TITLE:
FINANCIAL ASSISTANCE to NEW CONSTRUCTIONRENAISSANCE STATION INC.
PRESENTER:
AGENDA NO:
Grant McMillan,
General Manager of
Corporate Services
Treasury
DEPARTMENT:
DATE:
CLEARANCES:
Sept 26, 2007
ATTACHMENTS:
APPROVALS:
30/09/07
Sept 26, 2007
__________________
G M of Corporate Services
Date
City Manager
Date
SUMMARY OF HISTORY
On July 23, 2007, Mr. Tom Rice representing the Renaissance Station Inc. made a presentation to
City Council suggesting the City should consider tax incentives for the construction of new residential
units in the downtown area as well as requesting the City consider some changes on 9th St. adjacent
to the Renaissance Station development. This report will only deal with the tax incentive request.
Incentives for New Construction
An examination of the incentives in other centres reveals a variety of initiatives are currently being
utilized. Presumably, these incentives are crafted to promote specific community objectives. These
incentives may include such things as permit fee rebates, development fee rebates, parking
exemptions, green space dedication exemptions, tax rebates, heritage study grants, etc. Other
centres have created tax incentive funds (TIF) whereby the new tax revenue from developments in
the specific area is reinvested in infrastructure in that specific area.
The specific request in question is asking that the City provide tax incentives to new residential
construction in a similar way that the Renaissance Bylaw provides incentives for redevelopment of
historic properties. It also suggests an expanded area to include the Renaissance Station project
since the Renaissance Bylaw covers the area only as far south as Lorne Ave.
Mr. Rice requests this change to promote investment in the downtown area and to put new
construction and redevelopment construction on an even footing with respect to tax incentives. Tax
holidays would certainly promote investment in downtown. The question is whether this type of
incentive is fair and reasonable given any development generates costs as well as revenues. Mr.
Rice suggests the additional tax revenues are a windfall for the City when in fact, development and
the addition of residents comes with a price in order to properly serve them with such things as fire,
police, ambulance, parks and library services to name just a few. Tax dollars pay for services well
beyond property based services such as snow clearing and street repairs.
The primary reason for the passage of the Renaissance Bylaw was to assist in the preservation of
historic buildings and since it is widely recognized that restoration often costs more than new
development, some financial incentive must be provided to encourage the decision to redevelop as
opposed to leveling a property and building new. If we carry the “equal tax incentive” argument to the
next logical step, new construction developers outside of the downtown historic area may request tax
incentives to be on an even footing with new construction developers inside the downtown area.
Over the last several years there have been some large as well as smaller residential developments
in the greater downtown area. Some of these developers have sought and received some incentives
from the NRC in order to help address the affordable housing situation. However, the majority of
these developments are built without incentives and certainly have helped the housing availability
situation. While it was suggested this project would also help the affordable housing situation through
people leaving their homes to move to the condominiums at the Renaissance Station, that can be
said of any condominium development. The Renaissance Station condominiums in and of
themselves could not be described as being readily affordable by the lower income segment of
society.
It is accepted that more people living in a particular area typically generates a more vibrant community
as well as economic opportunities which make the area healthier. The question is whether tax
incentives to attract high density home ownership in Brandon’s downtown area the best place to
spend limited tax dollars. A better investment may be the promotion of reasons to come to the
downtown area. Brandon does not suffer from significant traffic congestion which is one reason for
choosing the “living downtown” option. What it lacks are enough reasons to go downtown and
ultimately if there are enough reasons to go downtown, people may consider moving there for the life
style.
Conclusion
Over the past number of years, it is evident that there has been significant development and
redevelopment in the downtown area. A lot of this development has been in the residential sector and
indeed, unlike some other cities, no significant areas of the City are what I would consider to be so run
down that leveling of the structures and rebuilding is the obvious solution to the problem. Certainly
there is the odd property in disrepair but no general blight exists. In addition, no specific need for this
type of housing was identified during the analysis of Brandon’s housing situation leading up to the
Affordable Housing Plan. Therefore given my earlier comments about spending the City’s limited tax
dollars on reasons to come downtown and the fact significant development and redevelopment is now
occurring in the area without incentives, it is my conclusion that the request for tax incentives for the
Renaissance Station or like developments should not be pursued at this time.
RECOMMENDATION:
That the request for a tax incentive program for new high density residential development in a greater
downtown area similar to the Renaissance District bylaw be denied.