HomeMy WebLinkAboutReport to Council 2016-10-03.pdfCORPORATION OF THE DISTRICT OF MAPLE RIDGE
City of Maple Ridge TO: Her Worship Mayor Nicole Read MEETING DATE: October 3, 2016 and Members of Council FROM: Chief Administrative Officer MEETING: Committee of the Whole SUBJECT:
Town Centre Incentive Program Review, Revitalization Tax Exemption Agreement Authorization EXECUTIVE SUMMARY: Since January 2011, the Town Centre Incentive Program has been providing
residential and commercial incentives to help implement the Town Centre Area Plan. Originally in place through 2013, Council extended the commercial portion of the program through 2014,
and then again through 2015 and 2016. The Program will be coming to an end on December 30, 2016. This report is intended to provide a summary of program results to allow Council to
consider the program’s approaching expiry date. Additionally, and as a legislative formality, Council approval is required annually to authorize tax exemptions for eligible projects
in both the Town Centre Incentive Program, and the Employment Lands Incentive Program. RECOMMENDATION: a. That the Corporate Officer be authorized to execute Revitalization Tax Exemption
Agreements with the applicable property owners listed in Schedule A, as attached to the staff report “Town Centre Investment Incentive Program Review, Revitalization Tax Exemption Agreement
Authorization” dated October 3, 2016; b. That the Town Centre Investment Incentive Program be allowed to expire for building permits issued after December 30, 2016. DISCUSSION: a) Background
Context: The three-year Town Centre Incentive Program was first implemented in 2011. The program focused on encouraging density and accelerating development in the accordance with the
Town Centre Area Plan. In 2013 Council extended the commercial component through 2014 and allowed the residential portion to expire. Council then extended this commercial-only program
again for 2015 through 2016. At the same time, Council endorsed the Employment Lands Incentive Program for 2015 through 2018 to support implementation of the Commercial and Industrial
Strategy and attract high-value jobs. The programs were structured to provide both upfront incentives to ease development costs, and longer term financial support for property owners.
PROGRAM SUMMARIES Since the Town Centre Incentive Program was first implemented, 115 projects have been supported, bringing over $100 million of construction value to the Town Centre
Area. Sixty-five percent of this value came through new construction, with the remainder generated by improvements. Through this program 821 new residential units have been completed,
as well as more than 7,000 m2 of new commercial space. The City provided almost $900,000 in upfront incentives. These incentives include partnering agreements and building permit rebates.
Revitalization tax exemptions are provided to delay the financial benefit to the City as a result of these projects, while supporting property owners. The value of these exemptions
is forecast to be about $2.2 million. Project Type Number of Projects Construction Value Upfront Incentives Estimated Tax Exemptions Est. Total Incentives New Construction 12 $64,871,603
$692,705 $1,700,000 $2,400,000 Improvements 103 $35,897,324 $182,385 $ 500,000 $ 700,000 Grand Total 115 $100,768,927 $875,090 $2,200,000 $3,100,000 The four-year Employment Lands Incentive
Program has been in place for close to two years. To date it has supported nine projects generating nearly $12 million of new construction value. Two projects have completed and currently
employ between 18 and 35 staff. Project Type Number of Projects Construction Value Upfront Incentives Estimated Tax Exemptions Est. Total Incentives New Construction 9 $11,754,644 $
126,014 $ 350,000 $ 500,000 TAX EXEMPTION AUTHORIZATION A component of both the Town Centre and Employment Lands programs is a revitalization tax exemption. Council has adopted bylaws
to establish this component of the programs including eligibility requirements. The Community Charter requires the City to enter into formal agreements with property owners in order
to enable the exemptions. These agreements require Council authorization. For this year, nine projects meet program criteria and are eligible to apply. Due to legislated timing we do
not know in advance of executing the agreements which projects will generate a value that can be exempted. Therefore, it is requested that Council authorize agreements with all the
property owners, knowing that some may not be executed. The option to apply rests with property owners, and projects must meet all other requirements of the bylaw.
