168.4 of the Environmental Protection Act. This includes the following costs not covered
by any other financial incentive program in the CIP:
a)
Phase II ESAs, Remedial Work Plans, and Risk
Assessments;
b)
environmental remediation, including the costs
of preparing a RSC;
c)
placing clean fill and grading;
d)
installing environmental and/or engineering
controls/works as specified in the Remedial Work
Plan and/or Risk Assessment;
e)
monitoring, maintaining and operating
environmental and engineering controls/works, as specified in the Remedial Work Plan and/or Risk Assessment;
f)
environmental insurance premiums.
g)
the following
Leadership in Energy and Environmental Design (LEED) Program Components:
i)
base
plan review by a certified LEED consultant;
ii)
preparing
new working drawings to the LEED standard;
iii)
submitting
and administering the constructed element testing and certification used to
determine the LEED
The
amount of eligible costs applied against the development charges payable is
then deducted from the grant available under the Rehabilitation Grant Program.
This is a common practice among municipalities that offer a development charge
reduction program for contaminated sites. However, the 50%/25% cap on eligible
costs that can be applied against development charges payable in Ottawa is a
practice that is not used by any of the municipalities in the best practices
review who offer a development charge reduction program for contaminated sites
(Kingston, Hamilton, Niagara Falls, and Waterloo). These municipalities allow
applicants with an approved tax increment based grant to apply 100% of eligible
remediation costs against development charges payable.
3.0 BEST
PRACTICES REVIEW
3.1 Municipal
Brownfield Redevelopment Incentive Programs
Figure 2 presents a comparison of the incentive programs offered in the
Brownfield CIPs of eight Ontario municipalities (including Ottawa). The City of
Cornwall offers seven types of incentive programs to promote brownfield
redevelopment, and Ottawa is next with six types of incentive programs.
Kingston offers five, and the other municipalities offer four or three types of
incentive programs. However, it is not the number of programs offered by a
municipality that is important to a developer, but rather, the total amount of
brownfield related costs that can be recovered through the available incentives
and the timing of that cost recovery, i.e., upfront or at building permit stage
(more preferable) versus tax increment based grants (less preferable).
Figure 2 Summary
of Municipal Brownfield Redevelopment Incentive Programs
|
Type of Program
|
Municipality
|
|
|
Niagara
Falls
|
Hamilton
|
Chatham-Kent
|
Cornwall
|
Guelph
|
Kingston
|
Waterloo
|
Ottawa
|
|
1) Environmental Assessment Grant
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
|
2) Feasibility Study Grant
|
|
|
X
|
X
|
|
|
|
X
|
|
3) Tax-Increment Based Grant
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
|
4) Tax Assistance (Freeze/
Cancellation)
|
X
|
X
|
X
|
X
|
X
|
X
|
|
X
|
|
5) Development Charge Waiver
|
X
|
X
|
|
No DCs
|
|
X
|
X
|
X
|
|
6) Planning/
Development Application Fee Reduction/Waiver
|
|
|
|
X
|
|
X
|
|
|
|
7)Building Permit Fee Reduction/ Waiver
|
|
|
|
X
|
|
|
|
X
|
|
8) Payment In-Lieu of Parkland Dedication Waiver
|
|
|
|
X
|
|
|
|
|
As noted in the previous section, the City of Ottawa’s 50% cap on
eligible costs for all grants, tax assistance and development charges, and its
50% tax increment grant level for its Rehabilitation Grant Program (as compared
to 80% to 100% in most other municipalities) presents somewhat of a competitive
challenge for Ottawa as compared to the other municipalities in the Best
Practices Review.
3.2 Tax
Increment Based Grant Programs
Figure 3 compares the Rehabilitation Grant Program (tax increment
based) eligible costs of the 1357 Baseline Road application in Ottawa to the
comparable tax increment based grant programs in the seven other
municipalities, i.e., what would the 1357 Baseline Road application be eligible
for if it was taking place in these other municipalities? A blank cell in
Figure 3 means that cost is not an eligible cost in that municipality. Based on
the eligible cost issued identified in Ottawa, the rows showing the eligibility
and amount of on-site and off-site infrastructure costs have been highlighted.
Figure 3 Municipal
Comparison of Tax Increment Based Eligible Costs of
1357
Baseline Road Application (Ottawa)
|
Eligible Cost
|
Municipality
|
|
|
Niagara
Falls
|
Hamilton
|
Chatham-Kent
|
Cornwall
|
Guelph
|
Kingston
|
Waterloo
|
Ottawa
|
|
Environmental Remediation
|
$1,000,100
|
$1,000,100
|
$1,010,100
|
$1,000,100
|
$1,000,100
|
$1,000,100
|
$1,100,110
|
$1,010,100
|
|
LEED Costs
|
|
$74,081
|
|
|
|
$74,081
|
|
$74,081
|
|
Building Demolition
|
$1,820,498
|
$1,820,498
|
$1,820,498
|
$1,820,498
|
$1,820,498
|
$1,820,498
|
$1,820,498
|
$1,820,498
|
|
On-Site Infrastructure
|
$1,503,479
|
$375,870
(25%)
|
$1,503,479
|
$1,503,479
|
|
$751,740
(50%)
|
|
$1,503,479
|
|
Off-Site Infrastructure
|
$2,339,000
|
|
$2,339,000
|
|
|
|
|
$2,339,000
|
|
Building Permit Fee
|
|
|
|
$457,366
|
|
|
|
$137,210
|
|
Total Eligible Costs
|
$6,663,077
|
$3,270,549
|
$6,673,077
|
$4,781,443
|
$2,820,598
|
$3,646,419
|
$2,920,608
|
$6,884,368*0.50=
$3,442,184
|
|
RANK
(1=highest,
8= lowest)
|
2
|
6
|
1
|
3
|
8
|
4
|
7
|
5
|
|
Tax Increment
Grant Level
|
80%
|
80%
|
80%
|
80%
|
80%
|
80%
|
100%
|
50%
|
If the 1357 Baseline Road application was being made in each of the
municipalities in the comparison, based strictly on eligible costs included in
their tax increment based grant programs, Chatham-Kent (at $6.67 million) and
Niagara Falls (at $6.66 million) would offer the greatest eligible costs.
