COUNCIL REPORT FILE NO. 6950.30.2001 Regular Council - 13 Jul 2020 TITLE: Revitalization Tax Exemption (1114 Baker Street) PREPARED BY: Rob Price DEPARTMENT: Development Services PURPOSE: 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. Page 1 of 11
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.
Page 1 of 11
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
Page 2 of 11
AreasMOUNTAIN!O7OPPOIVUNTIVR ev ita liz ati on
AreaA_Kimberley'A'\/Vycliffe*9@ Cran brook
Page 3 of 11
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
Page 4 of 11
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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;
Page I 1
Page 6 of 11
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.
Page | 2
Page 7 of 11
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.
Page | 3
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
Page | 4
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;
Page I 5
Page 10 of 11
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