City can insulate arts hub from hikes
Critics argue 401 Richmond’s tax problems were result of how building is assessed
Queen’s Park says the city of Toronto has the power to protect 401 Richmond from crippling property tax hikes that threaten tenants of the downtown arts and cultural hub.
Finance Minister Charles Sousa’s office said city hall has many tools at its disposal to insulate Urbanspace, which owns the five-storey former factory, from being walloped by an increased assessment.
The owners of the landmark at Richmond St. W. and Spadina Ave., which has been offering affordable rents to artists and creative entrepreneurs since 1994, recently learned their property tax bill will almost double next year and will triple by 2020.
“We understand that concerns have been expressed about the assessment of this property due to the significant increase in the assessed value of the property determined by the Municipal Property Assessment Corporation (MPAC),” said Kelsey Ingram, Sousa’s press secretary.
“It’s important to emphasize that, if a property does see a large increase in its assessment, this does not mean that its property taxes will increase by the same magnitude,” Ingram said.
“Municipalities have the flexibility to adjust tax rates to offset the average impacts of reassessment. For example, the city of Toronto has the ability to provide a property tax rebate of up to 40 per cent of the property taxes paid by eligible heritage buildings,” she said.
Ingram emphasized that city hall does not need provincial permission to help 401Richmond.
“As the taxing authority, it is up the city to decide whether to provide property tax relief to specific heritage buildings within Toronto. Approval from the province is not re- quired,” she said.
“Furthermore, we understand that this specific property is occupied by a number of non-profit arts and culture organizations. The city of Toronto also has authority to provide property tax rebates directly to nonprofit organizations, regardless of whether they are the owner or the tenant of the property.”
Local Councillor Joe Cressy (Ward 20, Trinity-Spadina) said Friday that the city’s heritage tax rebate is only for one-time construction and maintenance projects, not just because a building has a heritage designation, and “doesn’t solve the overall problem.”
The city’s heritage rebate allows property owners to get a rebate for 50 per cent of the cost of eligible maintenance and conservation work, up to 40 per cent of their annual taxes paid. But to qualify, the work completed must total 20 per cent of the building’s property taxes in a single year.
He said his office is working with 401 Richmond in an appeal of their assessment. They are also looking at the heritage easement to strengthen their case, protecting against any additional storeys being allowed at the site.
“It basically, in the eyes of MPAC, further shrink wraps the building,” Cressy said.
Though those tenants that qualify for city rebate for charities have been notified, Cressy said it doesn’t cover the for-profit creative businesses and incubators that work within the space.
Cressy said rebates are “like putting on half a Band-Aid.” The issue remains that the building hasn’t been assessed on its existing use, but what it could be: a highrise condo. He said the province needs to consider a separate tax class for heritage buildings and cultural spaces.
On Tuesday, NDP Leader Andrea Horwath wrote to Premier Kathleen Wynne, urging her to reform the provincially controlled, municipally funded property assessment corporation.
“MPAC does not assess the value of commercial or industrial properties based on their current use, or even based on uses that are allowed under current zoning rules,” wrote Horwath.
“Instead, 401 Richmond was assessed based on the value of the 30storey condo tower that MPAC imagines might exist in its place. This is known as the principle of ‘highest and best use,’ ” she added.
For buildings such as 401 Richmond, the stunning assessment increases can seem out of whack.
Margie Zeidler, an urban visionary and Jane Jacobs Prize recipient, purchased the mostly derelict 1899 factory for $1.5 million in 1994. By 2020, its total annual tax bill ($1,286,800) will approach that.
“When I saw our assessment, I thought, ‘That’s it; the game’s over,’ ” Zeidler said recently.