Lease for Kingston Pen to jump from $1 to over $1 million

The City of Kingston’s cost to lease the Kingston Penitentiary for public tours will take a significant jump in future years.

Instead of a token payment of $1 per year, a new lease signed between the city and the federal government will see the city’s payments jump to $1.1 million a year.

The huge increase includes a $100,000 annual lease of the prison property to reflect market values of renting federal property, plus up to $550,000 a year to help cover prison utilities and maintenance costs, and the loss of an annual federal payment to the city of $474,000 in lieu of property taxes.

The agreement is between the city and the federal department of Public Safety and Emergency Preparedness. The city, in turn, will continue to bring in the St. Lawrence Parks Commission to manage the 19th century attraction with its notorious history.

In return for the more expensive lease, the city will secure a multi-year deal to ensure the former maximum security prison on the shores of Lake Ontario remains open for public tours and filming opportunities for up to eight years.

The initial lease term is for three years, from 2020 to 2022, with an option for five one-year lease extensions. Either party can terminate the agreement on 12 months’ notice.

City council agreed to the revised lease terms at its March 3 meeting, while staff predicted the higher costs will not be borne by local taxpayers.

Staff point to revenue generated since the former prison opened for public tours in 2016. In 2019, the attraction brought in $1.6 million in profits, and the year before that, $1.4 million in 2018.

6:15 How the Kingston Pen Tours help the local economy and charity

However, staff say that in the event of a tourism downturn and a shortfall of prison profits, they intend to draw on revenues from the newly-created municipal accommodation tax, which is charged to guests for hotel, motel and B&B stays, to offset any shortfall.

In addition, the agreement allows the city to use the prison for up to 110 days of for-profit activities, such as filming for television and movies.

“It is also important to mention that although the number of visitors for public tours may reduce slightly in future years, additional activities would be introduced in order to stabilize net profits,” according to a report by the city’s CAO Lanie Hurdle.

Prison tours are expected to begin in May and last until October.