b
rownfield redevelopment
for housing
CASE Studies
B row n f i e l d I n i t i a t i ve s
E N V I RO N M E N TA L R E M E D I AT I O N A N D S I T E
ENHANCEMENT (ERASE)
C O M M U N I T Y I M P ROV E M E N T P L A N ( C I P ) I N I T I AT I V E
Hamilton, Ontario
Summary
background
The City of Hamilton’s ERASE Community Improvement
Plan (CIP) is a comprehensive planning and financial incentive
framework for promoting brownfield development in the
older industrial area of Hamilton.The ERASE Plan, as its
name suggests, is designed to “erase” brownfields and
replace them with productive economic land uses.
The historic development of the City of Hamilton—one
of Canada’s major manufacturing centers—resulted in the
creation of hundreds of brownfields in various parts of
the city, as well as in the older industrial area.
Under the ERASE CIP, the City of Hamilton offers a
number of financial incentive programs to promote
brownfield redevelopment.These include tax-increment
financing (TIF) based grants, grants towards the costs of
environmental studies (Phase II and Phase III ESA) as well
as planning and development fee rebates.
The City’s ERASE Municipal Property Acquisition, Investment
and Partnership Program (MPAIP) targets key brownfield
sites for municipal acquisition and/or partnerships with
the private sector to clean up and redevelop these sites.
The ERASE CIP has received provincial and national planning
and economic development awards, and has been used by
several other Canadian municipalities as the template for
their brownfield redevelopment plans and incentive programs.
Date Implemented: 2001; the ERASE CIP has been
expanded to cover the urban area of the city as a whole.The
City is awaiting approval of the expanded CIP from the
Provincial Ministry of Municipal Affairs and Housing (MMAH).
Key Outcomes: Since 2001, 10.9 hectares (27 acres) of
brownfield lands have been remediated and redeveloped
with the assistance of the ERASE program. Ninety three
new residential units have been approved for construction.
Figure 1: LIUNA Nursing Home
Source: City of Hamilton, Economic Development Department
Significant structural changes in the post-war Canadian
economy had far-reaching implications for major steel
producing and related industries in Hamilton. Employment
in these industries dropped significantly over the last 25 years
with many manufacturers downsizing or ceasing production
altogether.These economic changes resulted in property
and building deterioration and abandonment in several
parts of Hamilton, including the older industrial area.
Several events precipitated the introduction of the City’s
ERASE Community Improvement Plan (CIP) in 2001. First,
in the early 1990s the City used a risk-based approach to
reclaim 16.2 hectares (40 acres) of contaminated land on
the city’s Bayfront and convert the land into Bayfront
Park.The park opened in 1994 and acted as a catalyst for
revitalization of the adjacent residential neighbourhood.
In 1997, there was a now infamous fire at a plastics
recycling facility known as Plastimet.The fire caused great
public concern as the site was close to a residential area.
The site was cleaned by the Ministry of Environment
(MOE) to industrial/commercial standards.The City then
contributed funding to further clean the property; a
passive community park is planned for the site.
In the early 1970s, before environmental testing became
the norm, the City of Hamilton purchased the vacant site
of the former Greening and Donald Wire Manufacturing
facility in downtown Hamilton for use as a public parking
lot.When the parking lot became surplus for City use in
the mid-1990s, environmental testing was conducted prior
to its sale.The site was discovered to be contaminated
with petroleum wastes.The estimated clean-up cost was
twice the clean value of the 0.8 hectare (two-acre) site.
The City was approached by a developer (LIUNA) who
wished to construct a nursing home on this downtown
property. A cost-sharing agreement was reached between
the City and LIUNA to remediate the site.The
remediation and the construction of a modern nursing
home facility are now complete.The City’s contribution
to the remediation costs will be eventually recouped
through increased tax revenues on the property.
Finally, the ERASE CIP was prepared in context of the
City’s sustainable community plan (Vision 2020). Vision
2020 is supportive of urban revitalization and
redevelopment that makes efficient and economical use
of existing infrastructure and services.
It was in this context that the City launched its formal
brownfield redevelopment program in 1997 because the
City realized
a) the need to prevent future brownfield sites, like the
Plastimet site
b) the ability of brownfield redevelopment to positively
affect surrounding neighbourhoods
c) the need for financial incentives to promote brownfield
redevelopment to return vacant and underutilized
properties to full property tax revenue generators
d) the role to be played by brownfield redevelopment in
promoting sustainable development in the community
In late 1997, a public/private sector task force known as
the Industrial Redevelopment Task Force was formed to
develop ways to promote brownfield redevelopment in
the city’s older industrial area.This task force was
comprised of 20 senior private and public sector
stakeholders from the legal, finance, real estate,
development, environmental consulting, engineering,
planning and government sectors.
