CORNWALL – City planners are looking at tightening some rules on tax increment grants in order to keep the program sustainable while still promoting development.
Planning Coordinator Dana McLean explained to the Planning Advisory Committee (PAC) Monday night, the cycle of paying out those grants since 2006 is catching up with the fund.
The Heart of the City fund was created from agreements between the City of Cornwall and the Province of Ontario around 2003 and 2004 over the Cadillac Fairview shopping center development. The province gave the city $3.5 million to cover an outstanding loan, provided the city used the money for business development.
That $3.5 million has remained untouched – the interest income is used to fuel the Community Improvement Plan (CIP) projects, much like how the Progress Fund works.
As of the end of 2016, the interest income account is projected to be in a deficit of $151,462 on paper.
Though McLean said the Community Improvement Plan (CIP) fund would be in the black had it not been for $193,457 in downtown investment since 2006 for various down items like parkette furniture, a parking study and lighting on Second Street.
As for tightening up the rules, the proposed changes would adjust the 10 year tax forgiveness scale which would start at 60 per cent or 80 per cent of the development cost – no longer would there be eligibility for 100 per cent.
There would also be areas opened for eligibility to the fund – so-called gateways to the Le Village and Central Business Districts – places like Water Street West, Second Street West, Montreal Road east of Park Street, and the entire Cotton Mill Lofts District.
Zeroing in on new construction of multi-storey residential – those developers that would be successful for the tax increment grant would no longer be able to apply for so-called paid out grants for tipping fees, parking spaces, municipal fees and project design fees.
For example, a development like Knox City Center would have received just over $1 million ($1,044,962) in grants through the tax forgiveness program rather than the $1,617,341 it did receive.
PAC didn’t make any decisions Monday night – the adjustments have been delayed as the committee wants more information on accelerated payment schedules for the program and whether there can be a classification for social housing.