STAFF REPORT TO COUNCIL CORPORATE MANAGEMENT

Transcription

1 DATE: June STAFF REPORT TO COUNCIL CORPORATE MANAGEMENT 1100 Patricia Boulevard, Prince George, B.C., V2L 3V9 TO: FROM: SUBJECT: ATTACHMENT(S): MAYOR AND COUNCIL WENDY NORDIN, MANAGER OF POLICY INITIATIVES Proposed Downtown Incentives Program Update Appendix A Proposed 2011 RTE Program Estimated Tax Exemption Appendix B Public Consultation Letters Received Schedule A Proposed 2011 RTE Boundary RECOMMENDATION(S): 1. THAT the Staff Report be received. 2. THAT Administration be directed to return a Revitalization Tax Exemption Bylaw for Council s consideration with provisions as described in this report, be approved. PURPOSE: This report provides a progress report on the development and implementation of the Downtown Incentives Program, seeks Council direction to proceed with the development of a Revitalization Tax Exemption (RTE) Bylaw. POLICY / REGULATORY ANALYSIS: 1. Background In January of 2011, Council approved in principle a proposed Downtown Incentives Program including a revitalization tax exemption and early incentive program, and directed that Administration: approach Northern Development Initiative Trust (NDIT) to discuss funding the proposed program; engage the public regarding the proposed program; and report the results to Council. Existing Bylaw The of Prince George Downtown Revitalization Tax Exemption Bylaw No. 7735, 2005 (the Bylaw), establishes a revitalization tax exemption program in accordance with the provision of the Community Charter as they existed at the time the Bylaw was enacted. The Bylaw enables applications for exemptions from 2007 to 2011, making 2011 the last year that tax exemption certificates may be issued under the current regulation. Changes were made in 2007 to section 226 of the Community Charter, granting local government greater discretion and flexibility in designing and applying tax exemption programs. Local governments now have the authority to design tax exemption programs that incent particular kinds of development, or exempt the entire municipal tax payable on land and improvements. Housing and Land Use Policy

2 Council, through its social development and land use policy, has supported the concept that housing as a catalyst for downtown revitalization. Policy that incents the development of high density, mixed use multifamily housing in the downtown is aligned with Council s strategic objective of the realization of a vibrant downtown. The Smart Growth on the Ground Downtown Concept Plan supports high density multi-family housing and mixed use development in the downtown, and recommended that incentives to developers within an affordable housing strategy be provided. The Smart Growth on the Ground Concept Plan will be incorporated into the updated Official Community Plan. The Downtown Partnership The Downtown Partnership provided its recommendations in an interim report to Council in November of The report included a number of recommendations, which taken together are aimed at providing additional incentives for sustainable downtown development. The following recommendations, contained in the Downtown Partnership s report, were approved by Council for immediate action: Create and strategically market a downtown prospectus to give downtown development a face, creatively express the vision for downtown development, and detail incentives and land packages available to affirm and promote that the downtown is open for business. Establish one or more Special Economic Development Districts (SEDD) to be developed through policy review. Provide incentives for building facade improvements. Evaluate existing local government housing grant programs in B.C. to select a preferred program model for Prince George. Expand incentives for market housing in the C-1 Zone and in the Residential Wood Innovation Comprehensive District. Provide public land for the development of new market, non-market, and mixed-market housing in the downtown. RTE Analysis In 2010, in response to the Downtown Partnership recommendations, the of Prince George conducted a review and analysis of RTE as a tool to incent development and revitalization in the downtown. Consultation undertaken with developers in conjunction with that analysis generally resulted in agreement with the conclusion that downtown market conditions are the most important incentive for development and that tax exemptions alone cannot create economic investment opportunities. An additional recommendation from consultation with developers conducted in conjunction with the RTE analysis suggested that, in Prince George, a development incentive program could be strengthened with the availability of an early benefit to the developer, rather than a benefit that is paid over time, such as a tax exemption. Municipalities, however, have limited ability to provide such early benefits, due to both fiscal and legal constraints. 2. Proposed Downtown Incentives Program The Proposed Downtown Incentives Program includes terms for a proposed RTE, recommendations for housing incentives, provision of access to city owned land, and an early benefit option, offered in partnership with Northern Development Initiative Trust. Together, these recommendations offer a package of incentives for downtown development. Principles and goals of the program, approved by Council, are: Principles: Utilize the available legislative tools; Integrate with the Smart Growth on the Ground Concept Plan, Official Community Plan, Zoning Bylaw, and other existing downtown land use policy; Encourage sustainable development; 2

