Councillors suspicious of Stelco land decision

City rejected tax break, MPAC slashed value

City officials say they were asked for a tax break on vacant Stelco lands just months before Ontario’s independent land assessor controversially slashed the land’s tax value.

That news prompted some local politicians to decry the timing of the property reassessment as suspicious — while provincial Opposition leader Andrea Horwath called Wednesday for an investigation into the “sketchy” decision.

The Municipal Property Assessment Corp. recently revalued 375 acres of vacant Stelco land from $108,000 to $100 an acre — leaving the city short $2 million in expected tax revenue and homeowners facing a 2018 tax hike.

MPAC and the province say the drop in value was due to updated pollution information gleaned during the Stelco sale process and a recent inspection of the vacant property, which is now owned by a still-forming land trust, LandCo.

That body was created as part of a court-supervised agreement brokered by the provincial Liberal government with Stelco’s new owner, Bedrock, with the aim of selling vacant land to help fund the company’s pension obligations.

City finance head Mike Zegarac confirmed Wednesday “property tax relief was raised” at meetings between “LandCo agents” and municipal officials before the court-supervised sale was completed earlier this year.

Councillors Chad Collins and Sam Merulla reported being told by city staffers the issue was raised by LandCo at least twice in the last year.

They said the land trust’s agents were told the tax relief proposals were either unaffordable or outside city jurisdiction.

(The city cannot change the assessed value of a property. It can, however,

take measures like writing off unpaid tax bills, as it did in 2004 for the new owners of Slater Steel.)

Collins said he understood the floated tax relief “mirrored” the $2million tax impact of MPAC’s recent property reassessment. “I think it is more than a coincidence,” he said. “It certainly makes me question the neutrality of the assessment process.” Merulla also called the timing of the reassessment “suspicious” and “insulting.”

Mayor Fred Eisenberger said he believes the prospect of Hamilton “taking a tax haircut” on the vacant properties came up in informal discussions about the complicated Stelco sale, but added “that conversation didn’t have legs.”

“My concern is that an independent agency made an assessment that doesn’t make any sense whatsoever,” he said. Eisenberger pointed out the land was “just as polluted” the last time MPAC assessed the land — yet the value in 2016 was still set at $108,000 an acre. Bedrock has also committed up to $80 million to clean up to the vacant lands, he noted.

Horwath, who represents Hamilton Centre, called on the Liberal government to “scrap” the “fishy” MPAC decision and ask an independent out-of-province body for a redo.

Spokesperson Cathy Ranieri-Sweenie said MPAC started a review of the vacant Stelco lands in response to a formal appeal filed by the steelmaker for the 2017 taxation year. She also suggested the re-evaluation should not have been a surprise to the city because MPAC met on 10 occasions with “all parties to the process” in 2017, including a joint site visit in March. That visit showed derelict buildings, heaps of slag and coke on the vacant land. LandCo also provided MPAC with updated maps showing areas with environmental problems.

Ranieri-Sweenie said the new valuation was based on the environmental condition of the vacant lands as well as U.S. Steel Canada’s earlier failed efforts to attract a buyer. (The value of land hosting operating Stelco facilities has not changed.) She added MPAC shared the proposed new land value with the city in May and asked for feedback.

Ministry of Finance spokesperson Jessica Martin also responded to the political outcry by reiterating MPAC makes its valuations independently of the provincial government. “To suggest otherwise is simply irresponsible,” she said.

Local Liberal MPP Ted McMeekin said provincial, Stelco, LandCo and city officials have met many times to discuss financial and development implications of the impending land sales. He doesn’t see anything wrong with that. He dismissed the suggestion the province would try to “direct” or improperly influence an independent MPAC assessment. “There’s no skullduggery here,” McMeekin said. “It’s an independent body that made an independent decision.”

The city is seeking to speak to the head of MPAC about the decision and is contemplating a formal appeal.