Evaluation of Community Improvement Plan Incentives€¦ · Evaluation of Community Improvement...
Transcript of Evaluation of Community Improvement Plan Incentives€¦ · Evaluation of Community Improvement...
Evaluation of Community Improvement Plan Incentives
Public Engagement Open HouseThursday October 20, 2016
What Are We Here to Talk About?
Review of the Financial Incentives through Community Improvement Plans:
• Loans & Grants- Upgrade to Building Code & Façade Improvement Loans- Forgivable Grant Programs- Non-street Façade Loan Program- Awning, Signage and Decorative Lighting Grant Program
• Industrial Development Charges
• Residential Development Charges
• Tax Back Grants - Residential;- Brownfield;- Heritage;- Airport
Why Review ?
Objectives of Review• Determining the overall best value for money – “bang for
buck”/ROI
• Ensure we are not incenting something that would occur even without the incentives in place
• Ensure that the incentive programs implement the goals of the CIPs
• Focus on key policy objectives of the CIPs
• Establish clear measures of success for programs
• Ensure consistent with CIP Legislation
• Find savings wherever possible
Interim Report & Direction
August 22, 2016 – Report to Planning and Environment Committee
DIRECTION GIVEN FROM COUNCIL THAT:• No CIP or program for Sports and Recreation Programs• No CIP or program for Private/Not-for-Profit Education Facilities
• Retain Upgrade to Building Code Loan Programs (Downtown, Old East, SoHo)• Retain Façade Improvement Loan Programs (Downtown, Old east, SoHo)• Retain Tax Increment Grant Programs (Downtown, Old East)• Retain Brownfield Tax Increment Grant Program and Property Tax Assistance Program• Retain Brownfield Assessment Study Grant Program
• Noting that changes to the programs to align with the objectives above will be recommended.
Existing Programs
Existing Types of Financial Incentives through CIPs
Loans
Tax Grant
Other Grants
DC Grants
Existing Types of Financial Incentives through CIPsPrograms Examples Description
Loans- Upgrade to Building Code- Facade Improvement- Non-street Façade Improvement Loan
No interest, 10 year pay back to the City, Capped (percentage of cost of improvements set to a max.), Low cost
Tax Grant
- Brownfield Tax Increment Equivalent Grant- Rehabilitation & Redevelopment Grant- Heritage Tax Increment Grant - Airport Tax Increment Grant
Tied to increase Tax (related to improvement), New taxes paid, grant provided for a set proportion of the tax increase, city received no less than prior to improvement, Low cost
Other Grants
- Forgivable Upgrade to Building Code - Forgivable Facade Improvement - Awning, Signage & Decorative Lighting Grant - Tax Holiday Grant- Industrial Corridor Enhancement Grant
Typically tied to Small Scale propertyimprovement Projects or studies, Capped, Moderate cost
DC Grants
- Industrial - Residential- Brownfield- Heritage Development Charge Equivalent Grant
Widely used for a variety Projects,Not capped for IND/RES/AIR, Capped for HER/BRO based on costs of site improvement/remediation – value of grants determined at Building Permit Stage, High cost
Loan Programs
Loan Programs
Programs Examples Current Program Description
Loans • Upgrade to Building Code
• Facade Improvement• Non-street Façade
Improvement Loan
• No interest, 10 year pay back to the City, Capped (percentage of cost of improvements set to a max.),
1. Loan Programs - Upgrade to Building Code
Areas of Eligibility proposed: – Downtown CIP;– Old East Village CIP; and– SoHo CIP.
Upgrade to Building Code
Current Model Proposed Changes
Up to $50,000 loan to property owner or half the value of the eligible works
Up to $ 250,000 loan to property owner or half the value of eligible works
Review criteria for ‘eligible works’
2. Loan Programs – Façade Improvement
Areas of Eligibility proposed for Façade Improvement: – Downtown CIP;– Old East Village CIP; and– SoHo CIP.
Areas of Eligibility proposed for Non-Street Façade program:– Downtown CIP; and – Old East Village CIP.
