TIF Grants: Giveaways or Good Policy?

A recent letter to the editor in a local paper decried the use of brownfield grant incentives given to Tricar, the developer who is building on the former Marsh Tire site on the corner of Wellington and Macdonell.  See letter here.

This is the not the first time I have heard the sentiment “we shouldn’t be giving away taxpayer money to developers.”   But is that really what we are doing?  In reality, grant recipients give much MORE back in taxes than they receive from the city.

The Downtown Activation Grants and brownfield grants are tax-increment financed (TIF) grants.  This means that:

a)  the grant amount is calculated based on future taxes generated from the site post-development,

b) grant money is not paid until the site begins generating revenue through new tax assessment,

c) grants are time-limited,

d) grants are earmarked for projects that have barriers to construction (such as contamination, bedrock, risk), and

e)  if the site does not generate the anticipated assessment, the grant is adjusted.

TIF grants are risk-free, pay for themselves, and pay back into the city revenue stream over the long-term. Let’s take a closer look at a project (simplified for clarity):

  • Site P is a brownfield, a former gas station, that must be cleaned up prior to development, and has been sitting vacant for over 10 years.
  • Infrastructure adjacent to the site (water, wastewater, hyrdro, roads, transit, etc.) is underutilized, but already fully paid for.
  • Current tax revenue generated by the  vacant, contaminated site is $1,000 per year.
  • The owner plans to develop a 25-unit, 4-storey stacked townhouse on the property, which will generate $15,000 per year in taxes to the city once constructed and occupied.
  • A portion of the increased tax revenue, $10,000 per year, generated from the developed site is granted back for 5 years ($50,000) is granted back to the developer in the form of a TIF grant.
  • The city still receives additional revenue ($4,000 per year) and yields the full benefit of increased taxation after five years and in perpetuity.
  • The developer receives the money after construction is complete and the site is generating the anticipated assessment.

CONCLUSION:   TIF grants are a win-win-win.  The city wins because a vacant and contaminated site is cleaned up, the developer wins because the project moves ahead and the grant offsets clean-up costs, and the taxpayer wins because increased revenue is generated and contributes to the cost of infrastructure and future operating budgets.




Staying Cool in Guelph — Extended Hours for Splash Pads and Wading Pools

GUELPH, ON, July 6, 2010 – As a result of the hot temperatures this week, the City of Guelph has extended the hours at wading pools and splash pads and opened the Sleeman Centre to help residents cool off.

Extended hours are as follows:

Sleeman Centre: 10 a.m.-5 p.m.
Wading pools: 9 a.m.-8 p.m.
Splash pads: Norm Jary: Wednesday 11 a.m.-8:30 p.m. & Thursday 9 a.m.- 8:30 p.m.
Hanlon Creek: Wednesday 9 a.m.-8:30 p.m. & Thursday 11 a.m.-8:30 p.m.
West End Community Centre: Wednesday & Thursday 9 a.m.-8:30 p.m.

Residents are reminded that Guelph’s community centres are also great places to keep cool. Community Centre hours are as follows:

Evergreen Seniors Community Centre: Monday to Friday 8:30 a.m.-4 p.m.
West End Community Centre: Monday to Friday 6 a.m.-11 p.m. & Saturdays and Sundays 6 a.m.-5 p.m.
Victoria Road Recreation Centre: Wednesday 2-5 p.m. & Thursday 2-4 p.m. for public swims
Lyons Pool: 10 a.m.–12 noon, 1–4 p.m., 5–8 p.m.
Centennial Pool: 1–4 p.m. for public swims

Wellington Dufferin Guelph Public Health advises people to stay out of the sun, drink lots of water, limit outdoor activity to morning and evening hours and stay in air conditioned places. Seniors and young children are particularly at risk during heat and smog-related weather conditions. Residents are encouraged to call or visit family, friends and neighbours to make sure they are okay, especially isolated adults and seniors, who are at greater risk of suffering from heat-related illness.

Environment Canada expects the hot, hazy and humid conditions to continue today through Thursday. For more information on heat safety, visit Wellington Dufferin Guelph Public Health.

Region of Waterloo Organics Coming to Guelph

Dean Wyman, Manager of Solid Waste Services for the City of Guelph, announced some fantastic news today!

When Council awarded the design-build contract to Maple Reinders to construct and operate the new Organic Waste Processing Facility, Council asked “with 20,000 tonnes of excess capacity will staff be able to source that much tonnage?”.

Today, Mr. Wyman wrote:

“I’m pleased to inform Council that City staff in partnership with AIM Environmental and the City of Hamilton have been awarded a contract to process up to 20,000 tonnes per year of source separated organics (SSO) from the Region of Waterloo.  The term of the contract starts in October of 2009 and ends October 2013.  Until Guelph’s new OWPF is operational the material will be processed at Hamilton’s Central Composting Facility (CCF).

This means that once the new Guelph OWPF is operating in 2011 that it will be operating at very close to full capacity.”
This is great news for Guelph, as the revenue will help offset the operational costs for the facility and will also allow the Region of Waterloo to process its organic waste close to home.  Congratulations to Solid Waste services for making this happen!

Breaking Ground for New South End Emergency Services Station

Another first for Guelph — an integrated fire station, police station and land ambulance station — the first in Ontario!  The ground breaking ceremony for this new facility was attended by local, provincial and federal representatives this morning, October 2nd, at the site of the new station.  The facility is expected to be completed in the fall of 2010.  The residents of the southern part of Guelph have been waiting a long time for this new site to come to fruition.  The ceremony was attended today by Todd and Lynda Dennis, representing the Clairfields Neighbourhood Group.

Ground Breaking

Photo:  (l-r) Liz Sandals, MPP;  Dave Levac, Ministry of Community Saftey and Corrections; Mayor Karen Farbridge, Chief Shawn Armstrong, Ward 6 councillors Christine Billings and Karl Wettstein.

March Move-in For New City Hall

From Hans Loewig, CAO

I’m pleased to be in touch with good news this morning about the completion of City Hall and our move-in schedule.

Resulting from a thorough inventory of work that remained after Urbacon’s termination, the City’s general contractor estimates that City Hall will be substantially complete by the end of March 2009.  Departmental move-ins are being scheduled to take place even earlier in mid-March.
A report containing these details will be presented to Council next Monday night.

New Main Library – Size Matters

From Norm McLeod, Chief Librarian

Dear Council Members:

Numbers often tell a compelling story. For 125 years Guelph has enjoyed the services of a highly successful public library. In recent years demand for all of the GPL’s expanding services has grown exponentially. As Rob O’Flanagan reported in a recent article in the Guelph Mercury (Feb11, 2008), the age of the Internet has not killed libraries, it has invigorated them.

Circulation of library materials has increased by 49% since 2000, more than four times the rate of Guelph’s population growth. Demand for library materials has more than doubled in the past twenty-five years, with over 1.73 million items borrowed in 2008.
Numbers also tell a compelling story about the space needs for the new central library. The figures highlighted in the attached PowerPoint presentation do just that. Originally presented to the library board at their December meeting, “Right-sizing the Guelph Public Library” supports the need for a new central branch of at least 90,000 square feet.
This presentation will be shared with a number of community organizations and will be made available to the general public via the library’s website. However we first wanted to share our findings with the mayor, members of city council and the senior management team.

We have also included a condensed web-friendly version:

Download document: