Its two steps forward, one step back for downtown renewal in Hamilton.
Hamilton's rebounding core saw a $1.8 million increase in tax revenue between 2008 and 2012 from growth – new construction projects and positive property reassessment values.
But there was also a $1.3 million decrease within the downtown renewal zone because of declines in other properties, tax classification changes and decreases in property assessment over that same period. That means the city has seen just a $500,000 net increase in cash from downtown growth.
'There is typically a two to three year lag and the upward momentum downtown has been in the last three to four years.'- Glen Norton, manager of urban renewal
Overall, the city saw a $2.6 million increase in municipal taxes associated with the downtown renewal zone in the past four years, according to a new report. But $1.7 million of that was because of the city's overall tax increases that impacted every property in the city.
Over the past decade, the city has invested almost $7 million in property renewal downtown: It's paid out $4 million in grants to help with improvement or redevelopment of downtown properties and an interest free loan program has cost the city another $2.9 million (foregone interest and a defaulted loan).
The grants to properties are money well spent, said Glen Norton, manager of urban renewal. More taxes will come with time, he says.
“An assessment always lags,” said Norton. “There is typically a two to three year lag and the upward momentum downtown has been in the last three to four years.”
The downtown urban renewal area goes from St. Joseph’s Hospital’s Charlton Campus, north to Liuna Station on James Street North, from Cannon to Hunter streets and Queen to Victoria streets.
The positive growth from the 21 properties that received renewal grants or incentives “countered the decreases and more,” he said.
Some of the tax reductions come from taxation class changes. An example is a residential complex at 125 Wellington St. North that changed from a multi-residential apartment to a residential condo, resulting in a net tax reduction of $240,000.
“We don’t control the decreases,” Norton said, adding the change to the Wellington complex was a business decision by the owners. “We would be in the negative without the incentives.”
Downtown ward councillor Jason Farr also said it's important to look at the big, annualized picture.
From 10 properties that received grants or incentives between 2008-2012, the city will bring in roughly $500,000 more annually in taxes now compared to pre-development.
“The more that happens, the more to add to that figure,” he said.
Farr said there are 16 current project within new developments within the renewal zone in progress that are projected to bring in $1.563 million in taxes once completed, such as the new Hilton Hotel at Main and Bay streets.
“There’s progress in the bottom line,” he said.
Some of the developments bringing in tax dollars now that were supported by grants or loans between 2008 and 2012 are the Filmwork Lofts on King William Street, the condo building at 47 Caroline Street North and a multi-use building at 52 Cannon Street West.
Projects on the go now that will add to city tax revenue in future years that have received either a renewal grant or a residential development loan from the city are the Royal Connaught condos, the multi-use development at James and Vine streets, a residential complex at 205 Hunter Street West and the Hotel Hamilton building on James Street North.