FAÇADE IMPROVEMENT COMPONENT Another component of the Town Centre Incentive Program is a $25,000 maximum annual contribution to the Downtown Maple Ridge Business Improvement Association
to support their Façade Improvement Program. If the incentive program is allowed to expire at the end of 2016, Council may wish to continue their financial support. A report highlighting
the success of the Façade Improvement Program along with staff recommendations will be circulated separately by the Economic Development department. b) Desired Outcome: That property
tax exemptions are provided for projects meeting the requirements of the incentive programs as adopted by Council, and that Council provides direction as to the future of the Town Centre
Incentive Program. c) Strategic Alignment: The Town Centre Incentive Program was intended to support the Town Centre Area Plan and maintain development momentum during a period of economic
downturn. The program’s deadline was key to ensuring the projects moved beyond planning stages and were constructed. Continually extending the deadline weakens this intent. Furthermore,
the incentives have become a “bonus” rather than an attraction tool for the majority of projects. The Economic Development department supports the recommendation to allow the program
to expire. d) Business/Financial Implications: The five-year financial plan includes revenue projections due to growth in the tax base. Tax exemptions will require the City to forgo
revenue for a period of time, with the intent that future revenues, as a result of stimulated growth and density, will provide a net financial benefit. In 2020, when all Revitalization
Tax Exemptions conclude for TCIIP projects, an estimated $960,000 of new property tax revenue will be generated annually. Should all eligible properties included in “Schedule B” experience
non-market change equivalent to the estimated construction value, exempted tax revenues would be approximately $75,000 in 2016 and $220,000 over the full exemption period.
CONCLUSIONS: This report serves two purposes. It requests that Council consider the continuation or expiry of the Town Centre Incentive Program. The program has supported over $100 million
of construction since its inception in 2011, and draws to an end on December 30, 2016. Further, it requests that Council authorize Revitalization Tax Exemption Agreements for qualifying
projects under the City’s two development incentive programs. (Original signed by Daniel Olivieri) _______________________________________________ Prepared by: Daniel Olivieri, Research
Technician (Original signed by Lino Siracusa) _______________________________________________ Reviewed by: Lino Siracusa, Manager of Economic Development (Original signed by Laura Benson)
_______________________________________________ Reviewed by: Laura Benson, CPA, CMA Manager of Sustainability and Corporate Planning (Original signed by Paul Gill) __________________________________
_____________ Approved by: Paul Gill, BBA, CPA, CGA General Manager, Corporate and Financial Services (Original signed by Frank Quinn on behalf of E.C. Swabey) _______________________________________
________ Concurrence: E.C. (Ted) Swabey Chief Administrative Officer Schedule A: Development Incentive Programs – Fast Facts Schedule B: List of potential Revitalization Tax Exemption
Agreement Signatories Schedule C: Revitalization Tax Exemption Agreement (TCIIP Program) Template
Schedule A: Development Incentive Programs – Fast Facts Program name Town Centre Incentive Program Employment Land Incentive Program Program acronym TCIIP-2011 TCIIP-2014 ELIIP Time
period 2011-2013 2014-2016 2015-2018 Scope Residential and commercial development, commercial renovations and façade improvements in the Town Centre Commercial development, renovations
and façade improvements in the Town Centre New construction and renovations on industrial lands, except for uses that were identified as providing low-value and/or lowdensity employment.
Program status Closed Closing Dec. 30, 2016 Open Number of projects supported 64 projects 51 projects to date 9 projects to date Estimated construction value of projects supported $90
million (mostly residential) $10 million to date $11 million to date Projects receiving revitalization tax exemptions to date 25 projects; est. value of tax exemptions = $2.2 million.
6 projects; est. value of tax exemptions = $350, 000 Combined impact to date Over 120 projects with an estimated construction value of over $110 million.
