Section I – History and legislative context
Designated as a Traditional Main Street, Montreal Road is the main commercial thoroughfare of Vanier. The street contains a mix of businesses, community organizations and residential properties. The historically francophone neighbourhood nearby is well established with most of the housing constructed prior to the 1960’s and that is among the most affordable in Ottawa. Commercial development and redevelopment on the portion of Montreal Road between North River Road and the Aviation Parkway has not kept pace with other main streets in the city and has not shown material improvement in recent years.
The lack of development and perceived deterioration along the Montreal Road corridor has resulted in reduced property values and low commercial and residential rents enhancing the street’s attractiveness for some sectors. Of note, the overall affordability of space in the area has attracted many artists, artistic and cultural organizations, social enterprises, not-for-profits, and entrepreneurs, making it one of the most distinct and dynamic communities in Ottawa and creating opportunities for future growth.
In 2018, the City, in partnership with the Quartier Vanier Business Association, started a process to consider methods of improving conditions along Montreal Road to support investment and build on the areas unique qualities by beginning a consultation process to meet with business and property owners to discuss the viability of a Community Improvement Plan (CIP) for this portion of Montreal Road.
Basis of the Plan
Consideration of a CIP for Montreal Road began when the Quartier Vanier Business Improvement Area (BIA) requested that the City explore implementing a CIP to stimulate renewal, business growth, and commercial vitality in the community of Vanier.
Commercial property owners have been reluctant to make investments in their properties that would be necessary to capitalize on existing opportunities. The result of this underinvestment is low economic returns, few new job opportunities, and poor improvement prospects.
On Monday, April 30, 2018, Economic Development and Long Range Planning (EDLRP) conducted two consultation meetings for property owners in the proposed CIP Area to receive information and provide input. These meetings were by invitation and were conducted through both afternoon and evening sessions. The purpose of these meetings was to explore property owner readiness for a CIP on Montreal Road and to facilitate a discussion around the types of incentives and mechanisms that would best fit the area.
2. Cushman & Wakefield Independent Study
EDLRP retained Cushman & Wakefield (C/R) to assist with research and analysis to study the opportunities and efficacy of a Montreal Road Community Improvement Plan (CIP) based on the premise that if enacted, a CIP would permit the City to provide financial incentives to property owners. The CIP would encourage urban renewal, support businesses including not-for-profits and cultural organizations, and encourage property investment and expansion. The plan under consideration would offer Tax Increment Equivalent Grants (TIEGs) for eligible projects. These grants would be calculated based on the increase in the property’s contribution to municipal property taxes resulting from the value created through redevelopment.
The Study Area extended along Montreal Road from North River Road in the west, to the Aviation Parkway in the east. Along this route, the character and pattern of land use does change noticeably from a “main street/storefront commercial” feel in the west, to a more “arterial commercial” feel in the east. City staff had previously identified 76 properties for review. A tour of the Study Area revealed a diversity of land uses, limited vacancy, a notable presence of independent businesses, no sites with significant excess land, and the presence of some currently vacant land parcels.
Cushman & Wakefield prepared an Opportunity Short List categorizing the 76 properties into five groups, based upon varying levels of potential/probability of future redevelopment. Sites that exhibited potential for a higher and better use, and those where an owner controlled adjacent properties which together would have increased redevelopment potential, were placed on a short list for further assessment.
Cushman & Wakefield then contacted property owners on the short list and 19 of the 25 property owners/representatives participated in the study. C/W observed that larger regional/institutional owners were generally willing to explore participation in the program but that implementation of a CIP would not necessarily expedite decisions to improve their properties. Importantly, a strong majority of regional/institutional owners indicated that the minimum property value uplift threshold ($250,000) being considered for eligible properties under a CIP program could be a barrier for smaller, localized participants and that a potential modified threshold should be implemented to encourage wider participation.
Among the local/independent property owners, almost 80% indicated that the implementation of a CIP would expedite decisions to improve their properties. Two- thirds of respondents indicated they did not have the funds required to reach the minimum property value uplift threshold that was being considered. They raised concerns that the investment in the property would not be “worth it in the end.” All respondents indicated that further program information would be well received, and should be made available to them in a comprehensive but accessible means in order for them to understand the potential of the CIP fully.
Cushman & Wakefield concluded that the City of Ottawa should proceed with the development of a CIP for Montreal Road, focused on properties from North River Road to St. Laurent Boulevard. They recommended that City staff reconsider the
$250,000 investment threshold minimum and instead implement a lower threshold amount of $50,000. This would prohibit trivial applications that do little to enhance property values, while having the effect of increasing the perceived equitability/inclusiveness of the CIP.
C/W’s suggested implementation strategy identified: the role of the Quartier Vanier BIA as a “program champion”; having a dedicated City staff point-of-contact; preparing a comprehensive marketing plan; and setting a minimum five-year initial program horizon.
3. Municipal Act
Section 106(1) and (2) of the Municipal Act, 2001 prohibits municipalities from directly or indirectly assisting any manufacturing business or other industrial or commercial enterprise through the granting of bonuses. Prohibited actions include:
- giving or lending money or municipal property;
- guaranteeing borrowing;
- leasing or selling any municipal property at below fair market value; and
- giving a total or partial exemption from any levy, charge, or fee.
