CIP Objectives
The proposed redevelopment of the property located at 1567 Ouellette Avenue for use as business incubator and recommended Small Business Investment Grant supports the following CIP objectives:
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Encourage investment that results in the productive use of lands and/or buildings for the purposes of establishing or maintaining a business enterprise, or the expansion of existing businesses to realize more effective use of the land’s potential;
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Encourage capital investments that create new and/or maintain existing permanent jobs, as well as short-term construction jobs that contribute to the reduction of the unemployment rate;
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Provide financial incentive programs that are attractive to potential investors and corporate decision-makers, but are balanced with expectations of City taxpayers and the City’s ability to fund the financial incentive programs;
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Attract investment based on the community’s strengths and competitive advantages; and
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Support investment and development that results in an increase in property assessment and grows the non-residential municipal tax base over the long-term.
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 employment use and issuance of annual grants will also be required over the next ten years. Should Council refuse the CIP request Start Up Central may not be included as part of the development proposal.
Financial Matters:
Small Business Investment Grant Program
The tax increment portion of the Small Business Investment 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, municipal tax rate, and percentage of gross floor area within the building allocated to eligible uses.
Because the proposed development is not 100% eligible under the CIP the recommendations indicate that grant payments will be calculated based on the percentage of gross floor area within the building allocated to Start Up Central (i.e. 50% based on the information in the grant application). The area allocated to Start Up Central will be verified prior to grant payments being issued. If the area allocated to Start Up Central decreases to the point where the use is substantially ineligible—grant