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If CIVIC is not supported, then CIP looks to be well supported by both citizens and Council.  The 2016 budget was only $50,000 but CAO Stephen Peacock suggests “Funding (in 2016) above budgeted amounts (for CIP projects) to be taken from Holdco reserves”.  This to be done on a case by case basis.  In fact, Council is being asked at the Sept 12 meeting to approve an application from Ferreri for 10-14 King Street West. (Edward Jones is moving across the road to the old Dollar store. Ferreri is moving to this larger property that he owns).  The effectiveness of the CIP program is to be reviewed “at the end of 2016 for budgeting purposes in 2017”.  Further, Stephen recommends that: “If it is found that the CIP does not provide the desired incentives it is recommended that the CIVIC could then be reconsidered for the 2018 budget year”.  But it’s not the same CIVIC as recommended by the Economic Development Department and the consultant.

After discussing CIVIC per the previous post, the CAOs’ report goes on to say:

In discussions at the Downtown Coalition the committee was concerned that with only the CIP in place, levels of funding would not create enough incentives to trigger major building renovations to ground and upper floors in buildings in the Downtown. [This issue is key to Downtown vitalization].

Three options are therefore available to Council for consideration at this time. They will be reviewed in light of the concern of Council, the Coalition, cost and citizen input. The options are:

  1. Continue with existing incentive programs as presently funded
  2. Provide additional funding to existing programs
  3. Initiate a CIVIC program

Stephen then goes on to analyse these three options.

1. Continue with existing incentive programs as presently funded

The existing Community Improvement Plan (CIP) consists of eight incentive programs.

  1. The Study Grant Program
  2. Facade Improvement Grant/Loan Program
  3. Building Improvement Grant/Loan Program
  4. Residential Grant/Loan Program
  5. Vitalization Tax Increment Grant
  6. Brownfield Tax Assistance Program.
  7. Vitalization Development Charge Grant Program.
  8. Fee Grant Program. Case Study

A major concern of the Downtown Coalition was that the existing programs available would not incentify major redevelopment. Stephen’s report says that “to demonstrate that this may not be the case, let’s review a case study of a typical large redevelopment and the funds available potentially through the CIP program. We will consider a major project in the downtown heritage area with a projected cost of $500,000.”

He then goes on to show an example where the total CIP contribution including 0% loans, grants and tax incentives would be $276,750 on an expenditure of $500,000.

The conclusion would be that CIP could help major projects of this size but would need a larger budget – see next option.

2. Provide additional funding to existing programs

A CIP does not suffer from many of the problems criticized by Stan Frost and Don Morrison since control of expenditures remains in the hands of elected officials and the program has a proven track record. But “existing funding of the CIP may be inadequate”. In Stephen’s example, for a $500,000 renovation:

CIP Program costs would be $105,000 in grants, $5715 in tax rebates and $4200 interest payments (assuming a 3% Town borrowing rate) for a first year cost of $114,915. Additional costs for interest payments and tax rebates would occur in subsequent years. It is felt that the level of funding would be very attractive to potential redevelopers and should be considered by Council [my emphasis].

3. Initiate a CIVIC program

The disadvantages of the original CIVIC are discussed in the earlier post but Stephen suggests a scaled back version of this program with the following possible adjustments:

  1. Adjust board mandate to provide recommendation to Council for Council’s review and final decision. The board would also develop lending criteria for Council approval.
  2. Scale back program to be a trial program with a limited number of targeted projects (1-3).
  3. Have Finance staff administer trial program with no additional staffing.

However, Stephen says:

Due to the demonstrated ability of existing programs to meet needs for incentives for Downtown major reconstruction, proceeding with any type of CIVIC at this time is not recommended.

The CIP program is beginning to yield results with 3 applications being approved at the August 10/16 meeting of Council. More applications are being received by the Planning Department with expectations that requests will exceed budgeted amounts for 2016. It is recommended that Council continued funding CIP incentive programs beyond the budgeted amount based on staff recommendation on a case by case basis. It is further recommended that Staff report to Council on the effectiveness of the program at the end of 2016 for budgeting purposes in 2017. Budget allocation for 2017 could reflect the inclusion of sufficient funds for major reconstruction projects as costed in this report. These actions will allow time for further review of the effectiveness of the CIP program by the Downtown Coalition. If it is found that the CIP does not provide the desired results it is recommended that the CIVIC could then be reconsidered for the 2018 budget year.

It seems to me that Stephen is not talking about CIVIC as originally proposed but an entity that would administer CIP with a CIVIC sized budget.  It seems option 2 is what he is really suggesting.

Download Stephen’s full 9 page report here.

 

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