Revitalization Tax Exemption (1114 Baker Street)TITLE:
PREPARED BY:
Rob Price
To consider entering into a Revitalization Taxation Exemption Agreement with Collective Assets Limited Partnership, with respect to the recently completed renovations of an existing building located in downtown Cranbrook.
RECOMMENDED BY: Staff
THAT Council authorize the City to enter into a Revitalization Taxation Exemption Agreement with Collective Assets Ltd., Inc. No. 2021302936, for renovation improvements made to an existing building located at 1114 Baker Street, legally described as Lot A, District Lots 5 & 29, Kootenay District, Plan 8764 (PID 013-530- 488)
BACKGROUND INFORMATION: Collective Assets Limited has applied to the City to take part in the Downtown Revitalization Taxation Exemption with respect to renovations carried out to an existing commercial buildings located at 1114 Baker Street. The project involved interior and exterior renovations. The building had been vacant for several years and required extensive upgrades to electrical and mechanical systems. Renovations included a revitalized interior space for the Mission Thrift Store - the anchor tenant and the creation of two smaller lease spaces fronting Baker Street. Exterior renovations included entrance build-outs, a variety of new metal siding panels for walls and parapet, refinished canopy with wood soffit and pot lights. repainted surfaces, new lighting and signage. Staff Comments The property is located in the City's downtown core in Revitalization Area C and zoned C-1 - Community Commercial Zone (see attached map). The project qualifies for an exemption of 75% of the municipal share of the property tax due annually on the amount of any increase in the assessed value related to improvements on the parcel for a period of 5 years: where the development has a construction value of at least $400,000.00, as determined based on Building Permit value. In July, 2019, a Development Permit was approved for building renovations. Building occupancy has been granted and two retail businesses are currently operating in the space. The indicated Building Permit construction value and submitted financial information confirm the project meets the above criteria qualifying it for the tax exemption. While the current municipal taxes have not been paid for the property, commercial businesses have until September 30, 2020, to pay due to the Covid pandemic.
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COUNCIL REPORT – REVITALIZATION TAX EXEMPTION (1114 BAKER STREET) ALTERNATIVE: NIL BUDGETARY IMPACT: The exemption will provide a tax exemption of 75% of the municipal share of property tax payable on the amount of any increase in the assessed value related to improvements on the parcel for a period of 5 years commencing in 2021. POLICY IMPLICATION: NIL ATTACHMENTS: Rivitalization Area Map Cover Letter - 1114 Baker St Elevation Drawing - 1114 Baker St Draft Schedule B Revit Tax Exemption Agreement Approved By: Status: Marnie Dueck, City Clerk Approved - 09 Jul 2020 Ron Fraser CAO, Acting Chief Administrative Officer Approved - 09 Jul 2020
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AreasMOUNTAIN!O7OPPOIVUNTIVR ev ita liz ati on
AreaA_Kimberley'A'\/Vycliffe*9@ Cran brook
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January 29, 2020
To: The City of Cranbrook
Please accept this letter outlining the revitalizationof the building located at 1114 Baker St in Cranbrook, BC.
CAL purchased the property in the spring of 2019 with the intention of renovating the property to attract new tenants. Prior to purchasing the building, it had been vacant for a number of years, and was in poor condition overall. The construction process began in summer of 2019 and was completed by December 2019. Construction included but was not limitedto; extensive upgrades to the buildings electrical and mechanical systems, a thorough renovation of the exterior of the building revitalizing its appearance, a complete redesign and demising of the interiorof the building.When the construction process was complete the space was tum—keyready for our anchor tenant -
Mission Thrift.
MissionThrift is a non-pro?t organization who serve as the anchor tenant at 1114 Baker St. We have two other leasable spaces, which have generated interest from local users. Additionally,as a further contribution to the community, we are coordinating a competition for a public art mural on the building. This competition willtake place in 2020.
l have attached the construction invoices from our general contractor - Wards Bros Construction. The total of the construction value from Wards alone far exceeds the $400,000 minimumvalue, however there are many other construction related costs we have incurred. if more documentation is required, please let me know.
We believe that the DowntownRevitalizationTax Exemption Program was created to encourage a redevelopment project such as this and hope that this project willbe approved.
