Evaluation of Community

Improvement Plan Incentives

Stakeholder Meetings

Tuesday, April 18, 2017

Thursday, April 20, 2017

Service Review Objective

Council Resolution, February 16, 2016:Staff directed to undertake Comprehensive Service review of the City’s existing Community Improvement Plans and associated incentives:

Through the review we seek to:

Evaluate the potential for adding more Community Improvement Plans and associated incentives,

Consider the cost and value of existing incentives, and

Consider the potential for re-allocating funding associated with one or more of these programs to best meet Council’s strategic priorities.

Request for New Incentives

Requested Incentive Programs

• For NEW Hamilton Road CIP

• For NEW Lambeth CIP

• From expansion of the Downtown CIP (new boundaries of BIA)

• Granting DC rebate for publicly accessible sports and recreation

• Granting DC rebate for private/not-for-profit educational facilities (music schools)

• For environmentally sustainable buildings or communities

• Granting DC rebate to accommodate small businesses

• Funding existing Brownfield Contamination Assessment Study Grants incentive program

• Fund the existing Industrial Corridor Enhancement Program

• Funding existing Tax Increment Grant program in SOHO

• Funding existing Heritage Building Assessment/Condition Grant Program in Downtown & Old East Village

Part of this Service review also included consideration of the demand for new incentive programs that have been requested of Council, these include:

Request for New Incentives

Requested Incentive Programs

• For NEW Hamilton Road CIP

• For NEW Lambeth CIP

• From expansion of the Downtown CIP (new boundaries of BIA)

• Granting DC rebate for publicly accessible sports and recreation

• Granting DC rebate for private/not-for-profit educational facilities (music schools)

• For environmentally sustainable buildings or communities

• Granting DC rebate to accommodate small businesses

• Funding existing Brownfield Contamination Assessment Study Grants incentive program

• Fund the existing Industrial Corridor Enhancement Program

• Funding existing Tax Increment Grant program in SOHO

• Funding existing Heritage Building Assessment/Condition Grant Program in Downtown & Old East Village

Part of this Service review also included consideration of the demand for new incentive programs that have been requested of Council, these include:

Incentives Through CIPS

The City of London has 7 CIPS though which Financial Incentive Programs are offered

CIPs Financial Incentive Programs Offered

DowntownLast Mile

Grant

Façade Improvement

Upgrade to Building Code

Tax Grant Program

DC Grant

Old East Village

Façade ImprovementUpgrade to

Building CodeTax Grant Program

DC Grant

SoHo Façade Improvement Upgrade to Building Code

Heritage Tax Increment GrantDevelopment Charge Equivalent

GrantAirport

AreaTax Increment Grant

BrownfieldTax Increment

Equivalent Grant

Contamination Assessment Study

Grant Program

Development Charge Rebate

Property Tax Assistance Program

Industrial Lands

Development Charge Grant

Incentives Currently Offered

CIP Programs

AirportTax Increment Grant: provides a tax grant for eligible aerospace industries for up to 10 years that locate in the identified airport area

Heritage

Tax Increment Grant: provides a tax grant for a portion of the tax increase associated with a new development, where a heritage building resource is conserved through rehabilitation

DC Equivalent Grant: provides a grant equivalent to the DCs that would have been due if the heritage building had been built at the time of the redevelopment.

Brownfield

Contamination Assessment Study Grant: provides grant for 50% of the cost of the study, up to $10,000

Property Tax Assistance Program: provides for the cancellation of 25% of current property taxes for up to 3 yearsDevelopment Charge Rebate: provides grant back to property owner for up to 50% of normal DCs to cover eligible remediation costs

Tax Increment Equivalent Grant: provides a grant for the amount of the municipal property tax increase resulting from rehabilitation for up to 3 years

There are NO proposed changes to the CIPs and Programs below as at this time

Industrial DC Program ChangesTo align with corporate economic development strategies, including the Industrial Lands Development Strategy, the recommended change to the program is to differentiate two categories of industrial uses: targeted and non-targeted

Building (Category)

Applicable DCs ($)

Applicable Grant (%)

DC Grant Amount

DCs Payable

Agri-Food Manufacturer(Targeted)

$ 600,000 100 % $ 600,000 $ 0

Shipping/Warehousing (Non-Targeted)

$ 600,00050%

(of $500,000 cap)$ 250,000 $ 350,000

The categories “targeted” and “non-targeted” will be based upon existing definitions withinthe Industrial Lands Community Improvement Plan.

This approach strategically links incentives to targeted uses – those that will generate moreemployment and multiplier employment (spin-offs) and also will have the largest impact ondeveloping London’s economy for the future.

