A plan to redevelop the Medicine Hat Arena would be subject to an expanded tax incentive bylaw being discussed in Medicine Hat city hall.--News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
The three-year-old proposal to turn the site of the Medicine Hat Arena in to mixed-use housing would likely be rolled forward into a new plan to incentivize development, according to city administrators.
This week a council committee heard a proposal to build on an initial tax incentive bylaw in two tracts; for substantial new plant of commercial operations, and to promote redevelopment of any non-residential property that boosts the tax base by certain amounts. Discounts on the new assessed value of buildings could range between half or full forgiveness for either three or five years.
That would likely capture the plan to erect a large mixed use commercial-residential development on Ash Avenue, where the city struck a deal with local developer New Rock Developments.
They negotiated tax abatement to help costs of taking over the property, but the project has been been on hold since late 2019 owing to economic uncertainty while deadlines have been extended several times.
“This new bylaw would replace that (original deal),” said Eric Van Enk, head of the city’s Invest Medicine Hat office. “We have discussed updating the cost estimates based on inflation and other factors coming through COVID, and coming to a final investment decision this (year).
“There are concerns about cost escalation, and that’s the basis of the viability of the project.”
Van Enk said the city is also proposing the creation of a “high-density” mixed-use land zone that would fit the project (The definition of the new land classification would allow six-storey or taller structures, and will be debated in early June).
The terms of the conditional sale, which has still not closed, is that the city would part with the land for $1 and provide $1.5 million in servicing upgrades and take care of subdivision fees while the buyer would be responsible for an estimated $3 million worth of demolition work.
The specific tax reduction for the property would be capped at $400,000 spread over three years under regulations at the time, which limited deduction to costs specific to environmental remediation.
In 2020 however, the province expanded the sort of incentives municipalities could offer and has encouraged cities, towns and counties to develop bylaws.
The local bylaw would consider the change in assessment caused by the physical improvements, then reduce the total tax bill by the relative portion.
The company did not respond to messages seeking comment, but has previously stated the project would be a first for Medicine Hat that would add a premium dimension to the housing market.
Administrators and elected officials in 2019 said the deal solved the city’s problem of decommissioning and demolishing the early 1970s era rink, bolster central population and make the greater area more attractive for investment.
The project, known as the Alto, was highlighted at the 2020 State of the City address, where the economic development office also laid out the “Riverfront” redevelopment concept.
That focus on driving investment to the city centre and adjacent areas includes portions of N. Railway Street, Maple Avenue and the old Arena site.
Some grants are also available for property upgrades that improve commercial buildings or add residential units.
The ground-floor commercial units would be subject to the tax incentive, administrators told the News on Thursday, while the residential portion in above floors would not.
The 2019 proposal was one of three local tax incentive bylaws passed by the previous council after the province gave cities the power to help developers recuperate specific costs of “Brownfield Redevelopment.”
The others were the since-failed move to build a hotel on the 603 First St. parking lot, and a retroactively applied tax subsidy given to Mint Carwash near Dunmore Road after it was built on the former site of Maser’s Lumber.
Under the new program, an approved newly built large industrial or commercial project worth at least $10 million and creating 10 new jobs could see its tax bill reduced between 25 and 100 per cent for up to five years.
Redevelopment projects worth $1 million that add $25,000 to tax bills could see that difference discounted on similar terms.
Council will hear first reading of the related bylaw in June.