Section 106(3) of the Municipal Act, 2001 however, provides an exception to this bonusing rule for municipalities exercising powers under the provisions of Section 28(6), (7) or (7.2) of the Planning Act or Section 365.1 of the Municipal Act, 2001
4. Planning Act
Section 28 of the Planning Act allows municipalities with provisions in their Official Plans relating to community improvement to designate through by-law a “community improvement project area,” to prepare and adopt a community improvement plan for the community improvement project area. Once the community improvement plan has been adopted by the municipality and comes into effect, the municipality may exercise authority under Section 28(6), (7) or (7.2) of the Planning Act or Section 365.1 of the Municipal Act, 2001 in order that the exception provided for in Section 106(3) of the Municipal Act, 2001 would apply.
According to Section 28(1) of the Planning Act, a “community improvement project area” is defined as “a municipality or an area within a municipality, the community improvement of which in the opinion of the council is desirable because of age, dilapidation, overcrowding, faulty arrangement, unsuitability of buildings or for any other environmental, social or community economic development reason.”
Section 28(1) of the Planning Act defines “community improvement” as “the planning or re-planning, design or redesign, re-subdivision, clearance, development or redevelopment, construction, reconstruction and rehabilitation, improvement of energy efficiency, or any of them, of a community improvement project area, and the provision of such residential, commercial, industrial, public, recreational, institutional, religious, charitable, or other uses, buildings, structures, works, improvements or facilities, or spaces therefore, as may be appropriate or necessary.”
Once a CIP has come into effect, the municipality may:
- acquire, hold, clear, grade or otherwise prepare land for community improvement (Section 28(3) of the Planning Act);
- construct, repair, rehabilitate, or improve buildings on land acquired or held by it in conformity with the community improvement plan (Section 28(6));
- sell, lease, or otherwise dispose of any land and buildings acquired or held by it in conformity with the community improvement plan (Section 28(6)); and
- make grants or loans, in conformity with the community improvement plan, to registered owners, assessed owners and tenants of land and buildings within the community improvement project area, and to any person to whom such an owner or tenant has assigned the right to receive a grant or loan, to pay for the whole or any part of the eligible costs of the community improvement plan (Section 28(7)).
Section 28(7.1) of the Ontario Planning Act further specifies that the eligible costs of a community improvement plan for the purposes of Section 28(7) may include costs related to environmental site assessment, environmental remediation, development, redevelopment, construction and reconstruction of lands and buildings for rehabilitation purposes or for the provision of energy efficient uses, buildings, structures, works, improvements or facilities.
Section 28(7.3) of the Planning Act specifies that the total of all grants and loans made in respect of particular lands and buildings under Section 28(7) and (7.2) of the Planning Act shall not exceed the eligible cost of the community improvement plan with respect to those lands and buildings. The grant program contained in Section II of this report sets out the program details for a Montreal Road CIP Plan that includes safeguards to ensure that this legislative requirement is met.
5. Provincial Policy Statement
The Provincial Policy Statement (PPS), issued under Section 3 of the Planning Act, guides municipalities as planning decisions are made. The Planning Act requires that municipal decisions in respect of the exercise of any authority that affects a planning matter “shall be consistent with” the PPS.
The PPS supports long-term economic prosperity. For example, Section 1.7 b) of
the PPS states, “long-term economic prosperity should be supported by optimizing the long-term availability and use of land, resources, infrastructure, and public service facilities.” The Montreal Road CIP seeks to attract private sector investment in redevelopment projects that optimize available land while promoting job creation.
The PPS also supports Smart Growth through urban growth management. For example, Section 184.108.40.206 of the PPS states “planning authorities shall identify and promote opportunities for intensification and redevelopment where this can be accommodated taking into account existing building stock or areas, including brownfield sites, and the availability of suitable existing or planned infrastructure and public service facilities required to accommodate projected needs.”
Other policies in the PPS (Sections 1.1.1 a), 1.1.1 g), and 1.6.2) support the management of growth to achieve efficient development and land use patterns that sustain financial well-being over the long-term. The development and redevelopment of employment properties along Montreal Road has a role to play in supporting the economic and social health of the community.
6. Ottawa Official Plan
The Community Improvement policies in Section 5.2.5 of the Official Plan set out the rationale for preparing a community improvement plan, criteria to be considered when designating a community improvement project area, priority areas for community improvement, and the range of actions that Council may undertake to implement community improvement plans. Depending on the purpose for which it is designated, a Community Improvement Plan Project Area may be part or all of the urban area of the City of Ottawa, and/or part or all of one or more villages in the City of Ottawa. The full text of Section 5.2.5 of the City of Ottawa Official Plan is contained in Schedule “B”.
7. Economic Strategy
On 14 November 2012, Council approved the 2013 Economic Development Services Work Program, presented in a report entitled the “Economic Development Strategy Implementation Plan Update” (link to report ACS2012-CMR-OCM-0015). Item 11 of the plan, “Community Improvement Plans”, sets out a citywide strategy to use CIPs strategically for economic development.
The City of Ottawa’s updated economic development strategy, “Partnerships for Innovation 2015 – 2018,” adopted by City Council on 13 May 2015 says:
“Financial incentives and municipal programs that support businesses, contribute to making a city an attractive place for business investment and expansion. When companies are considering expanding or relocating operations, one of their many deciding factors includes the availability of incentive programs.”
