Development Services Committee

 

 

 

 

 

TO:

Mayor and Members of Council

 

 

 

 

FROM:

Jim Baird, Commissioner of Development Services

Valerie Shuttleworth, Director of Planning and Urban Design

 

 

 

 

PREPARED BY:

David Clark, Town Architect

 

 

 

 

DATE OF MEETING:

2004-Dec-07

 

 

 

 

SUBJECT:

Submission to the Province regarding Financial Tools to Implement Markham Centre

 

 

 

 

 

 

RECOMMENDATION:

 

That the staff report entitled “Submission to the Province regarding Financial Tools to Implement Markham Centre” dated December 7th, 2004, be received;

 

That Council endorse and request that the Province take necessary action to provide the five financial tools summarized in this report and set out in Appendix “A” attached, namely;

 

1. Introduce Tax Increment Financing (TIF) legislation in support of Markham Centre and permanently remove tax capping within TIF zones;

 

            2. Invest in The Region of York’s Rapid Transit Strategy and Plan;

 

3. Amend the Development Charges Act to support future urban growth and intensification;

 

4. Empower “Downtown Development Corporations” to act as a flexible business model to promote the provincial growth plan for the Greater Golden Horseshoe; and

 

5. Use provincial land and facilities strategically to promote and support the provincial growth plan for the Greater Golden Horseshoe.

 

And that the Clerk be requested to forward a copy of this report to the Minister of  Public Infrastructure Renewal, the Minister of Municipal Affairs and Housing, the Minister of Finance, the Minister of Transportation, the York Rapid Transit Plan, York Region MPPs, the Region of York, and the Assistant Deputy Minister for the Ontario Growth Secretariat.

 

PURPOSE:

 

The purpose of this report is to outline for the Province the urgency and importance of provincial action to provide financial support for the implementation of Markham Centre.  It is recommended that the Town of Markham request that the Province take the necessary action to implement the five potential financial tools identified in the report.

 

BACKGROUND:

 

The implementation of Markham Centre will require Provincial support

 

Markham Centre has been in the planning stages for over a decade. The policy framework is firmly in place and the Markham Centre plan and vision is now moving forward into the implementation of the next phases of development and construction. Over the past two years Council has approved a number of development applications that, taken together, will begin to implement significant components of the Markham Centre plan.  However, implementation of this highly urban form of development in a Greenfield context requires the policy leadership and financial support of all levels of government to provide the necessary public infrastructure.

 

Markham Council has undertaken a number of key strategic initiatives recognizing the impact that the build out of Markham Centre will have on the transportation and service network, transit and parking facilities and the Town’s financial resources.

 

Directing the Town’s intensification and growth into a more sustainable, compact, mixed-use, transit supportive urban form generates a number of key capital investment and operating challenges that cannot be wholly funded through the traditional suburban growth tools of fees and development charges. New tools and mechanisms must be developed and brought to the table to give municipalities the ability to embark on and sustain urban intensification. Action is required at all levels of government to meet the financial challenge of delivering and sustaining higher service levels in a new urban environment.  Upfront investments in road, transit and parking structures is critical to foster private investment in compact urban form at appropriate densities in the earliest stages of build out.

 

Provincial action to provide new financial tools and invest in public transit is critical now at the initial stages of implementation to help drive appropriate urban form. Failure to deliver upfront infrastructure, rapid transit facilities and  the structured parking to support appropriate development densities, from the outset, will place Markham Centre at a competitive disadvantage compared with traditional suburban locations in the GTA and risks underutilizing the land asset and postponing intensification to a future generation of development.           

 

 

The Town initiated a Financial Strategy study to identify potential financial tools

 

In 2003 Council authorized staff to undertake a Financial Strategy Study to assess the impact of Markham Centre on the Town and to identify potential financial tools that could assist in delivering the vision. The consultant team retained by the Town identified a number of potential financial impacts on the Town’s resources to implement and sustain Markham Centre that could not be funded through traditional suburban growth tools. Delivering compact urban form from the outset of the plan’s build out also presented a number of unique financial challenges associated with the need to make strategic investments in infrastructure early on, particularly investment in parking structures and rapid transit facilities.

 

The Financial Study focused on identifying potential new financial tools with the capability of supporting the timing and scale of investments required to deliver the Markham Centre plan and vision. Of a wide range of potential tools investigated, Tax Increment Financing (TIF)  was identified as the single most significant financial instrument possible.  TIF has a proven track record, primarily in the US, of supporting development or re-development on the scale of Markham Centre. Diverting a portion of the municipal (Town and Region) tax share alone cannot support the investment required for Markham Centre; access to a portion of the provincial tax share is an essential component of the financial strategy. Provincial legislation is required to enable TIFs to provide financial support for the scale of investment required to establish and sustain Markham Centre on the right path in the critical early stages of the build out.

 

Existing tax legislation that places a cap on property tax for newly constructed commercial/industrial development reduces the effectiveness of proposed TIF financing.  Capping has a tendency to shift the burden of new commercial/industrial development in a region/county to smaller municipalities that are not experiencing commercial/industrial assessment growth.  Recent amendments to capping legislation contained in the 2004 Provincial Budget allows municipalities to accelerate the progress of newly constructed commercial/industrial development through the capping program, potentially reaching full tax burdens by 2008.  In order to make TIF financing as effective as possible, it is imperative that newly constructed commercial/industrial assessment in TIF zones be taxed at full Current Value Assessment (CVA) on a permanent basis as soon as possible.

