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What is a Community Improvement Plan?

Municipalities may create community improvement plans according to Ontario's Planning Act to facilitate improvements within targeted areas. These plans allow municipalities to create financial or other types of tools, or direct capital investments – such as tax increment-based grants – towards achieving community goals.

What is a Brownfield Site?

Brownfields are abandoned, idle, or unused industrial and commercial lands that have been or are perceived to have environmental contamination due to historic activities. A brownfield site may be as small as a vacant gas station with remaining underground storage tanks, or as large as several hundred acres of abandoned factory that may have dumped waste on its property during its operation

What is a tax increment-based grant?

Tax increment-based grants are tools to attract private-sector investment and stimulate development in targeted areas of the City. They are based on the difference between the municipal portion of the property taxes collected on a property before development and the estimated taxes that will be collected after development.  They are reconfirmed against actual taxes before any grant monies are paid. Following is an example of how the difference, which amounts to the tax increment-based grant, is calculated.

Property taxes after development    $ 40,000/yr x 85% (Municipal Portion)    =>   $ 35,000/yr

Property taxes before development  $   5,000/yr x 85% (Municipal Portion)    =>    $   4,250/yr

Tax increment                                  $ 29,750/yr

Incentive 80% of Increment               x       80%

Tax increment-based grant (80%) $ 23,800/yr

Total Maximum Grant Available $23,800/yr x 10 years = $238,000

Why is the City promoting tax-increment based grants?

They help to achieve Kingston's community improvement goals of reducing the number of contaminated sites in the City and renewing Kingston's downtown. They also contribute to the growth of the City's assessment base by attracting private sector projects. Every $1 spent on invested in brownfield redevelopment, $3.80 is invested in the economy.

I have a contaminated property, what is the first step to exploring a Brownfield Program?

Contact the Brownfield Project Manager to arrange for a Pre-Consultation to review your project.

Are projects that are eligible for a grant automatically approved by Council?

No. Applying for grants is a separate process from seeking Council Planning approval for projects. All projects, regardless of whether they are eligible for a grant, must go through the City's planning and development approvals process and seek Council approval where required.

Where does the grant money come from?

The funding is through the property tax rebates and cancellations by both City and Province. If a property is vacant and contaminated, the tax base is very low, however when remediated and redeveloped, the tax base increases substantially and the province and the municipality want to assist in the process by rebating the property taxes for a period of time to compensate for the extra costs of remediation and rehabilitation, compared to working with clean land.

What is the difference between BFTIP education property tax assistance and TIRGP (Tax Increment Based Grant Program)?

The difference between tax assistance under BFTIP and a TIRGP is that taxes are cancelled or deferred on the tax rolls for BFTIP.  TIRGP and similar programs are arrangements where an amount equivalent to taxes is granted back to a property owner or other eligible recipient.

There is no provision in the provincial tax assistance program for grants, as the program does not provide for direct payments, only for a cancellation or deferral of municipal and education taxes.

What types of costs are eligible for funding?

Some of the eligible costs are:

  • 100% of the cost of environmental rehabilitation;
  • 100% of the costs of placing clean fill and grading;
  • 100% of the cost of a Phase II ESA, Phase III ESA, and/or a Site-Specific Risk Assessment (SSRA) not covered by the Initial Study Grant;
  • 100% of the cost of preparing a Record of Site Condition (RSC);
  • 100% of the cost of demolishing buildings;
  • 100% of the financing cost (interest charges) of preparing the studies and undertaking the rehabilitation;
  • 100% of the cost of the insurance premiums to guarantee that the remediation will be completed;
  • 100% of the legal costs associated with the preparation of legal agreements pertaining to the following:
    • The preparation, review and implementation of the Remedial Work Plan;
    • The review and implementation of any Brownfield By-Law and/or Brownfield Site Agreement; and,
    • The filing of the Record of Site Condition (RSC)
  • 100% of the cost of obtaining assessment estimates for the property in order to estimate the tax differential between the pre-development and post-development property taxes.

What is the maximum Tax Assistance/Grant available?

For the TIRGP, the grant is paid annually in an amount equal to 80% of the incremental increase in municipal taxes of the property (pre-development versus post-development).  The grant is payable for up to 10 years or once the eligible costs have been repaid to the owner, whichever comes first.

What is a Tax Sale Properties?

A tax sale is the sale of a property by a municipality to recoup unpaid property taxes. When the property tax on the land goes into arrears for a period of three years, the City can initiate a sale of the property to recover the amount of unpaid taxes. Occasionally, however, a property may fail to sell at a municipal tax sale. This would occur when the City does not receive any bids on the property that meet or exceed its cancellation price (total unpaid taxes plus the cost of undertaking the sale).

What is a Failed Tax Sale Properties?

A property with questionable market value, such as a brownfield, may be more likely to fail a tax sale process. A Crown lien on the property may also contribute to the failure of a tax sale as this is one the few liens that is not removed from a tax sale.

The City does not automatically own failed tax sale properties, however during a 2 year period (the Failed Tax Sale period), the city has the choice and ability to transfer the properties and complete environmental assessments on the property. This can productive step if contaminated properties are not purchased. The properties can be transferred to a developer who will remediate the property and redevelop it to a productive state. The Failed Tax Sale properties are transferred using a competitive RFP (Request for Proposal) process.