The approved strategy sets out to expand the CIP program and proposes to explore adding new urban renewal CIPs as a method of stimulating private investment in commercial neighbourhoods where commercial renewal has been non-existent or sluggish. Potential new areas for CIP exploration included Montreal Road as a neighbourhood that may benefit from renewal investment.
Criteria set out in the strategy required that for an area to be considered for a CIP, one or more of the following conditions would need to be present:
- A large pool of properties with existing structures which would not only benefit from improvement, but if upgraded, would result in increased assessment and corresponding increases in property taxes;
- Clear evidence of significant commercial (retail or office) vacancies or a trend indicating that the condition would not likely be remedied without some form of intervention; or
- Clear evidence that commercial renewal has been non-existent or sluggish in the area where there is significant presence of tired or dilapidated and possibly unmarketable buildings, which if upgraded would result in greater marketability and increased economic activity.
The Montreal Road area exhibits all three of these conditions.
9. Term of Council Priorities
The Montreal Road CIP directly aligns with Priority EP2 of the 2014-2018 Term of Council Priorities, which seeks to support the growth of the local economy by ensuring that businesses and entrepreneurs have access to economic development programs, services, tools, and infrastructure that encourage and facilitate business start-up, expansion and job creation.
Within Priority EP2 is Strategic Initiative 2, which sets out a priority to renew and implement the Economic Development Strategy. Initiatives within the strategy include use of CIPs and increased support for Business Improvement Areas.
Section II - Recommended Financial Incentive Program
The Montreal Road Community Improvement Plan would provide a financial incentive in the form of a Tax Increment Equivalent Grant (TIEG) to property owners with qualified development and redevelopment projects in the Montreal Road Community Plan Area. The grant would be equivalent to a portion of the increase in the municipal property taxes directly attributable to the improvement. These TIEG grants would be “self-financing” or in other words, funded through the property tax increase associated with the improvement.
The program would be based on the assumption that development would not occur 'but for' the incentive made to the property owner. Grants would be paid only after site development is completed, the Municipal Property Assessment Corporation (MPAC) has reassessed the property and the first year of taxes at the new assessment have been paid in full.
The program would commence on or after the date that this Plan comes into effect, and would be offered for a period of five years, subject to the availability of funding as approved by City Council. A twenty-five million dollar ($25,000,000) upset limit on aggregate grant commitments over the duration of the five-year Montreal Road CIP program period is recommended, with staff reporting to Council for direction in the event this limit is likely to be reached or exceeded.
Because TIEG grants are “self-financing” or in other words, funded through the property tax increase associated with the improvement, TIEG incentives are in frequent use in Ontario.
Development Incentive Grant Program
The intent of the Development Incentive Grant Program is to encourage the rehabilitation of lands and buildings and/or stimulate new development on sites previously occupied. The Development Incentive Grant Program would also encourage infill and mixed-use development, and assist in achieving improved building architecture, site design and site landscaping in the area. These benefits would be encouraged by offering a financial incentive in the form of an annual grant funded from incremental property tax assessments and the corresponding increased contribution to tax revenues made by owners of CIP project properties.
All submissions under the Montreal Road CIP Development Incentive Grant Program must be for redevelopment (not Greenfield development) of properties located within the defined boundaries of the Montreal Road Community Improvement Plan Area as illustrated in Document 1.
Eligible projects can include non-residential properties and/or mixed-use properties that include one or more residential dwelling units. Ground floor space in eligible mixed-use properties however, must be exclusively comprised of active uses except those properties having ground floor tenant space with frontage on Montreal Road that are required to have active uses in the front 6 metres as a minimum under the zoning By-law, but permit ground floor dwelling units farther than 6 metres back from the frontage.
Active uses shall promote an active pedestrian environment on the ground floor and may include, but not be limited to shops, small businesses, markets, cafes, arts workshops, retail establishments, restaurants, catering establishments, bars and brewpubs, art and craft studios, performance space, wineries, personal service establishments.
Candidate properties would be reviewed in detail, based on best knowledge of current trends and history to ensure that an incentive is, in fact, required to stimulate development. The applicant is required to provide a rationale clearly demonstrating that the project would not otherwise proceed in the absence of the incentive and that the project meets a need in the community for urban renewal and/or job creation appropriate to the local labour market or goods/services provision to the local consumer or business market.
The City would reimburse the successful applicants in the form of an annual grant equal to seventy-five per cent (75%) of the municipal tax increment resulting from the redevelopment. Grants would extend for up to 10 years after project completion to a maximum of five million dollars ($5,000,000), but not exceeding fifty per cent (50%) of the total cost of the redevelopment project.
2. Quartier Vanier District
The Montreal Road CIP Area extends along Montreal Road from North River Road in the west, to the Aviation Parkway in the east. However, a distinctive change in character exists between the "arterial commercial" feel east of St. Laurent Boulevard, compared with the "main street/storefront commercial" feel in the western section between North River Road and St. Laurent Boulevard. This western segment, which coincides with the boundary of the Montreal Road portion of the Quartier Vanier BIA, is incredibly unique. Not only does it exhibit a broad diversity of land uses, limited vacancy, and a notable presence of independent businesses, but it also has become a hub for artists, artistic and cultural organizations, social enterprises, not-for-profits, and entrepreneurs, making it one of the most distinct and dynamic communities in Ottawa.
