Item - 2018.EX30.6

Tracking Status

  • City Council adopted this item on April 24, 2018 without amendments.
  • City Council considered this item on January 31, 2018 and postponed its consideration to a later date. Consult the text of the decision for further information on the deferral.
  • This item was considered by the Executive Committee on January 24, 2018 and adopted without amendment. It will be considered by City Council on January 31, 2018.

EX30.6 - Review of the Imagination, Manufacturing, Innovation and Technology Property Tax Incentive Program

Decision Type:
ACTION
Status:
Adopted
Wards:
All

City Council Decision

City Council on April 24, 25, 26 and 27, 2018, adopted the following:  

 

1.  City Council repeal the three Community Improvement Plans that currently define the Imagination, Manufacturing, Innovation and Technology Program and enact a new single Community Improvement Plan by-law to simplify the Program.

 

2.  City Council direct the General Manager, Economic Development and Culture to amend the new Community Improvement Plan by-law to provide greater clarity for applicants and to incorporate the following changes:
 

a.  eliminate office eligibility from the Imagination, Manufacturing, Innovation and Technology Program within the City's proposed expanded TOcore Financial District boundaries (subject to Part 2e below);

 

b.  maintain and simplify office eligibility outside of the expanded TOcore Financial District boundaries;

 

c.  maintain incentives for non-office sectors and uses which are currently eligible under the City-wide Community Improvement Plan;

 

d.  implement a sector-based enhanced grant for Manufacturing, Food and Beverage Wholesaling, Creative Industries, Film Studio Complexes, Convergence Centres and Incubators to equal 70 percent of the municipal tax increment over a ten year period or 77 percent if a combined brownfield incentive is eligible;

 

e.  amend the criteria for a 'Transformative' Project to be:

 

1.  minimum investment of $1.5 billion;

 

2.  minimum of 200,000 square metres net new space that will be constructed and occupied within 7 years;

 

3.  creation of a minimum of 3,000 net new jobs to the City of Toronto;

 

4.  be of superior architectural design that includes unique and exceptional attributes;

 

5.  have the ability to act as an anchor within its district and to stimulate collateral new investment;

 

6.  demonstrate a clear need for financial incentives in order for the development to be financially viable, verified by a qualified third-party satisfactory to the Chief Financial Officer; and

 

7.  continue with the following criteria:

 

a.  meet all the criteria for a standard Imagination, Manufacturing, Innovation and Technology application;

 

b.  must be approved by Council;

 

c.  applies City-wide;

 

d.  must be linked to regional transit; and

 

e.  provide significant amenities that are accessible to the public and will transform the nature of the area;
 

f.  include environmental testing costs and costs incurred for remediation within 12 months prior to the submission of an application for the Brownfield Remediation Tax Assistance Program as eligible for assistance;

 

g.  refine the administrative processes for Commercial and Industrial Condominium applications by eliminating any restrictions on size of condominium units and require approved applicants to engage a third party facilitator to assist in administration and tracking; and

           

h.  amend the Imagination, Manufacturing, Innovation and Technology Program's eligibility requirements and conditions to:

 

1.  increase the minimum eligible construction value from $1 million to $5 million;

 

2.  require all eligible office developments to meet Tier 2 of the Toronto Green Standard;

 

3.  place a financial incentive cap of $30 million total on individual incentive approvals excluding Transformative Projects and the Brownfield Remediation Tax Assistance portion;

 

4.  implement an annual Program Administration Fee of thirty cents per square metre based on the eligible Gross Floor Area of each approved development to be deducted from the grant awarded each year for all existing and new projects, beginning in 2019; and

 

5.  include the replacement of office space at the same location in new mixed use developments to match the parameters of the City's Office Replacement Policy as set out on Official Plan Amendment 231.

 

3.  City Council direct the General Manager, Economic Development and Culture to report back to the Economic Development Committee in the first quarter of 2019 with further analysis and recommendations to improve and enhance the employment requirement under the Imagination, Manufacturing, Innovation and Technology Program in order to ensure that it achieves maximum benefit for City of Toronto residents.