Schedule B: List of potential Revitalization Tax Exemption Agreement signatories TCIIP Program – 2014 Maple Ridge Plaza Properties Ltd. #300 – 1285 Pender Street West Vancouver, BC V6E
4B1 Lands: #300 – 22645 Dewdney Trunk Road Legal Description: Lot 2; Sub Lot 23; Section 20; Township 12; New Westminster District; Plan NWP20546 PID #: 008-867-747 Folio Number: 527870200X
Building Permit # 16-116271 Project: Tenant improvement Term of Tax Exemption: Three years Stacks & Decker Developments Inc. PO BOX 29533 STN DEL CTR Maple Ridge, BC V2X 0V2 Falcon
Homes 751 Capital Crescent Port Coquitlam, BC, V3C 6E4 Mainstay Holdings 23505 Dogwood Avenue Maple Ridge, BC, V2X 4S4 Lands: #102 – 11862 226th Street Legal Description: Lot 2; District
Lot 401; New Westminster District; Plan EPS2538 PID #: 029-587-964 Folio Number: 31872-0102-0 Building Permit # 15-123431 Project: Create dental office Term of Tax Exemption: Three
years Fraser Street Holdings Ltd. #400 – 8085 North Fraser Way Burnaby, British Columbia, V5J 5M8 Lands: #105 -22420 Fraser Street Legal Description: Lot 103; District Lot 398; New
Westminster Plan; NWP49778; Group 1 PID #: 001-022-954 Folio Number: 31701-0100-6 Building Permit # 16-111142 Project: Tenant improvement Term of Tax Exemption: Three years Fraser Street
Holdings Ltd. #400 – 8085 North Fraser Way Burnaby, British Columbia, V5J 5M8 Lands: #106 -22420 Dewdney Trunk Rd Legal Description: Lot 103 District Lot 398 New Westminster District
Plan NWP49778 Group 1 PID #: 001-022-954 Folio Number: 31701-0100-6 Building Permit # 16-119278 Project Tenant improvement Term of Tax Exemption Three years Fraser Street Holdings Ltd.
#400 – 8085 North Fraser Way Burnaby, British Columbia, V5J 5M8 Lands: #300 -22420 Dewdney Trunk Rd Legal Description: Lot 103 District Lot 398 New Westminster District Plan NWP49778
Group 1 PID #: 001-022-954 Folio Number: 31701-0100-6 Building Permit # 16-105673 Project Tenant improvement Term of Tax Exemption Three years
Schedule B: List of potential Revitalization Tax Exemption Agreement signatories 0947690 BC LTD 20232 Powell Avenue Maple Ridge, BC, V2X 4N2 Lands: 22328 119 Avenue Legal Description:
Lot 3; District Lot 398; New Westminster District; Plan NWP2899; Group 1 PID #: 001-154-109 Folio Number: 31519-0000-8 Building Permit #: 15-125511 Project Tenant Improvement Term of
Tax Exemption: Three years ELIIP 2014 MCF Holdings 1750 Coast Meridian Road Port Coquitlam, BC V3C 6R8 Lands: 20070 113B Ave Legal Description: Lot 9; District Lot 280; New Westminster
District; Plan NWP86659; Except Plan BCP45137 PID #: 016-469-771 Folio Number: 21342-0209-9 Building Permit #: 15-124166 Project New Construction-2 storey Industrial Term of Tax Exemption:
Five years-declining annually M D Z Holdings #2 – 169 Golden Drive Coquitlam, BC, V3K 6T1 Lands: 20159 115A Avenue Legal Description: Lot 15; District Lot 280; New Westminster District;
Plan NWP86659 PID #: 016-469-844 Folio Number: 20134-2021-5 Building Permit #: 15-122539 Project New Construction-12 unit Industrial Term of Tax Exemption: Five years-declining annually
Waldun Forest Products 9393 287th Street Maple Ridge, BC, V2W 1L1 Lands: 9393 287th Street Legal Description: Parcel A; District Lot 438 & 6048; New Westminster District; Plan LMP7504
PID #: 017-993-300 Folio Number: 94793-0300-0 Building Permit #: 15-109608 Project New Construction-Steel manufacturing Term of Tax Exemption: Five years-declining annually
Schedule C: Revitalization Tax Exemption Agreement (TCIIP Program) Template City of Maple Ridge 11995 Haney Place, Maple Ridge, BC V2X 6A9 Tel: 604-463-5221 Fax: 604-467-7329 enquiries@mapleridge.ca
www.mapleridge.ca Form RTE2015B-TCIIP Revitalization Tax Exemption Agreement Town Centre Investment Incentive Program THIS AGREEMENT dated for reference _________________________________.
