NIAGARA GATEWAY  ECONOMIC ZONE AND CENTRE  

 COMMUNITY IMPROVEMENT PLAN 

 DRAFT IMPLEMENTATION PLAN 

 

Submitted To: 

 

 

 

 

 

Submitted By 

 

 

 

February 2012

 

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1.0 Project Update The purpose of preparing a Community Improvement Plan (CIP) for the Niagara Gateway Economic Zone and Centre (also referred to herein as the “Gateway CIP”) is to provide a comprehensive framework for the introduction and implementation of financial incentive programs and municipal leadership actions designed to accomplish the goals identified in the Province’s Growth Plan and the Niagara Gateway Economic Zone and Centre Final Report for the employment lands within the Niagara Gateway Economic Zone and Centre. A Background Report was prepared in July of 2011. In addition to the legislative, regulatory and policy framework for the Gateway CIP, this background report contained a best practices review of other relevant CIPs and incentive programs. The Background Report specifies a preferred approach to preparation and adoption of the CIP that involves the Region coordinating with the five local municipalities in the Gateway to prepare a Gateway CIP that is adopted by each of the five municipalities. The Background Report also describes the preliminary goals, recommended community improvement project area and preliminary incentive program concepts for the Gateway CIP. The Executive Summary of the Background Report is attached as Appendix A to this report. The Background Report was then sent out to 100 key stakeholders along with an invitation to attend a Stakeholder Consultation Session on September 16, 2011. Forty (40) key stakeholders attended this session which commenced with a presentation of the Background Report by the project consultant. This was followed by a question and answer session. The attendees were then divided into four working groups (each led by a facilitator) and asked to comment on the:

a) Preliminary Goals for the Gateway CIP; b) Recommended Community Improvement Project Area; c) Guiding Principles for the financial incentive program concepts and the types of financial incentive

programs preferred for the Gateway CIP; and, d) Other strategies and actions on the part of the Region and Local Municipalities that should be included

in the Gateway CIP to help achieve the plan’s goals. Written comments were also received from the City of Niagara Falls and the Town of Fort Erie in November of 2011. A summary of the September 2011 Consultation Session is provided in the next section of this report. In addition to the September 2011 Consultation Session, a project update was presented to the Niagara Gateway Economic Zone and Centre Implementation Committee on November 18, 2011 and Committee members provided input at this meeting. Based on the input received from the key stakeholders, the following project steps in regard to the Gateway CIP were undertaken:

i) Augmented the goals for the CIP; ii) Recommended a Community Improvement Project Area for the CIP; iii) Proposed financial incentive programs to be included in the CIP; and, iv) Proposed municipal actions to be included in the CIP that will complement the incentive programs.

This report presents items i) to iv) above and forms the basis for further consultation on the Gateway CIP.

 

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By way of Regional Council approving the Integrated Community Planning Committee Report ICP 63-2011 in July of 2011, Regional Council directed that the Gateway CIP Background Report be used as the basis to develop a CIP for the Gateway Economic Zone and Centre, and that the Gateway Land Use Policy Review (Dillon Consulting, July 2011) and the Gateway CIP Background Report be used as the basis to develop and amendment to the Regional Policy Plan to define the Gateway Economic Zone and Centre. Draft Regional Policy Plan Amendment (RPPA) 1-2012 has now been prepared and circulated to Local Municipalities for comment. As recommended in the Gateway Land Use Policy Review, Draft RPPA 1-2012 includes the identification of six (6) Priority Investment Areas within the Gateway Economic Zone and Centre.

2.0 Consultation Summary The 40 people who attended the September 2011 Consultation Session represented a broad spectrum of key stakeholders from various levels of government, and business and development industry representatives. The breakdown of the 40 attendees was as follows:

9 Local Municipal staff; 6 Business/Development representatives; 6 Representatives from the New York State area; 4 Province of Ontario staff; 4 Region of Niagara staff; 4 Region of Niagara councilors; 3 Local Municipal councilors; 3 Institutional/Not-for-Profit representatives; and, 1 Niagara Economic Development Corporation representative.

The attendees were divided into four (4) working groups with each group containing relatively proportional representation as per the above-noted breakdown of attendees. Each of the working groups was led by a facilitator in providing responses to the following series of questions: 1) Goals of the Gateway CIP a) Have any goals been missed? b) Which goals are most important? 2) Community Improvement Project Area a) Does the recommended Community Improvement Project Area reflect:

i) Policy direction? ii) Goals of the CIP? iii) Area of critical need for the Gateway?

3) Incentive Programs a) Which type of incentive program is preferred? b) Which of the guiding principles are most appropriate?

 

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4) Other Key Actions a) What other strategies/ actions on the part of the Region/ `Local Municipalities should be included in

the Gateway CIP to help achieve the plan’s goals. A summary of the responses to these questions by each of the four working groups is contained in Appendix B. A number of common responses to the questions were identified and these are briefly discussed below.

2.1 Goals of the CIP

The stakeholders provided a number of comments on the goals of the CIP. Many of these comments reinforced and identified a number of the goals contained in the Background Report as primary goals for the Gateway CIP. Other comments suggested additional goals for the Gateway CIP with a focus on supporting small business, workforce development and enhanced linkages to local institutions. While the stakeholders and members of the Gateway Implementation Committee strongly support diversifying the Region’s economy, some of the stakeholders (and Gateway Implementation Committee members) questioned the goal of developing the employment lands for targeted strategic growth sectors and expressed concern about targeting requirements being too restrictive. As a result of the input from key stakeholders, the goals for the CIP have been revised, including the identification of a number of primary goals, and augmented with a number of other goals. The goals of the Gateway CIP are provided in Section 3.0 of this report.