 

4.  City Council direct the General Manager, Economic Development and Culture to report back to the Economic Development Committee in the first quarter of 2019 with the details of an enhanced marketing, promotion and outreach plan for the Imagination, Manufacturing, Innovation and Technology Program.

 

5.  City Council direct the General Manager, Economic Development and Culture and the Chief Planner and Executive Director, City Planning to report to the Planning and Growth Management Committee with a recommendation to repeal the existing Imagination, Manufacturing, Innovation and Technology Community Improvement Plan By-laws and to enact a new City-wide Imagination, Manufacturing, Innovation and Technology Community Improvement Plan By-law consistent with Council directions on this Item.

 

6.  City Council direct the General Manager, Economic Development and Culture to initiate the next Imagination, Manufacturing, Innovation and Technology Program Review with a report back to Executive Committee four years after any Community Improvement Plan amendments from this review come into full force and effect.

Background Information (Committee)

(January 16, 2018) Report and Attachment 1 from the Deputy City Manager, Cluster A, the Deputy City Manager, Cluster B and the Acting Chief Financial Officer on Review of the Imagination, Manufacturing, Innovation and Technology Property Tax Incentive Program
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-111606.pdf
(December 15, 2017) Attachment 2 - HEMSON CONSULTING LTD - IMIT Review
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-111609.pdf
(January 9, 2018) Report from the General Manager, Economic Development and Culture on Review of the Imagination, Manufacturing, Innovation and Technology Property Tax Incentive Program - Notice of Pending Report
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-111607.pdf

Communications (Committee)

(January 22, 2018) Letter from Toronto & York Region Labour Council (EX.Supp.EX30.6.1)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78172.pdf
(January 22, 2018) Letter from Joel Pearlman, President, National Association for Industrial and Office Parks (NAIOP) (EX.Supp.EX30.6.2)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78179.pdf
(January 23, 2018) Letter from Joyce Hall (EX.Supp.EX30.6.3)
(January 24, 2018) Letter from Daryl Chong, President and CEO, Greater Toronto Apartment Association (EX.New.EX30.6.4)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78225.pdf
(January 24, 2018) Submission from Susan McMurray, Executive Assistant, Toronto and York Region Labour Council (EX.New.EX30.6.5)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78343.pdf

Motions (City Council)

Motion to Adopt Item (Carried)

Vote (Adopt Item) Apr-27-2018 9:45 AM

Result: Carried Majority Required - EX30.6 - Adopt the item
Total members that voted Yes: 25 Members that voted Yes are Paul Ainslie, Maria Augimeri, Ana Bail„o, Jon Burnside, Christin Carmichael Greb, Janet Davis, Glenn De Baeremaeker, Frank Di Giorgio, John Filion, Michael Ford, Jim Hart, Stephen Holyday, Jim Karygiannis, Mike Layton, Josh Matlow, Mary-Margaret McMahon, Denzil Minnan-Wong, Frances Nunziata (Chair), Cesar Palacio, James Pasternak, Gord Perks, Neethan Shan, Michael Thompson, John Tory, Lucy Troisi
Total members that voted No: 0 Members that voted No are
Total members that were Absent: 19 Members that were absent are John Campbell, Josh Colle, Gary Crawford, Joe Cressy, Vincent Crisanti, Justin J. Di Ciano, Sarah Doucette, Paula Fletcher, Mary Fragedakis, Mark Grimes, Michelle Holland, Norman Kelly, Chin Lee, Giorgio Mammoliti, Joe Mihevc, Anthony Perruzza, Jaye Robinson, David Shiner, Kristyn Wong-Tam

EX30.6 - Review of the Imagination, Manufacturing, Innovation and Technology Property Tax Incentive Program

Decision Type:
ACTION
Status:
Deferred
Wards:
All

City Council Decision

City Council on January 31 and February 1, 2018, deferred consideration of Item EX30.6 until City Council considers the proposed financing and funding of Smart Track.

