Evaluation of Community Improvement Plan Incentives Public - - PowerPoint PPT Presentation

Evaluation of Community Improvement Plan Incentives

Public Engagement Open House Thursday 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 CIPs

Programs 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 property improvement 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

• f 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.

Grant Programs (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
• n 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.

Residential DC

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.

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 Threshold Criteria Note 100% DC Grant Up to a maximum

• f $ 2 Million per

building 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).

Industrial DC

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

Summary

• f Proposed

Options

Program Comparison / Evaluation

Program 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
• r 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
• wner 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 / Evaluation

DC 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

• bjectives (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 heritage

building 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.