Winnipeg | Forks Redevelopment | Parcel 4 - Rail Side Initiative | Proposals

[rrskylar]

Originally Posted by CoryB

Is no one else upset the province handed $12 million to The Forks to make this happen by effectively foregoing the education levy on property taxes from this residential development? Then we will get people moving in complaining about how there is no funding for the schools...

Utterly ridiculous, $12 million for a project that should be able to stand on its own feet without govt. handouts.

And meanwhile a company like Bold receives a paltry $125K for employee training when they plan on doubling their workforce from 350 to 700!

[wags_in_the_peg]

Over$110 million PRIVATE investment is happening.

[dmacc]

I think the TIF program is a great idea, I'm sure there are better ways to offer incentives for developers to build a particular vision but I don't know what they are. The TIF program helps fund the public spaces, and helps reduce risk the developers carry. As long as a cost analysis is done and shows the TIF investment will return more within a few years and pay dividends after then why not?

Just wait until the City agrees to cough up TIF funding... some people will be pissed that both levels of government are throwing money at this. The City though is the level of government with the most to gain from this development however. A parking lot paying relatively little in property tax if any will likely generate over $10 million per year after this development is complete. Why wouldn't they be willing to offer up a little money up front.

I generally think better then TIF would be to offer reprieve from Property tax for a period of time after development is complete to provide incentive to developers. That way you pay no upfront costs you just differ the benefit to yourself. It also offers the benefit to the developer to take on the risk of spending capital while offering them a period of time to get the management of the development figured out before having to pay the higher property tax amount.

[Winnipegger]

Originally Posted by dmacc

Just wait until the City agrees to cough up TIF funding... some people will be pissed that both levels of government are throwing money at this. The City though is the level of government with the most to gain from this development however. A parking lot paying relatively little in property tax if any will likely generate over $10 million per year after this development is complete. Why wouldn't they be willing to offer up a little money up front.
.

Actually, the benefit to the City really isn't that much on an annual basis when you consider the level of investment that's being made.

Consider this: based on the info I could find, the surface parking lot next to the Forks was assessed at around $16.5 million in 2019, meaning it paid $143,000 in property tax this year.

Now let's pretend Rail Side is fully built out and when done, in total it's assessed at $110 million - that's a massive investment over the surface parking lot. Keep in mind though, $110 million of assessment is a massive change. Currently, 201 Portage is assessed at less than $93 million, so it would be a stretch to say rail side would be assessed at $110 million.

In any case, the property tax revenue the city gets from a property assessed at $110 million would be around $660,000 per year at 2019 tax rates. That's roughly $514,000 more than the surface parking lot.

Let's pretend the City wanted to also give a $10 million grant to the development. That $10 million grant from municipal coffers means the City would be forgoing the equivalent property tax revenue for around 15 years. So now the city has to wait for over a decade to see the financial "benefits" of the development while still having to provide city services (transit, police, fire, etc.) to the development during that time.

So sure, the investment is an awesome thing for our city in general, but to municipality the effect on revenue is never as big as people think, mostly because our municipal tax rates are so low. That $660,000 annually is enough to pay for maybe 6 police officers.

[wardlow]

Just going to leave this here...


This doesn't show The Forks, but it's clear that dense urban areas perform better than suburban areas, from a tax assessment perspective.

I'm not sure if direct government subsidies of private development downtown is the way or not. It certainly comes with a lot of unintended consequences over the long term. But in any case, it's clear that from the City's perspective, supporting Railside's transition toward density is going to generate a lot more tax revenue than another Royalwood or Sage Creek will.

[dmacc]

Interesting, when the initial proposal for the hotel on Carlton, before TNS, they claimed the site would generate $16 million in property taxes, that does seem high but still a far cry from a few hundred thousand.

I can't imagine the City dropping that much money on a $110 million development. TNS got $15-20 million from the City I think and that was a $400+ million dollar development. This one should get more like $4-5, unless the arguement can be made that this site deserves more capital due to its significance to the Cities culture.

[CoryB]

Originally Posted by rrskylar

Utterly ridiculous, $12 million for a project that should be able to stand on its own feet without govt. handouts.

That is basically my point. Either there is market driven demand for the residential development at The Forks willing the pay the unsubsidized costs or the development should not be proceeding.

I am definitely against how TIF is being used in Winnipeg and Manitoba and that is not specific to this project.

Now say someone came to the table with a proposal to redevelop the downtown Bay building that may be worth a TIF as no one is going to touch it without assistance. The Forks on the other hand, if you let the free market play out someone would fund it without assistance as that is a fairly in demand property if market constraints (The Forks oversight) is removed.

[Winnipegger]

Originally Posted by dmacc

Interesting, when the initial proposal for the hotel on Carlton, before TNS, they claimed the site would generate $16 million in property taxes, that does seem high but still a far cry from a few hundred thousand.

I can't imagine the City dropping that much money on a $110 million development. TNS got $15-20 million from the City I think and that was a $400+ million dollar development. This one should get more like $4-5, unless the arguement can be made that this site deserves more capital due to its significance to the Cities culture.

Claims on property tax revenue are complicated.

For residential properties (like Rail Side), as per Provincial legislation properties can only be taxed on 45% of the property's assessed value and have one municipal mill rate and one school division mill rate applied to them.

For commercial properties, like TNS or the initial hotel on Carlton proposal, they can be taxed on 65%of the property's assessed value. While they still only have one municipal mill rate applied to them, commercial properties are subject to two individual school division mill rates - one for the school division and one for general education special levy. Typically this means that commercial properties will generate a good chunk more of property tax revenue, but that extra chunk goes to the Province, not the City.

[dmacc]

How does it work since most of these are mixed use?

How much will be subject to the residential mill rate and how much to business mill rate?

