City doesn’t have the money for consultant’s study so property owners chip in to pay the $25,000 bill
Tax forgiveness being offered to St. Catharines developers is such a lucrative option that five property owners in the Oakdale neighbourhood are agreeing to pay $25,000 for the chance to be included in the incentive plan.
St. Catharines councillors agreed this week to add the Oakdale neighbourhood – between the CN railway line and Centennial Park – to the city’s Community Improvement Plan. But before development incentives can be handed out, a planning study must be conducted, and there’s no money in the city budget to pay for it, said a report from the city planner Paul Chapman.
So the five property owners have chipped into pay the $25,000 consulting cost to hire Marshall, Macklin and Monaghan to do the study, said Chapman, and they’ve already written the cheque.
But some of the councillors objected to the accepting the money, saying it would end up costing the city more.
“Instead of a comprehensive plan, we are bending to the whim of a developer that comes along,” said Councillor Bruce Williamson.
Councillor Joe Kushner was also opposed, saying, “If we expand the program, we will have to expand the money.”
But Chapman said the only incentives that Oakdale property owners would be eligible for are a program known as a tax increment financing, where a portion of the increased property taxes faced by a redeveloped property are refunded according to a 10 year declining scale, starting at 90 per cent refund.
The program is meant to help compensate developers for increased costs they incur developing in troubled areas, Chapman told councillors. And the Oakdale neighbourhood would have qualified for inclusion in the original Community Improvement Plan if the city had had enough money to pay for the study.
Councillor Charles Gervais also supported the plan, saying developers will take their business to other municipalities where there is more land and fewer obstacles.
“We have run out of nice green, developable land and our neighbours have not,” said Gervais, adding St. Catharines needs the incentives in order to compete.
“This is a win-win situation,” wrote Chapman in his report to the council. “For the applicant, it provides the opportunity for an income flow after the construction of the project. For the city, the program will encourage redevelopmentin an area where the city wants it, and also provide a steady stream of future (tax) revenue. New housing will be provided to strengthen existing neighbourhoods.”
The five property owners who have contributed to the study costs are Anthony Continelli, Rob Baiocco, Venanzio Pinque, Tim Kenny and Phil Moore.
“The more residential development there is the more tax base there is for the city.” said Continelli, who owns two acres on Moffat Street.
“With the help of a program like this, it can entice developers like us to make it a go.”
Baiocco said the Moffat Street property he owns would be too expensive to develop without incentives.
The presence of Highway 406 and the CN track require noise and vibration studies and possible noise barriers, he said, which make development more costly.
“It would be virtually impossible for these developments to go forward without the incentives,” said Baiocco, whose land would have room for about 60 units.
Once they are built, “there is tax dollars flowing to the city,” he said.
West St. Catharines was also identified as an area that should be included in the Community Improvement Plan, Chapman wrote, but since there is no more money in the city budget to pay for a study, one will only be done if the property owners pay for it.