2.2 Community Improvement Project Area

The Background Report proposes that the Community Improvement Project Area for the Gateway CIP be “all designated employment lands in the settlement areas within Welland, Port Colborne, Niagara Falls, Fort Erie and Thorold”. While this definition was supported by the stakeholders, they made a couple of key suggestions:

i) priority for development within the Project Area should focus on properties within the urban area boundary that are serviced; and,

ii) the Project Area should incorporate flexibility for future urban area additions and designation of employment lands so that the Gateway CIP does not have to be amended when this happens.

2.3 Incentive Programs

The comments from stakeholders on the guiding principles for the incentive programs varied, but a few consistent themes did emerge:

Performance criteria are important, especially job creation/retention, but performance criteria must be uniform, applied early in the evaluation process, and the application/evaluation process should not be too complicated/lengthy;

Project performance must be properly monitored, performance criteria should be enforced and there must be clear responsibility for administration of incentive program application and the monitoring of results;

Incentive programs should focus on the urban area and the priority investment areas, but sectoral targeting (if included) should be flexible;

Consideration should be given to providing significant incentives to “catalyst projects”, i.e., projects that will have a significant economic impact;

 

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Development charge reduction and tax increment based grants are the preferred form of incentive for the Gateway CIP; stakeholders did not appear to be particularly interested in loan programs or other programs such as fee rebates; and,

While development charge incentives provide an upfront and significant benefit for the developer, tax increment based grants can provide a big payback for the business owner. Stakeholders suggested that the Region and the Local Municipalities should really be providing incentives to attract business owners instead of providing incentives to developers, and therefore, it is important to find a way to promote the developer passing any incentives they receive along to the end user.

In addition to the above-noted comments, it was noted in the Best Practices Review that only projects in certain targeted high growth sectors within the Toronto City-Wide CIP and the Windsor Economic Revitalization CIP are eligible to receive the tax increment based grant. Both these CIPs exclude retail commercial uses (Toronto has exceptions). However, the eligible targeted sectors in both these CIPs are quite broad in terms of permitted eligible uses. This raises the question of the value of the stated sectoral targeting in these CIPs as an economic diversification tool. The Erie County Industrial Development Agency (ECIDA) Uniform Tax Exemption Policy was also reviewed. This program has been in existence in one form or another since the early 1970’s with over 900 projects approved under the program since inception. The ECIDA Uniform Tax Exemption Policy is a 3-tier project performance based property tax abatement program. ECIDA scores applications based on an incentive worksheet which is essentially a score sheet that provides points for preferred locations, industry sector, economic impact, building/facility performance and innovation of operations. ECIDA scores each project using the Incentive Worksheet and the project falls into one of three tiers based on its score. Tier 1 (projects scoring from 1-6 points) receive a property tax abatement for 7 years based on a sliding scale from 90% in Years 1-2 to 80% in Years 3-4 and 70% in Years 5-7. Tier 2 (projects scoring from 6.5 to 12 points) receive a property tax abatement for 10 years based on a sliding scale with 90% in Years 1-3, 80% in Years 4-6, and 70% in Years 7-10. Tier 3 (projects scoring over 12.5 points) receive a property tax abatement for 10 years based on a sliding scale with 100% in Years 1-7, 90% in Year 8, 80% in Year 9 and 70% in Year 10. So, better performing projects get a longer tax abatement period and a higher % of tax abatement. The ECIDA Uniform Tax Exemption Policy includes sectoral targeting by providing points in the incentive worksheet if the proposed use falls into one of six strategic sectors. While the range of sectors and permitted uses in each sector is fairly broad, the ECIDA policy includes a number of ineligible sectors, including retail trade. The ECIDA incentive evaluation worksheet is also fairly specific about which sectors can receive additional points under their evaluation system. There was generally good support among the stakeholders for the concept of providing larger incentives in the six priority investment areas. There was also general support for the goal of diversifying the Regional economy through targeting high growth economic sectors. However, when the stakeholders began discussing operationalizing this goal by providing incentives only to certain targeted sectors within the Gateway or within each priority investment area, support for this concept was divided. Therefore, based on the comments received from the key stakeholders, the Gateway Implementation Committee and the review of best practices in other municipalities, the ability to properly implement an effective sectoral targeting strategy for the incentive

 

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programs contained in the Niagara Gateway CIP is questionable. Sectoral targeting may be better accomplished through land use planning tools such as the Regional Official Plan and Local Official Plans.

2.4 Municipal Strategies and Actions

In addition to the incentive programs, the stakeholders suggested a number of other actions on the part of the Region and Local Municipalities to help achieve the goals of the Gateway CIP. With regard to actions that are appropriately included within the Gateway CIP, these suggestions included:

Development of a Marketing Strategy one the Gateway CIP is in place to effectively educate stakeholders on the availability of incentive programs and market these programs;

Ensuring a strong coordinator function to guide applicants through the application process and to monitor participating project results; and,

Working with U.S. counterparts to grow economic development on both sides of the border using an enhanced cross border approach.

3.0 Goals of the Gateway CIP Based on the policy framework for the CIP and input from key stakeholders, the primary goals of the Gateway CIP are to:

Improve the attractiveness and competitiveness of the employment lands in the Gateway; Create new employment and retain existing employment; Diversify the Region’s economic base; and, Increase property assessment and the Region’s non-residential tax base; and, Develop energy efficient, sustainable industrial buildings.

In addition to the primary goals, additional (secondary) goals of the Gateway CIP identified by key stakeholders include:

Increase opportunities for cross border trade, movement of goods and tourism; Contribute to the development of sustainable and complete communities; Promote efficient use of water and wastewater infrastructure; Support entrepreneurs and small businesses to grow; Strengthen business links to local institutions, especially educational institutions; Promote workforce development and better use of human capital; Increase the attractiveness of Niagara Region as an economic centre to the international market.

