A sanctuary for artists
Under a little-known provision, the city may be able to save tenants from being priced out of 401 Richmond
The city has invoked a last-ditch measure to save tenants from being priced out of 401Richmond St. W., the lively downtown cultural hub.
Thanks to a little-used city provision, a portion of the building’s space is set to be classified as a “community benefit.”
But the move is only a stop gap in its continued pursuit of a permanent solution: a new tax category at the provincial level for private owners willing to rent their space below market value for arts and culture incubators that it believes will provide an incentive for 401and others to flourish.
“I’m hopeful,” said Joe Cressy, the councillor for Ward 20, where 401 is located, at Richmond St. and Spadina Ave.
“The tone, I feel, has changed from ‘This is up to the city to solve’ to ‘How can we work together?’ ”
The issue began when the Star revealed in December that UrbanSpace, the owner of 401 Richmond, had been hit with a property assessment that would nearly triple its tax load by 2020.
The neighbourhood, subject to intense condominium development in recent years, had pushed its assessed value sky high.
Its tenants, many of them not-forprofit arts and culture organizations, artists and authors, would bear the brunt of it, with property tax for commercial buildings most often paid separately from rent. UrbanSpace, founded in 1987 by Margie Zeidler for the express purpose of sheltering such tenants from market pressures, had long charged belowmarket rents. The tax increase on its own would price many of its tenants out and into a tight rental market in the central city, where commercial rental rates have skyrocketed in recent years.
Cressy, vowing to “not let 401 Richmond die,” proposed a motion in March that would designate roughly 20 per cent of the building a Municipal Capital Facility (MCF), making that portion immune from property taxes and reducing UrbanSpace’s tax load by that amount. The MCF provision acknowledges the “community use” of both public buildings, such as schools and community centres, which are 100 per cent tax exempt, and some privately owned buildings, such as Artscape’s Wychwood Barns, which has a partial MCF.
Cressy’s motion to put in place an MCF at 401 Richmond will be voted on at committee on Monday, where he expects it to pass quickly. It will be voted on by city council at the end of the month, where he also expects no opposition. But as Cressy notes, it does not address the larger problem.
“The solution does not lie in the city running around declaring MCFs,” Cressy said. “What we need is a new property tax class at the provincial level.”
In January, city council unanimously passed a motion asking the province to change Ontario’s tax code regarding heritage properties, particularly those used to house cultural activities. Since then, discussions have been ongoing, with a meeting between councillors and Mayor John Tory expected some- time in April.
John Sewell, the former mayor of Toronto and one of 401 Richmond’s tenants, has been one of the leaders of a tenant-organized movement in the building to propose what a new tax category for properties like 401 might look like.
“What we’ve worked out so far is this idea of a new (tax) class called ‘creative industries,’ ” Sewell said.
Meetings with senior staff at the Ministry of Finance, which oversees the Municipal Property Assessment
“What we need is a new property tax class at the provincial level.” JOE CRESSY COUNCILLOR FOR WARD 20
Corporation — arbiters of property values and therefore property tax assessments — have been encouraging, Sewell said.
For Sewell, who in the 1970s, first as councillor and then as mayor, helped to preserve the area south of Queen St. W. along the Spadina Ave. corridor as an industrial area, it’s a remarkable evolution for a place that was left for dead in his day.
“It became an industrial wasteland,” Sewell said. “We were trying to preserve the garment industry, which left anyway.” Their use restricted to industrial purposes, Sewell’s efforts inadvertently left many of the old factory buildings either derelict, or subject to illegal occupants, like artists’ studios.
By the ’80s, then-mayor Barbara Hall had lifted the industrial use provision and the area began to blossom with all kinds of ad hoc uses, cultural organizations chief among them.
But with development pressure now at its apex, it’s now up to the province to build the means to preserve, and encourage, what has flourished on its own.
“I really believe you’ll see other owners wanting to fit into this tax class,” Sewell said. “It would have a big impact.”