Building on existing strengths and diversity in this unique area, shown as "Quartier Vanier Zone" on Document 1, three special programs would be available for redevelopment projects that qualify under the Development Incentive Grant Program. These additional incentives would be available to successful applicants under the Montreal Road CIP Development Incentive Grant Program where the project includes one or more of the specific elements detailed below, that would strengthen and enhance the distinctive nature of the Quartier Vanier Zone.
2.1 Affordable Housing Development Supplementary Benefit
The intent of the "Affordable Housing Development Supplementary Benefit" is to encourage a range of higher-density housing types in the Quartier Vanier Zone that include affordable housing. This would help to offset possible affordability losses attributable to increased property values and reinforce Montreal Road as a hub for the artistic and cultural community. Providing affordable housing would not only help to strengthen the arts community in Vanier by attracting new artists to the community but would help prevent current artists from having to leave the area in search of lower rents.
Projects must include ten (10) or more new residential dwelling units, of which at least 30% of the units consist of affordable housing in accordance with criteria set out in the City of Ottawa Official Plan
Affordable Housing shall be defined as:
- in the case of rental housing, the least expensive of:
- a unit for which the rent does not exceed 30 percent of gross annual household income for low and moderate income households; or
- a unit for which the rent is at or below the Average Market Rent (AMR) of a unit as determined by the Canada Mortgage Housing Corporation (CMHC) for Zone 10 “Vanier,” for a given year.
- in the case of ownership housing, the least expensive of:
- housing for which the purchase price results in annual accommodation costs which do not exceed 30 percent of gross annual household income for low and moderate income households; or
- housing for which the purchase price is at least 10 percent below the average purchase price of a resale unit in the regional market area.
The Property Owner acknowledges and agrees that to continue to qualify for the Montreal Road Development Incentive Grant, Affordable Housing Development program and receive the Supplementary Benefit, the period of affordability, as determined by the City in its sole and absolute discretion, must be maintained exclusively and continuously throughout the entire grant period.
2.2 Support for Cultural Activities and Artists Supplementary Benefit
Building on existing strengths and diversity in the Quartier Vanier Zone, the "Support for Cultural Activities and Artists Supplementary Benefit" would support the life and work of artists in Vanier, helping to revitalize the heritage, cultural and creative sector in the area.
The objective of the program would be to support the area's artists and arts organizations and encourage collaboration between artists and property owners, to provide access to affordable space for cultural activities, arts and arts programming, and create new opportunities for arts activities.
Eligibility for the Support for Cultural Activities and Artists Supplementary Benefit would be defined as projects that provide a minimum of three hundred square meters (300 M2) of space dedicated to arts and cultural activities.
To maintain the supplementary benefit, dedicated arts/cultural space must be designed and used exclusively and continuously throughout the grant period for arts and cultural endeavours including one or more of the following:
- creation, practice, sale, development and or public presentation of artistic, cultural, heritage and/or indigenous activities; and/or
- administration of an artistic, cultural, heritage and/or indigenous for profit or not-for-profit organization who's mandate is to present artistic, cultural, heritage and/or indigenous activities to the public of Ottawa or elsewhere.
2.3 Support for Social Enterprises Supplementary Benefit
As with 2.1 and 2.2 above, the "Support for Social Enterprises Supplementary Benefit" is intended to build on existing strengths and diversity in the Quartier Vanier Zone.
A social enterprise would be defined under the Support for Social Enterprises Supplementary Benefit program as a not-for-profit organization with primarily social objectives and an overall mission to serve the public good. These organizations may sell goods, provide services or operate one or more profit enterprises to generate earned income to create a blended financial and social return on investment. Their profits would be returned to the business or to a social purpose, rather than maximizing profits to shareholders. Social Enterprise organizations would reinvest their earned income into realizing their social mission and pursue the development of the community rather than being driven by the need to maximize profit for shareholders and owners.
Where eligibility under one or more of: Affordable Housing Development Supplementary Benefit program, Support for Cultural Activities and Artists Supplementary Benefit Program or Support for Social Enterprises Supplementary Benefit programs has been met, the City would reimburse the owner in the form of an annual grant equal to one hundred per cent (100%) of the municipal tax increment for the property. Grants would extend over up to a 10-year period after project completion to a maximum of five million dollars ($5,000,000), but not exceeding fifty per cent (50%) of the total cost of the redevelopment project.
Staff from Economic Development and Long Range Planning and Financial Services would examine each application. This review would ensure that the projects receiving grants are eligible under the program and that they do not represent 'organic growth' but rather are occurring because of financial incentives. In the case of applications under the Support for Cultural Activities Incentive Grant Program and Support for Social Enterprises Supplementary Benefit program, this review shall include staff from Cultural Services. Similarly, in the case of applications under the Affordable Housing Development Supplementary Benefit program, the review shall include staff from Housing Services.
Grants would be paid only after site development is completed, the Municipal Property Assessment Corporation (MPAC) has reassessed the property and the first year of taxes at the new assessment have been paid in full.
Staff will prepare a report for each application under the Montreal Road CIP and submit it for approval by Council. Following approval by Council, each year until the end of the grant period, or until the maximum grant amount has been reached, staff would:
- review the project to ensure that performance targets and qualifying requirements continue to be met;
- confirm that the owner has paid the property taxes in full for that year; and
- confirm that all other amounts to be paid to the City are in good standing.
Using the tax increment amount as a guide provides a reasonably consistent mechanism of determining grant payment amounts that reflect actual improvements carried out on a property.
Applications will be processed and approved on a first come, first served basis, subject to availability of funding as approved by Council.