4.0 Community Improvement Project Area The Background Report proposed that the Community Improvement Project Area for the Gateway CIP be “all designated employment lands in the settlement areas within Welland, Port Colborne, Niagara Falls, Fort Erie and Thorold”. In order to include flexibility for future urban area additions and designation of employment lands so that the Gateway CIP does not have to be amended when this happens, it is recommended that the Community Improvement Project Area for the Gateway CIP be defined as “all designated employment

 

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lands in the settlement areas within Welland, Port Colborne, Niagara Falls, Fort Erie and Thorold, as amended from time to time.” This definition will not be accompanied by mapping in the CIP that shows the outline of the Community Improvement Project Area, again, in order to avoid an amendment to the CIP should there be future urban area additions and/or designation of employment lands within the five municipalities. In reviewing Draft RPPA 1-2012, it is duly noted that the lands in Thorold and Port Colborne shown on Schedule 2 of RPPA 1-2012 that are outside the Urban Area Boundary are not part of a settlement area. Therefore, as per the recommended definition of the Community Improvement Project Area for the Gateway CIP above, these lands would not currently form part of the proposed Community Improvement Project Area for the Gateway CIP.

5.0 Proposed Incentive Programs Two incentive programs are being proposed for inclusion in the Gateway CIP. The first is a Tax Increment Based Grant that increases for projects in the Priority Investment Areas (location) (see Figure 1) and projects that exhibit a higher level of economic and environmental/design performance (see Section 5.2). The second program is a Development Charge Grant that would be provided only for projects with exceptional economic and environmental/design performance (see Section 5.3). Based on comments received from key stakeholders, the Gateway Implementation Committee, and review of actual sectoral targeting practices contained in incentive programs in other municipalities, active sectoral targeting has not been included in the incentive programs proposed for inclusion in the Gateway CIP. However, based on recommendations contained in the Gateway Land Use Policy Review (July 2011) and the Draft RPPA 1-2012, it is anticipated that sectoral targeting within the Gateway Community Improvement Project Area will be accomplished through the Regional Official Plan and Local Official Plans that contain policies that complement the Gateway CIP. As is the case with the existing Tax Increment Based Grant Program under the Smarter Niagara Incentive Programs, it is proposed that the new Tax Increment Based Grant Program for the Gateway CIP be a matching program, i.e., the Region will match the percentage of the tax increment based grant provided by the Local Municipality. However, rather than each Local Municipality determining the duration and percentage of the tax increment based grant, the duration of tax increment based grant in each Local Municipality will be based on project location (within or outside one of the Priority Investment Areas) and the percentage of the tax increment based grant will be based on the project’s economic and environmental/design performance as described in Section 5.2 below. Because the Regional property tax share is larger than the Local Municipal property tax share, this means that the Region will contribute more to the Tax Based Increment Grant than the Local Municipality. Consultation with the Ministry of Municipal Affairs and Housing (MMAH) has confirmed that upper tier municipalities may in fact decide on a case-by-case (application) basis whether or not to provide grants or loans to a lower tier municipality in relation to the funding of incentive programs available in a Local Municipal CIP. Furthermore, the upper-tier municipality may also attach different terms and conditions as to security and otherwise to individual applications. The proposed administration of the Gateway CIP incentive programs is discussed in Section 5.4.

 

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5.1 General Program Requirements

All of the incentive programs contained in the Gateway CIP will be subject to the following general requirements as well as the individual requirements specified under each incentive program. The general and program specific requirements contained in the CIP are not necessarily exhaustive, and the Region and the Local Municipality reserve the right to include other requirements and conditions as deemed necessary on a property specific basis: a) An application for any incentive program contained in the Gateway CIP:

i) can be made only for properties within the Community Improvement Project Area; ii) must be submitted prior to the commencement of any works to which the incentive program

will apply and prior to application for building permit; and, iii) must include plans, drawings, studies, reports, estimates, contracts, construction values,

certifications, and other details and information as required by the Local Municipality and the Region to satisfy the Local Municipality and the Region with respect to project design, performance and conformity with the CIP;

b) As a condition of application approval, the applicant may be required to enter into a grant agreement

with the Local Municipality and the Region. This Agreement will specify the terms, duration and default provisions of the incentive to be provided.

c) Where other sources of government and/or non-profit organization funding (Federal, Provincial, Municipal, Federation of Canadian Municipalities, etc…) that can be applied against the eligible costs are anticipated or have been secured, these must be declared as part of the application. Accordingly, the grant may be reduced on a pro-rated basis;

d) The Local Municipality and the Region reserve the right to audit the cost of any and all works that have been approved under any of the financial incentive programs, at the expense of the applicant;

e) The Local Municipality and the Region are not responsible for any costs incurred by an applicant in relation to any of the programs, including without limitation, costs incurred in anticipation of a grant;

f) If the applicant is in default of any of the general or program specific requirements, or any other requirements of the Municipality and/or the Region, the approved grant may be delayed, reduced or canceled, and the applicant maybe required to repay part or all of the approved grant;

g) If a building that was erected or improved using a grant available under the Gateway CIP is demolished prior to expiry of the grant period, the grant is terminated and any grant amount paid is repayable to and will be recovered by the Local Municipality and the Region.

h) The Local Municipality and the Region may discontinue any of the programs contained in the CIP at any time, but applicants with approved grants will still receive said grant, subject to meeting the general and program specific requirements;

 

