“The high property values and the rising real estate market are having a corresponding negative impact by driving creative industries out of our cities,” Cressy said at council’s 2018 budget meeting Monday. “And this is a problem not just because the absence of arts and culture makes for an unlivable city, but more broadly this hurts the economy.”
Councillors at executive committee earlier this month originally passed a 30 per cent reduction for “creative co-location facilities” but voted in favour of upping it to 50 per cent on Monday.
“We are thrilled,” said Tim Jones, CEO of Artscape, a not-for-profit developer that operates several buildings at below-market rates for culture-sector tenants. “(The reduction) is going to make a huge difference not only to our existing properties, but to our ability to actually look at new properties both in the core and outside of the core.”
Artscape Distillery Studios saw property taxes increase 106 per cent over five years, said Jones. It is home to 63 work and retail studios, offices and rehearsal and performance spaces. 401 Richmond St., owned by Urbanspace Property Group and one of the city’s largest cultural institutions, saw a 40 per cent increase over the same period.
Less than 20 properties will request and be approved as part of the subclass and the tax reduction will amount to about $1.6 million in 2018, Cressy told the Star. But that amount will be spread across 40,000 commercial properties and therefore become negligible.
To qualify as a creative co-location facility, buildings must have tenants that produce cultural goods and services, charge tenants below market rent, and have a minimum rentable space of 10,000 square feet, 5,000 square feet if owned by the city, or house more than 40 separate tenants, among other requirements, said a staff report.
Cressy pushed for a 50 (instead of 30) per cent reduction to ensure these organizations are “not only here to stay, but here to thrive,” he said at council. The benefits of a 30 per cent reduction would be “wiped out” the next assessment cycle, with property taxes likely to keep increasing.
Councillor Paula Fletcher expressed her support for Cressy’s motion saying the subclass is introducing “an instrument to make it more attractive to establish these types of really critical cultural hubs in our city.”
City staff will monitor the impacts of the new subclass and tax reduction, and report back to council in 2019.