Background Information (Committee)

(January 16, 2018) Report and Attachment 1 from the Deputy City Manager, Cluster A, the Deputy City Manager, Cluster B and the Acting Chief Financial Officer on Review of the Imagination, Manufacturing, Innovation and Technology Property Tax Incentive Program
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-111606.pdf
(December 15, 2017) Attachment 2 - HEMSON CONSULTING LTD - IMIT Review
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-111609.pdf
(January 9, 2018) Report from the General Manager, Economic Development and Culture on Review of the Imagination, Manufacturing, Innovation and Technology Property Tax Incentive Program - Notice of Pending Report
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-111607.pdf

Communications (Committee)

(January 22, 2018) Letter from Toronto & York Region Labour Council (EX.Supp.EX30.6.1)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78172.pdf
(January 22, 2018) Letter from Joel Pearlman, President, National Association for Industrial and Office Parks (NAIOP) (EX.Supp.EX30.6.2)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78179.pdf
(January 23, 2018) Letter from Joyce Hall (EX.Supp.EX30.6.3)
(January 24, 2018) Letter from Daryl Chong, President and CEO, Greater Toronto Apartment Association (EX.New.EX30.6.4)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78225.pdf
(January 24, 2018) Submission from Susan McMurray, Executive Assistant, Toronto and York Region Labour Council (EX.New.EX30.6.5)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78343.pdf

Motions (City Council)

1 - Motion to Defer Item moved by Mayor John Tory (Carried)

That City Council defer consideration of this Item until City Council considers the proposed financing and funding of Smart Track.

Vote (Defer Item) Feb-01-2018 9:52 AM

Result: Carried Majority Required - EX30.6 - Tory - motion 1 - Defer the item
Total members that voted Yes: 30 Members that voted Yes are Paul Ainslie, Ana Bail„o, Jon Burnside, John Campbell, Shelley Carroll, Josh Colle, Gary Crawford, Joe Cressy, Janet Davis, Glenn De Baeremaeker, Frank Di Giorgio, Sarah Doucette, John Filion, Michael Ford, Mary Fragedakis, Mark Grimes, Jim Hart, Stephen Holyday, Norman Kelly, Josh Matlow, Mary-Margaret McMahon, Joe Mihevc, Frances Nunziata (Chair), Cesar Palacio, Gord Perks, Neethan Shan, David Shiner, John Tory, Lucy Troisi, Kristyn Wong-Tam
Total members that voted No: 0 Members that voted No are
Total members that were Absent: 15 Members that were absent are Maria Augimeri, Christin Carmichael Greb, Vincent Crisanti, Justin J. Di Ciano, Paula Fletcher, Michelle Holland, Jim Karygiannis, Mike Layton, Chin Lee, Giorgio Mammoliti, Denzil Minnan-Wong, James Pasternak, Anthony Perruzza, Jaye Robinson, Michael Thompson

EX30.6 - Review of the Imagination, Manufacturing, Innovation and Technology Property Tax Incentive Program

Decision Type:
ACTION
Status:
Adopted
Wards:
All

Committee Recommendations

The Executive Committee recommends that:  

 

1.  City Council repeal the three Community Improvement Plans (CIPs) that currently define the Imagination, Manufacturing, Innovation and Technology Program and enact a new single Community Improvement Plan by-law to simplify the Program.

 

2.  City Council direct the General Manager, Economic Development and Culture to amend the new Community Improvement Plan by-law to provide greater clarity for applicants and to incorporate the following changes:
 

a.  eliminate office eligibility from the Imagination, Manufacturing, Innovation and Technology Program within the City's proposed expanded TOcore Financial District boundaries (subject to Recommendation 2e);

 

b.  maintain and simplify office eligibility outside of the expanded TOcore Financial District boundaries;

 

c.  maintain incentives for non-office sectors and uses which are currently eligible under the City-wide Community Improvement Plan;

 

d.  implement a sector-based enhanced grant for Manufacturing, Food and Beverage Wholesaling, Creative Industries, Film Studio Complexes, Convergence Centres and Incubators to equal 70 percent of the municipal tax increment over a ten year period or 77 percent if a combined brownfield incentive is eligible;