3 Focus on housing and mixed use developments with main floor commercial ; and Respect Council s Strategic Plan. Goals: Encourage new market and non-market housing development Encourage facade improvements Encourage commercial mixed use development Encourage green construction Encourage infill construction Maximize the value of city land holdings Increase value of overall tax base in the downtown and subsequently Prince George 2.1 RTE Bylaw Administration recommends that a Bylaw, supporting the downtown incentives program principles and goals, be brought to back for Council consideration with the following provisions: Definitions Threshold for qualification Location Minimum qualifying value of project, derived from building permit Special Economic Development District, as shown on Schedule A, attached to this report. Exemption In all cases, the exemption granted includes municipal taxes only for a 10 year period with no decline in benefit, and cannot exceed the value of the investment High density multifamily Minimum 3 units and density 90 units per ha Table A Revitalization Tax Exemption for Residential Development Description Residential Development (High Density Multi-Family) Threshold for $50,000 $500,000 qualification Location Area A & B Area A Area B Improvements Any construction or Any new construction Any new construction upgrade Exemption 100% of increase in assessed value of improvements. 100% of assessed value of land and improvements. 100% of assessed value of improvements. Table B Revitalization Tax Exemption for Commercial Development Description Commercial Development Threshold for qualification $50,000 $500,000 Location Area A Area A Improvements Any construction or upgrade Any new construction Exemption 100% of increase in assessed value of improvements. 50% of assessed value of land and 100% of assessed value of improvements. Table C Revitalization Tax Exemption for LEED Certified Development and Exterior Improvements Description LEED Certified Development Exterior Improvements Threshold for qualification $500,000 $20,000 3

4 Description LEED Certified Development Exterior Improvements Location Area A & B Area A Improvements LEED / Green Globes Any exterior improvement certified developments Exemption 100% of assessed value of land and improvements. 100% of the value of the improvement. Appendix A Estimated Tax Exemption, attached to this report, provides estimated tax exemptions that would be achieved for three different development scenarios for investments of $500,000 and $5,000,000. To be eligible for an RTE, the property owner would, upon completion of a qualifying project, complete a Revitalization Tax Exemption Agreement by October 31 of the current year. The completed agreement would be provided for Council consideration, and if approved, a Revitalization Tax Exemption Certificate would be issued. Administration would provide support and guidance to the property owner through the application process. Administration recommends that the program be in place for a maximum of 5 years, or until the tax exemptions provided reach $5,000, NDIT Funded Incentives RTE Early Benefit Program At the direction of Council, Administration approached NDIT with a proposal to fund an early benefit option to the RTE program, to address developer input heard through the RTE public consultation program, that initiatives which remove barriers to entry would provide significant incentive to investment in the downtown. Following those discussions, in February of 2011, the NDIT Board approved the development of a program that would see NDIT provide funding to a qualifying property owner for an amount equal to the total value of the municipal tax exemption available over the term of a revitalization tax exemption agreement. Under the terms of the proposed program, the property owner would choose the RTE Early Benefit or the revitalization tax exemption, but would not be eligible for both. The program requires that an RTE Bylaw be in place. The early benefit would be payable by NDIT to the property owner on completion of the project and issuance of an occupancy permit. The would agree to redirect future taxes collected for the property to Northern Development until the early benefit amount is repaid. RTE Early Benefit Program funding would be from the NDIT Prince George Nominal Allocation. Expenditures from this account can only occur with authorization of Council. The program would be established through an enabling agreement, approved by Council, between the of Prince George and NDIT. Project agreements, approved by Council, between the of Prince George and the property owner would authorize the transfer of funds from NDIT to the property owner. To be eligible for funding under the RTE Early Benefit Program, the property owner would, upon completion of a qualifying project and issuance of an occupancy permit, complete the RTE Early Benefit Program Agreement by October 31 of the current year. The completed agreement would be provided for Council consideration, and if approved, funds would be advanced by NDIT to the property owner. The early benefit amount would be equal to the value of the municipal taxes payable on the property in the year of application, multiplied by the term of possible exemption, or ten years. 4