Residential DC Program ChangesCombined DC rebate and a Tax-back Increment rebate simultaneously, further changed include:• At the time of building permit issuance applicants pay DCs & apply to Grant program• Grants commence in the same year (after a re-assessment)• The scheduled grant-back will be equivalent to 100% of the municipal portion of the tax

increment each year until all the DCs have been repaid

Could take fewer or more than ten years to pay back the value of DCs

Residential DC Program Changes

Development Charges: 4,000,000$

Tax Increment: 650,000$

Assessed Value: 55,000,000$

Year Annual Grant Amount

Rate (%) $ Rate (%) $ (= 100 % of Increment)

1 60 390,000$ 40 260,000$ 650,000$

2 60 390,000$ 40 260,000$ 650,000$

3 50 325,000$ 50 325,000$ 650,000$

4 40 260,000$ 60 390,000$ 650,000$

5 30 195,000$ 70 455,000$ 650,000$

6 20 130,000$ 80 520,000$ 650,000$

7 10 65,000$ 90 585,000$ 650,000$

8 10 65,000$ 90 585,000$ 650,000$

9 10 65,000$ 90 585,000$ 650,000$

10 10 65,000$ 90 35,000$ 100,000$

Totals 1,950,000$ 4,000,000$ 5,950,000$

Tax Rebate (TIG) DC Rebate

Tax Increment Grant Program Changes

Level 1 Level 2 Level 3

Year CurrentProposed

NewNo Change No Change

1 80% 100% 70% 60%

2 80% 100% 70% 60%

3 70% 100% 60% 50%

4 60% 90% 50% 40%

5 50% 80% 40% 30%

6 40% 70% 30% 20%

7 30% 60% 20% 10%

8 20% 50% 10% 10%

9 10% 40% 10% 10%

10 10% 30% 10% 10%

Increase the value of the grant for Level 1 properties to encourage the adaptive re-use of properties designated under the Ontario Heritage Act

*Full program to be activated in SOHO CIP area

Façade Loan Program Changes

EXISTING Façade Improvement Loan Programs

Offered through:Downtown CIP,Old East Village CIP& SoHo CIP

Loans up to $25,000 or half of the value of work (whichever is less). Heritage building facades are eligible for loans up to $30,000. One lifetime loan per property.

Loans are paid back at 0% interest over a 10 year period.

REVISED Façade Improvement Loan Programs

To be offeredthrough:Old East Village CIPSoHo CIP

Expanded Downtown CIP Hamilton Road CIP &Lambeth CIP

Loans increased from $25,000 to up to $50,000 or half of the value of work (whichever is less).

Loans are paid back at 0% interest over a 10 year period.

Forgivable loans to be offered to 3 years (2018 to 2020) withOngoing Evaluation (for future budget considerations).

One application per property every eleven years or one year after the previous loan is repaid to the City, whichever is less.

REVISED PROGRAM DETAILS:

EXISTING PROGRAM DETAILS

Upgrade to Building Code Loan Programs

Offered through:Downtown CIP,Old East Village CIP& SoHo CIP

Loans up to $50,000 or half of the value works (whichever is less).

Loans are paid back at 0% interest over a 10 year period

Upgrade to Building Code Loan Program Changes

REVISED Upgrade to Building Code Loan Programs

To be offeredthrough:Old East Village CIPSoHo CIP

Expanded Downtown CIP & Hamilton Road CIP

Loans increased from $50,000 to up to $200,000 or half of the value of work (whichever is less).

Loans are paid back at 0% interest over a 10 year period.

Forgivable loans to be offered to 3 years (2018 to 2020) withOngoing Evaluation (for future budget considerations).

One application per property every eleven years or one year after the previous loan is repaid to the City, whichever is less.

REVISED PROGRAM DETAILS:

EXISTING PROGRAM DETAILS

Incentives to be OfferedThe follow table illustrated what programs would be available by CIP:

DowntownOld East Village

SOHODowntown Expansion/

Richmond Row (*)

Hamilton Road (*)

Lambeth (*)

Facade Loan

Bldg Code Loan

Forgivable Façade Loan

Forgivable Bldg Code Loan

Rehab & Re-dev Tax Grant

DC Rebate(*) Proposed CIP

Next Steps

• Staff Report to April 24, 2017 PEC Meeting

• Prepare New Program Guidelines for programs to be implemented on January 1, 2018, and report back to Council for information

• Revise other Program Guidelines (for: Airport, Brownfield, and Heritage CIP programs)

• Amend the current CIPs (Downtown, Old East Village, SoHo, Airport, Brownfield, Heritage and Industrial Lands) to provide performance measures/indicators of success

• Amendments to the Downtown CIP and the Official Plan to expand Downtown CIP project area to include Richmond Row with different programs.

• Possible future amendment to the Official Plan to add the Hamilton Road CIP and Lambeth CIP project areas, and to adopt new CIPs for those CIP project areas

• Annual and 5-year monitoring reports of program activity and success

Sources of financing for potential new programs arising from the new Hamilton Road and Lambeth CIPs and new programs arising from expanded CIP project area have been identified through this CIP program review