Ottawa’s tax increment based grant program offers $3.44 million, which ranks
Ottawa fifth out of the eight municipalities. Waterloo Region (at $2.92
million) and the City of Guelph (at $2.82 million) offer the lowest eligible
costs for this particular application.
However, as previously noted, Figure 3 does not tell the whole story
because a developer will actually be interested in how much of the eligible
costs they can recoup from the incentive program, and how quickly they can
recoup these costs. The total eligible costs in Figure 3 are nothing more than
a potential maximum. The actual amount of the eligible costs the developer will
recoup is dependent on the assessment value of the project, property tax rate,
and the tax increment grant level provided in each municipality.
The calculation of the pre-project and post-project assessment value of
the proposed project at 1357 Baseline Road if built in each of the
municipalities in the comparison, and application of the applicable property
tax rates in each of those municipalities to calculate municipality specific
tax increments is outside the scope of this study. However, if it is assumed
that the estimated annual municipal tax increment for Phase I of the project in
Ottawa ($315,837) would be generated in the other municipalities in the
comparison, the tax increment grant level and eligible cost maximums can be
applied to calculate the actual tax increment grant that would be received by
the developer if Phase I of this project was built in each of the eight
municipalities.
All eight of the municipalities in the
comparison offer their tax increment based grants for 10 years, or up to the
point in time where the total grant paid out equals the total eligible costs
(see Figure 3), whichever comes first. Applying the tax increment grant levels
in each of the municipalities to the tax increment of $315,837 produces the
following estimated grant if the proposed project at 1357 Baseline Road were
built in each of the municipalities:
Waterloo = $2,920,608 (maximum eligible cost paid out in 9.2 years);
Niagara Falls, Hamilton, Chatham-Kent, Cornwall, Guelph and Kingston =
$2,526,696 paid out over 10 years; and,
Ottawa = $1,579,190 paid out over 10 years.
This comparison clearly demonstrates that if only Phase I of the
project was built in the eight municipalities, because of the tax increment
grant level of only 50% in Ottawa, the developer can expect to recoup
approximately $1.3 million less than if the project was built in the Waterloo
Region, and approximately $1 million less than if the project were built in any
of the other municipalities.
As on-site and off-site infrastructure upgrading costs have been
identified as a key issue in Ottawa, the highlighted section of Figure 3
provides a comparison of the eligibility status of on-site and off-site
infrastructure upgrading costs in the tax increment based grant programs of the
eight municipalities in the comparison. Six of the eight municipalities include
on-site infrastructure upgrading as an eligible cost in their tax increment
based grant programs. Ottawa, Niagara Falls, Chatham-Kent and Cornwall allow
100% of on-site infrastructure upgrading as an eligible cost. Kingston allows
50% of on-site infrastructure upgrading as an eligible cost, and Hamilton
allows only 25%. Clearly, a majority of the municipalities in the comparison
recognize on-site infrastructure upgrading as an eligible cost in their tax
increment based grant programs. However, two of these municipalities (Kingston
and Hamilton) provide a reduced level of funding for on-site infrastructure
costs. This practice presumably recognizes that only some of these costs would
be for removal of existing obsolete on-site services or improvement of existing
services. Therefore, the reduction of on-site infrastructure upgrading costs
from their current 100% eligible level is an option for the City of Ottawa’s
Rehabilitation Grant Program. This option will be further discussed in Section
4.0.
Three of the eight municipalities in the comparison include 100% of
off-site infrastructure upgrading as an eligible cost in their tax increment
based grant programs. The other five municipalities do not include off-site
infrastructure upgrading as an eligible cost in their tax increment based grant
programs, presumably because these municipalities do not think off-site costs
should be an eligible cost. Reduction from the current 100% level, or
elimination of off-site infrastructure upgrading costs is an option for the
City of Ottawa’s Rehabilitation Grant Program. This option will be further
discussed in Section 4.0.
3.3 Similar
Program Issues in Other Municipalities
The particulars of the 100 Landry Street and 1357 Baseline Road
Rehabilitation Grant Program applications have raised a number of issues in
Ottawa that led directly to the questions specified in Section 1.2 of this
report. The size and type of development proposed for 100 Landry Street, and
especially 1357 Baseline Road, has resulted in the eligible on-site and
off-site infrastructure costs for these projects being very large, especially
in comparison to the environmental remediation costs. Therefore, the continued
inclusion or eligibility of on-site and especially off-site infrastructure
costs in Ottawa’s tax increment based grant program has been questioned.