5 2.2.2 Housing Contribution Program As part of the downtown incentives package, Council approved the concept of the Housing Contribution Program funded through NDIT. This program would provide non-repayable funds of $10,000 per unit for high density multi-family development. Housing contributions would not be available where there are public financial contributions to the project. Funding for this program would be provided from the NDIT of Prince George Nominal Account. To be eligible for the Housing Contribution Program, the property owner would, upon completion of a qualifying project and issuance of an occupancy permit, complete the Housing Contribution Program Agreement. The completed agreement would be provided for Council consideration, and if approved, funds would be advanced by NDIT to the property owner. 3. Public Consultation Public consultation and outreach for the program was conducted on several front. An RTE consultation section of the website was developed, providing links to RTE program information included a backgrounder, frequently asked questions document, and community presentation. Invitations to an online survey- ed to RTEsubmissions@city.pg.bc.ca, written submissions to RTEsubmissions@city.pg.bc.ca, and 30 second clip on the RTE program- ed to socialmedia@city.pg.bc.ca were provided. An RTE Consultation Media Release with RTE consultation details was provided April 11, At the same time, a 3 minute video was produced with details on what is involved in the RTE program and how the public can provide feedback on the program. During the week of April 8, the Mayor s report on Shaw TV laid out the program and invited public input. Mayor Rogers provided presentations to stakeholder groups, including the Winston s Group and Downtown Rotary. At the same time, the Downtown Incentives Implementation Team have continued to consult with the development community regarding the program. Two letters received through the public consultation process, are attached to this report for Council s information. 4. Timeline for Implementation If Council is supportive of the RTE as laid out in this report, Administration could prepare the Bylaw for Council s consideration, satisfying public notice requirements as set out in the Community Charter. Amendment to the Financial Plan Bylaw, which sets out Council s intentions regarding RTE programs, is also required. The RTE program, NDIT RTE Early Benefit Program, and NDIT Housing Contribution Program can be in place to benefit any qualifying project that is complete and at the occupancy stage in SUMMARY AND CONCLUSION: In January of 2011, Council approved in principle a proposed Downtown Incentives Program including a revitalization tax exemption and early incentive program, and directed that Administration: approach Northern Development Initiative Trust (NDIT) to discuss funding the proposed program; engage the public regarding the proposed program; and report the results to Council. In accordance with Council s direction, a proposed RTE and early incentive program have been developed and public consultation on the program has been completed. The result of that work is provided for Council s consideration and further direction. Respectfully submitted: To: Mayor and Council Wendy Nordin Manager of Policy Initiatives 5

6 Appendix A Proposed RTE Estimated Tax Exemption Scenario 1 Scenario 1 Area A Downtown Area A Downtown New Residential Development adding $500,000 value 100% Land and Buildings Exempt for Purposes New Residential Development adding $5,000,000 value 100% Land and Buildings Exempt for Purposes Value Taxes Current Value 5 Vacant Commercial Lots $375,000 Value Taxes Current Value 5 Vacant Commercial Lots $375,000 Current Property Taxes based on vacant commercial rate $11,712 $8,182 $3,530 Current Property Taxes based on vacant commercial rate $11,712 $8,182 $3,530 Add Residential Development $500,000 Add Residential Development $5,000,000 Value now Residential Class $875,000 Property Taxes would then be based on Improved Residential value of $875,000 $12,161 $8,410 $3,751 Value now Residential Class $5,375,000 Property Taxes would then be based on Improved Residential value of $5,375,000 $74,705 $51,659 $23,046 Ten Year Exemption $84,100 Ten Year Exemption $516,590 * city portion also includes 2015 winter games * city portion also includes 2015 winter games

7 Appendix A Proposed RTE Estimated Tax Exemption Scenario 2 Scenario 2 Area A Downtown Area A Downtown New Commercial Development adding $500,000 value 100% Buildings, 50% Land Exempt for Purposes New Commercial Development adding $5,000,000 value 100% Buildings, 50% Land Exempt for Purposes Value Taxes Current 5 Vacant Commercial Lots Land Value $375,000 Value Current 5 Vacant Commercial Lots Land Value $375,000 Taxes Current Property Taxes based on vacant commercial $11,712 $8,182 $3,530 Add Commercial Development $500,000 Current Property Taxes based on vacant commercial $11,712 $8,182 $3,530 Add Commercial Development $5,000,000 Value Commercial $875,000 Value Commercial $5,375,000 Property Taxes would then be based on Improved Commercial value of $875,000 $27,328 $19,092 $8,236 Less 50% of Land which remains taxable $4,091 Property Taxes would then be based on Improved Commercial value of $5,375,000 $167,869 $117,277 $50,592 Less 50% of Land which remains taxable $4,091 Tax Exemption $15,001 Tax Exemption $113,186 Ten Year Exemption $150,010 Ten Year Exemption $1,131,860 * city portion also includes 2015 winter games * city portion also includes 2015 winter games