With the assistance of City staff in the Economic
Development Department, the task force explored
financial incentives and programs used by municipalities in
the U.S. to promote brownfield redevelopment.This
included tax-increment financing (TIF).
In 1999, City staff began liaising with MMAH staff
regarding the optimal process for implementing
innovative financial tools to promote brownfield
redevelopment. MMAH staff indicated that developing a
community improvement plan (CIP) under Section 28 of
the Planning Act was an acceptable approach. In 1999, City
Council authorized staff to prepare a CIP.
In the fall of 1999, the City hired a Brownfield
Coordinator who led development of the ERASE CIP
with input and direction from the Industrial
Redevelopment Task Force.The ERASE CIP was adopted
by City Council and approved by the MMAH in August of
2001. Hamilton was the first municipality in Canada to
adopt a comprehensive program containing financial
incentives to promote brownfield redevelopment.
Figure 2: LIUNA Nursing Home property, prior to development
Source: City of Hamilton, Economic Development Department
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remediation and other costs typically associated with
brownfield sites.The program helps level the financial
playing field between greenfield and brownfield sites.
These grants are funded through the tax increase
that results from redevelopment of the property.
Therefore, the grant is only available for projects that
actually create an increase in assessment and
property taxes.
The costs for the following activities are eligible
Figure 3: Hamilton’s ERASE CIP area.
Source: City of Hamilton, Economic Development Department
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environmental remediation
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environmental studies not paid for by the Environmental
Study Grant (ESG) Program (see below)
demolition
site preparation, including construction or upgrading
of on-site public works, such as, water services,
private sanitary and storm drains, and private sewers
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Program Description and
Goals
The ERASE CIP is a comprehensive planning and financial
incentive framework for promoting brownfield
development in the older industrial area of Hamilton,
which encompasses 1,376 hectares (3,400 acres).The
main goal of the Plan is to improve the area’s economic
opportunities and environmental conditions.
The ERASE Plan also proposes other goals as they
pertain to the ERASE Community Improvement Project
Area, and the community as a whole.These include
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retaining, expanding and attracting industrial and
commercial uses
increasing property tax revenues for the City of
Hamilton and the Province of Ontario
retaining and increasing employment opportunities
reducing urban sprawl and its related costs
improving the physical and visual quality of the area
improving environmental health and safety
increasing the provision of city core housing
opportunities
increasing the provision of waterfront access and
recreational opportunities
stimulating private investment activity and private
property maintenance
The ERASE Plan offers three financial incentive programs
directed at the private sector designed to encourage
remediation and redevelopment activity on brownfield sites.
1) ERASE Redevelopment Grants are tax-increment
financing (TIF) based grants offered to those
undertaking brownfield development to help pay
The ERASE Redevelopment Grant (ERG) equals 80 percent
of the municipal portion of the increase in property taxes
that results from the redevelopment, payable in the form
of an annual tax rebate for up to 10 years.This tax rebate
is paid after property taxes have been paid in full each
year.The other 20 per cent of the municipal tax
increment is dedicated to the Municipal Property
Acquisition, Investment and Partnership Program
(MPAIP) (see below).
ERG payments cease when the total amount of grant
payments equals the total value of work done under
eligible programs costs.
The grant can be assigned by the developer/owner and is
transferable upon sale of the property, subject to City
approval. Grant applications must be accompanied by
documentation supporting the estimated costs.This
includes
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Phase II and/or Phase III Environmental Site
Assessments (ESAs)
eligible demolition and servicing works
These estimated costs are used to calculate an
approximate total grant amount.The actual amount of
the grant is calculated based on the actual costs and
property tax increase after project completion.
Successful applicants are required to enter into an
agreement with the City.This legal agreement specifies
the terms and conditions of the grant, provisions relating
to the owner, the City, and default and remedies.The
purpose of this agreement is to protect the legal, financial
and planning interests of the municipality.
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The ERG is an application-based program, with applications
processed on a first come first serve basis.All applications
and supporting materials are reviewed by City staff against
program eligibility requirements.The ERG is only offered
for certain types of land uses, depending on location within
the older industrial area.This helps to ensure that the City
is not using this financial incentive to promote projects that
do not conform to the City’s long-term land use goals.
Once the remediation is complete, applicants must
demonstrate that the eligible property has been
appropriately remediated for the proposed use.This is
normally done by submitting a Record of Site Condition
(RSC) to the Ministry of Environment (MOE).This RSC
must be acknowledged by the MOE.
iii) acquire and redevelop key privately owned
brownfield sites
iv) fund brownfield pilot projects (public-private
partnerships) to clean up and redevelop privately and
publicly owned brownfield properties
v) educate and inform the public about the importance
of brownfield redevelopment
The ERASE MPAIP program also allows the City of
Hamilton to successfully access brownfield feasibility study
and remediation funding available from the Federation of
Canadian Municipalities (FCM) Green Municipal Funds1.
