Why do we offer financial incentives for the redevelopment of brownfield properties in the City of Guelph?

November 13, 2012

Blog

A “brownfield” is a property that has been contaminated by a former use to the extent that requires the additional expense of clean-up prior to putting it to a new use.  A brownfield property might be vacant, underutilized, or in full productive use. Brownfield properties that lay vacant or are underutilized do not contribute to the efficient functioning of our City.  As such, it is important for the City to remove barriers to making the full productive use of vacant or underutilized brownfield properties.

There are alternatives the City has to dealing with vacant or underutilized brownfield properties.  Which scenario would you choose?

1.  Do Nothing

As the name of this scenario suggests – nothing happens.  The property remains vacant or underutilized.  The value of land is low and fewer taxes are generated from the property to pay for city services and to maintain local infrastructure that services such properties.  This means the burden for this infrastructure maintenance falls to other property taxpayers in the City.  It also means the environmental contamination remains.  In extreme cases, even at the low rates associated with vacant or underutilized properties, the property taxes may go unpaid. 

This was what the City used to do – nothing – before developing our Brownfield program to encourage the clean up and redevelopment of contaminated properties.

2. Initiate a tax sale

In the cases where the property taxes are unpaid and owing, the City can initiate a tax sale in an attempt to recoup outstanding taxes.  If no one is prepared to take on the risk of owning the brownfield property because they will be responsible for the environmental cleanup, the City can end up owning the property.

This has happened.  The former IMICO property went to a tax sale and ended up in city hands.  This brownfield property is subject of a Ministry of Environment Order requiring the owner (now the City) to clean up the property.  This property has already cost municipal taxpayers in excess of $2.5M to deal with the contamination and demolition of old buildings. Estimates for further required remediation using traditional approaches are in the approximate range of $4-$8M.   

3. Provide financial incentives to property owner to clean up and redevelop their contaminated properties

Most environmental contamination in Guelph gets cleaned up by the private sector, not the City.  Rehabilitated brownfield properties generate more taxes that help to pay for services and infrastructure maintenance.  The City’s major Brownfield program is based remediation costs being paid back over a defined period of time once the project is completed and providing increased tax revenue. Only very specific remediation costs are eligible in the program.

By foregoing some, but otherwise non-realizable, property taxes, the City assists in promoting business and other activities by removing part of a significant barrier to putting vacant and underutilized brownfield properties into full productive use. 

This is what is now happening in our community and we are now seeing the redevelopment (and clean up) of vacant and underdeveloped land in our city.  This is good for property taxpayers and good for the environment.

About Karen Farbridge

An unwavering change maker seeking a just, democratic and sustainable world.

View all posts by Karen Farbridge

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