Cornwall developers challenge changes to tax grants

Two developers are objecting to proposed changes to the Cornwall's Heart of the City tax grant program. Robert Pelda (standing) and Gary Jans (seated, right) spoke to the Cornwall Planning Advisory Committee on Monday Nov. 17, 2014. (Cornwall Newswatch)

CORNWALL – A couple of city developers believe they would be unfairly undermined by proposed changes to Cornwall’s Heart of the City (HOTC) development incentive program.

More specifically, one of the changes to the HOTC Community Improvement Plan (CIP) would affect developers of multi-storey residential with ground-floor commercial space.

The proposal would see a full commercial tax rebate over 10 years, provided the space it kept 75 per cent occupied.

The residential rebate would be laddered on a declining percentage over the same amount of time.

“They were 100 per cent cash grants (on the residential tax portion of the development)…that’s changing,” Planning Programs Coordinator Dana McLean told the Planning Advisory Committee Monday night.

However, this program would only apply to the priority areas of the two downtown areas and their connecting link – basically one block north and south of Water Street, from Amelia Street east to Marlborough Street.

But Gary Jans of Ray-Jans Construction believes it would hurt the profitability of building outside of those areas. “Ultimately, this equates to the amount of tax relief to make these projects even viable…worthwhile,” Jans told the committee.

“Without the projects there’s no new revenue without raising property taxes on everybody else. The city needs revenue,” Jans argued.

Robert Pelda, developer of Cotton Mill Cornwall and the Cotton Mill Lofts, believes the change would jeopardize a long-term good faith deal with the city on his multi-phased project to revitalize the waterfront area.

“With 210 new homes, I can honestly say, would never have happened without Heart of the City grant funds,” Pelda told the committee.

Pelda says shareholders and investors have put millions into the project and the proposed change would “greatly change the intent of the original agreement.” The next phase of the Cotton Mill has 60,000 sq. ft. of proposed commercial space.

But committee member Denis Carr, who is also the administrator for Heart of the City, challenged Pelda saying the program was designed for those specific downtown areas in an original agreement with the provincial government.

Carr also pointed to other condo developments, such as the ones on Water Street, that have not asked for grants from the city.

In what was his last PAC meeting, Carr passionately recounted the major improvements to the two downtown areas and the sacrifices they have made. “Those fancy streetlights in Le Village. (The city didn’t pay for those). The BIA paid for those.”

Carr said the $40 million in new assessment for the $5-6 million invested by the city is an eight per cent return.

And Carr warned the committee and new councillors in the audience, with dwindling transfer payments from the province, that giving away tax money now will hurt the city down the road. “I’m sorry we’re not a bank.”

He tempered his criticism with praise for Pelda’s project. “We support your project because the waterfront is the future of this community. This new council is going to have to negotiate with the federal government for the port and canal lands. (We) support the developments on the waterfront because that is the future,” Carr said.

The feedback from the two developers will be included in a report for the new planning advisory committee (PAC) to consider when it revisits the proposed changes in the coming months.

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