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i) Proposed land uses must be in conformity with the Regional Policy Plan and applicable Local Official Plan(s), Zoning By-laws and other planning requirements and approvals at both the local and regional level;

j) Retail uses will not be eligible for the incentive programs included in the Gateway CIP, and if a retail use is included as an accessory use within an approved application, the level of any grant provided under the CIP will be calculated only in relation to non-retail uses;

k) If part or all of a building(s) in a project approved for a grant is converted to retail use at any time after project completion, but prior to the cessation of grant payments, the amount of the remaining grant payments will be adjusted accordingly on a go forward basis to reflect only the remaining non-retail uses;

l) All proposed works approved under the incentive programs shall conform to provincial laws, municipal by-laws, and Local Municipal and Regional guidelines, by-laws, policies, procedures, and standards;

m) All works completed must comply with the description of the works as provided in the application form and contained in the grant agreement, with any amendments as approved by the Local Municipality and the Region;

n) All construction and improvements made to buildings and/or land shall be made pursuant to a Building Permit, and/or other required permits, and constructed in accordance with the Ontario Building Code and all applicable zoning requirements and planning approvals;

o) Outstanding work orders, and/or orders or requests to comply, and/or other charges from the Local Municipality and the Region must be satisfactorily addressed prior to grant approval or payment;

p) Property taxes must be in good standing at the time of program application and throughout the entire length of the grant commitment;

q) Local Municipal and Regional staff, officials, and/or agents may inspect any property that is the subject of an application for any of the incentive programs;

r) Local Municipal and Regional staff have the right to require annual reports from approved applicants and conduct annual inspections to ensure compliance with the grant agreement and make adjustments to incentive levels to reflect actual project performance in relation to the program requirements and the executed grant agreement;

s) Applicants approved for the programs contained in the Gateway CIP will be required to complete the eligible works within specified timeframes; and,

t) The total of all grants, loans and tax assistance provided in respect of the particular property for which an applicant is making application under the Gateway CIP and any other CIPs shall not exceed the eligible costs of the improvements to the property under all applicable CIPs.

 

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5.2 Tax Increment Based Grant Program

5.2.1 Purpose

The purpose of the Tax Increment Based Grant Program is to stimulate new, sustainable investment by existing businesses and new businesses in the form of development, redevelopment, rehabilitation or adaptive reuse of buildings and properties within the Community Improvement Project Area.

5.2.2 Description

The Tax Increment Grant Based Program is a grant program that would be available to all eligible projects involving the development, expansion, rehabilitation or redevelopment of a building or property (except residential and retail commercial uses) in conformity with the CIP. This program will provide an annual tax increment based grant payment equal to a percentage of the municipal (Local Municipal and Regional) property tax increase generated by the approved project. The annual grant would be offered on a “pay-as-you go” basis. The applicant will initially pay for the entire cost of the eligible project. When the property is revalued by the Municipal Property Assessment Corporation (MPAC) and annual property taxes are paid after project completion, the applicant will then be paid an annual grant equivalent to a percentage of the increase in municipal taxes (Local and Regional) that results from the project. For purposes of the grant calculation, pre-project municipal taxes will be determined before commencement of the project at the time the application is approved. The increase in municipal taxes will then be calculated as the difference between pre-project municipal taxes and post-project municipal taxes that are levied as a result of re-valuation of the property by the MPAC following project completion. Grant payments will cease when the total grant along with all other grants and loans provided under all applicable CIPs equals the eligible cost of the improvements to the property under all applicable CIPs, or after 5 or 10 years (depending on the location of the project), whichever comes first. The duration of the tax increment based grant would be based on the location of the project (inside or outside one of the six Priority Investment Areas) and the percentage of the tax increment based grant would be based on the project’s economic performance and environmental/design performance as described below.

5.2.2.1 Location

Approved tax increment based grants for projects within one of the Priority Investment Areas (see Figure 1 in Appendix C) would be paid out over a 10 year period. Approved tax increment based grants for projects outside the Priority Investment Areas would be paid out over a 5 year period.

5.2.2.2 Economic Performance

Points for economic performance of a project would be awarded based on both the project construction value and the number of jobs created/retained as follows:

Construction Value1 Points $400,000 - $1,999,999 1 $2,000,000 - $9,999,999 2

                                                            1 Construction Value as per the building permit.

 

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$10,000,000 - $39,999,999 3 $40,000,000+ 4 PLUS Full-Time Jobs Created/Retained Points 5-19 1 20-49 2 50-99 3 100+ 4

5.2.2.3 Environmental Design Performance

Points for environmental design performance of a project would be awarded based on the level of Leadership in Energy and Environmental Design (LEED) certification achieved by the project or conformity of the project with the Region’s new Smart Growth Design Criteria2 as follows: LEED Certification Points LEED 2 LEED Silver 4 LEED Gold 6 LEED Platinum 8 OR Region’s Smart Growth Design Criteria Points Conforms with 70% of Smart Growth Design Criteria 2 Conforms with 80% of Smart Growth Design Criteria 4 Conforms with 90% of Smart Growth Design Criteria 6 Conforms with 100% of Smart Growth Design Criteria 8 The maximum points a project can earn is 16 points (8 for economic impact and 8 for environmental design performance). The annual percentage of the municipal (Region and Local) tax increment grant provided to a project will be based on its total project performance score as per Table 1 below. Projects located within one of the Priority Investment Areas would receive the tax increment grant as indicated in Table 1 for 10 years. Projects outside the Priority Investment Areas but still within the Community Improvement Project Area would receive the tax increment grant as indicated in Table 1 for 5 years.

