City reviewing brownfield tax breaks
`We have to do better with our criteria' for eligibility, councillor says
A program that offers big municipal tax breaks for redeveloping contaminated sites is under review as the city moves closer to recommending a new Official Plan for the City of Ottawa.
City council is poised to approve another brownfield grant on Wednesday in what has become a political rubber-stamp exercise for these types of developer applications.
The Dymon storage facility at 2583 Carling Ave. is eligible for a $1.26-million grant in the form of municipal fee reductions after the company redeveloped a site previously occupied by an auto repair shop, a gas station and restaurant. The facility, which also has retail and office space, is just west of Lincoln Fields transit station.
Coun. Theresa Kavanagh, whose Bay ward includes the facility, said she was surprised to learn properties qualified for a grant by simply being close to a transit stations, even if it's a drive-in self-storage business.
“The fact that you get a deal for developing it, but it has nothing to do with the transit that you're supposed to be near, it doesn't make sense,” Kavanagh said. “We have to do better in our criteria.”
The brownfield community improvement grants spur redevelopment of properties with contaminated soil in key areas of the city, including land across the central region, along main streets, in mixed-use centres and within 600 metres of an existing or planned rapid transit station. The grant program started in 2007.
Grants help cover some of the costs of remediating the contaminated soil, development charges for the project and the increase in property taxes that come with redevelopment.
The grants can't exceed 50 per cent of the total cost to rehabilitate the land.
Applications are reviewed by staff to make sure they meet the program conditions. Council has no reason to reject a brownfield grant application if it checks council-approved criteria for financial assistance.
Kavanagh said she agrees the city doesn't want to see brownfield sites linger undeveloped and acknowledges the properties come with steep costs to remediate, but said if the city is handing out development grants, they should be tied to housing.
“Storage does not fit into that picture for what we're trying to incentivize,” Kavanagh said.
The city's next Official Plan will come with ambitious intensification targets, and the redevelopment of brownfield sites could help meet the goals. More than half of all new housing should be built in established areas, according to a growth-management strategy.
A scheduled five-year review of the brownfield grant program has a connection to policies in the new Official Plan, which is expected to be approved by council later this year.
Don Herweyer, the city's director of economic development and long-range planning, said staff are also reviewing the program's relation to the city's design priority areas and eligible types of development.
“The city has made no determinations as to where and how the program would apply in different areas of the city,” he said.
Herweyer said staff anticipate bringing a report with possible recommendations to council's finance and economic development committee before the end of June.
Self-storage businesses could have a prominent role in the context of residential intensification if the city expects more people to live in smaller homes. Dymon's 2016 planning rationale for the Carling Avenue facility produced by Fotenn touched on that point, saying modern storage facilities need to be near residential areas “in an era of declining unit sizes.”
The organization representing the local commercial real estate sector says the city's brownfield grant program helps commercial developers transform lands that otherwise wouldn't be revitalized.
Dean Karakasis, executive director of the Building Owners and Managers Association of Ottawa, said brownfields are often suited for commercial or industrial development.
“We would definitely be disappointed if it became an us-orthem-type model,” Karakasis said.