Next, concern has been expressed with respect to former owners of
brownfield sites, specifically public institutional owners, who sell
contaminated sites at fair market value (or higher), only to then have the
private sector purchaser make an application to the City of Ottawa for its tax
increment based grant program. This raises the issue of who should be eligible
to apply for and receive funding under the programs contained in the CIP.
There has also been some concern expressed with regard to appropriate
end uses for applications to the Rehabilitation Grant Program. While permitted land
use is governed by the Official Plan and Zoning By-law, there has been some
question as to why large commercial developments/ developers require the
financial assistance offered by the Rehabilitation Grant Program and the other
incentive programs contained in the Brownfields Redevelopment CIP.
Finally, some or all of the above noted issues may have led to the
direction to staff to “ensure the policy is applied to land, not buildings”.
While this direction is vague, the question of whether or not the Brownfields
Redevelopment CIP Programs should apply to only to “land” or “land and
buildings” will be addressed along with all the other issues in Section 4.0.
Available monitoring reports from the other municipalities in the best
practices review comparison were reviewed to identify if any issues similar to
those in Ottawa had arisen. Furthermore, the Brownfield CIP coordinators in
Cornwall, Kitchener/Waterloo, Hamilton and Niagara Falls were interviewed to
determine if any similar issues had arisen in their municipalities, and if so,
how these issues were resolved.
Review of available monitoring reports in the other municipalities did
not find any mention of the significant on-site/off-site infrastructure cost
issues that have arisen in the applications in Ottawa. The tax increment based
grant applications in other municipalities included municipalities that had
seen mostly commercial development projects (Cornwall), mostly residential
developments (Waterloo) and a mix of commercial and residential projects
(Hamilton).
During the interviews with the CIP coordinators in the other
municipalities, it was determined that a few tax increment based grant
applications in the other municipalities did contain eligible on-site and
off-site infrastructure costs. However, the size of these on-site and off-site
infrastructure upgrading costs does not appear to be nearly as large as in the
100 Landry Street and 1357 Baseline Road applications in Ottawa. Therefore, it
would appear that at this time, this issue of large on-site and off-site
infrastructure costs is unique to Ottawa, and it has not come up with any
frequency in other municipalities.
Despite considerable probing, only two of the four municipal Brownfield
CIP coordinators could recall any issues arising around brownfield incentive
program applications in their municipalities that were in any way similar to
the issues raised to date in Ottawa. One of the many tax increment based grant
applications approved in Hamilton was for a large commercial development project
(480.000 sq.ft.) on a former 14.7 ha (36.4 acre) industrial site. The
application was for a $2,162,000 tax increment based grant. This application
was similar in terms of end use and scope to the 1357 Baseline Road application
in Ottawa. There was some discussion at the Hamilton Planning and Economic
Development Committee meeting by one or two councilors around the need to
provide this grant to a large commercial developer, and if the grant funding
could not be put to better use on other brownfield redevelopment projects. City
of Hamilton staff and the developer’s consultant reminded the Planning and
Economic Development Committee that the application met all of the City’s
program requirements, the eligible costs were significantly large, and denying
an application simply on the basis of the applicant being a large commercial
developer would be discriminatory. The application was approved by a wide
margin by Hamilton’s Planning and Economic Development Committee and Council.
The above noted large commercial development project in Hamilton also
faced similar planning issues to the 1357 Baseline Road application in Ottawa.
The City of Hamilton was also concerned that office/hotel uses on the site be
constructed at the same time as the large retail commercial building. However,
Hamilton relied only on the holding provision in their zoning by-law amendment
to secure this requirement, rather than also adding this requirement to their
tax increment based grant agreement with the developer.
The only other instance where an issue similar to that in Ottawa arose
in the other municipalities interviewed was in Kitchener. Kitchener (as a lower
tier municipality) and Waterloo Region (as the upper tier municipality)
administer their Brownfield CIP programs together, although the Region does
much of the actual processing of the applications. A developer who had been
approved for a tax increment based grant in Kitchener made a statement to the
media that they may have elected to undertake the proposed project even if they
had not been approved for the municipal grant. This generated some discussion
at the Regional level, and there was some indication that Waterloo Regional
Council may review proposed program applications somewhat more closely
vis-à-vis need for assistance and financial ability and track record of the
applicant, but no changes were made to any of the incentive programs or
eligibility criteria as a result of the developer’s comments.
A few of the eight municipalities in the comparison have made minor
revisions to their CIPs recently. Most of these were housekeeping type
amendments. However, the City of Hamilton just recently approved a few
substantive revisions to its ERASE Brownfields CIP. One of the revisions was to
increase the 50% matching grant amount available under their ERASE Study Grant
Program from a maximum grant of $15,000 per study and maximum of $20,000 per
study/project, to a maximum grant of $20,000 per study and maximum of $25,000
per study/project. This increase is in recognition of the increased costs of
Phase II ESAs that will result from the recent introduction of new (more
stringent) environmental standards through amendments to O. Reg 153/04.
The City of Hamilton also revised the eligible costs under its tax
incremented based redevelopment grant program to include not only LEED
certification costs but also LEED construction and material costs as eligible
costs. The City of Hamilton also introduced a pilot remediation loan program
for brownfield sites in its downtown area. This program provides a low interest
rate loan equal to 75% of remediation costs, up to a maximum loan of $100,000.