                                                            2 The new Regional Smart Growth Design Criteria are currently being developed.

 

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Table 1 Tax Increment Based Grant Level Economic Performance Score Environmental Design Performance Score

2 4 6 8

2 40% 50% 60% 70% 4 50% 60% 70% 80% 6 60% 70% 80% 90% 8 70% 80% 90% 100%

An alternative to the scoring system in Table 1 above is to base the Tax Increment Grant level on the total project score as follows: Score Tax Increment Based Grant Level 4 40% 6-8 60% 10-12 80% 14+ 100% While this simple scoring system is somewhat less complex than the scoring system in Table 1, it is also less precise in terms of gradation of projects.

5.3 Development Charge Grant Program

5.3.1 Purpose

The purpose of the Development Charge Grant Program is to stimulate new, sustainable investment by existing businesses and new businesses in the form of the development, redevelopment, rehabilitation or adaptive reuse of buildings and properties within the Community Improvement Project Area.

5.3.2 Description

The Development Charge Grant is a grant program that would be available only to approved Tax Increment Based Grant Program applications that qualify as “exceptional” projects. These are projects that achieve a combination of high scores on both economic performance and environmental/design performance, i.e., those shaded green in Table 1 above (alternatively projects that score 12 points or higher if the simplified scoring system is used). Once the Tax Increment Based Grant application is approved, the applicant would pay Local and Regional development charges as normal, i.e., usually paid at the time of building permit issuance. After project completion and occupancy, the actual level of the Tax Increment Grant would be calculated. If the Tax Increment Based Grant Level is equal to or exceeds 12 points, a Regional Development Charge Grant equal to 100% of the Regional Development Charges paid would be provided to the applicant. This grant would be a one-time payment, capped at a maximum of $1.5 million. The amount of the Development Charge Grant would be deducted from the Tax Increment Based Grant to be paid to the applicant.

 

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While the Region would certainly encourage Local Municipalities in the Community Improvement Project Area to provide a similar Development Charge Grant Program for Local Municipal Development Charges, this is not considered mandatory.

5.4 Program Administration

As previously mentioned, the MMAH has confirmed that upper tier municipalities may in fact decide on a case-by-case (application) basis whether or not to provide grants or loans to a lower tier municipality in relation to the funding of incentive programs available in a Local Municipal CIP. Furthermore, the upper-tier municipality may also attach different terms and conditions as to security and otherwise to individual applications. Because the Gateway CIP will cover employment lands in five local municipalities in the Niagara Gateway Economic Zone and Centre and because the primary goals of Gateway CIP relate to both Regional and Local economic goals, it is proposed that Niagara Region play a more active role in the administration of the Gateway CIP incentive programs than it does in the administration of the Smarter Niagara Incentive Programs. The administration of the Gateway CIP incentive programs is proposed as a shared or joint process between the Local Municipalities and Niagara Region. While Local Municipal CIP coordinators would receive applications for the Gateway CIP Tax Increment Based and Development Charge Grant, Regional staff would also be involved in pre-application meetings (as required), and Regional staff would also review the applications to ensure all program requirements, Regional information and other requirements have been met. Scoring of the applications using the performance matrix would be done in consultation between the Regional Incentive Programs Coordinator (Expeditor) and the Local Municipal CIP coordinator. Once the project has been scored, a grant agreement would be prepared and a recommendation report would be prepared. This recommendation report would first be forwarded to the Local Municipal Council (or Council’s designate) for consideration and then to Regional Council (or Council’s designate) for their consideration. Once the grant is formally approved by the respective Councils, and the grant agreement has been fully executed, the project can commence. Once the project is complete and occupied, the Local Municipal CIP Coordinator and the Regional Expeditor would inspect the facility to determine as built project performance and adjust the Tax Increment Grant Level accordingly. The Local Municipal CIP Coordinator and the Regional Expeditor would then request an annual or periodic report on project performance (ostensibly the number of jobs) and/or conduct an inspection of the facility. Again, the Tax Increment Grant Level could be adjusted depending on the ongoing project performance. It is proposed that the Regional Expeditor in cooperation with the Local Municipal CIP Coordinators take the lead in monitoring and reporting both project performance and Regional and Local funding of the incentive programs. This will help to standardize the format and frequency of the reporting of program results across the five municipalities.

 

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6.0 Proposed Municipal Actions It is proposed that the Gateway CIP will contain a number of actions that the Local Municipalities and Niagara Region can undertake to complement the incentive programs contained in the Gateway CIP. As permitted under the Planning Act, this includes the following community improvement activities:

a) acquire, hold, clear, grade or otherwise prepare land for community improvement; b) construct, repair, rehabilitate or improve buildings on land acquired or held by it in conformity with the

CIP; and, c) sell, lease, or otherwise dispose of any land and buildings acquired or held by it in conformity with the

CIP. It is proposed that the Region and Local Municipalities within the Niagara Gateway Economic Zone and Centre consider the strategic acquisition and consolidation of employment lands and preparation of these lands for development within the Community Improvement Project Area. This will allow the Region and Local Municipalities to provide key opportunities for demonstration type projects that will diversify the local economy and help advance the goals of the Gateway CIP. The Niagara Gateway Economic Zone and Centre Final Report (December 2008) also recommends that Niagara Region explore options for creating a coordinated institutional vehicle to guide the implementation of the Gateway vision, with responsibility for measures such as improvements to employment lands, reduction of servicing costs, potential consolidation of all public land holdings and their deployment, strategic land acquisition, strategic land development and the establishment of Centres of Excellence and Innovation. As noted in the Niagara Gateway Economic Zone and Centre Final Report (December 2008), there are a number of other recommendations regarding potential incentive programs in the Niagara Gateway Economic Zone and Centre, including a:

Tax Increment Financing Zone; Tax Incentive Zone; and, Export Distribution Zone. These incentive programs require provincial or federal approval and would be implemented outside the Gateway CIP. The Niagara Gateway Economic Zone and Centre Final Report includes a number of recommendations for the Region to work with the Province to improve transportation and servicing infrastructure in order to facilitate development of employment lands within the Gateway and improve the attractiveness and market potential of these lands. Section 30 of the Planning Act states that the Minister, with the approval of the Lieutenant Governor in Council, and a municipality may enter into agreement providing for payment to the municipality on such terms and conditions and in such amounts as may be approved by the Lieutenant Governor in Council to assist in the community improvement of a community improvement project area as defined in section 28, including the carrying out of studies for the purpose of selecting areas for community improvement. R.S.O. 1990, c. P.13, s. 30.

