Hamilton Chamber of Commerce – Energy and Environment Committee

December 14, 2010

Brownfields / ERASE

Hamilton – The Brownfield Context

• One of the oldest and most heavily industrialized City’s in Canada

• Early 1970’s – 70% of all Canadian Steel production came from Hamilton

• Physical legacy of the rich industrial heritage includes a large number of Brownfield's

The most “common” perception of Hamilton

Hamilton - the best kept secret in Southern Ontario

We have more waterfalls & trees than any other city in Canada

Historical Land Use Inventory (2008)

• 18 different data-sets referenced

• Approximately 1400 individual properties identified as having potential for contamination

The Brownfield Context

• What then, is the City of Hamilton doing to encourage Brownfield redevelopment?

What is ERASE?

• Environmental Remediation and Site Enhancement (ERASE) Community Improvement Plan (CIP)

• Comprehensive set of programs designed to encourage and promote brownfield redevelopment

• Designed to “erase” brownfields by providing financial incentives to remediate and redevelop properties

What is ERASE?

• ERASE – first Brownfield specific CIP in Canada

• Has been revised and/or amended three times since its inception in 2001 (most recently April 2010)

• Hamilton viewed as a leader in terms of brownfield redevelopment and related initiatives

ERASE 2001

ERASE Program Area (2005)

ERASE Program Area (2010)

ERASE Study Grant Program (SGP)

• Matching grants for Environmental Site Assessments: e.g. Phase II and III

• Maximum of $20,000 per study, maximum of 2 / property

• Recently increased the maximum contribution due to O. Reg. 153/04 amendments

• Current owners or purchasers of property are eligible

ERASE Redevelopment Grant Program (RGP)

• A Tax Increment Financing (TIF) program using future tax increase (tax increment) to pay for specific eligible brownfield costs, e.g.,

– Environmental remediation

– Demolition (Area 2 and 3 only)

– Infrastructure upgrading (25%) (area 2 and 3 only)

– the following Leadership in Energy and Environmental Design (LEED) Program components up to a maximum of 50%

a) incremental construction costs (to a maximum), b) consultation costs, c) energy modeling, and d) certification fees

ERASE Redevelopment Grant Program (RGP)

• 80% of City portion of tax increase rebated annually for up to 10 years (grant)

• Development MUST increase assessed value (AV) and property taxes

• Development Charge Reduction option

Example

GRANT CALCULATION – Remediation and Redevelopment of Select Mazda – 347 Centennial Parkway North

– The Grant shall be calculated according to the following formulas:

Grant Level (% of Tax Increment): 80%

Total Remediation Costs $243,250

Demolition Costs $43,000

Infrastructure Upgrades (@25%) $30,155

Total Eligible Costs $316,405

Example of Grant Calculation

Calculation of Grant Payment in Year 1 (Initial Grant)• Increase in MVA from $458K, to $1.7 million• Municipal Tax Increment = Post-project Municipal Taxes

(actual) - Pre-project Municipal Taxes = $38,813• Maximum Grant Payment in Year 1 = $38,813 x 0.80 =

$28,650• Therefore Grant Payment Year 1 is $28,650• Owner receives $28,650 per year for ten years (or up

to eligible amount of grant - $316,405) & program ends.

Select Mazda - Before

Select Mazda – After

ERASE Tax Assistance Program (TAP)

• Matching education assistance with the RGP

• Freezing

• Maximum 18 months during the remediation and maximum 18 months during the redevelopment period, or

• Or cancellation of taxes 36 months post development

• Remediation only

LOWE’s

• $1,281,900 Tax Assistance and ERASE Redevelopment Grant for environmental site remediation, demolition and infrastructure upgrading

• 12 acre site on Barton Street

• Construction of 140,000 sq.ft. commercial building

Lowe’s - Before

Lowe’s - After

ERASE Municipal Acquisition & Partnership Program (MAPP)

• City property acquisition, investment and involvement in pilot projects with the private sector to clean up and redevelop brownfield sites

• Innovative remediation techniques

• Requests for Proposals (RFP’s) on municipally owned brownfield sites and/or participate in private/public partnerships

Hamilton General Hospital

• Hamilton Health Sciences (HHS) partnered with Private enterprise, the City and FCM to rehabilitate a five-hectare site comprised of four former industrial properties

• Former Stelco Nail factory failed tax sale• Redevelopment of property included new parking and

expansion of Hospital (David Braley Cardiac, Vascular and Stroke Research Institute)

Braley Centre

ERASE Program Results Since 2001

• 22 Redevelopment Grant applications • 4 Brownfield Pilot Projects• Total construction expenditures in excess of

$249 million• Remediation and redevelopment of over 161

acres of formally vacant and underutilized brownfields

• Projects anticipate to be awarded a total of approximately $9.5 million in ERASE Redevelopment Grant funding

• Estimate of approx. 450 new jobs

NEW! – ERASE Hamilton Downtown/West Harbourfront Remediation Loan Pilot Program

• Low interest loan for the remediation of properties being developed/ redeveloped for residential or residential/commercial use

• loan equal to 75% of the cost of remediating a property within the defined areas to a maximum of $100,000

• loan is to be a ‘bridge’ until such time as the property owner receives their ERASE Redevelopment Grant money

• As such, the grant will be assigned by the owner to the City of Hamilton to repay the loan

Hamilton LEEDing the Way

What is LEED Certification?

• Leadership in Energy and Environmental Design (LEED) is a rating system administered by the Canada Green Building Council which takes a sustainable development to the design, construction and operation of the built environment.• LEED Certification verified at 4 levels

– certified, silver, gold, platinum

Benefits of LEED Buildings

• Minimizes the impacts of buildings on the environment and on occupants

• Less energy consumption• Less potable water use• Less solid waste• Healthier indoor environments• Reduce City infrastructure costs• Less overall environmental impact is good

business and for the community

Examples of LEED Buildings in Hamilton

McMaster University Les Prince Hall 2007 LEED Certified

Steel Care Plant 19 2006 Canada’s

First LEED Gold Industrial Building

Examples of LEED Buildings in Hamilton

City of Hamilton’s Woodward Ave Environmental Laboratory LEED Silver Pending

McMaster Innovation Park Master Plan

Sustainable Building

LEEDING the WayCommunity Improvement Project Area

• Original CIP Project Area (September 2008) included Industrial Business Parks, Bay Front & East Hamilton Industrial Areas

• Limited to Industrial and Commercial Developments / Redevelopments

Hamilton LEEDING the WayCommunity Improvement Project Area Expansion

• Expansion of CIPA to the entire Urban Area of City of Hamilton (April 2010)

• Additional Land Uses – including Mixed-Use and Multi-Unit Residential (as defined in Part 3 – Group C – of the Building Code)

LEED Grant Program (LGP)

• Economic catalyst for construction of sustainable buildings and land development

• City to share (50/50) incremental construction costs (to a maximum)*, consultation, energy modeling and certification fees to achieve LEED certification

*eligible costs based on level of LEED certification achieved

LEED Grant Program (LGP)

• A five year grant, based on pre- & post development assessments & is subject to Council approval. Grant not to exceed 75% of municipal tax increase over the grant period as a result of the LEED development / redevelopment

• Initial grant payment the year after the building has been officially certified by Canadian Green Building Council.

• Grant is assignable• Other incentive programs apply – except other TIF

programs

Brian Morris, Ec.D., LEED Green Assoc.Business Development Consultant

Economic Development & Real Estate DivisionCity of Hamilton

905-546-2424 x. 5602brian.morris@hamilton.ca

brownfieldoffice@hamilton.ca

Thank You!