City to slash price in bid to sell contaminated property
KITCHENER — Kitchener is taking another stab at forcing the sale of a contaminated industrial property.
The former Electrohome site at 152 Shanley St. went up for sale for $1.1 million this past spring, but yielded only one bid of $200,000, well short of the minimum amount of $1,086,116.41 required under tax sale rules.
This time, the city is trying to make the sale more appealing by slashing the price to about $423,000 and by indicating the city is open to zoning changes that would make the property easier to develop profitably. Provincial rules allow the city to cut the price in a sale that follows a first unsuccessful tax sale.
Although the 0.35-hectare property is in a desirable location a short walk from the Breithaupt Block and the future transit hub at King and Victoria streets, it has several problems that could deter potential buyers: it’s a small site close to nearby homes; it’s on the city’s inventory of historic buildings so would require a heritage study; it’s in poor shape with a leaky roof and sagging floors; and it’s contaminated with metals, petroleum hydrocarbons and volatile organic compounds.
Current zoning permits only a residential development of up to four storeys, a limitation that could make redevelopment and cleanup financially difficult.
“If it’s for residential uses it needs to be cleaned up to a very high standard,” said Alain Pinard, Kitchener’s director of planning. And that may just be too costly an undertaking for the types of development now allowed, he said.
So the city plans to consult with the neighbourhood, holding a “charrette” — a sort of brainstorming session — in the first half of 2018.
“The objective would be to engage the community broadly and explore the possibility of establishing a new vision for the site, a vision that would make that site attractive for someone to invest in,” Pinard said.
That vision might include commercial or retail uses, or some combination, he said.
The city would then put the property up for sale and prospective buyers would know there’s already neighbourhood buy-in for a new use.
The city has carried out such charrettes for other areas, such as the Woodside townhouse complex near Harry Class Pool, with great success, Pinard said.
The four-storey yellow brick building has been an eyesore for decades, and a steady source of complaints from neighbours. The building is owned by a numbered company, 848835 Ontario Inc., that hasn’t paid property taxes in years. The property is also a chronic property standards offender, and the city regularly sends out crews to clear snow from sidewalks and cut grass on the site, adding those costs to the tax bill.
Redevelopment “can’t come soon enough,” said Coun. Sarah Marsh, who represents the area. “It’s an eyesore, everyone knows it’s contaminated and this does not belong in our city, much less does it belong in a neighbourhood.”
“Writing off the interest portion would make the property more appealing for purchase,” said Dan Chapman, Kitchener’s chief administrator.
The city felt the price reduction would be enough to encourage interested developers, he said. Kitchener didn’t want to completely write off all taxes owed, since that would give the current owner the chance to carry on with impunity without getting any improvement on the site.
The city has heard from a number of potential developers since the first tax sale failed, Chapman said. He’s “a lot more optimistic” that this second sale will succeed, he said.
“We know there is interest in this property, so with a reduced minimum bid there is greater chance for success of a tax sale, which means a greater chance of success for redevelopment — ultimately benefiting not only the immediate neighbourhood, but the city as a whole,” Chapman said.
Council will consider the proposals for a charrette and a new tax sale at its finance committee on Monday.