 

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Therefore, it is proposed that the key infrastructure and transportation improvements identified in the Niagara Gateway Economic Zone and Centre Final Report and the preparation of secondary plans ((including detailed infrastructure, transportation, land use, phasing and urban design plans) identified in the Niagara Gateway Employment Lands Study be included in the Gateway CIP as items for which Niagara Region and Local Municipalities could request funding for from the Minister, with the approval of the Lieutenant Governor in Council. Finally, based on input from stakeholders, a number of other actions on the part of the Region and Local Municipalities are included in this section to help achieve the goals of the Gateway CIP. These include:

Development of a comprehensive Marketing Strategy3 once the Gateway CIP is in place to effectively educate stakeholders on the availability of incentive programs and market these programs;

Ensuring a strong coordinator function to guide applicants through the application process and to monitor participating project results (this has been specified in the Program Administration section); and,

Working with U.S. counterparts to grow economic development on both sides of the border using an enhanced cross border approach.

7.0 Next Steps Using input from the second stakeholder consultation session as well as comments received from the Local Municipalities and the Gateway Implementation Committee, a Draft Gateway CIP will be prepared. The Draft Gateway CIP will then be the subject of further consultation with the Local Municipalities and the Gateway Implementation Committee prior to finalization of the Gateway CIP, circulation of the CIP to the MMAH, and a final Public Meeting under the Planning Act.

                                                            3 A Basic Marketing Strategy will be prepared and included in the Gateway CIP.

 

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Appendix A Background Report Executive Summary

 

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Executive Summary

Background The Province of Ontario’s Places to Grow Growth Plan for the Greater Golden Horseshoe, (referred to herein as the Growth Plan) was released in 2006 and recognized the Niagara Gateway Economic Zone and Centre as having unique economic importance to the Greater Golden Horseshoe region and Ontario. The Growth Plan states that planning and economic development in the Gateway Economic Zone and Centre will support the goals of economic diversity and promote increased opportunities for cross-border trade, movement of goods and tourism. In December of 2008, Niagara Region prepared the Niagara Gateway Economic Zone and Centre Final Report to provide an action plan to achieve the goals for the Gateway Economic Zone and Centre specified in the Province’s Growth Plan. The Niagara Gateway Economic Zone and Centre Final Report was received by Regional Council in February of 2009, and in May of 2009, Regional Council approved an Implementation Work Plan and Implementation Committee for the nine recommendations in the Gateway Economic Zone and Centre Final Report. The preparation of a Community Improvement Plan (CIP) for the Niagara Gateway Economic Zone and Centre (also referred to as the “Gateway CIP”) stems largely from Recommendation #8 in the Niagara Gateway Economic Zone and Centre Final Report which states that “The Region of Niagara will work with the Province, local municipalities and its economic development agencies to create an attractive investment climate for its employment lands through such measures as improving their appearance, improving infrastructure, reducing the cost of servicing industrial lands, expanded targeted tax increment equivalent grant programs on a regional scale and opportunities for developing environmentally sustainable industrial buildings in such a way as to ensure sufficient employment lands are available for the future.” The Niagara Gateway Economic Zone and Centre Final Report identified incentives within a CIP as a way to accelerate the process of bringing employment lands within the Gateway Economic Zone and Centre to market.

Purpose The purpose of preparing a Gateway CIP is to provide a comprehensive framework for the introduction and implementation of financial incentive programs and municipal leadership strategies designed to accomplish the goals for designated employment lands within the Gateway identified in the Province’s Growth Plan, the Niagara Gateway Economic Zone and Centre Final Report, and other Regional and Local Municipal plans, policies, reports and studies. The Gateway CIP will apply to designated employment lands within Welland, Port Colborne, Niagara Falls, Fort Erie and Thorold. A number of tasks were undertaken to gain insight into and make recommendations on the best way to approach preparation of the Gateway CIP. These tasks included a review of:

The Provincial legislative and regulatory framework applicable to the preparation of CIPs; Relevant plans, policies, reports and studies at the Provincial, Regional and Local level; and, Relevant CIPs in Ontario that provide incentive programs for the development of employment lands.

 

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The purpose of this Background Report is to present the results of the tasks outlined above and to develop and recommend an approach to preparation of the Gateway CIP that sets out a preliminary direction for a number of key elements in the CIP. This includes the rationale and goals for the CIP, delineation of the community improvement project area, and the incentive program concepts to be further considered and discussed in the next phase of the project. Therefore, this Background Report provides the legislative, policy and regulatory framework and foundation for preparation of the Gateway CIP, and it also provides a foundation for future consultation sessions on the Gateway CIP.

Proposed CIP Approach and Direction

CIP Approach Based on the Provincial legislative and regulatory framework, a CIP that offers grants and loans for development of the employment lands in the Niagara Gateway Economic Zone and Centre cannot be adopted by the upper-tier (Region). This leaves the Niagara Region and the five municipalities in the Gateway with two options for the approach to preparation of a CIP for the employment lands in the Gateway:

i) Expand the myriad of existing CIPs in the five municipalities to cover the employment lands in the Gateway;

ii) Prepare a new Gateway CIP that applies only to the employment lands in the Gateway with this CIP adopted by the five local municipalities.