Façade Improvement
Current Model Proposed Changes
Up to $ 25,000 loan to property owner Up to $ 100,000 loan to property owner or half the value of eligible works
Review criteria for ‘eligible works’
Only one (1) application per property Permit one (1) application per property every eleven (11) years or one (1) year after the previous loan is repaid.
Open eligibility to include non-street façades
Grant Programs (including Forgivable)
Program Example Description
Grant Programs
(not including Tax Increment Grant Programs)
• Forgivable Upgrade to Building Code Grant;
• Forgivable Façade Improvement Grant;
• Awning, Signage & Decorative Lighting Grant;
• Tax Holiday Grant;• Industrial Corridor Enhancement
Grant.
• Typically tied to small scale property improvement projects or studies.
• Moderate cost to City with costs capped.
GrantPrograms(Non-DC)
Grant Programs (including Forgivable)
Propose re-activation of pilot program for Forgivable Loans as part of Grant programs.
Forgivable portion only applicable for defined ‘eligible uses’.
Note: List of ‘eligible uses’ requires review and confirmation.
Note: Awning, Signage and Decorative Lighting Program subject to a future budget ask; possibly incorporated into Façade Improvement Program.
Eligible Areas Proposed Changes
Downtown CIP • 25% of Upgrade to Building Code and Façade Improvement Loans to be paid back to property owner through a grant, up to a cap of:
• $ 12,500 forgivable portion for Façade Improvement; and
• $ 25,000 forgivable portion for Upgrade to Building Code;
Old East Village CIP
SoHo CIP
Tax Grant Programs
No changes proposed to Tax Grant programs
Program Example Description
Tax Grants • Brownfield Tax Increment Equivalent Grant
• Rehabilitation &Redevelopment Grant
• Heritage Tax Increment Grant• Airport Tax Increment Grant
• Tied to increased tax (related to improvements) through new taxes paid;
• Grant provides for a set portion of the tax increase;
• City receives no less than prior to improvement.
• Identified as lower cost to the City.
Development Charges
Programs
Development Charge Programs
Program Example Description
Development Charges Grants
• Industrial;• Residential;• Brownfield;• Heritage DC Equivalent
Grant
• Widely used for a variety of projects;• Cost not capped for Industrial or
Residential;• Costs capped for Heritage and
Brownfield, based on costs of site improvement/remediation.
• Value of grants determined at Building Permit Stage.
• High cost program to the City.
Brownfield and
Heritage DC
DC Grant Programs – Brownfield & Heritage DC Equivalent
Development Charges
Program Current Model Proposed Program Changes
Brownfield • Grant for eligible remediation costs on up to 50% of the Development Charges that have been paid
No changes proposed.
Heritage • Grant in the amount of the DCs that would have applied to the heritage-designated building, had it been built today, when that structure is rehabilitated or incorporated into a development project.
• Grants may not exceed cost of rehabilitating the heritage-designated building
No changes proposed.
ResidentialDC
DC Grant Programs - Residential
Four (4) options for the Residential DC Grant Program:
Note: funding for the Council-approved but un-funded SoHo Residential DC Grant Program under consideration.
Residential DC Grant program
Option 1 Option 2 Option 3A Option 3B Option 4
“Existing” “Stepped” “Straight Cap” “Cap with Minimum Quality Threshold Criteria”
“Heritage”
DC Grant Programs – Residential (Option 1)
Option 1: “Existing Program”
• 100% grant back of Development Charges
• Eligible in the Downtown CIP and Old East Village CIP areas
DC Grant Programs – Residential (Option 2)
Option 2: “Stepped”
• Units 0 to 100 at a 100% DC rebate;• Units 101-200 at a 75% DC rebate;• Units 201+ at a 50% DC rebate.
0
20
40
60
80
100
120
DC Grant%
Stepped DC Rebate (% by # of units)
100 units 101-200 units 201 units +
DC Grant Programs – Residential (Option 3A)
Option 3A: “Straight Cap”
– 100% Development Charges Grant;
– Grant is up to a maximum of $ 2 million cap;
– $ 2 million cap is a cap per building.