This loan program is designed to assist the owners of smaller projects with
upfront remediation funding.
Based on the analysis contained in the previous sections, this section
reviews and responds to the questions specified in Section 1.2 of this report
that have been raised around various program issues in Ottawa. Each of the five
questions is posed and a response is provided below.
1) Who should be eligible to apply for and receive funding
under the CIP programs?
This question arose out of some concern that large commercial
developers are being provided the same opportunity to apply for the
Rehabilitation Grant Program as any other applicant. In particular, concern was
expressed with the 1357 Baseline Road application that the applicant may have
overpaid for a brownfield property that was sold by a public institution, and
is in turn requesting municipal financial assistance for remediation and
redevelopment of the property.
The definition of an “applicant” is clear in the Glossary of Terms
contained in the Ottawa Brownfields Redevelopment CIP. An applicant is an owner
or tenant within the community improvement project area and any person to whom
an owner or tenant has assigned the right to receive a grant. The only
restriction in the definition of applicant is that public sector owners of
property can apply only for the Feasibility Study Grant Program and the
Environmental Site Assessment Grant Program.
Once an applicant meets the definition of “applicant” in the CIP, then
the appropriate answer to the question of who should be eligible to receive
funding lies in focusing on the application, and not the applicant. If the application
meets all the general and program specific eligibility requirements, and the
applicant is not the polluter of the property, then staff should make their
recommendations to Council, and Council should make its decision on the
application based solely on the merits of the application, without regard to
the previous owner or previous land use. The definition of “applicant” and the
program eligibility requirements in the CIP are clear and have been included in
the CIP to establish who can make application to the programs contained in the
CIP. While staff and Council may wish to consider the financial and project
experience ability of the applicant to complete the proposed project, the
former land use and/or previous owner of the site should not factor into the
evaluation of the application. To date, no other municipality has deviated from
this approach. To do so could be considered discriminatory could meet with
considerable criticism from applicants, undermine the integrity of the
Brownfields Redevelopment CIP, and ultimately have possible legal consequences.
2) What land uses should be
eligible for funding under the CIP programs?
This question is very similar to question 1). This question arose out
of the concern that commercial developments, and in particular large commercial
developments, should not be provided with municipal financial assistance
because they do not actually require the financial assistance. Due to the more
stringent standards for residential development, many brownfield sites simply
cannot be feasibly redeveloped for residential use even with financial
incentives. If brownfield sites that are zoned for commercial use or that could
be zoned for commercial use are not provided with financial assistance for
remediation and rehabilitation, and these sites cannot feasibly be redeveloped
for residential use due to costs, then these sites may simply sit idle across
Ottawa.
Similar to the response to question 1), for the municipality to begin
deciding which types of end uses or even which projects require financial
assistance and which do not, is highly assumptive and potentially
discriminatory. Again, the program requirements in the Brownfield CIP have been
established to promote only projects that require financial assistance with
remediation and other brownfield related expenses. It is also important to
remember that the determination of permitted land uses is made through the
Official Plan and Zoning By-law. The planning process is the appropriate
process for determining land use. While it may be appropriate to utilize
financial incentive agreements to help achieve certain site-specific planning
goals such as project phasing, these site specific goals should be established
in planning documents such as the Zoning By-law through the use of holding
provisions, or in other City policy guidelines or documents.
The financial incentive programs in a CIP should not be used to promote
certain end land uses over others unless the CIP itself has identified a need
to promote certain end land uses within a specific community improvement
project area, or part thereof. In this regard, the Ottawa Brownfields
Redevelopment CIP does provide greater incentive program benefits for
applications on brownfield sites in the Central Area, Mixed Use Centres, along
Mainstreets and within 600 metres of existing or planned rapid transit stations
to support the sustainable growth
management objectives of the Official Plan, but it does not
differentiate incentive program benefits based on end land use.
Again, while it is not appropriate to use the
Brownfields CIP programs approval process to determine end land use, it is
appropriate to utilize financial incentive agreements to help achieve certain
site-specific planning goals such as project phasing. The recommendation in the
staff report on the 1357 Baseline Road application is a good example of this
approach. Construction and completion of two street edged buildings was tied to
commencement of construction of the large format retail store through a holding
provision in the Zoning By-law amendment. Enforcement of this condition by
withholding of the Rehabilitation Grant until the condition is met is an
appropriate and progressive use of the Brownfields Rehabilitation Grant
Agreement in that it protects the municipality’s planning and financial
interests. However, the City of Ottawa should ensure that any future
integration between the Brownfields CIP programs approval process and the
planning approvals process in this manner, i.e., use of the grant agreement to
enforce planning conditions, is:
a) solely for the purpose of enforcing a planning
condition that is explicitly specified within an origin planning document,
e.g., holding provision in the zoning by-law; and,
b)
used judiciously
and appropriately.
4) Should the Brownfields CIP programs apply only to land, or
to land and buildings?
The answer to this question lies in a
review of the purpose of the Ottawa Brownfields Redevelopment CIP, i.e., was it
designed solely to address contaminated sites, or was it designed to address
contaminated properties that also have obsolete/derelict buildings? The stated
purpose of the Ottawa Brownfields Redevelopment CIP is to “act as the
primary vehicle for implementing the Ottawa Brownfields Redevelopment Strategy
by providing a framework containing financial incentive programs and a
municipal leadership strategy that will encourage the remediation, rehabilitation
and adaptive reuse of brownfield properties in Ottawa. Furthermore,
implementation of this CIP will help the City to meet its growth management
goals.”
