CORNWALL – A vacancy or sale of the Eleven Points Logistics (EPL) facility could be bad news for Cornwall homeowners when it comes to municipal taxes.
The city’s financial bookkeeper is concerned the conditions could mimic what happened when the Domtar paper mill shut down in 2006.
“We don’t need to panic but we need to be concerned,” CFO Maureen Adams told Cornwall Newswatch.
The EPL facility on Industrial Park Drive, which is owned by Target, is valued at $102.5 million, according to the Municipal Property Assessment Corporation (MPAC).
The 1.4 million square foot facility accounts for a good chuck of tax revenue for Cornwall.
In 2014, the facility paid $2.9 million in taxes to the City of Cornwall – roughly five per cent of all the taxes collected by the city that year.
Target says it’s going to be appointing an adviser to sell its property in Canada.
Under municipal rules, if the EPL facility were to shut down, after 90 days Target could apply for a vacancy rebate which, if approved, would see Target get a 30 per cent rebate on taxes.
Add to that, the distribution center is currently one of three DC’s appealing the calculation of its property value to the Assessment Review Board (ARB). That could see the city have to rebate a portion of the taxes paid back to 2013 if the ARB rules in favour of Target. A date for the ARB hearing has not been set.
Target would still be eligible to receive any money from an ARB ruling even if it didn’t own the property and any new owner would also be eligible from the time it owned the property until the building and land was reassessed (a new assessment calculation won’t happen until 2017).
But Adams is more concerned about a future sale of the property because a new valuation by the province would mean less tax revenue and a subsequent shift of the tax burden to homeowners, a scenario the city has been trying to move away from in recent years by building its industrial and commercial base.
For example, if the EPL facility were to sell for 75 per cent of its current value, the city would be out roughly $700,000 in taxes.
In 2014, the commercial class was responsible for roughly 35 per cent of all city taxes paid and Target/EPL made up 13.5 per cent of those commercial taxes.
A similar situation happened in 2006 when Domtar closed, shifting the tax burden to homeowners.
As part of its 2015 budget, the city wants to add $400,000 into its Tax Stabilization Reserve, which already has $1 million sitting in it. The city anticipates more money may be added in 2016 in order to reduce the sting of assessment appeal and wild tax fluctuations.