Report to: Development Services Committee Report Date: January 12, 2010

SUBJECT: Approval of a Markham Designated Heritage Property Grant Program

PREPARED BY: Regan Hutcheson, Manager, Heritage Planning, ext 2080

RECOMMENDATION:

1) That the report entitled “Approval of a Markham Designated Heritage Property Grant Program”, dated January 12, 2010, be received;

2) And that the Markham Designated Heritage Property Grant Program and Guidelines (attached as Appendix “A” to this report), be approved for a four year period (2010-2013);

3) And that a by-law be adopted to implement the program generally in the form attached as Appendix “B” to this report;

4) And that a reserve fund entitled “Designated Heritage Property Grants” be established;

5) And that the Designated Heritage Property Grant Reserve Fund be allocated $120,000 in funding for the four year period (2010-2013) from the following sources:

(i) a transfer of $95,000 from the Heritage Loan Reserve Fund; and

(ii) a transfer of the $25,000 in the 2008 Capital Project - Residential/Non-Commercial Heritage Grant Program;

6) And that Staff be authorized and directed to do all things necessary to give effect to this resolution.

EXECUTIVE SUMMARY:

Not applicable

1. Purpose 2. Background 3. Discussion 4. Financial

5. Others (HR, Strategic, Affected Units) 6. Attachment(s)

PURPOSE:

The purpose of this report is to obtain approval for the Markham Designated Property Grant Program to allow implementation of the program in 2010 for a four year period based on an allocation of $30,000 per year for a total commitment of $120,000.

BACKGROUND:

Council previously directed staff to review other Canadian incentive programs

Council directed staff to investigate what types of financial and non-financial programs were being offered in other Canadian municipalities for downtown renewal and heritage designated properties. The results of this analysis assisted staff in creating the Town’s façade and signage improvement programs, and was found to be useful in determining whether a more comprehensive assistance program is warranted in Markham. Staff discovered the further need for a grant program focussed on residential heritage property owners as well as institutional owners (i.e. churches) and commercial heritage owners outside of heritage districts. The report entitled “Review of Canadian Municipal Incentive Programs for Heritage Preservation and Downtown Renewal” was received by Development Services Committee on May 18, 2004.

Council has created a number of heritage financial assistance programs to address specific issues

Council currently offers the following financial assistance programs to the heritage community:

1. Heritage Property Tax Program - offers an annual property tax refund to help offset the additional maintenance costs associated with conserving the heritage features on a designated property. Municipal and education tax components can be reduced by 30%. Requires owners to enter into a Heritage Easement with the Town.
2. Heritage Loan Fund - Offers a short term loan (5 years) of up to $15,000 at a reduced interest rate to restore heritage features or replicate lost features on a designated property. The program was created in 1981 and was initially funded in the amount of $200,000 from the tax base. Currently, the fund has $386,375 through accrued interest.
3. Commercial Façade Improvement Grant - provides matching grants of up to $15,000 to assist in the restoration or improvement to exteriors of commercial properties in heritage districts.
4. Commercial Signage Replacement Grant - provides assistance up to $1,000 to
   replace inappropriate commercial signage in a heritage district. This matching grant helps to fund the production and installation of new signage.

Requests have been received for a designated property grant program

In January 2007, Heritage Markham recommended that the Heritage Section investigate the potential for a Markham grant program for designated residential heritage buildings to assist with restoration work similar to a grant program approved by the City of Brampton, or the former designated property grant once offered by the Ontario Ministry of Culture.

In June 2007, as part of the approval of the Thornhill Heritage Conservation District Plan (2007), Council directed staff to examine various options including a matching grant program or enhanced loan program for non-commercial designated properties to assist in heritage restoration projects, potentially using some of the monies currently allocated to the Heritage Loan Fund. This was in response to the feedback provided by residents during the study process who wanted the Town to take a more active role in providing financial assistance if heritage materials and features were required to be preserved.