It
is clear from the Purpose statement in the Brownfields
Redevelopment CIP that the incentive programs contained in the CIP are
purposely designed to promote not only remediation of brownfield properties,
but also rehabilitation of those properties and adaptive reuse of the buildings
on those properties. The Brownfields Redevelopment Strategy is also intended to
help the City achieve its growth management goals through promoting and
directing infill and intensification to identified priority areas as specified
in Ottawa 20/20 and the Official Plan.
These goals of the Brownfields Redevelopment
Strategy are as follows:
i)
Promote
Smart Growth, including the reduction of urban sprawl and its related costs,
and the construction of energy efficient buildings;
ii)
Improve
the physical and visual quality of brownfield sites and the urban area;
iii)
Improve
environmental health and public safety;
iv)
Retain
and increase employment opportunities;
v)
Increase
tax assessment and property tax revenues for the City of Ottawa and the
Province of Ontario;
vi)
awareness
of the economic, environmental and social benefits of brownfield redevelopment;
vii)
Utilize
public sector investment to leverage significant private sector investment in
brownfield remediation, rehabilitation, adaptive re-use, and redevelopment.
Goal i) includes the construction of energy efficient buildings. Goal
ii) refers to improving both the physical and visual quality of brownfield
sites. Goal v) seeks to increase assessment and property tax revenues. Goal
vii) includes not only remediation, but also rehabilitation, adaptive re-use,
and redevelopment. Therefore, it is clear that the goals of the Ottawa
Brownfields Redevelopment Strategy (and therefore the Brownfields Redevelopment
CIP) focus not only on remediation of land, but also on building
rehabilitation, redevelopment and adaptive reuse. The Ottawa Brownfields Redevelopment
CIP takes a holistic program approach to promoting brownfield redevelopment
that seeks to achieve the City’s growth management and sustainability goals.
Therefore, restricting the eligible costs of the Rehabilitation Grant Program
to remediation (land) costs only is not consistent with the goals of the
approved Ottawa Brownfields Redevelopment Strategy and does not reflect the
purpose or intent of the Ottawa Brownfields Redevelopment CIP.
5) What should be included as eligible costs in the Rehabilitation
Grant Program?
This is a broader and more relevant version of question 4. Question 5
asks which specific costs should be included as eligible costs in the
Rehabilitation Grant Program. Furthermore, it is important to ensure that the
answer to this policy question (and any resulting recommendations for
amendments to the program eligible costs in the CIP) in fact continue to allow
the CIP to achieve its intent. Based on the response to question 4 and the
review of the stated goals of the Brownfield Redevelopment Strategy, it is
clear that the currently eligible costs associated with both the land
(environmental remediation and associated costs) and buildings (demolition,
rehabilitation/ retrofit, and LEED program component) within the Rehabilitation
Grant Program should remain as eligible costs.
At issue are the upgrading of on-site infrastructure and the
construction/upgrading of off-site infrastructure as eligible costs. As
previously stated, based on comparison to brownfields tax increment based grant
applications in several other Ontario municipalities, on-site and off-site
infrastructure costs as an issue appears to be somewhat unique to the
applications received to date in Ottawa. Notwithstanding that the impact of
these eligible on-site and off-site infrastructure costs is mitigated by the
50% eligible cost cap in Ottawa, what appears to be the key concern is the size
of these costs in two of the three applications received to date
As previously stated, it is not anticipated that the City of Ottawa
will receive numerous applications similar to the 1357 Baseline Road (large
share of total eligible costs in on-site and especially off-site infrastructure
upgrading) in the future. However, the issue around eligibility of on-site and
off-site infrastructure costs does need to be addressed. In order to address
this issue, the approach taken was to once again review the goals of the
Brownfields Redevelopment Strategy and CIP, and also to review how other
municipalities deal with these eligible costs.
The goals of the Brownfields Redevelopment Strategy include promoting
Smart Growth, the reduction of urban sprawl and utilizing public sector
investment to leverage significant private sector investment in brownfield
remediation, rehabilitation, adaptive re-use, and redevelopment. The reference
to promoting Smart Growth, reducing urban sprawl and promoting adaptive
building reuse implies that brownfield redevelopment projects re-use existing
infrastructure. However, existing on-site infrastructure cannot always be
reused in its current condition and capacity. It sometimes needs to be
upgraded, or removed and replaced. Similarly, off-site infrastructure must
often be upgraded or constructed to support the proposed development.
Therefore, there is certainly policy support for expenditures required to reuse
existing infrastructure as an eligible cost in the Brownfields Rehabilitation
Grant Program. The question then becomes to what extent should on-site
infrastructure upgrading and off-site infrastructure upgrading/construction be
included as eligible costs in the Brownfields Rehabilitation Grant Program?