Staff from Economic Development and Long Range Planning and Financial Services would examine each application. This review would ensure that the projects receiving grants are eligible under the program and that they do not represent 'organic growth', but rather are occurring because of financial incentives. In the case of applications under the Support for Cultural Activities and Artists Supplementary Benefit program and Support for Social Enterprises Supplementary Benefit program, this review would also include staff from Cultural Services. In the case of applications under the Affordable Housing Development Supplementary Benefit program, the review would include staff from Housing Services.
Grants would be paid only after site development is completed, the Municipal Property Assessment Corporation (MPAC) has reassessed the property and the first year of taxes at the new assessment have been paid in full.
Staff would prepare a report for each application under the Montreal Road CIP and submit it for approval by Council. As a condition of approval of an application for a Montreal Road CIP Tax increment equivalent grant, the applicant must enter into an agreement with the City. The Agreement will be registered against the land to which it applies and will specify the terms, duration, and default provisions of the grant.
4. Program Duration and Limits
The amount of time needed from concept to completion for a typical redevelopment project may take from a few months to several years to complete depending on factors such as the area of the development project, how complex the issues are in that area, and what kind of resources are available to do the work. Often projects can take 3-5 years to be ready to make an application.
The Ontario Planning Act sets no legal time limit for completing a Community Improvement Plan. Accordingly, in order to allow time for full assessment, design and planning, and to provide time for City outreach and marketing, it is proposed that the grant program be open for five years following Council approval and adoption of the required by-laws.
The Montreal Road CIP program would commence on or after the date that this Plan comes into effect, and would be offered for a period of five years, subject to the availability of funding as approved by City Council.
Applications would be accepted during this five-year period (up to 2023), but would not be available on a retroactive basis. For Council-approved TIEG grants that have been approved for a duration of up to ten years, discontinuation of the program or a change in grant entitlement would not affect or reduce the approved grant amounts, or the grant entitlement period.
All grants are offered subject to Council approval of operating funds where applicable. The commencement of timing for program duration for each incentive grant starts on the date the application is approved by Council, based on total program funding available.
A twenty-five million dollar ($25,000,000) upset limit on aggregate grant commitments over the duration of the five-year Montreal Road CIP program period is established as a guideline, with staff reporting to Council for direction in the event this limit is likely to be reached or exceeded.
All applications for grants under this program are subject to the availability of funding. The provision of any grant commitment will be administered on a first come, first served basis to the limit of available funding in accordance with any administrative rules governing this and other grant or loan programs.
5. Goals and Objectives
The principal goals of the Montréal Road CIP would be to attract new business investment to the area and to encourage rehabilitation, redevelopment, and revitalization of the existing built environment. This would provide enhanced employment opportunities while supporting the life and work of artists and activities of arts and heritage organizations, all of which are important for the health and liveability of Montréal Road.
The CIP objective is to encourage and co-operate with the private sector in a long- term program supporting revitalization to ensure a favourable climate for commercial activity and to stimulate property development within its boundaries to the economic potential that their location, accessibility, natural amenities, and community infrastructure would allow.
Other goals include:
- Improve the appearance of Montreal Road streetscape and buildings, including built cultural heritage resources and façade improvements through redevelopment;
- Encourage a range of higher-density housing types, including affordable housing in the area to help offset possible affordability losses attributable to increased property values, and reinforce the Montreal Road area as a central focus for the artistic and cultural community;
- Build on existing strengths and diversity in the area by supporting the life and work of artists in Vanier and help to revitalize the heritage, cultural and creative sector in the area;
- Increase employment opportunities;
- Encourage redevelopment of vacant and underutilized properties;
- Improve physical and visual quality of the commercial centre along Montreal Road;
- Improve environmental health and safety (including energy efficiency);
- Stimulate private investment activity and private property maintenance;
- Reinforce the Montreal Road area as an important commercial and employment centre within Rideau-Vanier Ward; and
- Strengthen the area as a recognized “live, work, create and play” destination.
6. Community Improvement Project Area
The proposed Montreal Road CIP Project Area is illustrated in Schedule “A”. The incentive program would be available to properties within the Montreal Road
Community Improvement Plan Project Area. All owners of private properties in the Montreal Road CIP Project Area may apply for a CIP grant. The CIP would not apply, however, to public road rights-of-way, residential properties, or Greenfield development.
In cases where the Project Area boundary does not follow a property line, only that portion of the property and building(s) within the project area would qualify for the Montreal Road CIP grant program. City staff would determine the limit of the project area on properties where a lot line is not followed at the time an application is submitted.
7. Community Improvement Plan Incentive Program
Among several incentive options available for Ontario municipalities under the provisions of the Ontario Planning Act, The Montreal Road CIP would include only a Tax Increment Equivalent Grant (TIEG) grant. The TIEG program would be structured to cover the costs associated with the progression of typical redevelopment projects from inception to completion. All grants would be paid only after the site development is completed, the Municipal Property Assessment Corporation (MPAC) has reassessed the property, and the first year of taxes at the new rate have been paid in full.
