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Kingston may provide massive tax incentives to kick-start Davis Tannery housing project

Kingston city council is asked to support massive tax rebates to spur residential development of former Davis Tannery site.
Kingston city council is asked to support massive tax rebates to spur residential development of former Davis Tannery site. YouTube: Draft Video Davis Tannery

The City of Kingston may be willing to waive several of its own development charges and other policies in order to kick-start a massive housing project on the old Davis Tannery lands.

City managers are asking councillors to forgo the mandatory requirement for the developer to obtain a nearly $1 million tree permit and provide community benefits estimated at three to six million dollars.

READ MORE: Task force studies Kingston's housing shortage

In addition, they’re asking council to approve a special designation to make the 13-hectare industrial land eligible for $45 million in municipal tax rebates — nearly three times what the current policy allows — to help cover most of the estimated $66 million in brownfield clean-up costs.

Developer Jay Patry is proposing to construct over 1,500 residential units on the old Davis Tannery site, pending municipal support for a $66 million brownfield clean-up.
Developer Jay Patry is proposing to construct over 1,500 residential units on the old Davis Tannery site, pending municipal support for a $66 million brownfield clean-up. YouTube: Draft development Davis tannery video

In return for financial incentives, the developer is proposing to construct about 1,500 housing units on a site that’s been scarred by decades of heavy industrial use as a former lead smelting operation and a leather tannery.

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The Davis Tannery operated for nearly a century at 2 River Street, bordering the Cataraqui River, before it was abandoned in the 1980s.

The inner harbour site, which has remained derelict ever since it closed, was the focus of a municipal tax sale and later purchased by Kingston developer Jay Patry a few years ago.

The Davis Tannery operated for nearly a century until it closed in the 1980s, leaving a legacy of soil contamination.
The Davis Tannery operated for nearly a century until it closed in the 1980s, leaving a legacy of soil contamination. City of Kingston

Initial housing development plans were unveiled in 2017 to widespread criticism from local residents, mainly over height and density concerns.

But city planners say they have spent the past year working with Patry to refine the development concept with the assistance of city-hired urban planner Brent Toderian, to achieve variation in building height and massing, enhanced public spaces, greater water setbacks with a naturalized shoreline and other improvements to enhance the cultural heritage significance of the nearby Rideau Canal.

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“The applications, as initially submitted, propose the division of the subject lands into four development blocks and open space and parkland blocks,” said a staff report.

READ MORE: Davis Tannery housing proposal

The developer is proposing to construct four six-storey buildings with a total of 1,509 residential units and 4,961 square metres of ground-floor commercial area, with each building being completed as a separate phase, according to staff.

Private and public park space including a proposed plaza/pavilion-style park is also proposed.

Staff has revised the projected timeline, indicating the developer intends to secure land-use planning and brownfield approvals in 2020, complete the site remediation from 2020 to 2022, and then construct the housing blocks in four phases spanning more than a decade from 2022 to 2033.

“Each of the four phases of the proposed project is estimated to generate approximately one million dollars annually in incremental municipal taxes, in 2019 dollars, in the form of development as presented,” said a staff report to council Dec. 17.

Brownfields remediation is key to starting the massive housing project and could be the costliest clean-up project in Kingston’s history as the site has “profound” soil and groundwater contamination, said staff.

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13 hectare Davis Tannery site has ‘profound’ contamination, according to city staff.
13 hectare Davis Tannery site has ‘profound’ contamination, according to city staff. CKWS TV

City councillors will be asked at their Dec. 17 meeting to give conditional support for an “enhanced” site designation for the property in order to provide additional tax rebates and other municipal incentives to help the owner recover $45 million of the $66 million clean-up expenses.

Officials point out the current policy that supports a tax rebate for only 24 per cent of remediation costs, or $16 million, is not enough to get the housing project built.

“This level of unrecoverable environmental remediation expense renders the project unfeasible,” staff noted.

READ MORE: Ontario curbs illegal soil dumping

Kingston’s brownfields program allows eligible developers to recover their cleanup costs by not paying full property taxes for 10 years. Most of the taxes are instead rebated back to the developer during that time. But because of the long construction phase-in for this project, it could be decades before city hall collects full property taxes from the completed development.

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Another key change being recommended is for the city to rebate up to 90 percent of annual taxes to the developer to recoup cleanup costs, instead of the current maximum of 80 percent.

It’s not the only policy that city council may be willing to bend in order to spur development of the Davis Tannery site.

A site assessment revealed about 1,600 trees, many non-native species, will have to be removed.

However, staff asked council to waive the requirement for a $963,000 tree permit — money the developer won’t have to contribute to the city — adding the property will be re-vegetated as part of the redevelopment.

READ MORE: Kingston tree cutting for bridge put on hold

The city also has a policy to obtain “community benefits” in exchange for increased height and density, estimated at three to six million dollars in this case. At the developer’s request and with staff’s support, council is being asked to scrap negotiations for community benefits, subject to the owner obtaining the necessary planning approvals.

Future report will provide more planning details of the housing project, allowing more public feedback.
Future report will provide more planning details of the housing project, allowing more public feedback.

While council’s support, in principle, is being sought now, city staff say they will provide a more detailed report on the David Tannery housing application and financial incentives to the planning committee in 2020, which will include a public meeting.

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