BETWEEN: CITY OF MAPLE RIDGE, a municipal corporation under the laws of British Columbia and having its offices at 11995 Haney Place, Maple Ridge, British Columbia V2X 6A9 (“City”)
AND: OWNER NAME/ADDRESS (“Owner”) A. Under the Maple Ridge Revitalization Tax Exemption Bylaw No. 7010-2013 (the “Bylaw”), the City of Maple Ridge established a revitalization tax exemption
program for the purpose of encouraging revitalization of the Town Centre Investment Incentive Areas identified in the Bylaw. B. The Lands subject to this Agreement are located within
the Town Centre Investment Incentive Areas. C. The Owner proposes to construct an improvement(s) or to carry out an alteration(s) to an existing improvement(s) on the Lands. D. This
Agreement contains terms and conditions governing the provision of a general municipal property tax exemption under the Bylaw. NOW THEREFORE, in consideration of the mutual promises
contained in this Agreement and the payment by the Owner to the City of $1.00, the receipt and sufficiency of which are acknowledged by the City, the parties agree as follows: 1. Definitions
1.1. In this Agreement the following words have the following meanings: “Lands” means those lands and premises located at: Legally described as: Parcel Identifier (PID):
Schedule C: Revitalization Tax Exemption Agreement (TCIIP-2014 Program) Template Page 2 of 5 Form RTE2015B-TCIIP Folio Number: “Project” means the project identified on Building Permit
No: “Municipal Property Tax” means the property taxes Council has imposed pursuant to Schedule A of the Maple Ridge Tax Rates Bylaw, and does not include any other property taxes 2.
Owner’s Obligations 2.1. In consideration of the City granting the Owner a revitalization tax exemption in accordance with the Bylaw, the Owner agrees to construct the following new
improvement(s) or carry out the following alteration(s) to an existing improvement(s) on the Lands: Brief description and reference building permit number and DP# where applicable.
2.2. The Owner will ensure that the Project is constructed, maintained, operated and used in a fashion that will be consistent with and will foster the objectives of the revitalization
tax exemption program, as outlined in the Bylaw. 2.3. Throughout the term of this Agreement, the Owner shall operate, repair and maintain the Project and will keep the Project in a
state of good repair. 2.4. The Owner agrees that a revitalization tax exemption granted by the City under the Bylaw is subject to the Owner’s compliance with and fulfilment of all the
terms and conditions arising out of the Building Permits issued. 2.5. The Owner shall construct the Project and, at all times during the term of the tax exemption, operate, use and
occupy the Lands and the Project in compliance with all statutes, laws, regulations and orders of any authority having jurisdiction and, without limiting the generality of the foregoing,
all federal, provincial, or municipal laws or statutes or bylaws, including all the rules, regulations, policies, guidelines, criteria, or the like made under or pursuant to any such
laws. 2.6. The Owner must bear all the expenses of performing the obligations and covenants of contained within this Agreement. 2.7. All covenants made by the Owner herein shall be
for the benefit of the City. 2.8. The Owner represents and warrants to the City that: a. All necessary corporate actions and proceedings have been taken by the Owner to authorize its
entry into and performance of this Agreement; b. Upon execution and delivery on behalf of the Owner, this Agreement constitutes a valid and binding contractual obligation of the Owner;
c. Neither the execution and delivery, nor the performance of this Agreement shall breach any other Agreement or obligation or cause the Owner to be in default of any other Agreement
or obligation respecting the Lands; and,
Schedule C: Revitalization Tax Exemption Agreement (TCIIP-2014 Program) Template Page 3 of 5 Form RTE2015B-TCIIP d. The Owner has the corporate capacity and authority to enter into and
perform this Agreement. 3. City’s Rights, Powers and Obligations 3.1. Nothing contained or implied in this Agreement prejudices or affects the City’s rights and powers in the exercise
of its functions or its rights and powers under any public and private statutes, bylaws, orders or regulations to the extent the same are applicable to the Lands, all of which may be
fully and effectively exercised in relation to the Lands as if this Agreement had not been executed and delivered by the Owner. 3.2. Where the terms and conditions of this Agreement
and the Bylaw have been met, the City shall issue a Revitalization Tax Exemption Program Certificate to the Owner in accordance with the provisions of the Bylaw. 3.3. The City reserves
the right to terminate this Agreement and revoke the Revitalization Tax Exemption Program Certificate if the Owner fails to comply with any of the terms, conditions or requirements
of this Agreement or the Bylaw, and the Owner fails to remedy any such breach or non-compliance within the time specified by the City in its notice to the Owner. 3.4. For a Revitalization
Tax Exemption Program Certificate that is revoked, the City may recapture: a. The value of the Tax Exemption provided on the Lands for the current and any previous taxation years to
which the Revitalization Tax Exemption Program Certificate applies; and, b. The value of any amounts provided through a Partnering Agreement entered into by the Owner and the City.