Grants would be funded from incremental property tax assessments and the corresponding increased contribution to tax revenues made by owners of CIP project properties that, but for the provision of financial incentives, would not otherwise have occurred. Representatives from Economic Development Services, together with Development Review Services Branch and Financial Services would examine each application to ensure that the projects receiving grants do not represent ‘organic growth’, but rather are occurring because of financial incentives. In the case of applications under the Affordable Housing Development Supplementary Benefit program, the review shall also include staff from Housing Services. Similarly, in the case of applications under the Support for Cultural Activities Incentive Grant and Support for Social Enterprises Supplementary Benefit programs, this review shall also include staff from Cultural Services.
As the municipality receives the additional property taxes that result from the increased assessment associated with the redevelopment, the City would reimburse the owner in the form of an annual grant. Grants would extend up to 10 years after project completion to a maximum of five million dollars ($5,000,000), but not exceeding fifty percent (50%) of the total eligible costs for the redevelopment project.
The assessment and municipal property taxes (“base rate”) will be determined before commencement of the project. The increase in municipal property taxes (or “municipal tax increment”) is calculated by subtracting the municipal property taxes before reassessment from the municipal property taxes after reassessment as determined by the Municipal Property Assessment Corporation (MPAC) following project completion. The amount of the grant payment will be recalculated annually based on the municipal property taxes levied and the resultant municipal tax increment paid by the owner for that year.
To be eligible for payment of a Montreal Road CIP TIEG, the amount of work undertaken on the property and/or buildings shall result in a minimum increase of fifty thousand dollars ($50,000) in the assessed value of the property as determined through post-construction reassessment by the Municipal Property Assessment Corporation (MPAC).
While the City cannot guarantee that the benefits of the Montreal Road CIP TIEG program would flow through to tenants, the owner is required to inform the tenant of his participation in the Montreal Road Community Improvement Plan. There is no requirement for the property owner and tenant to submit an application jointly. The owner must provide evidence to the City that the tenant is aware of the program so that they may negotiate lease terms with complete information.
Montreal Road CIP incentives would only be available to the owner that signed the original grant application and incentives are not transferable. If all or part of a property were sold within a grant eligibility period, then grant payments would immediately be discontinued.
However, the City may, at its discretion, transfer all or part of a grant amount to a new property owner subject to the new owner entering into an agreement (where applicable) with the City that fulfills the requirements of the original agreement, plus any new requirements.
Coordinated development proposals that include abutting properties under the same or separate ownership would be subject to a maximum grant amount, which may not exceed the lesser of five million dollars ($5,000,000) or fifty per cent (50%) of eligible costs for the project, and are treated as if the development consisted of a single property. (i.e., more than one application for the same type of grant on abutting properties that comprise a coordinated development is not permitted).
If the Montreal Road CIP is combined with any other CIP program, including brownfields CIP programs, total grant and grant commitments would still not exceed five million dollars ($5,000,000) or fifty per cent (50%) of eligible costs for the project.
The commencement of timing for program duration for each incentive grant starts on the date the application is approved by Council, as required based on total program funding amount.
The financial incentive programs in this CIP would apply to the private sector and are designed to encourage private sector revitalization of properties within the Montreal Road CIP Project Area.
8. General Program Requirements
The general and program specific requirements contained in this CIP are not necessarily exhaustive and the City reserves the right to include other requirements and conditions as deemed necessary on a property-specific basis. The financial incentive program contained in this CIP is subject to the following general requirements:
8.1 All owners of private properties in the Montreal Road CIP Project Area may apply for a CIP grant;
8.2 The City reserves the right to audit the works that have been approved under the Montreal Road CIP at the expense of the applicant;
8.3 The aggregate of all approved applications within the project period for the Montreal Road CIP shall not exceed ten million dollars ($10,000,000);
8.4 The applicant shall be required to include as part of any Montreal Road CIP TIEG grant application an independent tax study by a qualified consultant, having an AACI designation (Accredited Appraiser Canadian Institute) or an AIMA (Associate) or MIMA (Accredited) designation from the Institute of Municipal Assessors, which provides an estimate of the property assessment increment.
8.5 Generally, the City would provide grant payments under this CIP only after the applicable permits have been issued; construction is complete and has received final inspection approval by the City; the property has been reassessed by MPAC demonstrating that the minimum required increase in assessment has been achieved; and, following reassessment, the property owner has paid the first year property taxes in full;
8.6 The City is not responsible for any costs incurred by an applicant in relation to the program, including, without limitation, costs incurred in anticipation of a grant;
8.7 If an applicant is in default of any of the general or program specific requirements, or any other requirements of the City, the City may delay, reduce or cancel the approved grant;
8.8 The City may discontinue the program at any time, but applicants with approved grants would continue to receive said grants subject to meeting the general and program specific requirements;
8.9 All proposed works approved under the incentive program and associated improvements to buildings and/or land shall conform to all relevant codes, policies, procedures, standards, and guidelines, including applicable municipal by-laws, Official Plan policies and zoning requirements, and approvals;
8.10 The improvements made to buildings and/or land shall be made pursuant to a building permit where required, and/or other required permits, and shall be constructed in accordance with the Ontario Building Code where applicable;
8.11 City staff, officials, and/or agents of the City may inspect any property that is the subject of an application for the Montreal Road CIP Incentive Program offered by the City;
8.12 To be eligible to receive Montreal Road CIP grants, beginning with the first post-development grant payment and continuing throughout the grant period, the owner’s financial account with the City must be in good standing (including taxes, water, fines, and all other accounts due). On an annual basis, the current year’s property taxes must be paid before the grant is released (i.e., the grant would not be paid if the property owner is in arrears)’
8.13 If post-construction assessment is appealed by any party for a property and/or buildings subject of an approved grant application and the post-appeal assessment is reduced, the City would recalculate payments made to the Applicant under a TIEG grant application, that were based on the higher assessment and corresponding municipal tax increment, and any overpayment amount shall be repaid to the City by the Owner;
8.14 To be considered for the Montreal Road CIP grant program, a project must include one or more of:
- An addition of building space to an existing building;
- Construction of a new building where a previous building has been located;
- Interior fit-up;
- Significant alterations to an existing building resulting in improved marketability of the rental premises and a corresponding increase in assessed value;
- Exterior façade improvement facing a public road right-of-way;
- Site works including landscaping and signage; and
- Internal or external improvements to the structure and lands to bring the property up to current Ontario Building Code standards or to achieve compliance with the accessibility under the Accessibility for Ontarians with Disabilities Act;
8.15 Stand-alone internal building upgrades and maintenance costs in existing building space that are not expected to have a beneficial impact on the assessed value of the property or that do not fall into one or more of the above seven categories, do not qualify for the incentive grant programs in this CIP;
8.16 A pre-consultation meeting for the proposed development is required to determine the type of necessary planning applications.
