Centre Wellington council has approved Pearle Hospitality’s application for a Tax Increment Equivalent Grant (TIEG) for the Elora South development despite calls from some to defer a decision.
The agreement will see a portion of the taxes the company pays on the development returned to it over a period of around 15 years. The actual grant amount will depend on what’s built at the site, but based on high level calculations, the township estimates the company would receive around $3.8 million total in TIEG payments.
Centre Wellington treasurer Dan Wilson emphasized the $3.8 million figure is "a very high level estimate."
“It depends on what is actually built and it depends on the assessed value as determined by MPAC (Municipal Property Assessment Corporation),” Wilson told council on Monday.
He said the TIEG “acts more like a rebate” than a grant, because a property owner is required to pay taxes in full before getting some of that money back through the program.
In order to qualify for a TIEG, a property must be identified as a priority site by meeting one or more of a number of criteria. Those include having frontage on the Grand River, being a known brownfield and/or having significant heritage value among others.
The Elora South property was identified as a priority site by council in 2015. The township currently has over 20 approved priority sites, Wilson said.
Pearle Hospitality’s proposed six-building development will see the Elora South site’s assessed property value increase from $2 million to approximately $130 million at full build out, generating just under half a million dollars annually for the township in new taxation, according to a township report.
While 80 per cent of that increased revenue will be returned to Pearle during the TIEG agreement period, the township will benefit greatly in the long term from the increased taxation, Wilson said.
“The TIEG program allows us to construct these buildings that will generate the new tax revenue dollars for the municipality,” Pearle Hospitality president Aaron Ciancone said. “But also encourages us to build the infrastructure required for new public spaces and to clean up the contamination on the site.”
The proposal got some opposition at Monday’s meeting. Resident Vince Agostino called for a vote on the matter to be deferred until council and citizens had a chance to review the development’s updated master plan.
Coun. Bob Foster echoed Agostino’s comments calling the application “premature.”
“We don’t have full information,” Foster said, noting Pearle recently withdrew a zoning amendment application for the site.
The project “keeps changing, like quicksand,” he said
Coun. Steven Kitras seconded a motion from Foster to defer a decision on the tax incentive, but the majority of council wanted to move forward with the matter.
“This property is basically the ideal location for a TIEG,” Coun. Kirk McElwain said. “It’s a brownfield that needed to be developed and what Pearle is doing there fits exactly in what we wanted it to do.”
Coun. Neil Dunsmore said because the Elora South property had been identified as a priority site eligible to receive TIEG funding in 2015, it wouldn’t be ethical to deny an application now.
“To start making changes to that now because it’s Pearle Hospitality or it’s Elora South and people don’t like them, that’s a nasty road to go down in my book,” Dunsmore said. "These are grants that were already established and they’re trying to play by the rules.”
Council voted 5-2 to approve Elora South Inc.'s TIEG application.