City extends ‘lifeline’ to music venues
The measure isn’t COVID-19-related temporary relief, though the pandemic made it happen quicker
The cavalry has arrived in the nick of time for Toronto music venue owners.
Toronto city council has passed a proposal that enables property owners to claim a 50 per cent property tax break on sites that primarily operate as a live music venue, with the assumption that they’ll pass that savings on to their tenants.
With COVID-19 protective measures bringing live music to a standstill on March 17, the timing for this ruling — which covers city music clubs that hold a capacity up to 1,500 patrons and is retroactive to Jan.1, couldn’t have been better.
“It’s definitely a lifeline because we’re still in a position where we have to pay property tax and rent,” says Lisa Zbitnew, who co-owns the1,350-capacity Phoenix Concert Theatre.
“We have a landlord that is being helpful and accommodating, and working with us, so we’re fortunate all the way around. And it helps us see a light at the end of a tunnel.
Jeff Cohen, co-owner of the Horseshoe Tavern, Lee’s Palace and a voluntary member of the Toronto Music Advisory Council (TMAC), says that the property tax relief takes a huge load off club owners’ shoulders.
“It’s humongous,” says Cohen. “At the Horseshoe Tavern alone, our share of the commercial property tax bill is $110,000 per annum. So 50 per cent of that is $55,000 coming back to the business.”
The best news is that this measure isn’t COVID-19-related temporary relief — although the pandemic did play a catalyst role in the measure’s passing — but something that is annually renewable.
“COVID-19 supplied the urgency for us to move this through more quickly than might have been possible beforehand,” says Mike Tanner, music sector development officer, film and entertainment industries for the city of Toronto.
“We’ve known for a long time that commercial tenants are really subject to these massive macroeconomic forces that are beyond their control for the most part, and so rolling out something that would address the structural issues underlying sustainability for these music venues has been a discussion of note for at least several years.”
The property tax break falls under the rather long-winded heading of the Creative Co-Location Facilities Property Tax Subclasses: an incentive that was initially implemented by city council and the province of Ontario in 2018 when small business and creative enterprise tenants at 401 Richmond
St. W. found themselves unable to afford continuous tax increases that were being factored into their rent.
Tanner says that Toronto Coun. Joe Cressy (Ward10, Spadina-Fort York) found a solution.
“His office created a tax subclass of an existing category into which 401 Richmond fell, so tax was capped at 50 per cent of what it might have been, which made it much easier for those small creative tenants to stay,” Tanner explains.
Cressy and Tanner spearheaded the movement to extend that subclass to live music venues, which was easier to expedite “because you don’t have to create something out of nothing — you’re merely expanding something that exists already in order to encompass live music venues for a lot of valid reasons,” Tanner notes.
“Pre-COVID, the discussion was headed more in the direction of a grant or a rebate program as recommended by the revenue services folks,” he adds.
“Because of the urgency conferred by COVID, we ended up thinking to roll the program out more quickly without identifying a pool of money and going through a lot of checks and balances. Expanding the tax class, was the way to go.”
He also credited Mayor John Tory’s unflagging support of the initiative.
“Mayor Tory’s support of the tax reduction proposal was obviously key to it becoming a reality,” says Tanner. “He made room for the music venue tax item on the agenda of a special one-day session of City Council dealing with only urgent items and spoke strongly in favour of the idea during the discussion.”
The timeline to apply for the incentive is a tight one — June 19 at 5 p.m. is the deadline — and in order to qualify, a venue must demonstrate certain criteria.
For example, the application must prove that a live venue has a minimum of four of these amenities: a fixed stage or stage area; a sound booth or desk with sound board; an artist dressing room; a window, booth, or established point where tickets or cover charges are collected; an amplified PA system with microphones; performance or stage lighting and bookings and compensation.
Artists must be compensated either via contract or a percentage of bar sales or door cover and not be charged for the use of the stage or equipment.
The venue also must have been in operation for at least six months in order to qualify and must annually present live music for a minimum of144 days — or, due to COVID-19 closure, 40 per cent of all operating days within the calendar year.
If there haven’t been enough days of operation to quantify this time frame, clubs will be allowed to submit their 2019 calendars as an indicator of their regular booking practice.
Venues also must employ regular staff and at least two of the following roles connected with live music programming: venue booker, event promoter, audio technician, stage manager or door person/venue security.
An interesting side note is that venues that employ DJs can qualify for the property tax relief, as long as the DJ plays a creative role in music playback.
Simply playing recorded music does not qualify venues for the measure.
Shaun Bowring, owner of the 350-capacity Garrison and the 150-capacity Baby G, says that although the property tax relief is “fantastic news,” this incentive is just part of “the bigger puzzle” club proprietors are working to solve as they face an uncertain future in light of the pandemic.
There has still been no announcement as to when clubs might reopen and when people may be allowed to gather safely in larger groups..
There’s also no indication as to when borders may reopen, thereby deferring the local appearances of non-Canadian acts.
But if and when live music venues are given permission to reopen their doors, Bowring and other club operators understand that it won’t be business as usual.
“At this point, we’re going to be the last business to reopen,” says Bowring, who is also a member of TMAC.
As a result, Bowring and Cohen have reached out to other venue operators on a weekly basis to strategize and discuss potential next steps.
“We’ve been discussing financial matters and making sure that no one’s in threat of closing immediately — and if they are — if there’s anything we can all do to assist one another,” says Bowring.
“We’ve had some great frank discussions — making sure that everyone is accessing the programs that are available from the federal government so far and getting organized to lobby the Ontario government as well to figure out whatever support mechanism they can provide for us.”
He’s also cognizant that even with this tax break, the live music industry will need further funding in order to survive, so Bowring has co-founded the Canadian Independent Value Coalition as a network of small independent venues across the country.
Cohen says that until venues open up to the public safely again, they’ll try to use their spaces for “rehearsal, streaming concerts or video shoots — and when it’s really safe, we’ll open up with gusto.” But at the moment, he’s thrilled with the property tax break.
“It’s a love letter from the city to live music venues,” Cohen declares. “It’s a really big deal.”