Notionally, on-site infrastructure upgrading is much closer to the
concept of land rehabilitation or building rehabilitation/retrofitting than is
off-site infrastructure upgrading/construction. The water, sanitary and storm
sewers that service a building from the property line inward can be considered
a part of, or extension of, the building’s systems. This is not necessarily the
case with off-site infrastructure upgrades such as road and traffic system
upgrades. Also, because of the age and condition of existing on-site
infrastructure, the upgrading of on-site infrastructure may be required even if
the proposed reuse or redevelopment of the site is the same intensity or only
marginally more intensive than the existing use. The upgrading of off-site
infrastructure is almost always directly tied to the type and density of the
proposed development. Therefore, an argument can be made that based on the
goals of the Brownfields Redevelopment CIP, on-site infrastructure costs merit
inclusion as eligible costs in the Rehabilitation Grant Program, while off-site
infrastructure costs do not, or at the very least that off-site infrastructure
costs do not merit the same level of incentivization as on-site infrastructure
costs.
In reviewing how other municipalities handle on-site and off-site
infrastructure costs, it would appear that a number of these municipalities may
have reached the same conclusion. Five of the seven other municipalities in the
comparison include on-site infrastructure costs as an eligible cost in their
tax increment based grant programs, but only two of the other municipalities
include off-site infrastructure costs as an eligible cost. Niagara Falls, Chatham-Kent
and Cornwall include 100% of the on-site infrastructure upgrading costs as
eligible costs in their tax increment based grants. Kingston includes 50%,
while Hamilton includes 25% of on-site infrastructure upgrading costs as
eligible costs in their tax increment based grant. Presumably, this reduction
in Kingston and Hamilton was done to reflect that only some of the on-site
infrastructure upgrading costs would be for removal of existing obsolete
on-site services or improvement of existing services. Therefore, based on the
goals of its Brownfields Redevelopment CIP and best practices in other
municipalities, the City of Ottawa should consider reducing the eligibility of
on-site infrastructure costs to 50%. This would match the current practice in Kingston,
while still helping achieve the intent of the Brownfields Redevelopment CIP to
promote efficient use of existing services, adaptive reuse and redevelopment of
brownfield sites.
In the municipal comparison, other than the City of Ottawa, only Niagara
Falls and Chatham-Kent allow off-site infrastructure costs (100%) as an
eligible cost in their tax increment based grant programs. Obviously, the other
six municipalities do not feel it is necessary, appropriate and/or financially
sustainable to provide any financial assistance for off-site infrastructure
upgrading.
It is interesting that municipalities seem to either allow off-site
infrastructure costs at the 100% level, or not at all. This is likely a
reflection of the fact that each application containing off-site infrastructure
upgrading/construction costs is very different, and municipalities may find it
very difficult if not impossible to arrive at a percentage that adequately
addresses each application.
Therefore, based on
the goals of its Brownfields Redevelopment CIP and best practices in other
municipalities, and because off-site costs appear to be an order of magnitude
removed from the concept of land rehabilitation or building
rehabilitation/retrofitting when compared to on-site infrastructure costs, the
City of Ottawa should consider eliminating off-site infrastructure costs as an
eligible cost in the Rehabilitation Grant Program.
One test of the impact of the above noted suggestions regarding on-site
and off-site infrastructure eligibility would be to apply the reduction of
on-site site infrastructure costs to 50% and elimination of off-site
infrastructure costs to the two approved and one pending Rehabilitation Grant
applications in the City of Ottawa. Figure 4 displays the results of this exercise.
The impacts on the three applications are quite different and display clearly
how the proposed revisions to the Rehabilitation Grant Program would impact
different types of applications. Because the 345 St. Denis Street application
contains only $315,000 in on-site infrastructure upgrading costs and no
off-site infrastructure upgrading costs, the impact on the eligible costs of
the proposed changes is nominal. Eligible costs would have decreased by only
$78,757 or 4.2%. The 100 Landry Street application which contains $1.46 million
in on-site infrastructure upgrading costs and almost $600,000 in off-site
infrastructure costs would be more significantly impacted. This application
would have lost $662,625 in eligible costs for a 17.5% reduction. Because the
application at 1357 Baseline Road has well over half of its eligible costs in
on-site and off-site infrastructure upgrading (an estimated $1.5 million in
on-site infrastructure costs and $2.34 million in off-site infrastructure
costs), it is the most negatively impacted by the proposed revision to eligible
program costs. The application at 1357 Baseline Road could expect to see a $1.5
million reduction in eligible costs representing a 44.9% reduction.