DC Grant Programs – Residential (Option 3B)
Option 3B: “Cap with Minimum Quality Threshold Criteria”
Grant (%) Cap ($) Minimum Quality ThresholdCriteria
Note
100% DC Grant Up to a maximum of $ 2 Million perbuilding
Grant only provided if meets the criteria as follows:• If Heritage building on
the site, the building is appropriately conserved (Heritage Designated);
• Meets applicable Design Guidelines; and
• Provides green roof or an alternative that is acceptable to Council.
No grant back if development does not meet the minimum quality threshold criteria.
DC Grant Programs – Residential (Option 4)
Option 4: “Heritage”
• If no Heritage-designated building on the site:• 75% DC grant for site;• Grant is up to a maximum of $2 million (per building).
• If a heritage building is on site and is conserved with Heritage Designation:
• 100% DC grant for site;• Grant is up to a maximum of $2.5 million (per building).
IndustrialDC
DC Grant Programs - Industrial
Three (3) options for the Industrial DC program
Industrial DC Grant Program
Option 1 Option 2 Option 3
“Existing Program” “Targeted Sectors” “Employment Density”
DC Grant Programs – Industrial (Option 1)
Option 1: “Existing Program”
• 100% Development Charges Grant
DC Grant Programs – Industrial (Option 2) Option 2: “Targeted Sectors”
Industrial DC Grant Program – Option 2 “Targeted Sectors”
Sector DC Grant (%) Example Sectors
Targeted Sectors 100% • Research, Development and Commercialization;
• Life and Health Sciences;• Agri-Food Processing;• Advanced Manufacturing;• Automotive;• Defence and Aerospace.
Non-Targeted Sectors 60% • Transportation and Logistics;• Commercial Truck Service
Establishments;
Warehouses 50% • Warehouses• Data warehouse and data storage.
Retention of Businesses with existing operations in London
100% All sectors.
DC Grant Program – Industrial (Option 3)
Option 3: “Employment Density”
Industrial DC Grant Program – Option 3 “Employment Density”
Employees per building area (sq. ft.)
Industrial Sectors DC Grant (%)
High Category ‘A’ 100
Mid Category ‘B’ 75
Low Category ‘C’ 50
Summaryof Proposed
Options
Program Comparison / EvaluationProgram Proposed Changes Program Attributes
Loans• Upgrade to Building
Code;• Façade Improvement;• Non-Street Façade Loan
• Building Code: Loan up to $250,000 or half eligible work;
• Façade: Loan up to $100,000 or half eligible work and one loan every 11 years or 1 year after previous loan repaid.
• Low cost to City;• High leverage/ROI;• Feedback suggests
current caps too low.
Grants• Forgivable Building
Code and Façade;• Awning/Signage/
Lighting
• Reactivate pilot program of forgivable loans;
• Façade: $12,500 forgivable portion;
• Building Code: $25,000 forgivable portion;
• 25% paid back to property owner through grant
• Low cost to City;• Feedback suggests
sought by small businesses and effective for small businesses.
Tax Grants No Changes Proposed • Tied to increased tax;• Low cost to City
Program Comparison / EvaluationDC Program Proposed Changes Program Attributes
Residential • 5 Options: “Existing Program”; “Stepped”; “Straight Cap”; “Cap with Minimum Quality Threshold Criteria”; and “Heritage”.
• High cost; Currently no cap; Costs only known at time of building permit.
• Options for changes increase cost certainty and introduce criteria regarding community objectives (for heritage or quality threshold criteria).
Industrial • 3 Options: “Existing Program”; “Targeted Sectors”; and “Employment Density”.
• High cost; Currently no cap; Costs only know at time of building permit.
• Options for changes provide strategic alignment with City’s industrial land development strategies for economic development and employment generation.
Brownfield No change proposed. • Costs are capped at the cost of 50% of site remediation
Heritage No change proposed. • Costs are capped at the cost of heritagebuilding restoration;
• Offsets the DC demolition credit associated with demolishing the heritage building.
Next Steps
Review comments from Public Consultations (held October/November 2016); and
Report to Council with Recommendation on program changes by end of 2016.