2) ERASE Environmental Study Grants (ESG) pay for up
to one-half of the costs of environmental studies
(Phase II or III ESA), up to $10,000 per study and
$20,000 per property.This grant program aims to
promote the undertaking of environmental studies so
that more and better information is available
regarding the type and extent of contamination and
the cost of remediation.The lack of this type of
information is a key stumbling block to the
redevelopment of brownfield properties.
Applicants receive the grant following submission of the
completed study to the City and proof that the
environmental consultants who completed the study have
been paid in full. City staff reviews all applications
materials against program eligibility requirements.
Applications for the ESG Program are approved at the
staff level and do not require Council approval.
3) ERASE Planning and Development Fee Rebates provide
a series of planning and development fee rebates for
projects completed on remediated brownfield sites.
This program was discontinued in 2004 because it
had been sparingly used and was seen as playing a
very minor role in inducing brownfield redevelopment
in comparison to the ERG and ESG programs.
The ERASE CIP also includes two other programs.
1) The ERASE Municipal Property Acquisition, Investment
and Partnership Program (MPAIP) is a proactive
municipal program that targets key brownfield sites
for municipal acquisition and/or partnerships with the
private sector for clean-up and redevelopment.
Through the MPAIP the City aims to lead by example
and showcase innovative approaches to site
remediation and innovative remediation technologies.
Under the ERASE MPAIP Program, the City of Hamilton may
i)
ii) clean up and redevelop municipally owned brownfield
properties
conduct environmental site assessments
The ERASE MPAIP program provides a source of funding
for the City to conduct environmental investigation and/or
remediation on municipally owned or private/public
brownfield projects.This allows the City to act as a lead
applicant or municipal government partner when applying
to the FCM for funding to conduct environmental
studies, risk assessments or economic feasibility studies
(Green Municipal Enabling Fund) and/or funding to
undertake remediation in relation to a municipally owned
or sponsored brownfield redevelopment project (Green
Municipal Investment Fund).The ERASE MPAIP Program
will be maintained as long as the ERG Program continues.
2) The ERASE Redevelopment Opportunities Marketing
and Data Base Program is a municipally sponsored
marketing program to educate the development and
real estate industries, and to support professionals on
the programs available through the ERASE CIP and
redevelopment opportunities available in the older
industrial area.
A marketing brochure provides basic information on the
ERASE CIP Programs. Access to this brochure and
program contact information is also provided on the
City’s website.To publicize the availability of the ERASE
programs, the City launched an aggressive marketing
program to local and external developer, environmental,
legal and planning professionals.The City also monitors
the impact and results of each development participating
in the ERASE programs (see Program Response).
The ERASE CIP contained recommendations regarding two
complementary policy changes. A review and revision of
tax collection procedures on abandoned and contaminated
properties was undertaken with the goal to develop a
policy to encourage the transfer of such properties into
the hands of bona-fide developers.The changes to the
1
Information on the Green Municipal Funds can be found on FCM’s website,
http://kn.fcm.ca/
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Municipal Act introduced by the Province’s Brownfields
Statute Law Amendment Act, give municipalities enhanced
powers with respect to conducting environmental
investigations on failed tax sale properties, without incurring
regulatory liability. A five-year protection window from
regulatory liability has also been given, should the municipality
choose to vest (take ownership) of a failed tax sale
property.The City of Hamilton was one of the first
Ontario municipalities to develop a standardized policy
on the treatment of potentially contaminated properties
that fail tax sale.This policy has successfully facilitated the
transfer of abandoned brownfield properties into the
hands of new owners who are currently rehabilitating the
properties for future productive uses.
The ERASE CIP also recommended that the City develop
a program to reduce development charges for brownfield
redevelopment projects to promote the reuse of
environmentally impaired properties that are fully serviced.
As part of the City’s review of its development charges
bylaw in 2004, the City approved a program to reduce
development charges on brownfield redevelopment projects
by the eligible costs of remediation approved under the
ERG program. Applicants approved for an ERG under the
ERASE CIP will have the option of applying the costs of
environmental remediation against the development charges
payable, instead of receiving a repayment of these costs
through the annual tax-increment grant.Applicants choosing
this option will have the amount of eligible remediation
costs that is applied against development charges payable
deducted from eligible costs under the ERG program.
As the development charge reduction is an up-front cost
savings to the developer, as opposed to a cost-savings
spread over time, it is expected that many developers will
elect to apply the remediation cost component of their
approved ERASE redevelopment grants against their
development charges payable.