 

No single tool has the capability of providing the needed financial support for Markham Centre. The study identified a suite of potential tools where Province action is instrumental in facilitating critical financial support for Markham Centre. Those actions are the subject of this submission to the Minister of Public Infrastructure Renewal and set out in this report.      

 

Markham Centre is consistent with the Provincial and Regional growth strategies

 

On October 30, 2004 Council received a staff report commenting on the Discussion Paper on the proposed Provincial Growth Plan for the Greater Golden Horseshoe (Places to Grow). The report provided a number of comments on the provincial growth plan and sought further clarification on some specific elements of the plan. The Town’s response to the plan has been forwarded to provincial ministers’ offices. As the Growth Plan is developed the Province will identify criteria to guide infrastructure investment including transit. The Discussion Paper clearly identifies Markham Centre as an emerging urban centre and as such should qualify Markham Centre for priority investment. The implementation component of the Growth Plan is expected to identify specific provincial actions including programmes as well as regulatory and fiscal tools to assist municipalities to implement the plan.     

 

Recently the Region of York adopted an updated growth management strategy for “Centres and Corridors” which identified four key action areas in policy, programmes, financial tools and infrastructure investment to guide the development of an urban structure served by rapid transit. In the regional context Markham Centre is an identified urban centre that will be developed on the principles of balanced live/work opportunities, compact urban form, natural heritage protection, transit supportive development and housing choice. Markham Centre is consistent with Provincial and Regional growth strategies.

    

Town staff have met with provincial officials

 

Over the past three years Town staff  have met with various provincial officials on a number of occasions to present the Markham Centre vision and to outline implementation challenges.  In more recent meetings the discussion has been focused on a range of potential financial and planning tools including tax increment financing alternatives. Background materials have also been forwarded to provincial officials to assist in their deliberations.

 

During the same time, Town staff also participated in the former provincial government’s Smart Growth round table consultation process. The Town’s submissions to the Smart Growth Secretariat focused on the Town’s growth management policies and particularly emphasized the importance of Markham Centre as a ‘best practice’ demonstration of sustainable, compact urban intensification. Throughout our discussions with provincial officials Town staff have emphasized the critical importance of the Province putting in place effective implementation tools to help deliver the Markham Centre plan and vision.

     

The Town met with the Minister of Public Infrastructure Renewal

 

On September 22, 2004 the Mayor and members of senior staff met with the Minister of Public Infrastructure Renewal to discuss potential financial tools that the Province should consider to help support Markham Centre. During the discussion a number of specific tools were identified for the Minister’s consideration. The Minister indicated his willingness to look proactively at TIFs and other potential implementation mechanisms that could be used to support the implementation of the Provincial growth strategy. The tools discussed in the meeting are the subject of the submission to the Minister and form the basis of this report. Following the meeting with the Minister and the Mayor on September 29, 2004, the Mayor wrote to the Deputy Premier/Minister of Finance to request provincial action on TIF legislation. (Appendix ‘B’)

 

This submission is a call to action for the Provincial government

 

Markham Centre is poised to enter the next stage of the implementation of the plan and vision. The Town has committed funds to construct the completion of Enterprise Boulevard from Warden Avenue to Kennedy Road, to unlock the development potential of the heart of the plan.

The Town has committed to a higher standard of urban streetscape standards (sidewalks, medians, lighting, street furniture, landscaping) and urban park design and construction. The Town has also committed funds to extend the District Energy distribution network in advance of anticipated development. Construction has also commenced on an additional north south crossing of the 407 (Rodick Road) to expand the road access network to Markham Centre. This all represents a significant investment by the Town, to stimulate and ultimately sustain private development in Markham centre.

 

The time for action by the Province to invest in Markham Centre is now. Financial tools and mechanisms must be in place to fund critical infrastructure, rapid transit and parking structures needed to deliver the commercial intensification fundamental to implementing the Markham Centre plan and vision. Delay will risk postponing intensification to a future generation of development.

  

FINANCIAL CONSIDERATIONS:

 

The Town’s Financial Strategy study forms the basis for this report.  The Town has initiated significant local municipal investment in Markham Centre, and requires the financial support of other levels of government.

 

 

BUSINESS UNITS CONSULTED AND AFFECTED:

 

The Finance and Legal Departments have reviewed this submission and their comments are incorporated into this report.

 

ATTACHMENTS:

 

Appendix A: Submission to the Minister of Public Infrastructure Renewal regarding Provincial Support to Implement Markham Centre           

 

Appendix B:  September 29th, 2004 letter to Deputy Premier/Minister of Finance          

 

 

 

 

 

 

 

 

David Clark, B.Arch

Town Architect

 

Valerie Shuttleworth, M.C.I.P., R.P.P.

Director of Planning and Urban Design

 

 

 

 

 

 

 

_____________________________________

Jim Baird, M.C.I.P., R.P.P.

Commissioner of Development Services

 

Q:\Development\Planning\Teams\Markham Centre\Reports\Provfintools.doc