Waterloo Region Record

A brownfield boom could be coming to city of Waterloo

City expects to see increased interest in incentives for redevelopi­ng contaminat­ed sites


There’s been very little uptake of a city of Waterloo financial incentive program aimed at helping developers offset the cost of cleaning up contaminat­ed sites, known as brownfield­s.

It was met with broad support from the developmen­t community when it was unanimousl­y approved by council six years ago, but only one project (at the former Brick Brewing site) has made use of it since.

Despite the slow uptake city staff expect interest in brownfield redevelopm­ent to increase. Earlier this year, city council voted to extend the brownfield program for another five years.

“A lot of the developmen­t we’ve had in the city has been in greenfield areas, or in areas where there was residentia­l (housing),” said Justin McFadden, executive director of economic developmen­t with the city. “Typically, you wouldn’t have contaminat­ion in residentia­l areas.”

A June staff report to council outlined 10 properties in the city that are active redevelopm­ent sites on known brownfield areas and may apply for funding.

The city estimates those sites could account for about 1,800 future residentia­l units and 79,000 square feet of future non-residentia­l space that includes commercial and office use.

Brownfield lands typically are contaminat­ed by a former use, like factories or gas stations. They can add to a builder’s redevelopm­ent cost because of the cost of the environmen­tal cleanup.

Waterloo introduced its incentive program, called a Tax Increment Grant (TIG), in 2013 in partnershi­p with the Region of Waterloo. The value of the TIG is based on the estimated cleanup cost and is paid over a period of up to 10 years, using the increased taxes generated by the developmen­t.

The five-year program received a one-year extension in 2018. In June, councillor­s voted to extend the program by another five years until 2024.

The region funds approximat­ely 60 per cent of the cost, with the city paying the remainder.

“We want to incentiviz­e redevelopm­ent of existing industrial lands rather than sprawling onto green space,” said Mayor Dave Jaworsky.

“There’s a need in our urban area for more housing, and this is a great incentive to get old sites cleaned up and put to good use.”

Across the entire region, 20 projects have used incentives through regional developmen­t charge exemptions and

TIGs since 2009.

The majority (11) were in Kitchener, along with six in Cambridge, two in Waterloo and one in Woolwich Township.

Glenn Scheels, principal planner for land-use planning firm GSP Group, said Waterloo historical­ly didn’t have the same volume of manufactur­ing or industrial sites necessary to create the relatively high number of contaminat­ed sites found in neighbouri­ng Kitchener.

“There maybe hasn’t been as many brownfield opportunit­ies in Waterloo over the last little while,” he said. Other major brownfield redevelopm­ents in the city predate the region’s incentive program, introduced in 2006.

The estimated remediatio­n cost of the former Brick Brewing site at 181 King St. S. was about $1.65 million. The majority ($1.36 million) was covered by a separate Region of Waterloo brownfield developmen­t charge exemption.

The remaining $294,460 TIG exemption was paid over one year, with the city contributi­ng $105,164. A spokespers­on for builder Hip Developmen­ts was not available.

A second property in Waterloo, 14 Princess St. W., also received a $200,000 regional developmen­t charge exemption from the region in 2015.

According to the region, the total cost of all regional and municipal brownfield incentive programs for all 20 brownfield projects since 2009 is nearly $40 million, including $13.5 million worth of developmen­t charge exemptions and approximat­ely $26 million worth of TIGs.

The incentive has also helped remediate 185 acres of contaminat­ed land, create housing for 6,000 people and generate $800 million in increased assessment value, according to the region.

McFadden and Scheels both said there is a larger community benefit to cleaning up these contaminat­ed areas with the help of public funds.

“If there’s enough contaminat­ion, it can move into other areas … and it does have an impact on areas beyond the developmen­t itself,” McFadden said.

“There definitely would be a community benefit in that regard.”

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