The Hamilton Spectator

Can LRT spell tax relief?

- MATTHEW VAN DONGEN

Everyone agrees LRT would be the largest and most complex infrastruc­ture project in Hamilton’s history. But local politician­s disagree over nearly every other detail of what the $1-billion, provincial­ly funded light rail transit line would mean to the city.

That conflict comes to a head Wednesday – with $30 million-and-counting already spent – when council votes on whether to move LRT ahead. A vote in favour would allow project procuremen­t to start this summer. A “no” vote threatens death-by-delay for LRT with a provincial election looming in 2018.

Ahead of the vote, The Spectator launches a three-part look into what the light rail project should mean to Hamilton residents.

ON THE SURFACE,

Lloyd Ferguson seems an unlikely LRT champion.

The Ancaster councillor defends the rights of drivers to motor unimpeded through the lower city, scolds downtown colleagues for “choking” arterial streets with bike lanes and opposes equal transit tax rates in the old city and suburbs.

Yet Ferguson is an evangelist for building an 11-kilometre light rail transit line on the lower city’s busiest westbound artery from McMaster University to the Queenston traffic circle.

He is also unique as the only LRT booster among suburban councillor­s poised to vote Wednesday on

whether to move the $1-billion project ahead.

“I talk to my residents about it. I say, ‘What will LRT do for you personally?’ Maybe nothing. Maybe you’ll never even ride the thing,” Ferguson said. “But if you don’t like the taxes you’re paying or the way they’ve gone up over 30 years, then you should like this project… It’s the reason the suburbs should support LRT.”

With a big vote and contentiou­s poll results looming, LRT supporters are increasing­ly trying to explain how light rail transit would benefit suburban and Mountain residents who don’t live anywhere near the proposed line.

Here’s a pre-meeting primer on two of the big arguments — developmen­t-related tax relief and provincial infrastruc­ture replacemen­t.

LRT tax break?

THE CLAIM: Developmen­t along the lower city line will translate into tax relief for suburban homeowners from Stoney Creek to Binbrook to Ancaster.

THE EXPLANATIO­N: Done right, light rail transit is a magnet for high-density redevelopm­ent. That ideally means more people living, working and paying taxes along the line — in turn, easing the tax burden on existing residents across the city.

Here’s a real-life example of the ideal scenario. Coletara Developmen­ts is planning a 20-plus-storey highrise atop a new All Saints Church at the corner of King Street West and Queen Street South.

The land was formerly exempt from property taxes as a standalone church but is worth hundreds of thousands of dollars annually in new taxes if the project is successful. The developer, Paul Kemper, has said “we wouldn’t be building” without LRT.

The other carrot for non-lower-city residents is a (possible) tax shift. If property values along the LRT line rise faster than the city average, nearby

homeowners pay a higher proportion of taxes.

The recent real estate boom in Hamilton shows how it works. This year, Wards 1 through 3 face an average tax hike of 4.5 per cent as a result of spiking reassessme­nt, compared to average hikes of 0.7 per cent and 1.5 per cent in urban Glanbrook and Ancaster. In 2012, that trend was essentiall­y reversed.

THE OPPOSING VIEW: Critics argue Hamilton real estate is already hot and attracting fleeing GTA residents without digging up the lower city for LRT. New buildings along a single transit line would have a negligible impact, they say, on citywide tax assessment (early suggestion­s pegged it at around three per cent growth over 15 years) compared to the disruption of constructi­on and traffic snarls.

Skeptics also suggest repeated provincial changes to the original route have diluted the developmen­t potential of the route. Two examples: a shortened east-west line excludes major commercial and transit hub Eastgate Square (and cuts Stoney Creek out of the line, its councillor­s note). Another stop once eyed for private developmen­t, Scott Park, is now slated for non-taxable school and rec centre constructi­on.

The Spectator will look at LRT developmen­t possibilit­ies in a Tuesday story.

THE HISTORY: When councillor­s first voted in 2013 to ask Ontario to fully fund capital costs for LRT from the university to Eastgate Square, the city and Canadian Urban Institute painted a “conservati­ve” economic benefits picture that looked like this: 3,000-plus local constructi­on jobs,

hundreds of new permanent jobs; Triple the number of developmen­ts along the Main-King corridor compared to no LRT; $30 million in anticipate­d building related fees for the city; $22 million in new taxes paid by condo dwellers and businesses and $29 million in increased assessed

value on properties on or near the

line.

QUOTE TO CHEW ON: “As a city, we already rely too heavily on residentia­l assessment for growth. We’re not going to solve that problem by building new apartments on a transit line.” — Coun. Chad Collins

Free infrastruc­ture?

THE CLAIM: The $1-billion LRT project will use provincial cash to replace 11 kilometres of infrastruc­ture in Hamilton. If we did it ourselves, the same work would cost local taxpayers $200 million.

THE EXPLANATIO­N: This is true, with some important caveats. Metrolinx has agreed to pay to replace all “likefor-like” city infrastruc­ture along the 11-kilometre LRT line. That’s sidewalks, street asphalt, sewers, water pipes, light standards — even the repair or replacemen­t of the Longwood bridge, which will host a spur to a new storage facility.

But the city must share the cost of any upgrades — for example, bigger water or sewer pipes. Such upsizing is necessary given the expectatio­ns for higher-density developmen­t on the route and could cost as much as $35 million. The city hopes to get around those shared costs by pitching consolidat­ion, rather than upsizing, of some undergroun­d pipes.

Regardless, project fans point out we’re still getting plenty of mostly free new infrastruc­ture — or we’re

sharing the cost with all Ontario residents, anyway. We’re certainly getting a sweeter deal than local taxpayers in Kitchener-Waterloo, who had to put up a third of capital cash for their 19kilometr­e, almost-finished LRT line.

The infrastruc­ture argument is big in Hamilton because we fall behind on needed repairs and replacemen­t of roads, bridges and buildings each year by $195 million. Meanwhile, the city has added about $13 to the average homeowner’s tax bill each year since 2011 specifical­ly to help close that spending gap.

THE OPPOSING VIEW: Skeptics among councillor­s argue multi-year LRT constructi­on will dig up plenty of infrastruc­ture that doesn’t actually need to be replaced at all. The city admits many undergroun­d pipes along the route, for example, have been recently relined or replaced.

They also point out correctly very little of the LRT-affected infrastruc­ture is included on the 10-year capital priority list. (This is likely good news for the city, however, because Metrolinx has confirmed it won’t pay full replacemen­t costs for any project the city has already budgeted for.)

QUOTE TO CHEW ON: “It would be a betrayal of all Hamilton residents to not support the renewal this project brings, given our mammoth infrastruc­ture deficit.” — Coun. Sam Merulla

Skeptics suggest provincial changes to the route diluted its developmen­t potential

 ?? BARRY GRAY, THE HAMILTON SPECTATOR ??
BARRY GRAY, THE HAMILTON SPECTATOR

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