Please contact myself or our team should you require any further information.
Sincerely,
./ ' L r?"‘L/'gawk Kendal Hachkowski Managing Director Collective Assets Limited
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This Agreement dated for reference the
SCHEDULE ‘B’
BETWEEN:
Collective Assets Ltd., Inc. No. 2021302936 1114 — Baker Street Cranbrook, B.C., V1C 1A8 (the "Owner")
AND:
CORPORATION OF THE CITY OF CRANBROOK, 40—10"‘Avenue Cranbrook, British Columbia V1C 2M8 (the “City")
GIVEN THAT:
A The Owner is the registered owner in fee simple of lands in the City of Cranbrook at 1114 Baker Street legally described as Lot A, District Lots 5 and 29, Kootenay District, Plan 8764 (PID: O13-530-488);
Council has established a revitalization tax exemption program in a part of the downtown commercial area consisting of the parcels shown within the revitalization areas delineated on Schedule 'A' of “City of Cranbrook Downtown Revitalization Tax Exemption Bylaw No. 3746, 2012";
Council's objectives in designating the parcels within the revitalization areas are to encourage new commercial development in the downtown core, encourage development of mixed use commercial / residential uses; and encourage downtown businesses to enhance or redevelop their interiors and exterior facades;
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The Owner altered the existing improvement consisting of extensive exterior and interior renovation of the building, (the “Project”), on the Parcel and has applied to the City to partake in the revitalization tax exemption program in respect of this Project and the City has agreed to accept the Project under the program;
THIS AGREEMENT is evidence that in consideration of the following commitments, the Owner and the City covenant and hereby agree that:
1. The Project — The Owner will use its best efforts to ensure that the Project, is constructed, maintained, operated and used in a fashion that will be consistent with and will foster the objectives of the revitalization tax exemption program as set out in the “City of Cranbrook Downtown Revitalization Tax Exemption Bylaw No. 3746, 2012”.
Operation and Maintenance of the Project — Throughout the term of the Tax Exemption the Owner must operate, repair and maintain the Project and keep the Project in a state of good repair as a prudent owner would do.
Revitalization Tax Exemption — Subject to fulfillmentof the conditions set out in this Agreement and in the “City of Cranbrook Downtown Revitalization Tax Exemption Bylaw No. 3746, 2012”, the City will issue a revitalization tax exemption certificate (the "Certificate") to the Owner and provide the relevant assessor of BC Assessment with a copy of the Certificate entitling the Owner to a property tax exemption in respect of the Parcel (the "Tax Exemption") for the calendar years set out in this Agreement. The Certificate will be in the form attached to the Bylaw as Schedule 'C'.
Conditions — The following conditions must be met before the City will issue a Certificate to the Owner:
a) The Owner must obtain a Development Permit, ifapplicable, from the City for the Project prior to commencing the Project.
b) The Owner must obtain a Building Permit, if applicable, from the City for the Project prior to commencing the Project.
d) If the Project consists of a mixed use commercial / residential development the number of new dwelling units constructed must total four (4) or more dwelling units.
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e) The Owner must complete, or cause to be completed, construction of the Project in conformance with the conditions of all Development Permit(s) and/or Building Permit(s) issued for the Parcel and in compliance with all laws, statutes, regulations and Orders of any authority having jurisdiction, including bylaws of the City.
f) The Owner must provide the City with documentation from the Owner's design professional, or copies of valid paid invoices for work completed for the Project, in a form and content satisfactory to the City's Director of Corporate Services, which certifies that the actual costs to construct the Project exceeds $400,000.
Calculation of Revitalization Tax Exemption — This Certificate certifies that the Parcel is subject to a revitalization tax exemption in an amount equal to 75% of the municipal share of property tax payable on the amount of any increase in the assessed value related to improvements on the parcel calculated as the difference between:
a. The 2019 Revised Roll assessed value of the improvements; and
b. The Revised Roll assessed value of the improvements in the year in which the Tax Exemption Certificate is applicable
Term of Revitalization Tax Exemption — The maximum term of the Tax Exemption under this Agreement shall be 5 years subject to issuance of a Tax Exemption Certificate by the Director of Finance & Computer Services.