8.17 Applications for funding under this program are subject to approval by City Council.
8.18 As a condition of approval for a TIEG application, the applicant must enter into an agreement with the City. The Agreement would be registered against the land to which it applies and would specify the terms, duration, and default provisions of the grant.
8.19 If the property is demolished before the grant period elapses Montreal Road CIP grants shall be forfeited by the owner or third party, to whom the grant has been assigned, and repaid to the City.
9. Eligible Costs
Eligible costs for the Montreal Road Community Improvement Plan Incentive program include the following:
- Demolishing buildings;
- Constructing/upgrading on-site infrastructure, including water services, sanitary sewers, burial of hydro service and stormwater management facilities;
- Constructing/upgrading off-site infrastructure, including roads, water services, sanitary sewers, stormwater management facilities, electrical and gas utilities,
- Constructing/upgrading on-site features, including hard and soft landscaping, parking areas, and walkways;
- Constructing/upgrading the building façade, entrances, exterior decorative lighting and signage;
- Constructing/upgrading off-site features, including walkways, pedestrian amenities, hard and soft landscaping;
- Constructing new building(s), making additions to buildings, and upgrading building facade in front or external side yards;
- Building permit fees for any of the preceding works; and
- The following Leadership in Energy and Environmental Design (LEED) Program Components:
- Base plan review by a certified LEED consultant;
- Preparing new working drawings to the LEED standard; or
- Submitting and administering the constructed element testing and certification used to determine the LEED designation.
Applications would be processed and approved on a first come, first served basis, subject to availability of funding as approved by Council. City staff would undertake review and evaluation of an application and supporting materials against program requirements.
10. Project Eligibility
As a first priority, all submissions under the Montreal Road CIP must be in reference to properties located within the defined boundaries illustrated in Schedule “A.”
10.2 Property Type and Residential uses
Eligible projects can include non-residential properties and/or mixed-use properties that include one or more residential dwelling units. However, ground floor space in eligible mixed-use properties must be exclusively comprised of active uses. The front 6 metres of properties with ground floor tenant space with frontage on Montreal Road, where permitted under the zoning By-law must be exclusively comprised of active uses.
Active uses shall promote an active pedestrian environment on the ground floor and may include, but not be limited to shops, small businesses, markets, cafes, arts workshops, retail establishments, restaurants, catering establishments, bars and brewpubs, art and craft studios, performance space, wineries, personal service
Candidate properties would be reviewed in detail, based on best knowledge of current trends and history to ensure that an incentive is, in fact required to stimulate development. The applicant would be required to provide a rationale clearly demonstrating that the project would not otherwise proceed in the absence of the incentive and that the project meets a need in the community for urban renewal and/or job creation appropriate to the local labour market or goods/services provision to the local consumer or business market.
10.3 Ineligible Uses:
As the purpose of the Montreal Road CIP is to address deficiencies in the investment levels of businesses throughout Montreal Road in terms of market offerings and job creation, commercial uses that do not contribute to a desirable community fabric would not be eligible for the incentive financing of this program.
Excluded uses would include:
- Video arcades;
- Adult novelty stores, services and/or adult entertainment;
- Bingo parlours or other gaming facilities;
- Industrial uses, which, by their nature, generate noise, fumes, odours, and are hazardous or obnoxious;
- Body rub establishments;
- Correctional facilities;
- Corrections residences;
- Emergency shelters; and
- Pawnshops, cash-for-goods places, or short-term loan offices.
Economic Development and Long Range Planning (EDLRP) would manage and administer the Program with participation from the Development Review Services Branch (DRS), Cultural Services, Housing Services and Financial Services. A ‘one window’ approach would be used for a single application submitted at the time of site plan application, if required, or building and/or sign permit application for the project.
Final approval of all new grants would be contingent on Council approving the first year of grant payment at the time of the annual City budget approval. Once a grant application is approved and an agreement is entered into between the City and the applicant, the City is obliged to continue annual grant payments as set out in the agreement. However, the recipient’s accounts with the City – taxes, water, any fines, etc. – must be in good standing, and on an annual basis, the current year’s property taxes have been paid before the grant is released.
Applicants may have an initial conversation either with an Economic Development Officer from EDLRP or with a representative of DRS. In either case; these initial conversations may lead to an applicant’s desire to proceed.
