Summary of Potential Financial Incentives
The applicant proposes to spend a total of $1.95M on the project. The current assessment value for the property is very low at $246,000 due to the age, state, and condition of the existing building. Annual property taxes are $10,985 with the municipal share being $7,885.
It is difficult to determine if the proposed development is anticipated to increase the property value assessment due to the fact that a majority of the costs relate to interior renovations and exterior improvements which are not typically assessed by MPAC. However such improvements may increase the anticipated useful life of the building and also utilize all space within the buildings. Therefore it is possible that the current allowances which reduce the assessment value may be reduced or eliminated by MPAC, which would increase the value to $1.4 million.
Total property taxes on the increased assessment of $1.4 million using the 2019 approved tax rates would be $64,100 an increase of $53,115. The post-development annual municipal tax levy would be $46,021—an increase of $38,136. This would result in an annual grant of $38,136 or $381,360 over the lifespan of the 10-year grant program and represent approximately 20% of the eligible investment proposed by 2520034 Ontario Limited (see Figure 2).
| Figure 2: Estimated Grant Calculation - 1785 Walker Road | |||
|---|---|---|---|
| Year of Grant | Pre-Development Municipal Tax Levy | Estimated Post-DevelopmentMunicipal Tax Levy | Estimated Value of Grant |
| 1 | $7,885 | $46,021 | $38,136 |
| 2 | $7,885 | $46,021 | $38,136 |
| 3 | $7,885 | $46,021 | $38,136 |
| 4 | $7,885 | $46,021 | $38,136 |
| 5 | $7,885 | $46,021 | $38,136 |
| 6 | $7,885 | $46,021 | $38,136 |
| 7 | $7,885 | $46,021 | $38,136 |
| 8 | $7,885 | $46,021 | $38,136 |
| 9 | $7,885 | $46,021 | $38,136 |
| 10 | $7,885 | $46,021 | $38,136 |
| Total | $78,850 | $460,210 | $381,360 |
Details:
| Current Property Value Assessment | $381,360 |
| Current Municipal Tax Levy | $246,000 |
| Estimated Post-Development Property Value Assessment | $7,885 |
| Estimated Post-Development Municipal Tax Levy | $1,400,000 |
| Estimated Eligible Investment Costs | $46,021 |
| Percentage of Eligible Investment Offset by Grant | $1,950,000 |
| Development & Heritage Standing Committee - April 14, 2020 | 19.56% |