Proposed heritage incentive plan would offer grants, but not property tax discount


Somerset House – 352 Somerset (former Duke of Somerset pub). One of a couple of dozen of properties on a heritage watch list.

Julie Oliver / Postmedia

The City of Ottawa wants to increase financial incentives for owners of heritage properties to restore their buildings, but it won’t go as far as discounting their annual property taxes.

The proposed community improvement plan tailored for heritage properties has emerged as one of the key proposals from a task force struck by Mayor Jim Watson in 2016 when the city watched some of its landmark properties fall into decay, creating a blight on the capital’s streetscapes and raising a suggestion that landowners were letting their buildings fall into disrepair to win approval for demolition.

Somehow, the city needs to get owners of vacant heritage buildings to breathe life into their properties — think Somerset House in Centretown, or the former Our Lady’s school in Lowertown, or the Magee House in Hintonburg.

Watson supports creating a grant-based community improvement plan for heritage properties because it will help protect Ottawa’s heritage assets, said his spokeswoman Livia Belcea.

David Flemming, who sits on the mayor’s task force, said Heritage Ottawa has been advocating for a property tax discount for owners of heritage buildings, but he sees a community improvement plan as a step forward.

“It’s a good start,” Flemming said. “If we have a light at the end of the tunnel here, we should go to it.”

A community improvement plan, or CIP, under provincial planning law allows municipalities to distribute grants to landowners in priority areas. The City of Ottawa has created CIPs for the Orléans, Bells Corners and Vanier areas to stimulate business activity and beautification. There’s also a program to encourage the development of eyesore, contaminated properties known as brownfields.

The city believes it can create a CIP specifically for properties designated by council under the Ontario Heritage Act, and especially for those located in the city’s design priority areas, like downtown communities and main streets.

The theory is, a heritage property that’s repaired or developed in a way that protects the heritage attributes will see an increased property value assessment, and consequently, an increased property tax bill.

The CIP would provide a grant covering up to 75 per cent of increased portion of the property taxes for up to 10 years or up to the value of the restoration work to a maximum of $500,000.

Under the plan, all the rebates handed out in a given year wouldn’t be able to exceed $500,000. In other words, $500,000 would be the city’s annual budget for the heritage CIP program.

The city initially wants to make the heritage CIP available to applicants for three years to gauge the impact of the grants.

In researching options to incentivize landowners, the city discovered that more than 30 municipalities in Ontario offer some kind of tax-break program for heritage properties. In some cases, municipalities are offering refunds of up to 40 per cent of heritage landowners’ property tax bills, with the province even providing refunds for the education portion of the bills. Heritage buildings, which sometimes have ornate features, require money to maintain and those municipalities recognize the financial burden through those tax breaks.

The City of Ottawa doesn’t want to go that far, but it wants to do better than the heritage grant program already on the books. That program offers grants up to a maximum of $25,000 for restoration work.

Flemming, who has long supported the idea of a property-tax discount for heritage building owners, said the city has suggested to him in the past that a regular tax break could create a revenue dilemma, especially since the federal government owns heritage structures and could ask for a discount in the money it pays city hall in lieu of property taxes.

The CIP program would only work if it gets buy-in from heritage property owners.

Somerset House at Somerset and Bank streets is constantly cited as the textbook case for why the municipality needs to come up with a strategy to encourage redevelopment of rundown heritage properties.

Would the proposed CIP convince Somerset House’s owner to ramp up his redevelopment plan? He couldn’t be reached for comment by deadline Tuesday.

The CIP recommendations are scheduled to be discussed by the built-heritage subcommittee on Monday and the finance and economic development committee on Nov. 5 before going to council for final approval on Nov. 27.


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