Based on the advantages, disadvantages, complexities and anticipated timeline of each approach, it is recommended that the approach to the preparation of a CIP to promote the development of employment lands in the Niagara Gateway Economic Zone and Centre be that the Region coordinate with the five local municipalities in the Gateway to prepare a Gateway CIP that is subsequently adopted by each of the five local municipalities, i.e., Option 2 above.

CIP Direction

Rationale and Goals

The primary rationale for the Gateway CIP is to revitalize, diversify and strengthen the Regional economy by promoting development of the employment lands in the Gateway for targeted strategic growth sectors of the economy. Based on the Provincial, Regional and Local Municipal policy documents reviewed, the preliminary goals for the Gateway CIP include:

Diversifying the Region’s economic base; Increasing opportunities for cross border trade, movement of goods and tourism; Improving the attractiveness and competitiveness of the employment lands in the Gateway; Creating new employment and retain existing employment; Developing the employment lands in the Niagara Gateway Economic Zone and Centre for

employment in targeted strategic growth sectors of the economy; Increasing property assessment and the Region’s non-residential tax base; Developing energy efficient, sustainable industrial buildings; and,

 

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Contributing to the development of sustainable and complete communities.

Community Improvement Project Area

The preliminary recommendation is that the community improvement project area for the Gateway CIP be designated as “all designated employment lands in the settlement areas (urban area and rural settlement area) within Welland, Port Colborne, Niagara Falls, Fort Erie and Thorold”. As identified in the Niagara Gateway Employment Lands Study, it is recommended that consideration also be given to the designation or delineation of priority investment areas within the recommended designated community improvement project area for the purposes of prioritizing and/or phasing of incentive programs contained within the CIP. Policy 12.72 of the Niagara Region Policy Plan currently allows the Region to provide grants and loans to local municipalities for community improvement plans only within urban area boundaries. The recommended community improvement project area for the Gateway CIP includes urban areas and rural settlement areas within the five municipalities in the Gateway. Therefore, it is recommended that a housekeeping amendment to add “Rural Settlement Areas” to Policy 12.72 of the Niagara Region Policy Plan be prepared and adopted as soon as possible in order to enable the designation of the Niagara Gateway Economic Zone and Centre Community Improvement Project Area as described above.

Eligible Costs

Based on the review of the definition of “eligible costs” for grants and loans within a CIP contained in the Planning Act, and the rationale, objectives, eligible costs and program eligibility requirements within other municipal CIPs adopted and approved for employment lands in Ontario, it is recommended that the Gateway CIP avoid any references to the servicing status (e.g., serviced .vs. unserviced) and the development status (e.g., undeveloped/greenfield .vs. previously developed) of the employment lands to which it will apply and that the incentives programs contained in the Gateway CIP make no distinction on the basis of servicing status.

Incentive Programs

Based on the review undertaken for this Background Report, several preliminary incentive program concepts have been identified for further consideration during the next steps in preparation of the Gateway CIP. These include a:

i) Tax Increment Based Grant Program; ii) Development Charge Reduction/Deferral Program; and a, iii) Loan Program for the Costs of Front–End Servicing.

 

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Of the three programs listed above, only the Tax Increment Based Grant Program could be included in the Gateway CIP. The Development Charge Deferral/Reduction Program would require an amendment to the Region’s Development Charges By-law. The Loan Program for the Costs of Front–End Servicing would be best implemented through front-end servicing agreements with developers. The type of incentive programs above will be assessed for further development and inclusion in the Gateway CIP or implementation via amendment to the appropriate by-law or other implementation mechanism. Other potential incentive programs that are appropriate for the Gateway CIP may be identified and added during future consultation sessions and preparation of the incentive programs. Based on the review undertaken for this Background Report, it is recommended that the above-noted incentive programs, and in particular the tax increment based grant program and the development charge reduction/deferral program, be developed based on the following guiding principles:

a) The incentive programs may be more generous in the priority investment areas versus the balance of the designated employment lands, or the incentive programs may be focused only on one or more of the priority investment areas;

b) The incentive programs may be targeted to certain economic sectors within the Gateway; c) Introduction of some or all of the incentive programs may be restricted only to areas that are serviced

and ready for development, and/or the introduction of some or all of the incentive programs may be phased to reflect areas that are ready for development versus those that are not;

d) The incentive programs may contain performance criteria that must be met by eligible development projects, and these performance criteria may include criteria that deal with the quality and/or sustainability of the development, and economic performance of the development including job creation/retention, increase in assessment value, and other economic benefits; and,

e) The incentive programs may be more generous for development projects that achieve the Region’s Smart Growth Design Criteria.

Next Steps The CIP approach and direction outlined in this Background Report will form the basis for the next steps in the preparation of the Gateway CIP, with the first being a consultation session with key stakeholders session that will take place during the early fall of 2011. The purpose of this first consultation session will be to obtain input on the goals for the Gateway CIP, the appropriate community improvement project area, and to generate and refine ideas for incentive programs and a municipal leadership strategy containing actions designed to help achieve the goals of the CIP. Using the input from the first consultation session, a Draft CIP will be prepared and a second consultation session will then be held in early 2012 to obtain detailed input on the programs, strategies and actions proposed in the Draft CIP. The Draft CIP will then be finalized based on input from the second consultation session, Regional staff, affected Local Municipalities, and the Gateway Implementation Committee. The Gateway CIP will then be forwarded to the five Local Municipalities for adoption via a formal public meeting under the Planning Act. It is anticipated that this will take place in the first quarter of 2012.

