Risk Analysis:

There is little risk associated with the approval of the CIP application. Staff resources are required for the upfront administration of the grant program and finalization of the legal agreement. Limited staff resources related to on-going monitoring of the eligible employment uses and issuance of annual grants will also be required over the next ten years. Should Council refuse the CIP request Active Care Management may decide to expand in a different municipality, which is outlined in its business plan summary (see Appendix B) and include locations in LaSalle, Burlington, and Kingston as well as municipalities in Quebec, Manitoba, and British Columbia.

Financial Matters:

Business Retention and Expansion Grant Program

The tax increment portion of the Business Retention and Expansion Grant is not calculated or paid out until all eligible work is completed and the property is reassessed by MPAC. Reassessment of the property must result in an increase in assessment value. The grant amount is recalculated annually based on the actual assessed property value, tax class, and municipal tax rate.

Summary of Potential Financial Incentives

The applicant proposes to spend a total of $13M on the project. The current assessment value for the property is $3,752,000 and the annual property taxes are $187,745 with the municipal share being $140,845.

City staff anticipate the post-development assessment value to be $11,400,000. Total annual property taxes on the increased assessment value would be $515,766 — an increase of $328,021. The post-development annual municipal tax levy would be $373,266 — an increase of $232,421. Based on the percentage of the floor area dedicated to the eligible uses (i.e. approximately 35%) this would result in an annual grant of $81,347 or $813,473 over the lifespan of the 10-year grant program. This would offset approximately 6% of the eligible investment proposed by Active Care Management. The percentage of floor area dedicated to eligible uses will be verified following construction and prior to the first grant payment.