Council votes to give $33 million tax break to downtown developers

Posted February 11, 2014

Who knew that two years ago, council approved spending $33 million in “incremental grant funding” to six residential and commercial developments in the downtown area? Spending $33 million is not chopped liver.

The special funding was to encourage developers to take on heritage redevelopment projects, brownfield remediation and downtown intensification projects.

It is now apparent that the deals subsequently struck were so rich that heritage redevelopment and brownfield remediation were locked out. Ah, the best intentions sometime go awry.

All the remaining funding, $16 million, has now been allocated to intensify downtown residential development by Tricar Developments on a project on Wellington St. East and a Fusion Homes redevelopment of the W.C Woods project.

The tax deferments are for ten years. This results in millions of dollars in property taxes being denied taxpayers for that period.

It is yet another example of voodoo financial management. It’s an easy guess that not one of the present council will be on council in ten years, let alone next year.

Here are some questions.

Who pays the deferred taxes after expiration of the deferment?

Is it possible that this funding is grants from city reserves, if so which ones are they? How will they be replenished?

What is the taxing effect of assessment increases on these properties over ten years?

Will these developers receiving these tax deferments still be in business in ten years?

If not, how does the city benefit?

What assurances does the taxpayer have that this is not a too-generous handout to meet the agenda of the present council?

What other deferment deals, such as deferment of development fees, have been offered by the city to encourage downtown intensification?

Did council consider the impact of its cart-based waste collection system in regard to these projects?

Now that the so-called $33 million “incremental grant funding” has been exhausted, what happens to the proposed $34 million police headquarters renovation; the downtown library, the costs of which have recently varied widely, and the South End recreation centre that is not even on the ten-year capital spending program?

No, instead council decided to become a bank and spend $33 million to help developers to build condos downtown by deferring taxes for ten years.

Trouble is it’s your bank and your money.

 

 

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8 Comments

Filed under Between the Lines

8 responses to “Council votes to give $33 million tax break to downtown developers

  1. DAVID BIRTWISTLE

    Let’s not forget that the vote on this matter was 12-0 with Councillor Furfaro declaring a conflict of interest.One councillor interviewed on a local TV news station said that the City’s finance department told him that the City could expect a return of somewhere nearing 36 times the money invested;sure be nice to see the mathematical calculations that arrived at this data?! david.birtwistle@sympatico.ca

  2. geo

    36 times? So this means I can expect to see my property taxes steadily decline over the next 10 years?

  3. Rob

    This council made a huge mistake. Why must staff and council ignore other cities where the developers PAY THE CITY for the right to build condos not the other way around.

    • Rob: Wonder how other developers feel about this handout? Since Farbridge took over administration of the city, many Guelph developers and builders have established in friendlier jurisdictions. But then, favoritism is a watchword for the Farbridge crew including the FOF’s,Friends of Farbridge, now walking the corridors of city hall.

  4. geo

    At least this situation has finally made it clear to me why Furfaro, who does not live in the ward he is supposed to represent, is sitting on Council.

  5. Laura

    The VP of Planning and development for Fusion since 2007 is Larry Kotseff former City Administrator for the City of Guelph.

    Correct if me if I am wrong but didn’t Belmont Equities just get money from the city’s brownfield fund to remediate the former Rockwell site on Wellington Street??

    • Laura: I recall that movie line “follow the money” when you see how certain corporate entities seem to be favored by the administration. What I do know is there is a blacklist of local, qualified expert suppliers who are blocked out of receiving any city business. With an election year now here, could it be payback time for those who do business with the city? The mayor spent $65,000 getting re-elected in 2010. That money had to come from somewhere.

  6. DAVID BIRTWISTLE

    geo:I think you might have misread Councillor Furfaro’s not voting as he claimed a conflict of interest which I think was due to his pecuniary interest in a property abutting the former Woods property;good on him if the foregoing is factual.Hope other councillors would be so forthcoming.
    david.birtwistle@sympatico.ca

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