DATE:
May 6, 2013
REPORT NO. CD2013-103
TO:
Chair and Members
Committee of the Whole – Community Services
FROM:
Gregory Dworak, General Manager, Community Services
1.0
TYPE OF REPORT
CONSENT ITEM [ ]
ITEM FOR CONSIDERATION [ X ]
2.0
TOPIC City of Brantford Municipally Owned Industrial Land Price Policy
3.0
RECOMMENDATION
A.
THAT Staff Report CD2013-103 dealing with the City of Brantford Municipally
Owned Industrial Land Price Policy BE RECEIVED; and
B.
THAT the current municipally owned industrial land price structure: General
Industrial (M2): $75,000/acre, Business Park (M3): $125,000/acre BE
APPROVED, and
C.
THAT City staff, in conjunction with the Economic Development Advisory
Committee, BE DIRECTED to review the City’s Industrial land price policy with
surrounding municipalities on an annual basis to ensure the City’s competitive
position is maintained and report back to City Council on its findings.
4.0
PURPOSE
To review and recommend to Council a land sale price structure for municipally owned
industrial properties.
5.0
BACKGROUND
The Economic Development Advisory Committee met on March 28, 2013 to review the
staff report regarding the current price structure of municipally owned industrial lands.
The purpose of the meeting was to consider the City’s price structure given current
market conditions and competing municipalities price structures. The current prices for
municipally owned industrial land are General Industrial (M2): $75,000/acre,
Business Park (M3): $125,000/acre.
6.0
STRATEGIC PLAN CONTEXT
Industrial Land Sale Prices are directly related to the Strategic Plan’s Goal #1,
Economic Vitality and Innovation, Strategic Action 1.2- Create an investor friendly
environment. This relates to the Goal’s long term desired outcome for Brantford to have
a strong and diversified economic base that provides its citizens with excellent local job
Report No. CD2013-103
May 6, 2013
Page 2
opportunities. In addition, the City’s Economic Development Strategy recommends
continued investment in industrial land development and that the City should make best
use of the limited supply of industrial land it has remaining.
7.0
INPUT FROM OTHER SOURCES
Economic Development and Tourism Department staff has compiled information
comparing industrial land prices and inventories, development charges, and industrial
tax rates with other municipalities from a variety of sources. At its meeting held on
March 28, 2013, the Economic Development Advisory Committee reviewed the
information compiled by staff and approved the recommendation outlined above.
Furthermore, the Committee would also encourage City Council to have flexible pricing
on municipally owned industrial lands if a potential manufacturing investment is
plausible.
8.0
8.1
ANALYSIS
Industrial Land Sale Price
Current serviced General Industrial (M2) Land Prices (Per Acre) were surveyed for
surrounding Southwestern Ontario municipalities who remain active in developing and
selling industrial lands. For purposes of comparison, prices include development
charges where applicable and for Brantford, the price reflects the current price structure
of $75,000 per acre and $58,262 per acre for development charges (Refer to Table 1
and Figure 1).
Table 1: Current Municipally Owned General Industrial Land Prices
Land Price
DC's
DC's
(Per Acre)
$35,000
(Per Sq.Ft.)
$0
(Per Acre)**
$0
Total Land
Cost
(Per Acre)
$35,000
Chatham-Kent
$50,000
$0
$0
$50,000
Windsor
$70,000
$0
$0
$70,000
Woodstock
$70,000
$0
$0
$70,000
London
$75,000
$0
$0
$75,000
Stratford
$75,000
$0
$0
$75,000
Strathroy-Caradoc*
$35,000
$4.81
$52,381
$87,381
Sarnia-Lambton*
$50,000
$4.25
$46,283
$96,283
Ingersoll
$100,000
$0
$0
$100,000
County of Brant
$75,000
$5.33
$58,044
$133,044
Brantford
$75,000
$5.35
$58,262
$133,262
Hamilton
$205,000
$8.78
$95,614
$300,614
Cambridge
$210,000
$10.73
$116,850
$326,850
Kitchener
$250,000
$12.06
$131,333
$381,333
Guelph
$300,000
$9.97
$108,573
$408,573
Waterloo
$350,000
$14.60
$158,994
$508,994
Median
$75,000
$4.53
$49,332
$98,141
Municipality
St.Thomas
Report No. CD2013-103
May 6, 2013
Page 3
*2012 Data
**DC's (Per Acre) based on 25% lot coverage (10,890 sq.ft.)
Source: City of Brantford Economic Development and Tourism Dept., March 2013.
