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City seeks buyers for Lively industrial properties

In a 2013 interview, Tony Derro, the city's manager of taxation, said recovering back taxes from owners of brownfields is often a huge challenge for the city.
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The Kingsway Hotel, which opened in the early 1960s, will be demolished and the land sold following a recent city council decision to take ownership of the property because of a more than $200,000 tax bill. Photo by Heather Green-Oliver.
In a 2013 interview, Tony Derro, the city's manager of taxation, said recovering back taxes from owners of brownfields is often a huge challenge for the city.

While the city can take ownership of any property once tax arrears reach a certain point, brownfields can be particularly risky. Taking ownership could mean the province or a future owner could hold the city liable for any environmental problems that arise long-term.

“We’re cautious about getting on a property that we may be ordered by the Ministry of Environment to clean up,” Derro said in 2013. “We’re very, very careful about that. Because once one is on the title, one could be a potential cleaner.”

David Petrie, an operations assistant with the Canadian Brownfield Network, said municipalities across Canada are struggling to deal with the issue of brownfields and the problem of collecting delinquent taxes from their owners.

So, for example, if Sudbury took title of a brownfield because a property owner failed to pay taxes, cleaned it up and then sold it to someone else, they could still be liable for problems in the future, Petrie said.

“Say 10 years down the road they discover that, whatever the original environmental problem was, it has caused leaching into the water table and nearby businesses and homes are affected,” he said. “Those businesses and homeowners can go back, as far back as they want to, really, to find somebody to hold liable. And municipalities are seen as a good target, particularly when the earliest owner is no longer around or doesn’t have the resources to pay.

“It becomes very, very difficult for municipalities to avoid liability.”

Rather than taking ownership of brownfields, the city has implemented a brownfield strategy that offers buyers a number of incentives to make the properties more attractive.

They include municipal tax forgiveness while the new owners are rehabilitating the property; reduced tipping fees for soil being removed as part of the cleanup; rebates for building and other permits; and grants to help pay for remediating the land.

The strategy won the 2013 Federation of Canadian Municipalities Sustainable Communities Award. In February, a former welding shop in Chelmsford that's being redeveloped into a four-unit residential building received $44,792 in assistance through the brownfield strategy.

While resistant to take ownership of brownfields, the city did vest the former Kingsway Hotel earlier this year. The building was demolished and the land levelled this spring. It's being offered for $525,000.

Darren MacDonald

About the Author: Darren MacDonald

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