Program Response
Response to the programs offered under the ERASE CIP
has been positive.To the end of 2003, the ESG program
had provided a total of $43,000 in grant funding for six
environmental studies conducted on four properties
(four Phase II ESAs and two Phase III ESAs). One of these
properties has been redeveloped and two other
properties are currently proposed for redevelopment.
By the end of 2003, five projects had been approved for
an ERG. A sixth project known as Hamilton Beaches was
provided with a pilot project grant under the ERASE
MPAIP 2.This project will result in the remediation of a
former gasoline/automobile service station and
construction of 93 new residential units on this site.
Figure 4:The Hamilton Beaches development
Source: Lorne Haverty, architect
Once complete, the six projects that were awarded ERASE
Redevelopment Grant or Pilot Project funding will result in
a) total construction expenditures in excess of
$63,000,000
b) remediation and redevelopment of 10.9 hectares
(27 acres) of formerly vacant and underutilized
brownfields
c) construction of 93 new residential units
d) construction and refurbishment of over 27,870 m2
(300,000 sq. ft.) of industrial/commercial space
e) one hundred new full-time jobs
f)
an increase in long-term annual property tax
revenues of approximately $1,000,000
In less than three years, the ERASE CIP has successfully
provided the financial tools needed to promote the
remediation and redevelopment of brownfield sites in the
older industrial area of Hamilton.The existing ERASE CIP,
which applies only to this area of Hamilton has been
expanded to include the rest of the urban area of the city
and awaits only MMAH approval prior to implementation.
Applications have been filed for two high-density residential
development projects containing several hundred units in
anticipation of the expansion of the ERASE CIP.
2
For more information, see the CMHC Brownfield Redevelopment Case Study on
The Hamilton Beaches, Hamilton, Ontario which can be found at:
www.cmhc-schl.gc.ca/ en/imquaf/hehosu/sucopl/sucopl_008.cfm
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The City of Hamilton ERASE CIP has won numerous
provincial and national planning and economic
development awards. Among these include
Program Cost
The City of Hamilton originally budgeted
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$100,000 per year for five years for the ESG program
$45,000 per year for five years for the ERASE
Planning and Development Fee Rebate Program
$500,000 in the capital budget for the MPAIP
a one-time budget item of $30,000 for marketing the
ERASE programs
This represents a total initial budget commitment of
$1,255,000.
Considering that without the ERG program, a project
would likely never be initiated, and the pre-project
assessment and taxes would continue to prevail on the
property, then there is no actual loss of tax revenue to
the City under this program.The annual grant paid to the
applicant is paid out of the tax increase generated by the
development taking advantage of the ERG program.
Therefore, the ERG program is a budget flow-through item.
To the end of 2003, the City had committed a total of
approximately $2,500,000 in ERASE Redevelopment
Grant funding in the form of
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$43,000 in ERASE Environmental Study Grants
$175,000 pilot project grant under the MPAIP
$2,282,000 in ERASE Redevelopment Grants
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2002 Economic Developers Association of Canada
(EDAC)/Royal Bank Economic Development
Achievement of the Year Award
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2001 Economic Development Council of Ontario
(EDCO) Award of Excellence
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2001 Canadian Urban Institute (CUI) Brownie Award
for Leadership in Program Implementation
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2001 Ontario Professional Planners Institute (OPPI)
Outstanding Planning Achievement Award
Contact Information
Mr. Peter Minkiewicz4
Business Development Consultant/Brownfield
Coordinator
City of Hamilton, Economic Development Department
1 James Street South, 8th Floor
Hamilton, ON.
L8P 4R5
Telephone: (905) 546-2424, extension 5363
E-mail: [email protected]
For further information on the ERASE program, see:
http://www.hamilton.ca
Program Evaluation
The results of the ERASE programs have been monitored
since inception of the programs in 2001, with annual
reporting of progress to City council. Monitoring has also
allowed revisions to some of the programs and
administration procedures.
The ERASE CIP was the first comprehensive municipal
brownfield redevelopment plan in Canada to offer
financial incentives over a large scale area. It has been
used as a template by several other municipalities in
Ontario, such as Guelph and Brantford, to develop similar
brownfield redevelopment plans and programs.The City
of Edmonton is also developing a proposal to provide tax
incentives, broadly based on Hamilton’s ERASE CIP 3.
4
Contact information for former Brownfield Coordinator and Architect of the
Hamilton ERASE CIP is:
Luciano Piccioni, President
RCI Consulting
28 Woodbridge Road
Hamilton, ON.
L8K 3C7
Telephone: (905) 545-1899
E-mail: [email protected]
3
Dahme, H. (2002).“Current Trends in Legislation in Canada”. Gowlings. Presentation
to the CUI Brownfields Conference, October 17, 2002,Toronto, Ontario
08-05
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