 

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Appendix B Summary of Stakeholder Consultation Session #1 – September 16, 2011

 

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Question Group 1 Group 2 Group 3 Group 4 1. Goals of the Gateway CIP a) Have any goals been

missed? b) Which goals are most

important?

Add the goal of promoting “catalyst projects” which are unanticipated opportunities for significant economic growth and development.

With 4,000 acres of developable land, targeting of strategic growth sectors is not an important goal and there is likely no need for targeting.

Diversification across the Project Area is key and Local Municipalities do not want to be pigeon-holed.

Note to Province – Update of Growth Plan should look at legacy approvals and existing transportation assets.

Need to increase opportunity for green investment. Goals should focus on building on existing business

assets instead of chasing new major companies. The following should be added as goals:

- Improve quality of life; - Increase opportunities for cross border trade; - Support entrepreneurs and business incubation; - Increase the tax base; - Retain youth and use the local workforce; - Strengthen business links to local institutions.

Most important goals are: - Create new employment and retain existing

employment; - Improve attractiveness/competitiveness of

employment lands in Gateway Focus should be on net improvement over net growth.

Concern that CIPs can create “have and have not” communities – don’t cannibalize.

The following should be added as goals: - Provide venture capital/angel capital; - Assist small businesses to grow; - Develop underutilized lands with rail access,

including short-line rail; - Promote energy efficient development; - Promote efficient use of water and wastewater

infrastructure; - Establish a WNY/Niagara Region Economic

Centre; - Promote workforce development and better use

of human capital from immigration.

Need to define capture area of the Gateway. The following should be added as goals:

- Step up from domestic to international market; -

Diversification of Region’s economic base is an important goal, but are education institutions providing skills to match jobs that will be located in Gateway?

Retention of existing business is an important goal – creates a positive climate for business growth and new businesses.

Timing of goal achievement should be included.

2. Community Improvement Project Area

a) Does the recommended

Community Improvement Project Area reflect: i) Policy direction? ii) Goals of the CIP? iii) Area of critical need for

the Gateway?

Proposed Project Area does not reflect the definition of the Gateway in the Growth Plan.

The Project Area should incorporate flexibility for future urban area additions and designation of employment lands so that Gateway CIP does not have to be amended when this happens.

Discussed including whole Region as Project Area, but cannot say the whole Region is the priority.

Need to focus priority on areas of high unemployment. No mention of St. Catharines as an urban growth

centre – St. Catharines urban area should be a high priority.

Areas identified are fine, but priority for development of areas should focus on urban area boundary and servicing.

Six or seven priority areas within the Gateway may be too much.

Same programs applied consistently across the Gateway.

3. Incentive Programs a) Which type of incentive

program is preferred? b) Which of the guiding

principles are most appropriate?

Incentives are required for attracting the end user and not for the developer to put pipes in ground.

Need to promote the developer passing the incentive along to the end user.

Need Federal and Provincial governments to assist in creating economic activity zones.

Local Municipalities may not be able to afford some of the incentive programs – Region may have to fund these incentives at a greater level than 50%.

Region and Local Municipalities must think about return on investment of the incentive programs.

Region must develop uniform criteria for evaluating incentive programs applications.

Erie County has 3-tier incentive program system with a weighted rating system that also incorporates monitoring. Suggested that Region review Erie County example.

Performance criteria or “tests” must be applied early in the evaluation process and must also be flexible if key elements (e.g., a highway being built) change.

Niagara Region can learn from Western New York example as they have a lot of experience with incentive programs.

Sectoral targeting should not be too restrictive need some flexibility for uses that may not fit sector focus.

Development charge exemption or deferral is viewed as the most favourable incentive.

Guiding principles are all agreeable and important. Performance criteria are important, especially the

number of jobs, but need to clarify responsibility for monitoring performance.

Smart Growth criteria are also important. Could use a points system similar to the one used in WNY.

Incentive programs should focus on the urban area boundary regardless of servicing status.

Incentives should: - Focus on strategy and strengths of area that we

want to grow - Provide angel capital and tax credits;

Windsor Model Key to attracting manufacturing is not development

charge reduction or property tax reduction – variable costs are the key, i.e., hydro, transportation, R&D, training.

Incentive program funding must be sustainable over long-term.

Targeting of incentive programs is most effective.

Development charge reduction provides an immediate benefit.

Tax increment grants can provide a bigger payback for the business owner especially if they will retain the property.

Tax increment grants can be restrictive – what about pre-approval?

Find way to involve other 7 municipalities in tax increment based grants.

Loan Program – can government provide competitive rates to big business and are governments good at loaning money?

There are advantages to targeting by sector. Standardization of incentives by sector creates

equity. We need to ask different types of businesses what

they want as an incentive. How do we enforce the performance criteria? What

happens when there is a default?

 

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Question Group 1 Group 2 Group 3 Group 4

4. Other Key Actions a) What other strategies/

actions on the part of the Region/ `Local Municipalities should be included in the Gateway CIP to help achieve the plan’s goals.

It is important for Niagara Region to work with its U.S. counterparts to grow economic development on both sides of the border using a cross border approach.

Educate public about the incentive programs – better marketing plan.

Benchmark Niagara against similar regions looking at number of indicators and then move the yardsticks.

Assist the tourism/culture sector. Tax pooling. Consolidate Niagara to one economic development

organization.

Need to talk to businesses and determine how to serve them better.

A Marketing Strategy needs to be developed and implemented for the Gateway CIP incentive programs once they are in place.

Need good communication with businesses and developers to understand their needs and remove misconceptions.

Someone must be accountable for shepherding the projects through the application process and measuring results.

Need to create a “buzz” in the Region. Need to get people to buy in and need to see

progress to generate continued interest and results.

 

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Appendix C Priority Investment Areas

 

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