Last year's big projects diversify city tax base
March 09, 2010
Meredith Macleod
The Hamilton Spectator
http://www.thespec.com/News/Local/article/734617
Hamilton made big strides in boosting its non-residential tax base in 2009, with huge gains on the crucial industrial and commercial fronts.
While building permit values were down 15 per cent overall, industrial building permits grew in value by 113 per cent in 2009 over the previous year, and commercial permits increased by 37 per cent.
The industrial permits were valued at $115 million last year and commercial permits valued at close to $195 million.
Director of economic development Neil Everson said the numbers, all contained in a series of economic performance reports to councillors, are a good indicator of current economic activity and job creation. He said other area municipalities did not achieve such growth.
Some of the big projects include the Tim Hortons coffee roasting plant, $30 million; the CANMET materials lab, $60 million; and Mountain Plaza Mall, $55 million.
Others are the Red Hill Toyota dealership, the new Ancaster Fairgrounds, upgrades at ArcelorMittal Dofasco, and the Centre on Barton (the former Centre Mall).
City number-crunchers have long been concerned about Hamilton's heavy reliance on the residential taxpayer and a lack of assessment growth in the commercial and industrial areas.
But last year, both sectors soundly beat the four-year average, by 77 per cent on the industrial side and 72 per cent on the commercial.
Residential building was hard hit by the recession last year, falling 32 per cent in value over 2008.
The city issued $282 million in residential building permits, sharply down from the four-year average of $398 million.
The institutional sector was also off by 57 per cent over 2008, but much of that sector, which includes hospitals and schools, doesn't generate tax revenue for the city.
So far, 2010 is proving to be a strong year, with building permits up 108 per cent over January and February of last year.
The big coup is Canada Bread, which announced last month a $100-million, 375,000-square-foot bakery, which will make it the first tenant in the newly renamed Red Hill Business Park.
That will encourage other businesses to follow, Everson said.
"I call it the lemming effect," he added.
Council members praised Everson and his department for producing such positive results while the city was in the grip of the recession.
"I'm sensing that Hamilton is finally economically gaining at other municipalities' expense where for so many years the reverse was true," said Councillor Tom Jackson.
"We are seeing some spectacular growth," said Mayor Fred Eisenberger. He said performance measures across a broad range of indicators show the city's $1.5-million increase to the economic development budget last year paid off.
Overall assessment growth came in at 1.3 per cent. While that was short of the city's target of 1.5 per cent a year, Everson said it was a good result given the economy last year.
Close to half of the growth came from the industrial and commercial sectors, which had accounted for about a quarter of the growth in the previous two years.
Economic development staff also focused on a business retention program called Hamilton Calling, which surveyed 354 business owners last year.
"The Hamilton Calling program has really ramped up and that to me is the star of the show," said Councillor Brian McHattie.
"Keeping in touch with people who are already here is where our growth is going to be."
Everson said his department will be focused on completing a four-year economic development strategy, expected to be presented to council in June. He said major catalysts will include the Pan Am Games and light-rail transit.
The city is also throwing its efforts into marketing through social media and has been recognized for its success.
IN OTHER MEASURES OF 2009:
* Hamilton's unemployment rate was below the provincial average and two full percentage points below any other manufacturing centre in southern Ontario;
* The city lost 200 businesses in 2009. City council has set a target of increasing the number of businesses yearly by 5 per cent;
* The direct economic impact of film shoots dropped to $6.1 million in 2009 from $6.6 million in 2008;
* The downtown office vacancy rate dropped 25 per cent from 2008 to 2009;
* Only three residential units were added downtown, well short of the target of 150 a year;
* Ancaster Industrial Business Park sold out a 35-acre phase in 10 months;
* The economic development office achieved a 95 per cent approval rating from clients in 2009, breaking a city target of 90 per cent;
* 69 per cent of 354 companies surveyed in the city's Hamilton Calling program said they intend to expand in the next three years;
* The city sold $4.2 million in non-core assets and purchased about $20.5 million in property and capital projects.