Council approved the allocation of designated heritage grant funding in 2008.

As part of the 2008 capital budget, an allocation of $25,000 was identified as being funded through monies from the Heritage Loan Reserve Fund. A draft grant program was presented to and supported by Heritage Markham in April 2008 which would “encourage the preservation, restoration and enhancement of heritage buildings in the Town of Markham by providing a financial incentive to private owners of designated properties for the repair and restoration of existing heritage features and the restoration of missing heritage features”. However, the final program details and guidelines were not developed at the time and the program has not yet been implemented.

OPTIONS/ DISCUSSION:

The use of grant assistance is a common municipal heritage financial incentive

The examination of municipal incentive programs in Canada that was undertaken by the Planning and Urban Design Department in 2004 discovered the following information concerning the use of grant assistance:

· This form of incentive is the more popular form of assistance related to heritage specific programs, and it is also used for both designated properties and downtown renewal programs

· Type of eligible work is primarily exterior restoration and renovation (façade improvements) and conservation of heritage features

· Professional fees often are eligible

· Interior improvements are rarely eligible

· Grants range from $1,000 to $200,000, many in the range of $1,000-5,000.

· Most programs are 50/50 (municipality/owner) matching grant programs

· There is usually a requirement for larger grants to protect the investment through an easement registered on title.

At present, many Ontario municipalities including Toronto, Ottawa, Brampton, Kitchener, Richmond Hill and Mississauga offer designated property grants for heritage restoration work.

Ontario Heritage Act allows Council to provide grants

Sections 39 and 45 of the Ontario Heritage Act allow a Council of a municipality to provide grants to owners of property designated under the Act for the purpose of paying (in whole or in part) the cost of alteration of such designated property on terms and conditions as Council may prescribe.

There is a demonstrated need for a Designated Heritage Property Grant

Over many years, in response to the requirement or the request to preserve or conserve heritage materials or features on designated buildings, Heritage Section staff has encountered the appeal from property owners for municipal financial assistance. Home owners are often frustrated that they must maintain heritage materials but without any direct financial assistance from the Town. Designation does not require a property owner to undertake any restoration work. In some cases, heritage properties deteriorate to the point where the heritage features and materials become threatened or have to be replaced.

The Town’s commercial façade/sign grant program has been well received but is only applicable to commercial properties in heritage districts. The loan program was very popular when interest rates were high, but has very little take-up in today’s market. The heritage property tax program rewards owners with a reduction in their property taxes for their ongoing stewardship and maintenance of their heritage property but requires a Heritage Easement as a condition of assistance. Experience has shown that designated property grants provide an excellent incentive to owners to actually undertake necessary work and spend more on their restoration projects. This is especially true in cases of historic window restoration and conservation or replication of decorative exterior trim. It also encourages owners to designate properties voluntarily.

At present, there would be approximately 530 eligible properties in Markham (individually designated properties and significant heritage properties in heritage conservation districts). Based upon resident feedback and comments from other municipalities with a similar program, Markham could expect this program to be well received with 5-10 grant applications per year, and subject to the financial parameters to be established by Council (see below). Each application will be subject to approval by Council, and staff will also report to Council on an annual basis regarding overall program take-up within the available funding allocation.

Markham’s Designated Heritage Property Grant Program

The full details of the proposed program are presented in the Guidelines document (Appendix ‘A’) and the draft By-law (Appendix ‘B’). Highlights include:

