Last December, councillors slapped a moratorium on its brownfield redevelopment program after reviewing a grant application from SmartCentres, which is turning the old Laurentian High School at the corner of Clyde Avenue and Baseline Road into a new mixed-use commercial centre.

Heating oil tanks have leaked into the soil and groundwater beneath the former school, which also contained asbestos in some areas.

At the time, city staff recommended that the grant application, worth a maximum of $3.44 million over 10 years, be approved. However, councillors instead deferred the motion and directed staff to review the city’s policies.

Under changes approved last week, off-site infrastructure costs such as road and utility upgrades will no longer be included in the program and eligible on-site infrastructure costs will be capped at 50 per cent.

Dennis Eberhard, SmartCentres’ vice-president of development, says the project will proceed as planned, but says he is “disappointed” the city changed its policies after his company submitted its application and factored the anticipated grant into its business model.

“We provided the school (board) with a healthy amount of money for their property and we anticipated the (city’s brownfield) policy would be supportive of what we were doing,” he says.

“We did our research and felt we were a good candidate and staff agreed when we applied.”

Under the program, the city does not offer any up-front cash to developers. Instead, it rebates 50 per cent of the annual increase in municipal property taxes resulting from redevelopment.

These rebates are offered for a maximum of 10 years in “priority” areas, such as along main streets and in close proximity to transit stations, and five years in the rest of the city.

Rebates are also capped at 50 per cent of the eligible costs incurred in remediating a site.

This is less than in Kingston, Cornwall, Hamilton, Niagara Falls, Guelph and Chatham-Kent, where rebates go up to 80 per cent, while Waterloo offers 100 per cent, according to the staff report.

The bulk of the eligible costs incurred by developers come from demolishing existing buildings and removing contaminated material, says city planner Joseph Phelan.

However, infrastructure such as water mains and sanitary sewers must frequently be upgraded or replaced due to the age of the property.

Ottawa previously allowed all on-site and off-site infrastructure costs to be included in the calculation of the property tax rebate, as does Niagara Falls and Chatham-Kent.

Eliminating off-site infrastructure from the program and capping on-site infrastructure at 50 per cent “reduces the overall competitive attractiveness” of Ottawa’s incentive program compared to other municipalities, city staff say in their report. However, they say that on balance, the city’s program still offers a viable incentive to promote brownfield redevelopment.

SmartCentres’ Mr. Eberhard says Ottawa’s program remains “very comprehensive” but says his company does business in other communities that offer “much more favourable” grants.

The SmartCentres application now stands to receive up to $1.9 million in property tax rebates, roughly $1.5 million less than under the original policy.

Unlike the other two projects approved under the three-year-old policy, more than a third of SmartCentres’ eligible costs were from upgrading or replacing off-site infrastructure.

Claridge Homes will receive a maximum of $3.79 million for its Edinburgh Common neighbourhood on Landry Street while the Redevelopment Group is slated to receive up to $1.89 million for its Le Saint Denis condos in the former Ecole Cadieux on St. Denis Street.

According to the city, these projects – both in the Vanier area – contain a total of 393 residential units with an estimated construction value of $38.68 million.

The changes to the city’s brownfield policy will not apply retroactively to the above two projects.

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