Where the applicant does wish to proceed, and when initial discussions suggest the likelihood of acceptance under the Montreal Road CIP program, the next step would be a required preliminary pre-consultation meeting to be arranged by EDLRP. Where a Site Plan application is required, both EDLRP and DRS would be required at this meeting. At the pre-consultation meeting, the applicant would be advised about any additional steps that may be required. For example, the applicant may be advised that the project may require a Site Plan, Rezoning, Transportation Study, Conservation or Heritage Authority input, etc.
For those cases where the project may proceed directly to Building Permit, the EDLRP representative would arrange a subsequent meeting with a Development Information Officer (DIO) and Building Services. The applicant would be advised about any additional steps that may be required. For example, the applicant may be advised that his/her project would require separate permit applications for signs, encroachment, etc.
Where these initial conversations confirm that the project should proceed, subject to required approvals that form part of the process, the applicant would then complete a Montreal Road CIP Incentive Application. The application must include required supporting documentation, including, an independent tax study that sets out an estimate of the property assessment increment prepared by a qualified consultant, having an AACI designation (Accredited Appraiser Canadian Institute), and must be submitted to the CIP Coordinator in Economic Development Services.
EDLRP staff, together with Development Review Services would review the application, perform such due diligence as is deemed appropriate and forward the application together with any analysis or additional information to Committee and Council. In particular, Staff would examine the application to ensure that projects receiving grants do not represent ‘organic growth’, but rather are occurring because of financial incentives.
In the case of applications under the Support for Cultural Activities Incentive Grant Program and Support for Social Enterprises Supplementary Benefit program, this review shall also include staff from Cultural Services, Similarly, in the case of applications under the Affordable Housing Development Supplementary Benefit program the review shall also include staff from Housing Services.
Where a Montreal Road CIP TIEG incentive has been approved for a project, EDLRP would inform the applicant and immediately begin a process to initiate a formal agreement, which would be prepared by the City’s Legal Department, based on the detailed information supplied by the applicant in the CIP grant application.
Each year until the end of the TIEG grant period or until the maximum grant amount has been reached, staff would review the project to ensure that the owner has paid the property taxes in full for that year and all other amounts to be paid to the City are in good standing.
Concurrent with this process to enter into a formal CIP incentive agreement, the applicant would conclude any remaining design requirements and proceed with next steps required in the process of development and permit approvals.
These additional steps may include one or more of the following permits and approvals, but are not restricted to the following:
- Site Plan Approval
- Demolition permit
- Application for construction permit
- Septic permit
- Zoning and Permitted Uses
- Official Plan Amendment
- Minor variance etc.
- Other approvals
- Lot grading approval
- Ministry of Natural Resources consent
- Permit required from Ministry of Transportation Ontario (MTO)
- Permission to fill (Conservation Authority)
- Monitoring and Amendments
The City would conduct periodic reviews of the grant programs and activities relating to community improvement under this Plan to determine effectiveness. Council may utilize this information to amend this Plan as necessary to ensure that the goals outlined in Section 12 are achieved.
The following variables should be monitored on an individual project and aggregate basis for the incentive program:
- Number of applications;
- Increase in assessed value of participating properties;
- Estimated and actual amount of tax increment financing grants provided;
- Hectares/acres of land developed;
- Amount of commercial space constructed;
- Number of affordable housing units
- Amount of dedicated Cultural and Heritage space created
- Estimated number of jobs created/maintained; and
- Number of program defaults.
The feedback from monitoring the CIP may lead to minor revisions to the grant programs. Therefore, the City may periodically review and adjust the terms and requirements of any of the programs contained in this Plan, or discontinue any of the programs contained in this Plan, without amendment to the Plan. Such minor changes or discontinuation of programs would be provided to the Minister of Municipal Affairs and Housing for information purposes. Increases in funding provided by existing financial incentives or changes to eligibility criteria that would increase funding provided, the addition of any new programs to this Plan, or an expansion of the Community Improvement Project Area would require a formal amendment to the CIP in accordance with Section 28 of the Planning Act.
The grant program described in this Plan would be available subject to an annual budget allocation approved by Council. Similar to the tax increment-based brownfield grants, Montreal Road CIP grants would be identified as the applications are received and reviewed. Operating pressures associated with approved Montreal Road CIP grants would be brought forward through the budget process in the anticipated year(s) of payout and funded through the incremental taxes that would be generated from the community improvements.
13. Additional Community Improvement Plan Programs
The City of Ottawa Brownfields Redevelopment Community Improvement Plan under Section 28 of the Provincial Planning Act would continue to be available to property owners who apply for grants under the Montreal Road CIP.
Unlike the brownfields program, the Montreal Road CIP is not designed to reimburse remediation costs, but rather provides a financial incentive program that would encourage property owners to redevelop properties in the Montreal Road CIP Project Area.
Property owners undertaking brownfield redevelopment projects, who also wish to apply for grants under the Montreal Road CIP, shall be permitted to apply and, if eligible, receive grants under both the City of Ottawa Brownfields Redevelopment Community Improvement Plan (CIP) and the Montreal Road CIP. The tax increment grant however, can only be granted through one program (i.e., not granted twice) and the total grant and grant commitment amount shall not exceed the lesser of fifty per cent (50%) of the eligible costs for the project or five million dollars ($5,000,000).