 

e.  amend the criteria for a 'Transformative' Project to be:

 

1.  minimum investment of $1.5 billion

 

2.  minimum of 200,000 square metres net new space that will be constructed and occupied within 7 years

 

3.  creation of a minimum of 3,000 net new jobs to the City of Toronto

 

4.  be of superior architectural design that includes unique and exceptional attributes

 

5.  have the ability to act as an anchor within its district and to stimulate collateral new investment

 

6.  demonstrate a clear need for financial incentives in order for the development to be financially viable, verified by a qualified third-party satisfactory to the Chief Financial Officer of the City

 

7.  and continue with the following criteria:

 

a.  meet all the criteria for a standard Imagination, Manufacturing, Innovation and Technology application

 

b.  must be approved by Council

 

c.  applies city-wide

 

d.  must be linked to regional transit

 

e.  provide significant amenities that are accessible to the public and will transform the nature of the area
 

f.  include environmental testing costs and costs incurred for remediation within 12 months prior to the submission of an application for the Brownfield Remediation Tax Assistance (BRTA) Program as eligible for assistance.

 

g.  refine the administrative processes for Commercial and Industrial Condominium applications by eliminating any restrictions on size of condominium units and require approved applicants to engage a third party facilitator to assist in administration and tracking.

           

h.  amend the Imagination, Manufacturing, Innovation and Technology Program's eligibility requirements and conditions to:

 

1.  increase the minimum eligible construction value from $1 million to $5 million;

 

2.  require all eligible office developments to meet Tier 2 of the Toronto Green Standard;

 

3.  place a financial incentive cap of $30 million total on individual incentive approvals excluding Transformative Projects and the Brownfield Remediation Tax Assistance portion;

 

4.  implement an annual Program Administration Fee of thirty cents per square metre based on the eligible Gross Floor Area of each approved development to be deducted from the grant awarded each year for all existing and new projects, beginning in 2019; and

 

5.  include the replacement of office space at the same location in new mixed use developments to match the parameters of the City's Office Replacement Policy as set out on Official Plan Amendment 231.

 

3.  City Council direct the General Manager, Economic Development and Culture to report back to the Economic Development Committee in the first quarter of 2019 with further analysis and recommendations to improve and enhance the employment requirement under the Imagination, Manufacturing, Innovation and Technology Program in order to ensure that it achieves maximum benefit for City of Toronto residents.

 

4.  City Council direct the General Manager, Economic Development and Culture to report back to the Economic Development Committee in the first quarter of 2019 with the details of an enhanced marketing, promotion and outreach plan for the Imagination, Manufacturing, Innovation and Technology Program.

 

5.  City Council direct the General Manager, Economic Development and Culture and the Acting Chief Planner and Executive Director, City Planning to report to Planning and Growth Management Committee with a recommendation to repeal the existing Imagination, Manufacturing, Innovation and Technology Community Improvement Plan By-laws and to enact a new City-wide Imagination, Manufacturing, Innovation and Technology Community Improvement Plan By-law consistent with Council directions contained in the report (January 16, 2018) from the Deputy City Manager, Cluster A, the Deputy City Manager, Cluster B, and the Acting Chief Financial Officer.

 

6.  City Council direct the General Manager, Economic Development and Culture to initiate the next Imagination, Manufacturing, Innovation and Technology Program Review with a report back to Executive Committee four years after any Community Improvement Plan amendments from this review come into full force and effect.

Origin

(January 16, 2018) Report from the Deputy City Manager, Cluster A, the Deputy City Manager, Cluster B, and the Interim Chief Financial Officer

Summary

The Imagination, Manufacturing, Innovation and Technology (IMIT) Financial Incentive

Program (the "Program") provides incentives in the form of grants to support the new construction or major renovation of buildings in targeted employment sectors and for certain uses throughout the City. The Program also includes an added grant element for brownfield remediation situations (Brownfield Remediation Tax Assistance or BRTA). The Program provides grants to approved applicants relative to the incremental property taxes that are paid due to new development. Generally speaking, the total grants are equal to 60 percent of the increased municipal property taxes over the first ten years after construction. Thereafter, the City collects the entire municipal property tax. The Program is based on the premise that without the grant, the project would not proceed in the City (the 'but for' clause). The Program has been in place since 2008 and was reviewed first in 2012 with minor changes enacted in 2013 as a result of the review. This is the second review of the Program.