3.5. If the Owner fails to remit the recapture amount noted in Section 3.4 of this Agreement within thirty (30) days, the amount may be placed on the general property tax bill for the
Lands. 3.6. The City will act in its sole discretion to make or give any decision, direction, determination, or consent. 4. General Provisions 4.1. The Owner and the City represent
that the City has made no representations, covenants, warranties, guarantees, promises, or any agreements, express or implied, with the Owner other than those expressly contained in
this Agreement. 4.2. This Agreement may only be modified by written agreement of the City and the Owner. 4.3. This Agreement shall inure to the benefit of, and is binding on the parties
and their respective heirs, executors, administrators, successors and assigns. 4.4. Time is of the essence in this Agreement. 4.5. This Agreement constitutes the entire Agreement between
the Owner and the City with regard to the subject matter herein, and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written, of the
City with the Owner.
Schedule C: Revitalization Tax Exemption Agreement (TCIIP-2014 Program) Template Page 4 of 5 Form RTE2015B-TCIIP 4.6. No amendment or waiver of any portion of this Agreement shall be
valid unless in writing and executed by the parties to this Agreement. 4.7. Waiver of any default by a party shall not be deemed to be a waiver of any subsequent default by that party.
4.8. This Agreement shall be construed according to the laws of the Province of British Columbia. 5. Revitalization Tax Exemption 5.1. Subject to fulfilment of the conditions set out
in this Agreement and the Bylaw, the City shall issue a Revitalization Tax Exemption Program Certificate to BC Assessment entitling the Owner to a property tax exemption in relation
to the Project as specified in Part 6 of this Agreement. 6. Calculation of Revitalization Tax Exemption 6.1. The Tax Exemption is equivalent to 100% of the Municipal Property Tax payable
on the amount of Non-Market Change attributed to the Commercial Portion of the Project, as specified in Part 7 of the Bylaw, and where all the conditions as stated in Part 8 of the
Bylaw have been met for a total of <<Choose Exemption Term>> years. 7. Term of Tax Exemption 7.1. Provided the requirements of this Agreement and the Bylaw are met, the tax exemption
shall be for the taxation years: to inclusive. 8. No Refund 8.1. For greater certainty, under no circumstances will the Owner be entitled under the City’s revitalization tax exemption
program to any cash credit, any carry forward tax exemption credit or any refund for any property taxes paid. 9. Notices 9.1. Any notice or other communication required or contemplated
to be given or made by any provision of this Agreement shall be given or made in writing and either delivered personally (and if so, shall be deemed to be received when delivered),
or mailed by prepaid registered mail in any Canada Post Office (and if so, shall be deemed to be delivered on the sixth business day following such mailing, except that, in the event
of interruption of mail service, notice shall be deemed to be delivered only when actually received by the party to whom it is addressed), so long as the notice is addressed to the
party at the address shown on Page 1 of this Agreement. 10. Severance 10.1. If any portion of this Agreement is held invalid by a court of competent jurisdiction, the invalid portion
shall be severed and the decision that it is invalid shall not affect the validity of the remainder of this Agreement. 11. Further Assurances
Schedule C: Revitalization Tax Exemption Agreement (TCIIP-2014 Program) Template Page 5 of 5 Form RTE2015B-TCIIP 11.1. The parties shall execute and do all such further deeds, acts,
things and assurances that may be reasonably required to carry out the intent of this Agreement. As evidence of their agreement to be bound by the terms of this Revitalization Tax Exemption
Agreement, the parties have executed this Revitalization Tax Exemption Agreement as follows: Corporate Officer City of Maple Ridge Executed by the (Insert name) by its authorized signatories:
Name Name The Revitalization Tax Exemption Agreement template for the ELIIP program is essentially the same as this document, other than: Term and basis for exemption -the ELIIP tax
exemption is provided for 5 years on a declining basis, whereas the TCIIP is provided for 3 years on a static basis. Eligibility requirements – the ELIIP program outlines property
uses that comply with the Zoning Bylaw but are ineligible for the incentive program. ELIIP eligibility requirements are specified in Bylaw #7112-2014.