Figure 1: Total Municipally Owned General Industrial Land Cost Per Acre (Including
Development Charges)
$508,994
Waterloo
$408,573
Guelph
$381,333
Kitchener
$326,850
$300,614
Cambridge
Hamilton
$133,262
Brantford
$133,044
$100,000
County of Brant
Ingersoll
$96,283
Sarnia-Lambton
$87,381
Strathroy-Caradoc
Stratford
$75,000
London
$75,000
Woodstock
$70,000
Windsor
$70,000
Chatham-Kent
Land Price (Per Acre)
$50,000
St.Thomas
Development Charges (Per Acre)
$35,000
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
Source: City of Brantford Economic Development and Tourism Dept., March 2013.
As seen in both Table 1 and Figure 1, Brantford ranks sixth out of sixteen municipalities
surveyed in terms of Total General Industrial Land Cost Per Acre (including
Development Charges) at $133,262 per acre. This amount is $35,121 above the median
total land cost of $98,141 (per acre) for the group surveyed.
In order to determine if a pricing change is warranted for municipally owned industrial
land, it is important to highlight the industrial land inventories of the surrounding
municipalities to illustrate where future competition is evident. (Refer to Table 2 and
Figure 2).
With regards to the ranked inventories denoted in Table 2 and Figure 2, Windsor has
the highest inventory of industrial lands overall with 1071 acres. More importantly, from
a serviced land perspective, the City of London possesses the largest amount in this
category with 378 acres. The remaining municipalities cover a broad range of serviced
and non-serviced inventories, ranging from 290 acres in Woodstock to 2 acres in
Kitchener. Further, it is important to note that Brantford has 45 acres of serviced land
remaining in the Braneida Phase 9 Industrial Park (27 acres) and Northwest Business
Park (18 acres). For comparison purposes, Brantford’s inventory is approximately 120
acres below the median acreage total of 164 acres for the group surveyed.
Report No. CD2013-103
May 6, 2013
Page 4
Table 2: Current Municipally Owned Serviced & Non-Serviced Industrial Land Inventories
Windsor
Serviced
Land(acres)
171
London
378
284
662
Woodstock
242
48
290
County of Brant
50
128
178
Sarnia-Lambton*
210
50
260
0
220
220
Chatham-Kent
160
13
173
Guelph
80
100
180
Waterloo
29
125
154
Strathroy-Caradoc*
75
70
145
Stratford
78
56
134
St.Thomas
120
0
120
Brantford
45
0
45
Ingersoll
27
0
27
Hamilton
35
0
35
Kitchener
2
0
2
76.5
53
164
Municipality
Cambridge
Median
Non-Serviced Land (acres)
Total
900
1071
*2012 Data
Source: City of Brantford Economic Development and Tourism Dept., March 2013.
Figure 2: Municipal Industrial Land Inventories (Serviced and Non-Serviced Lands)
Source: City of Brantford Economic Development and Tourism Dept., March 2013.
Report No. CD2013-103
May 6, 2013
Page 5
Given the above information, it is important to review the changes that have occurred in
both land prices and inventories since the last land price survey was conducted in
March 2012 (Report No. CD2012-055). Generally speaking, total industrial land prices
have increased by $3,760 per acre on average (Table 3a). Aside from development
charge increases in several municipalities, the County of Brant decreased their
development charges considerably over the past year. Overall, land prices have
remained very stable across the group surveyed with the only increase occurring in
Waterloo and the only decrease in Chatham-Kent.
Table 3a: Municipally Owned Industrial Land Price Comparisons (March 2012-2013)
Municipality
Land Cost
Development
Charges
Development
Total Land Cost
(Per acre)
(Per sq.ft.)
