Councillor Lloyd Ferguson, in an attempt to reduce the impact of the $20 million operating and maintenance costs of the LRT had recommended the city look at dropping some of the incentives it offers to developers. The incentive programs were adopted more than 20 years ago as a means of encouraging residential development in downtown Hamilton in order to revitalize a dying core. Ferguson argues that with the prospect of LRT, and the economic uplift it is claimed to bring, there would be no need for artificial incentives to the development industry.
A staff report, however, suggests the incentives are still needed. Two of the key programs available are , the Hamilton Tax Increment Grant Program (HTIGP) and Hamilton Downtown, Barton / Kenilworth Multi-Residential Property Investment (Loan) Program (HDBKMPIP).
Staff reported that
• For every tax dollar of grant money provided under the HTIGP since inception, $26 in private sector investment has been leveraged; and
• For every tax dollar of cost incurred under the HDBKMPIP for the provision of low-interest loans since inception, $46 in private sector investment has been leveraged.
In the case of the Tax Increment Grant, which essentially forgives part of the increases in taxes as a result from redevelopment, the program has triggered over $280 Million in development in the last five years at a cost of $5.4 Million in forgone taxes.
The review said there are still “key issues and concerns commonly raised through stakeholder consultation which highlighted the continued importance and need for incentive programs to sustain revitalization efforts going forward due to the continued presence of significantly under-utilized buildings /properties across the eligible areas and the need to continue increasing local residential populations in or near commercial districts to support demand for local commercial businesses and services. The report went on to say that issues like climate change and the affordable housing shortage are further reasons to not drop the downtown incentive programs.
At Wednesday’s GIC meeting it was also pointed out that the Ferguson motion would not take effect until the next term of council –contrary to established practice that a council cannot bind future councils. The language was amended to ask the next council to “consider” dropping the incentives.