Figure 4 Comparison of Impact on Rehabilitation Grant Applications
of Proposed
Revisions to the Rehabilitation Grant Program
|
Eligible Cost Item
|
345 St. Denis Street
|
100 Landry Street
|
1357 Baseline Road
|
|
|
Current Rehab Grant Program
|
Revised Rehab Grant Program
|
Current Rehab Grant Program
|
Revised Rehab Grant Program
|
Current Rehab Grant Program
|
Revised Rehab Grant Program
|
|
1) Environmental Studies
|
$27,364
|
$27,364
|
$131,000
|
$131,000
|
$48,100
|
$48,100
|
|
2) Environmental
Remediation
|
$446,570
|
$446,570
|
$4,979,000
|
$4,979,000
|
$952,000
|
$952,000
|
|
3) LEED Program Component
|
$61,200
|
$61,200
|
$0
|
$0
|
$74,081
|
$74,081
|
|
4) Feasibility Study
|
$10,000
|
$10,000
|
$10,000
|
$10,000
|
$10,000
|
$10,000
|
|
5) 30% of Building Permit
Fee
|
$24,478
|
$24,478
|
$400,000
|
$400,000
|
$137,210
|
$137,210
|
|
6) Building Demolition
|
$125,500
|
$125,500
|
$0
|
$0
|
$1,820,498
|
$1,820,498
|
|
7) Building Rehabilitation
|
$2,775,480
|
$2,775,480
|
$0
|
$0
|
$0
|
$0
|
|
8) Upgrading On-Site
Infrastructure
|
$315,027
|
$157,513
|
$1,456,000
|
$728,000
|
$1,503,479
|
$751,740
|
|
9) Upgrading/Construction
of Off-Site Infrastructure
|
$0
|
$0
|
$597,250
|
$0
|
$2,339,000
|
$0
|
|
Total Eligible Costs
|
$3,786,249
|
$3,628,736
|
$7,573,250
|
$6,248,000
|
$6,884,368
|
$3,793,629
|
|
Total Eligible Costs – 50%
Cap
|
$1,893,125
|
$1,814,368
|
$3,786,625
|
$3,124,000
|
$3,442,184
|
$1,896,815
|
|
Change in Eligible Costs
|
|
-$78,757
|
|
-$662,625
|
|
-$1,545,370
|
|
% Change in Eligible Costs
|
|
-4.2%
|
|
-17.5%
|
|
-44.9%
|
The results in Figure 4 indicate that the proposed revisions to the
Rehabilitation Grant Program, namely the reduction of on-site infrastructure
upgrading to a 50% eligible cost and the elimination of off-site infrastructure
upgrading/construction as an eligible cost, would only significantly reduce
eligible costs for those applications that have a higher proportion of their
costs in on-site, but especially off-site infrastructure costs. These changes to
eligible costs would have little or no impact on brownfield redevelopment
projects where most of the eligible costs are in the environmental remediation,
building demolition, or building rehabilitation. To some extent, what this
proposed program revision does is reflect that the goals the Brownfields
Redevelopment Strategy and CIP consider on-site infrastructure upgrading costs,
and certainly off-site infrastructure upgrading and construction costs as being
of secondary importance when compared to on-site remediation, building
demolition, rehabilitation and energy efficiency costs. The proposed revision
to the eligible costs for the Rehabilitation Grant Program achieves improved
financial sustainability of the program, while maintaining the intent of the Brownfields
Redevelopment CIP.
4.2 Program
Recommendations
4.2.1 Program Revisions
It is recommended that the City of Ottawa
revise the eligible costs for the Rehabilitation Grant Program in the
Brownfields Redevelopment CIP as follows:
a) Revise item j) in Section 6.6.2 (Description) and item
f) x) in Section 6.6.3 (requirements) to read: “50% of upgrading costs for
on-site infrastructure including water services, sanitary sewers and stormwater
management facilities;”
b) Delete item k) in Section 6.6.2 (Description) and item
f) xi) under Section 6.6.3.
The revisions recommended in Section 4.2.1 a) and b) above do not
require formal amendment to the Brownfields Redevelopment CIP because they
represent the reduction or discontinuation of an existing program in the CIP.
4.2.2 Program Enhancements
In due course, it is recommended that the
City of Ottawa:
a)
Increase the
amount of matching funding available under the Environmental Site Assessment
Grant Program from $15,000 per study and $25,000 per property/project to at least
$20,000 per study and $30,000 per property/project; and,
b)
Include the
increase in material and construction costs of LEED components over standard
building code requirements as an eligible cost item in Section 6.6.2 g) and
6.6.3 vii) of the Rehabilitation Grant Program.
The program
revisions in 4.2.2 a) and b) above will require formal amendment to the
Brownfields Redevelopment CIP under the Planning
Act because they represent an increase in the funding provided by existing
programs in the CIP.
APPENDIX A
Corporate Services and Economic Development
Committee Motion - Disposition 51
(December 1, 2009)
Corporate
Services and
Economic
Development Committee
Comité des
services organisationnels
et du
développement économique
Disposition 51
Suite à donner 51
Tuesday, 1
December 2009, 10:00 a.m.
mardi 1
décembre 2009, 10h
Notes: 1. Underlining
indicates a new or amended recommendation approved by Committee.
2. Reports
requiring Council consideration will be presented to Council on 9 December 2009
in Corporate Services and Economic Development Committee Report 49.
Nota : 1. Le soulignement indique qu'il s'agit d'une
nouvelle recommandation ou d'une recommandation modifiée approuvée par le
Comité.
2. Les
rapports nécessitant un examen par le Conseil municipal devront être présentés
au Conseil le 9 décembre 2009 dans le rapport no 49 du Comité des
services organisationnels et du développement économique.
INFRASTRUCTURE SERVICES AND COMMUNITY
SUSTAINABILITY
SERVICES D’INFRASTRUCTURE
ET VIABILITE DES COLLECTIVITES
COMMUNITY AND
SUSTAINABILITY SERVICES
SERVICES DE VIABILITÉ DES
COLLECTIVITÉS
15. BROWNFIELDS GRANT APPLICATION - CLYDESDALE SHOPPING CENTRES LIMITED -
1357 BASELINE ROAD (FILE NO. F18-04-08-CLYDe)
Demande de subvention pour la remise en valeur
des friches industrielles – CLYDESDALE SHOPPING CENTRES LIMITeD – 1357,
chemin BASELINE
ACS2008-ICS-CSS-0004 RIVER/RIVIÈRE
(16)
That Corporate Services and Economic
Development Committee recommend Council:
1. Approve the Brownfields Rehabilitation Grant Application
submitted by Clydesdale Shopping Centres Limited, owner of the property at 1357
Baseline Road, for a Brownfields Rehabilitation Grant not to exceed $3,442,184,
payable to Clydesdale Shopping Centres Limited over a maximum of 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 Clydesdale Shopping Centres Limited establishing the terms and conditions
governing the payment of the Brownfields Rehabilitation Grant, for, and
redevelopment of, 1357 Baseline Road, satisfactory to the Deputy City Manager,
Infrastructure Services and Community Sustainability, the City Clerk and
Solicitor and the City Treasurer; and
3.
