The District of Mission will be offering a new and aggressive incentive program to encourage and accelerate private investment and improvement projects in the Mission City Downtown Action Plan area, which is roughly from Murray Street to the east to Grand Street to the west, and from N. Railway Avenue to Second Avenue, including the former Bellevue Hotel property.
The incentives include tax exemptions, municipal fee reductions, breaks in the community amenity contribution, relaxed density and parking regulations, and an increase in district services, such as priority processing, free land title searches and waiving public hearing requirements for three years.
The type of breaks a property owner receives will depend on the improvement.
There are three types of construction scenarios:
• new construction and major development, which is defined as a building permit value of more than $500,000. A property owner can apply for a tax exemption and phased in program for taxes above the pre-development assessed value for 10 years, or an early benefit tax package in the first five years, which is a five-year option for development projects where the building will be stratified and sold. In the early tax benefit program, a developer would pay taxes in the first two years based on pre-improvement taxes. In the third year, assuming the building is finished or close to completion, an amount equal to the assessed value based on construction costs, and multiplied by three (representing the last three years of a five-year program) will be paid to the developer. The new owners of the building will be taxed the assessed value of the land and the improvements in the third and subsequent years.
• large renovations up to $500,000. Property owners receive a tax exemption for the revitalization of their property in the first five years, then will have their taxes increase incrementally by 20 per cent over the next five and will be paying the full value of their property in the 10th year.
• small renovations and facade improvements greater than $15,000. Property owners receive a tax exemption for the first five years, then can apply to have their taxes increase incrementally by 20 per cent over the next five and will be paying the full value of their property in the 10th year. If owners don’t renew, they will pay their property taxes in full at the end of five years.
Another element of this incentive is a facade improvement grant where projects greater than $1,000 may also apply for a grant for 50 per cent of their costs, to a maximum grant of $2,000.
“This lower threshold may allow both business owners and building owners the opportunity to make more modest improvements to the front of their buildings,” said Stacey Crawford, Mission’s economic development officer.
Mission’s director of long range planning and special projects believes the package the district is offering will show developers they are serious about development downtown by reducing a developer’s risk.
No other community has offered to eliminate a public hearing, said Fletcher, who also pointed out the process for the application would remain unchanged and the development will still be advertised and the public could send in comments.
It’s still has to be fine-tuned with the help of lawyers, she noted.
She also noted property owners aren’t exempt from paying all taxes – they just won’t be paying any increases as a result of their improvements.
“They’re paying land value and assessed value prior to development, so Mission’s current tax base is not affected,” she said.
Fletcher and Crawford developed the incentive using a three storey, and a five-storey wood frame buildings as examples. Even with the incentives currently being offered, developers are not turning a profit due to the current market conditions. The pair adjusted number until they came up with a positive number for developers with a small swing in the market.
The incentives would apply to building permits received before Dec. 31, 2016 for projects that will be completed by Dec. 31, 2018.