Effect of Stratification — If the Owner stratifies the Parcel or the Project under the Strata Property Act, then the Tax Exemption shall be prorated among the strata lots in accordance with the unit entitlement of each strata lot for:
a) the current and each subsequent tax year during the currency of this agreement if the strata plan is accepted for registration at the Land Title Office before May 1 in the year of stratification; or
b) for the next calendar year and each subsequent tax year during the currency of this agreement if the strata plan is accepted for registration at the Land Title Office after May 1 in the year of stratification;
provided the property owner has assigned this Agreement to the strata corporation.
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8.
10.
11.
12.
Cancellation
a) The City may cancel the Certificate if the Owner requests cancellation in writing or fails to meet any of the conditions specified in the Certificate as conditions on which the Tax Exemption was provided.
b) If a Certificate is cancelled on or before October 31 in any year, it will apply to taxation in the following calendar year; otherwise it will apply to taxation in the year after the following calendar year.
Recapture — If, pursuant to the terms and conditions specified in this Agreement or the Tax Exemption Certificate, the Certificate is cancelled, the Owner will remit to the City, no later than 30 days after receiving notice from the City of the cancellation and the amount owing, an amount equal to the value of the tax exemption received after the date of the cancellation of the Certificate.
No Refund — For greater certainty, under no circumstances will the Owner be entitled, under this Agreement, the Bylaw, the Certificate or the City's revitalization tax exemption program, to any cash credit, any carry forward tax exemption credit or any refund for any property taxes paid.
Enurement — This Agreement shall enure to the benefit of and is binding on the parties and their respective heirs, executors, administrators, successors and assigns.
Notices — Any notice or other communication required or contemplated to be given or made by any provision of this Agreement shall be given or made in writing and delivered personally (and if so shall be deemed received when delivered) or mailed by prepaid registered mail in any Canada Post Office (and if so shall be deemed delivered on the sixth business day following such mailing except that, in the event of interruption of mail service notice shall be deemed to be delivered only when actually received by the party to whom it is addressed), so long as the notice is addressed as follows:
To the Owner at:
Collective Assets Ltd., Inc No 2021302936 1114 — Baker Street Cranbrook, B.C., V1C 1A8
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And to the City at:
City of Cranbrook 40-107”Avenue South Cranbrook, B.C. V1C 2M8 Attention: Director of Corporate Services
or to such other address to which a party hereto from time to time noti?es the other parties in writing.
No Assignment — The Owner may not assign its interest in this Agreement except to a subsequent owner in fee simple of the Parcel.
Severance — If any portion of this Agreement is held to be invalid by a court of competent jurisdiction, the invalid portion shall be severed and the decision that it is invalid shall not affect the validity of the remainder of this Agreement.
Interpretation — Wherever the singular or masculine is used in this Agreement, the same shall be construed as meaning the plural, the feminine or body corporate where the context or the parties thereto so require.
Further Assurances — The parties hereto shall execute and do all such further deeds, acts, things and assurances that may be reasonably required to carry out the intent of this Agreement.
References — A reference in this Agreement to the City or the Owner includes their permitted assigns, heirs, successors, officers, employees and agents.
Date of Effect — This Agreement shall be effective from and after the reference date in this Agreement, but only if this Agreement has been duly executed and delivered by the Owner to the City and duly executed by the City.
Expens — Unless otherwise expressly provided in this Agreement, the expense of performing the obligations and commitments of the Owner contained in this Agreement, and of all matters incidental to those obligations and commitments, is solely at the expense of the Owner.
Owners Representatio — The Owner represents and warrants to the City that:
a) all necessary corporate actions and proceedings have been taken by the Owner to authorize its entry into and performance of this Agreement;
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b) upon execution and delivery on behalf of the Owner, this Agreement constitutes a valid and legally binding contractual obligation of the Owner;
c) neither the execution and delivery, nor the performance, of this Agreement shall breach any other agreement or obligation respecting the Lands;and
d) the Owner has the corporate capacity and authority to enter into and perform this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written.
Mayor Chief Administrative Officer
Draft Schedule B Revit Tax Exemption Agreement