8 Appendix A Proposed RTE Estimated Tax Exemption Scenario 3 Scenario 3 Area B Downtown Wood District Area B Downtown Wood District New Residential New Residential Development 100% Building Exempt for Development adding adding $500,000 value Purposes $5,000,000 value 100% Building Exempt for Purposes Taxes Value Current Value 5 Vacant Commercial Lots $375,000 $11,221 $7,692 $3,529 Current Property Taxes based on vacant commercial $11,221 $7,692 $3,529 Add Residential Development $500,000 Taxes Value Current Value 5 Vacant Commercial Lots $375,000 $11,221 $7,692 $3,529 Current Property Taxes based on vacant commercial $11,221 $7,692 $3,529 Add Residential Development $5,000,000 Value now Residential $875,000 Value now Residential $5,375,000 Property Taxes would then be based on Improved Residential value of $875,000 $12,161 $8,410 $3,751 Property Taxes would then be based on Improved Residential value of $5,375,000 $74,705 $51,659 $23,046 Less Current Taxes $7,692 Less Current Taxes $7,692 Tax Exemption $718 Tax Exemption $43,967 Ten Year Exemption $7,180 Ten Year Exemption $439,670 * city portion also includes 2015 winter games * city portion also includes 2015 winter games

9 of Prince George May 16, Patricia Blvd Prince George BC To Mayor and Council Re 10 year tax incentive program I am writing this letter in response to the of Prince George plan to provide 10 year tax incentives for new development downtown. Investgo Ventures Ltd has been in the process of trying to build a high end condominium project located on 7 th Ave close to downtown. This property falls within the new development area and would qualify for the 10 year tax incentives proposed. Cost restraints on this project have been a major factor in delaying the building of these condominiums downtown. This incentive proposed by the is very innovative and would definitely help our decision making process in proceeding with our project. The incentive program will help Investgo to offer a more competitive price range in selling our condominium suites. As president of Investgo Ventures Ltd I welcome this tax incentive program and strongly support it. I believe that this will go a long way to kick start downtown development. Yours truly Gordon Bliss President Investgo Ventures Ltd.

10 Subject: Downtown Revitalization The proposals are good, but what we are lacking is a reasonable draw. All other downtown cores have a reason to go there. Right now, we have really decent restaurants, but an entertainment venue, or something that gets people out on the streets would really help. Bus Service going to and from the downtown is good, and parking seems to be good. We need to have some kind of vision or draw to come down in the first place. IF the city thinks that we just do the right kinds of incentives and developers will come flocking...uh no. We need some kind of marketing or advertising going out to developers out there that we have opportunity worth investing in. We need to get that word out there, otherwise, we are waiting for some kind of angel developer to just show up. some destination businesses are doing ok, but more foot traffic would help their stability. How can we increase the numbers of people coming into the downtown? Then, a good mix of boutique and niche retail, offering something worthwhile. While tax incentives are good, the asking price for a lot of lease rates is really high given how there is not the foot traffic to justify it. I like Kelowna's downtown mix; victoria has the same thing. High lease rates are worth it if people are on the street. Old Strathcona in Edmonton comes to mind. Would some kind of event, like a film festival help? When the casino was downtown, downtown had traffic, even if you did not agree with the kind and type of business. Now, it is really quite, which makes the street people way more visible. There needs to be a shift. Charlene Ross

11 QUEENSWAY LETHBRIDGE ST SPRUCE ST REDWOOD ST OAK ST NORWOOD ST INGLEDEW ST 1ST AVE GORSE ST WAINWRIGHT ST LARCH ST WATROUS ST UPLAND ST TAMARACK ST MAPLE ST JUNIPER ST HEMLOCK ST FIR ST 6TH AVE LAURIER CRES MELVILLE AVE CASSIAR ST EDMONTON ST µ 8TH AVE 7TH AVE ROSS CRES VANCOUVER ST 3RD AVE 9TH AVE 10TH AVE MCBRIDE CRES 12TH AVE EDMONTON ST 10TH AVE 9TH AVE 7TH AVE AREA 'B' AREA 'A' 11TH AVE 8TH AVE VICTORIA ST BRUNSWICK ST CIVIC PLAZA 6TH AVE QUEBEC ST DOMINION ST 5TH AVE GEORGE ST 4TH AVE ONTARIO ST 2ND AVE SCOTIA ST OTTAWA ST PATRICIA BLVD 13TH AVE WINNIPEG ST PATRICIA BLVD CAINE DR 15TH AVE RAMP 15TH AVE PINE ST 16TH AVE CAINE DR KENWOOD ST CONNAUGHT DR 15TH AVE Parcel Boundary Proposed 2011 RTE Boundary 17TH AVE AREA A B 1:7500 Path: \\Pc631\gisdev\Projects\Wendy\Proposed 2011 RTE Boundary.mxd 20/06/ :55:16 AM Proposed 2011 RTE Boundary Geographic Information Sys tems Group