Also, if it's a rental does it pay residential or business mill rate since the business pays the mill rate, not the person living there?

[rrskylar]

Originally Posted by CoryB

That is basically my point. Either there is market driven demand for the residential development at The Forks willing the pay the unsubsidized costs or the development should not be proceeding.

I am definitely against how TIF is being used in Winnipeg and Manitoba and that is not specific to this project.

Now say someone came to the table with a proposal to redevelop the downtown Bay building that may be worth a TIF as no one is going to touch it without assistance. The Forks on the other hand, if you let the free market play out someone would fund it without assistance as that is a fairly in demand property if market constraints (The Forks oversight) is removed.

Bang on! TIF should only be used to help revitalize development in areas of the city where an incentive is needed and not in an area where demand should already be high!

[bomberjet]

Downtown would be a barren wasteland right about now without the various tax relief schemes, tif's and subsidies. How many billions of private money have been spent, how many jobs rely on it. How many people live there because of it.

If it was based solely on what the market dictates, it would be virtually nothing.

Sure the $12 mil in tax relief at the forks would be nice to have in the coffers. I'm not overly upset about it.

[pspeid]

Originally Posted by bomberjet

Downtown would be a barren wasteland right about now without the various tax relief schemes, tif's and subsidies. How many billions of private money have been spent, how many jobs rely on it. How many people live there because of it.

If it was based solely on what the market dictates, it would be virtually nothing.

Sure the $12 mil in tax relief at the forks would be nice to have in the coffers. I'm not overly upset about it.

Exactly!

[Bdog]

Originally Posted by wardlow

Just going to leave this here...

Where is this from and what is it measuring?

[dmacc]

Looks like it is measuring the per square foot value of the land a building is on not the per square foot value of the building

[Andy6]

It's a graph of where the tall buildings are, essentially - I guess it's the amount of assessed value per square foot of land in a neighbourhood. So all the green space in Sage Creek and Royalwood bring their figures down ... is that correct?

[Winnipegger]

Originally Posted by Andy6

It's a graph of where the tall buildings are, essentially - I guess it's the amount of assessed value per square foot of land in a neighbourhood. So all the green space in Sage Creek and Royalwood bring their figures down ... is that correct?

That's likely correct. And while taking assessment value or tax revenue and dividing it by the total amount of space the revenue-generating structure occupies is a decent metric for examining "tax efficiency" of areas or structures, it doesn't tell the whole story.

The cost of providing civic services (roads, transit, police, fire, recreation, administration, lighting, etc.) to citizens in a city is a function of both area and population.

So while denser parts of the city might be more "financially sustainable" because there is more revenue and/or population per unit of land, some civic services are a function of population so it doesn't necessarily mean it's cheaper to provide services to them.

If you jam-packed everyone in Winnipeg in to a single skyscraper that reached in to the stratosphere, the cost for some services might not necessarily be cheaper because those services have their costs driven by population, not area.

Therefore, more dense doesn't always equate to cheaper, as denser areas still require the same amount of police officers per person, fire fighters per person (and perhaps more specialized equipment that is more expensive to service taller buildings), more transit buses, wider lanes, larger recreation centres, etc.

[wardlow]

Originally Posted by Bdog

Where is this from and what is it measuring?

The information is taken from the City of Winnipeg's tax assessment data, which measures $ value per square foot by neighbourhood. However, I admittedly just took the graph from a tweet by this forum's favourite local Twitter personality.

[esquire]

Originally Posted by wardlow

However, I admittedly just took the graph from a tweet by this forum's favourite local Twitter personality.

DJ Blitz?

[trueviking]

Originally Posted by Andy6

It's a graph of where the tall buildings are, essentially - I guess it's the amount of assessed value per square foot of land in a neighbourhood. So all the green space in Sage Creek and Royalwood bring their figures down ... is that correct?

Ha ha. Yeah. It’s not the miles of giant single family homes.

Yes. This is the total assessed value of each neighbourhood. Higher density equals higher value. Debunks the idea that the new suburbs with their big expensive houses are paying for the old ones.

[trueviking]

Originally Posted by Winnipegger

That's likely correct. And while taking assessment value or tax revenue and dividing it by the total amount of space the revenue-generating structure occupies is a decent metric for examining "tax efficiency" of areas or structures, it doesn't tell the whole story.

The cost of providing civic services (roads, transit, police, fire, recreation, administration, lighting, etc.) to citizens in a city is a function of both area and population.

So while denser parts of the city might be more "financially sustainable" because there is more revenue and/or population per unit of land, some civic services are a function of population so it doesn't necessarily mean it's cheaper to provide services to them.

If you jam-packed everyone in Winnipeg in to a single skyscraper that reached in to the stratosphere, the cost for some services might not necessarily be cheaper because those services have their costs driven by population, not area.

Therefore, more dense doesn't always equate to cheaper, as denser areas still require the same amount of police officers per person, fire fighters per person (and perhaps more specialized equipment that is more expensive to service taller buildings), more transit buses, wider lanes, larger recreation centres, etc.

But if the number of people is finite, then the density is the only variable we can control to reduce cost. The smaller area a population lives in, the lower the cost of providing services and infrastructure.

Higher density always equates to cheaper.

if you have 10,000 people living in a neighbourhood, you have one fire hall, one police station, buses run down a small number of streets and drive shorter distances.

if you have 2500 people living in four far flung neighbourhoods you have four of everything. You have way more roads and infrastructure. You drive longer distances. Infrastructure travels longer distances. Buses drive farther. Even if there are the same number of cops (or whatever) per person, spreading them out is more costly than concentrating them.

Distance equals cost. Always.

maybe a higher density neighbourhood has a bigger fire hall or bigger pipes in the ground, but it nowhere near makes up for traveling long distances to different neighbourhoods.