Charges
(Per acre)
(Per acre)**
Price
Change
2012-2013
12-Mar
13-Mar
12-Mar
13-Mar
12-Mar
13-Mar
12-Mar
13-Mar
Waterloo
$300,000
$350,000
$14.14
$14.60
$153,985
$158,994
$453,985
$508,994
$55,009
Guelph
$300,000
$300,000
$7.91
$9.97
$86,140
$108,573
$386,140
$408,573
$22,433
Kitchener
$250,000
$250,000
$11.75
$12.06
$127,958
$131,333
$377,958
$381,333
$3,375
Cambridge
$210,000
$210,000
$10.50
$10.73
$114,345
$116,850
$324,345
$326,850
$2,505
Hamilton
$205,000
$205,000
$6.65
$8.78
$72,419
$95,614
$277,419
$300,614
$23,195
County of
Brant
$75,000
$75,000
$7.85
$5.33
$85,487
$58,044
$160,487
$133,044
($27,443)
Brantford
$75,000
$75,000
$5.25
$5.35
$57,173
$58,262
$132,173
$133,262
$1,089
Ingersoll
$100,000
$100,000
$0
$0
$0
$0
$100,000
$100,000
$0
SarniaLambton*
$50,000
$50,000
$4.25
$4.25
$46,283
$46,283
$96,283
$96,283
$0
London
$75,000
$75,000
$0
$0
$0
$0
$75,000
$75,000
$0
Woodstock
$70,000
$70,000
$0
$0
$0
$0
$70,000
$70,000
$0
Stratford
$75,000
$75,000
$0
$0
$0
$0
$75,000
$75,000
$0
Chatham-Kent
$70,000
$50,000
$0
$0
$0
$0
$70,000
$50,000
($20,000)
StrathroyCaradoc*
$35,000
$35,000
$4.81
$4.81
$52,381
$52,381
$87,381
$87,381
$0
Windsor
$70,000
$70,000
$0
$0
$0
$0
$70,000
$70,000
$0
St.Thomas
$35,000
$35,000
$0
$0
$0
$0
$35,000
$35,000
$0
$98,142
$3,760
(Avg.)
Median
$75,000
$75,000
4.53
4.53
$49,332
$49,332
$98,142
*2012 Data
**DC's (Per Acre) based on 25% lot coverage (10,890 sq.ft.)
Source: City of Brantford Economic Development and Tourism Dept., March 2013.
From a land inventory perspective, there were a variety of changes that occurred over
the course of the past year (Table 3b). On average, industrial land inventories
decreased by 16 acres. Most notably, the County of Brant and Woodstock experienced
the largest changes in their inventories. The County of Brant changes were attributed to
land sale transactions, while Woodstock’s decrease in unserviced land was a result of
land use changes (industrial to parkland) and servicing initiatives. Similarly, London
increased their serviced land portfolio by acquiring a privately held 38 acre parcel of
land abutting their Innovation Park-Phase 2 development. Brantford’s inventory change
was the result of a 13.44 acre land sale on Kippax Court. Currently, the City has a total
Report No. CD2013-103
May 6, 2013
Page 6
of 45 acres of serviced industrial land remaining in its two industrial parks (Figures 3a &
3b).
Table 3b: Municipal Land Inventory Comparisons (March 2012-2013)
Municipality
Windsor
London
Woodstock
Sarnia-Lambton*
Cambridge
Guelph
County of Brant
Chatham-Kent
Waterloo
Strathroy-Caradoc*
Stratford
St.Thomas
Brantford
Ingersoll
Hamilton
Kitchener
Median
Serviced Land
March-12
March-13
171
340
210
210
0
80
171
185
29
75
78
120
58
27
25
0
79
171
378
242
210
0
80
50
160
29
75
78
120
45
27
35
2
77
Non-Serviced
Land
March-12
900
284
230
50
220
100
128
13
125
70
56
0
0
0
0
0
63
March-13
900
284
48
50
220
100
128
13
125
70
56
0
0
0
0
0
53
March-13
Total
Land
Inventory
Change
(acres)
1071
662
290
260
220
180
178
173
154
145
134
120
45
27
35
2
164
0
38
-150
0
0
0
-121
-25
0
0
0
0
-13
0
10
2
-16 (Avg.)
Total Land
March-12
1071
624
440
260
220
180
299
198
154
145
134
120
58
27
25
0
167
*2012 Data
Source: City of Brantford Economic Development and Tourism Dept., March 2013.
Given that land inventories have also remained relatively stable since the previous land
price survey and the City has limited land remaining, all of the municipalities surveyed
should be considered competitors for future investment opportunities. As illustrated in
the figures presented in Table 1, the City’s general industrial land price of $75,000 per
acre is the median land sale price for all the municipalities outlined. However, when
development charges are factored into the total land sale price, Brantford’s price
increases by an additional $58,262 per acre and is approximately $35,120 above the
median price for the group at $133,262 per acre.