• Total funding in the amount of $120,000 to be allocated to the program over a four year period (2010-2013) based on a targeted allocation of $30,000 per year;
• Assistance to the owner is in the form of a grant representing 50% of eligible work up to a maximum limit of $4,000 per property for eligible work (the amount of $4,000 is based upon funding programs offered in other Ontario municipalities and the desire to not require a heritage easement as a condition of funding);
• Minimum amount of eligible work - $500;
• Properties must be designated under the Ontario Heritage Act (Part IV or Part V). In the case of Part V (Heritage Districts), only properties identified in a district plan as being of cultural heritage value or interest are eligible;
• Ineligible Projects- Commercial façade projects in heritage districts as there is a separate program and projects in Markham Heritage Estates as these owners already receive a financial incentive through reduced lot prices;
• Grants are to be awarded on an annual cycle following a request for applications with a deadline established;
• Only one grant per calendar year per property;
• Subject property must be in conformity with municipal by-laws and regulations;
• Eligible work primarily involves the repair, restoration or re-creation of heritage features or components (cornices, parapets, doors, windows, masonry, siding, woodwork, verandas, etc.);
• Eligible costs include the cost of materials, equipment and contracted labour (but not donated labour or materials). A grant of up to 50% for architectural/ design/ engineering fees to a maximum of $1,000 (as part of the maximum permitted grant of $4,000) is available;
• Two separate estimates of work (due to the specialized nature of the work) are to be provided by a licensed contractor (other than the owner) for consideration;
• Applications will be reviewed by Town (Heritage Section) staff and recommended submissions will be forwarded to Council for approval;
• Grant commitments are valid for 1 year and expire if the work is not completed within that time period (an extension may be granted);
• Grants are paid upon submission of receipts to the satisfaction of the Town;
• Qualifying work cannot commence prior to application approval;
• Approved applicants will be required to enter into a Letter of Understanding with the Town.

FINANCIAL CONSIDERATIONS AND TEMPLATE:

Funding the Program

It is recommended by staff that $95,000 of the required funding for this grant program be transferred from the existing Heritage Loan Fund Reserve. The loan fund was established in 1981 with an allocation of $200,000 (tax based) and has been used successfully for many years when interest rates were very high. The current balance is $386,375 representing $186,375 in accrued interest. Therefore, staff recommends the following:

Ø Establish a Designated Heritage Property Grant Reserve Fund in the amount of $120,000 for a four year period (2010-2013) from the following funding sources:

o A transfer of $90,000 from the Heritage Loan Reserve Fund; and

o An additional transfer of $5,000 from the Heritage Loan Reserve Fund to be allocated to the 2008 Capital Project-Residential/Non-Commercial Heritage Grant Program ($25,000 had been previously transferred from the Heritage Loan Reserve in 2008) for a total program funding of $120,000 ($90,000 in the newly established reserve and $30,000 in the 2008 Capital Project);

Ø Retain $291,375 ($386,375-$95,000) in the Heritage Loan Fund Reserve;

Ø Allocate $30,000 per year for four years (2010-2013) for this Program through the annual Capital Budget Process;

Ø Any funds remaining in the annual budget of the Program and not allocated for a specific calendar year be transferred for use to the next calendar year;

Ø Report to Council in the 4^th year on the Program. Any funds remaining in the Grant Program at the end of the four year period could be transferred back into the Heritage Loan Fund Reserve or, subject to the approval of Council at the time, continue to be used for a future Designated Heritage Property Grant Program.

This program will not have any financial impact on the current tax base as it will be funded from accrued interest in the Heritage Loan Fund Reserve.

HUMAN RESOURCES CONSIDERATIONS

Not applicable.

ALIGNMENT WITH STRATEGIC PRIORITIES:

This project aligns with the Growth Management priority by working to preserve resources and features of cultural heritage value in order to create a better quality of community.

BUSINESS UNITS CONSULTED AND AFFECTED:

Reviewed by Financial Services, Legal Services and Heritage Markham Committee

RECOMMENDED BY:

____________________________ ______________________________

Valerie Shuttleworth, M.C.I.P., R.P.P. Jim Baird, M.C.I.P., R.P.P.

Director, Planning and Urban Design Commissioner of Development Services.

ATTACHMENTS:

Appendix “A” Designated Property Grant Program - Guidelines

Appendix “B” Designated Property Grant Program By-law

File path: Q:\Development\Heritage\SUBJECT\Grant Program Designated Property\DSC jan 2010 program.DOC