Arts and culture hubs to get property tax relief

401 Richmond among many creative centres set to benefit from new assessment class

Almost 20 cultural hubs in Toronto could qualify for a new property tax category under a draft plan that will lower the skyrocketing rates many have been struggling to afford.

On Tuesday, the province gave the city the go-ahead to start creating the special category for buildings that house artists and non-profit organizations.

Such a move will help centres such as 401 Richmond St. W., which has struggled to afford its tax bill amid sky-high assessments in a booming real estate market.

“This is a tremendous day; this has been a year in the works,” said downtown Ward 20 Councillor Joe Cressy, who has been behind the push for the separate tax assessment category. “We’ve been seeking to finalize an arrangement with the province whereby we would create a new subclass for creative hubs.

“With this announcement, we’re ready to go.”

Cressy will formally propose a motion at council in two weeks to work with the province, and said a draft definition is already in the works, that, if accepted, would mean about 17 buildings in the city could qualify for the “creative hubs” tax class: if they are more than 5,000 square feet, have many tenants (of which at least half are non-profits, charities or incubators) and offer free public programming, among other criteria.

“Our intention is to develop a financial model that encourages and incentivizes more of these creative hubs, as opposed to risking the loss of the few we have,” he said.

Trinity-Spadina MPP Han Dong, who made the announcement at Queen’s Park on Tuesday, said rising real estate prices have left cultural groups feeling the tax crunch.

While the city already has the ability to grant reduced rates to charities and heritage properties, a unique classification is needed to support arts and culture facilities, Dong says. He hopes other municipalities will also be interested.

An old factory, 401 Richmond sits amid pricey condos and office space and is home to a number of nonprofits and culture groups. Over the years, the owner has shouldered much of the increased tax bill. This year’s bill alone was estimated to be more than $846,000.

The owner, UrbanSpace, was recently successful in appealing its tax assessment and is to receive refunds back to 2013.

The building was initially assessed at $57.6 million in 2016, which has now been reduced to $33.2 million. NDP MPP Peter Tabuns (TorontoDanforth) said a unique tax class is welcome, “but I wish they’d done it earlier so that we didn’t have to go through, and people in that building didn’t have to go through, all the heartache and angst they’ve gone through.

“But it only makes sense; saying those cultural hubs are just waiting to be condos or should be taxed at the same level as condos doesn’t make sense at all,” he said at Queen’s Park. Tabuns added that the government is “correcting an irrationality that they put in place.”

The culture sector pumps $25 billion into the provincial economy and provides jobs for 28,000 people. Dong said “the province does not want our culture community feeling crushed by tax burdens when their focus should be on creating.

“It’s not fair in my mind to ask a creative industry — many of them are startups and incubators — to be looking at a commercial rate. And we know that the commercial rate in Toronto is quite high compared to other municipalities.”

Cressy said other buildings that could qualify for the new tax class include Daniels Spectrum, Artscape Wychwood Barns and the Centre for Social Innovation.

He said any tax reduction won’t result in less revenue for the city, as the amount will be covered by taxes paid by other commercial properties.