Staff and the Economic Development Advisory Committee recognize that when
examining the City’s land price structure, consideration must also be given to a number
of cost factors in which an industrialist/purchaser considers when selecting a location.
The cost of taxes over time is a considerable element in the cost equation when
industrialists consider alternative locations. This is not always the case with the private
sector whose main goal is to generate profit from the land sale in question as they do
not benefit directly from receiving ongoing tax revenues as the municipality would. The
total cost of land development (land price, development charges and construction) plus
the cost of municipal taxes over time must be competitive with other locations. To
remain competitive the City must set its land price in context with its industrial tax rates
to create a fiscally attractive cost package to industrial users.
Report No. CD2013-103
May 6, 2013
Figure 3a: Braneida Phase 9 Serviced Vacant Industrial Land Parcels
Figure 3b: Northwest Business Park Serviced Vacant Industrial Land Parcels
Page 7
Report No. CD2013-103
May 6, 2013
Page 8
Overall, Brantford is considered to have a high relative tax burden for industrial property
classes, an attribute illustrated in the past through the BMA Municipal Study (See
Report CD2012-055).To address this burden, the City adopted a financial tax strategy to
reduce the commercial, industrial and multi-residential tax ratio to 1.5 over a 12-year
period beginning in 2009. From an industrial perspective, this phased in reduction will
result in significant tax cost savings for industrial users in the years ahead and will only
strengthen the City’s position in attracting and retaining industrial businesses.
Staff and the committee, in their analysis, has attempted to clarify its role in establishing
land prices for municipally owned industrial lands as mandated by City Council. In
attempting to establish prices, staff and the committee first identified which communities
it was primarily competing for future investment based on the inventories of those
municipalities who will continue to be active in the development and sale of industrial
land. Based on the survey results, all of the municipalities should be considered
competitors for future investment opportunities; however Kitchener’s small inventory of
industrial land presents less competition at the current time.
Staff and the committee compared each community's land price and inventory totals
over the past year to clearly highlight the changes that are occurring in the marketplace.
Over the past year, the market has remained virtually unchanged overall with land
prices increasing by approximately $3,800 per acre on average, while inventories
decreased by 16 acres.
In summary, the data gathered demonstrates that the current industrial land price
structure for the City allows it to remain in the middle of the group when compared to
surrounding Southwestern Ontario municipalities who develop and sell land. The City’s
position over the past few years has been to position Brantford’s land pricing below
those communities to the north and east (Waterloo, Kitchener, Guelph, Hamilton, and
Cambridge) and above those communities to the west (Woodstock, London, ChathamKent, Ingersoll, Stratford, Sarnia-Lambton, St.Thomas, Strathroy-Caradoc, and
Windsor); a precedent that has worked successfully up until now. Moving forward, this
precedent may have to be reexamined based on two factors:
1) Municipally owned industrial land parcels continue to diminish; and
2) Brantford’s industrial space inventory is steadily depleting
Given these supply shortfalls, a price change for municipally owned land may be
justified in the future based on demand interests. As the the local economy continues to
rebound and market conditions follow suit, the value of these diminishing assets may
change prior to the annual price survey carried out by staff. If staff determine that a
price change is warranted in the marketplace, then a report will be brought before
Council accordingly.
9.0
CONCLUSION
The purpose of this report has been to review and analyze the current municipal
industrial land price structure by staff and the Brantford Economic Development
Advisory Committee and report their findings back to City Council.
Report No. CD2013-103
May 6, 2013
Page 9
The preceding pages have demonstrated that the current industrial price structure
allows Brantford to remain competitive in comparison to municipalities located in
Southwestern Ontario who remain active in the development and sale of municipally
owned industrial land. Therefore, it is recommended that the current pricing structure
remain the same for 2012 and that a survey be completed in a year’s time to investigate
the market conditions at that time.
_______
Gregory Dworak, MCIP, RPP
General Manager, Community Services
______
John Frabotta, Director
Economic Development & Tourism
____________________________
Kevin Finney, Information Officer
Economic Development & Tourism
In adopting this report, is a by-law or agreement required? If so, it should be referenced in the recommendation section.
Bylaw required
[
] yes
[ x ] no
Agreement(s) or other documents to be signed by Mayor and/or City Clerk
[
] yes
[ x ] no
Is the necessary by-law or agreement being sent concurrently to Council?
[
] yes
[ x ] no