 

This report provides an overview of the economic and financial impacts of the Imagination, Manufacturing, Innovation and Technology Program and provides a summary of a review of the Program undertaken in 2017, based largely on the research and advice of Hemson Consulting (the Hemson Report is Addendum A and as an integral part of this Report) as well as public and stakeholder consultations. The Hemson Report was also peer-reviewed by a qualified tax authority.

 

The Program is implemented under the Province's Planning Act through Community Improvement Programs (CIPs) and these must be amended to alter the Imagination, Manufacturing, Innovation and Technology Program. The Imagination, Manufacturing, Innovation and Technology Program consists of three separate Community Improvement Programs for different geographical areas of the City and with differing qualifying rules. An additional reporting process through Planning and Growth Management Committee and Council will be required to amend the Community Improvement Programs to give effect to these changes. This will be subject to appeal to the appropriate Planning appeal body.

 

The current grant amounts expended by the City for the Imagination, Manufacturing, Innovation and Technology Program are reported in detail in the Hemson Report. A total of 31 projects have been approved. These developments are expected to provide 1.1 million square metres of new employment space and support approximately 47,000 new or retained jobs. It is expected that these 31 projects will yield $889 million in new incremental taxes over the 10-12 year payment period while they will be eligible to receive $556 million in grants. On an annual basis, the City can expect to receive an average of $29 million in new net tax revenue from these developments during the grant period. After the grant period ends the City will receive the full property tax on the development. For these approved developments this would be an annual tax receipt for the City of about $79 million. There are 20 other projects for which an Imagination, Manufacturing, Innovation and Technology application has been received but not yet fully processed. The application process has started for these 20 projects but the applications are not yet approved and significant construction has not yet started.

 

The Hemson study found that the Imagination, Manufacturing, Innovation and Technology Program has been effective in stimulating investment but that market conditions have changed such that it is no longer needed in the Financial District to stimulate office development (with one exception). The Imagination, Manufacturing, Innovation and Technology Program is still a useful economic development tool for office uses outside the Financial District. The Study makes further recommendations to fine-tune certain aspects of the Program.

Background Information

(January 16, 2018) Report and Attachment 1 from the Deputy City Manager, Cluster A, the Deputy City Manager, Cluster B and the Acting Chief Financial Officer on Review of the Imagination, Manufacturing, Innovation and Technology Property Tax Incentive Program
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-111606.pdf
(December 15, 2017) Attachment 2 - HEMSON CONSULTING LTD - IMIT Review
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-111609.pdf
(January 9, 2018) Report from the General Manager, Economic Development and Culture on Review of the Imagination, Manufacturing, Innovation and Technology Property Tax Incentive Program - Notice of Pending Report
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-111607.pdf

Communications

(January 22, 2018) Letter from Toronto & York Region Labour Council (EX.Supp.EX30.6.1)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78172.pdf
(January 22, 2018) Letter from Joel Pearlman, President, National Association for Industrial and Office Parks (NAIOP) (EX.Supp.EX30.6.2)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78179.pdf
(January 23, 2018) Letter from Joyce Hall (EX.Supp.EX30.6.3)
(January 24, 2018) Letter from Daryl Chong, President and CEO, Greater Toronto Apartment Association (EX.New.EX30.6.4)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78225.pdf
(January 24, 2018) Submission from Susan McMurray, Executive Assistant, Toronto and York Region Labour Council (EX.New.EX30.6.5)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78343.pdf

Speakers

Susan McMurray, Executive Assistant, Toronto and York Region Labour Council
Michael Rosenberg
Councillor Gord Perks
Councillor Janet Davis
Councillor Shelley Carroll

Motions

Motion to Adopt Item moved by Councillor Michael Thompson (Carried)
Source: Toronto City Clerk at www.toronto.ca/council