That the terms and conditions referred to in Recommendation 2 include
the retention of funding until such time as, where a single large format store
is located in the east portion of the site as part of the first phase of
development, that at least two of the six buildings shown on the concept plan,
submitted in support of this Application, are constructed also as part of the
first phase along either Baseline Road or Clyde Avenue frontage and are
completed for occupancy within three years of the commencement of the large
format store; and
4.
That
staff bring forward to Corporate Services and Economic Development Committee
and Council recommendations for amendments to the policy in Q1 2010 that insure
the policy is used to achieve its intent; and
5.
That a
moratorium be placed on use of the policy until amendments to the policy are
approved by Council.
DEFERRED
DIRECTION TO
STAFF:
That Community and Sustainability Services staff
ensure that the policy is applied to land, not buildings.
DOCUMENT
2
SUMMARY OF 2008-2009 BROWNFIELDS PROGRAM OUTCOMES
Interest in the Brownfields
program was relatively strong. Staff
fielded at least 12 requests for information packages and background on the
program from across the province and from Ottawa-based developers. Five pre-submission meetings with prospective
applicants were held. As of the end of
December, 2009 two grant applications have been approved by Council. The development status of these projects is shown
in Table 1. One new grant application
was deferred on December 1, 2009 by the CSEDC pending Council approval of the
update to the Brownfields program. Two
new grant applications are pending submission later this year. These
applications cannot be submitted while there is a moratorium on the use of the
Brownfields program.
As part of the outreach program
staff have participated in seminars with private (Golder Institute) and
institutional sector (University of Ottawa Environmental Law) partners to further
interest and awareness of the Brownfields program. In addition, staff have presented at a
brownfield knowledge workshop in Cornwall sponsored by the Ontario Centre for
Environmental Technology Advancement (OCETA) and About Remediation.com and at the County of Carleton Law Association
conference held at Montebello, Quebec and, co-authored a brownfield
presentation with Kilmer Brownfield Equity for the Canadian Institute’s forum
on land use and development.
Staff participate in the informal
Ontario Brownfields Network. In
addition, details of the Ottawa brownfield incentives program are included in
the Ministry of Municipal Affairs and Housing Brownfields Ontario database and
in the Federation of Canadian Municipalities Green Municipal Fund (GMF) database
on approved projects. The Ottawa program is also showcased as a GMF case study
on brownfield redevelopment.
Staff also participated in
consultations sponsored by the Ministry of the Environment on proposed
amendments to the brownfields regulations as it pertains to site contamination
matters and with OCETA on the “Redevelopment Framework for Former Service
Stations in Ontario.”
The City’s website (Ottawa.ca)
contains background on the program and the contact information and is
referenced in the planning, environment and grants sections of the
website. The application and program
guide are not included on the site but are made available upon request to
interested parties.
As can be seen from Table 1, the
two approved brownfield applications are well underway. Construction on these former brownfield sites
has already led to new uses being established on under-utilized former
industrial land and in a former surplus school property. The construction permit value to date is
estimated at over $38.68 million, representing 393 residential units built or
under construction. Both applications
have signed legal agreements that specify the terms and conditions of any grant
payments to be made. No rehabilitation
grants have been paid to date though the first request for payments could occur
later this year.
Table 1
Status of Approved
Brownfields Rehabilitation Grant Applications-December 2009
|
Approved
Grant Application
|
100 Landry
|
Built/Under Construction as of December 2009
|
345 St. Denis
|
Built/Under Construction as of December 2009
|
Total Units in approved Plans
|
Total
Built/UC
December/09
|
|
Council
approval date
|
October 10, 2007
|
|
March 26, 2008
|
|
|
|
|
Total number of residential units -comprised of:
|
714
|
326
|
67
|
67
|
781
|
393
|
|
Apartments
|
385
|
190
|
48
|
48
|
433
|
238
|
|
Seniors rooming units
|
193
|
-
|
-
|
|
193
|
|
|
Stacked townhouses
|
60
|
60
|
-
|
|
60
|
60
|
|
Townhouses
|
76
|
76
|
19
|
19
|
19
|
19
|
|
Hectares of land redeveloped/remediated
|
3.17
|
|
0.75
|
|
|
3.92
|
|
Record of Site Condition filed with MOE
|
#44758
May 14, 2008
|
|
#45374
July 21, 2008
|
|
|
|
|
Estimated Construction value of building permits issued
|
$28.51M*
|
|
$10.17M
|
|
|
$38.68M
|
|
Maximum total Rehab. grant approved
|
$1,231,625
|
|
$1,760,048
|
|
|
|
|
Rehab. grants paid in 2007-2009
|
0
|
|
0
|
|
|
|
* In some cases includes
foundation permits only