CIP Update and Plan for 2019

At the Committee of the Whole meeting on Monday 11 March, staff will report on the results of the Community Improvement Plan (CIP) for 2018 and the planned process for 2019.  As mentioned in the report, the CIP has been implemented since 2016 in response to a 2013 survey where Cobourg residents expressed concern about the “poor appearance of building exteriors, back lanes and parking lots”.  The Downtown Cobourg Vitalization CIP is a collection of 8 incentive programs providing grants or loans for some of the cost of improvements.  The cost to the Town consists of grant dollars, plus loan admin and interest costs, and when compared to the applicants’ contribution, this produces leverage ratios which were 3:1 in 2016, 2:1 in 2017 and 5.6:1 in 2018.

Market and Smor exterior
Market and Smor exterior

The budgets in 2017 and 2018 were $150K and staff are suggesting the same amount for 2019.

2016-2017 Summary

In 2016, 5 projects valued at $231,119 were approved with grants totaling $54,696  and loans adding up to $51,886. Total Town cost was $56,252 giving a leverage of approx. 3:1   [Additional expenditure $175K divided by $56K].  More detail on the 2016 CIP was reported here.

In 2017, 13 projects were approved with grants of $100,200 and loans of $46,812. The total expenditure by the Town was $107,200 for projects valued at $310,502 so leverage was approx. 2:1.

2018 Summary

With the success of the first two years, the size of the proposed projects increased to a total of $991K with grants of $143,222 and loans of $98,786 for a total Town expenditure of $149,332 and a leverage of 5.6:1

Projects were:

# Project Project Type Funding Status
1 2 King St. W & 239 & 243 Division St. (Corner) Facade Improvement, masonry and roof repairs Grants – $19,258 Underway
2 Jakes – 40 King St. W New roof Grant – $4,000 Completed
3 Buttermilk & Peter’s – 42-44 King St. W New roof Grants – $2,750 Completed
4 39 King St. E – Market and Smør Facade Improvement, Painting, various interior upgrades (photo above right) Grants – $31,250 Partially completed
5 Cheslers – 35 King St W Facade Improvement, Various,  4 apartment units on second and third floors Grants – $70,964
Loans – $98,786
In progress
6 Royal Spa – 89 King St. W Study Grant – plans Grant – $2,500 Complete
7 52 King St. W – Was Bargain Shop Facade Improvement – Doors, windows, cladding and lighting Grant – $12,500 Complete

There’s a report here on the 2018 projects when they were approved [First 6 projects only].

For 2019, staff propose a single intake in July with an increased focus on larger projects like the one at 35 King which added new apartment units.  Another plus would be if the improvement “secured a landmark or anchor business such as a bank, a micro­brew pub, a corporate office, or a specialty or niche business”.

The staff report notes that “there are a number of potential applicants awaiting confirmation of the 2019 Intake” so assuming council accepts the recommendation from staff, we can expect to see further upgrades Downtown.

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Deborah OConnor

If I was the decision maker the only application that would be granted is Chesler’s, the one that includes 4 apartments. If we MUST provide subsidies to property owners some social good should be a requirement for success.

cornbread

I agree with you on one condition…that any subsidy, be it grant or the interest portion of a loan in total, be capitalized and become part of the property ownership percentage so that when the property is sold, the town of Cobourg receives a return on their
total investment. Perhaps the town should receive their portion of the monthly rent as well.

The people or companies that own property on main street Cobourg are not poor needing handouts.

It’s about time our town leaders became business people and stop giving away taxpayer money.

manfred s

I do agree, grants are not warranted nor needed, and should not be given in the case of real estate improvements of private property, period. Short term no interest loans, lengthier term with modest interest loans, partially deferred (but fully payable) taxes, these could all help the economic situation and (while fully protected,) provide some valuable stimulus in some instances that would benefit the municipality in the overall.

Ryan Francis

Not all buildings owned Downtown are by well off absentee owners, and it is unfair to paint everyone with that brush. Some buildings are owned by small business owners who could certainly use the help. And also remember it is the high taxes paid by these people and the tourist dollars brought to the Town by these businesses that help elevate your property values. Keeping these heritage buildings up to changing codes and also attractive to consumers is not cheap, nor is running a business.

Mrs. Anonymous

A thoughtful comment Deborah.

I happened to come across this Airbnb listing which appears to correspond to one of the grant properties: https://www.airbnb.ca/rooms/28121934?guests=1&adults=1

Is this one and the same as #6 on John Drapers list.? Are ratepayers being asked to subsidize Airbnb properties.?

Mrs. Anonymous

As an aside, reading the reviews for the existing Airbnb, one guests references a bedroom without windows. Isn’t that a major violation of the fire safety code?

Dave Moore

This should not have been approved….

Concerned

having family here and known Cobourg for many yrs we retired here full time a few yrs ago .
I remember when the main st was thriving and interesting to visit , but all of those old types of businesses have gone by the way side . They used to be fun and entertaining I remember the Pool hall the Chateau
the Plaza and the British hotels They all had music, food , booze and different forms of entertainment there was even an Archady for the younger folk , Sport fields and Ball diamonds . there was always some thing to do or see not just shop , or eat the same old thing .
A question I have is why has there never been a study or information released as to why so many new start up businesses have failed over the last 10 years . Surely this would shed some factual light on the picture .
Where are these facts being hidden ?????????

manfred s

for years now, I’ve repeatedly said that contriving “solutions” to problems that they don’t understand or have yet to even identify is a fool’s errand at best. Compounded by the erroneous belief that ‘concerned’ and ‘interested’ people with little hands-on experience or vested interests would be the best ones to understand and solve issues that “they” think to be central to the problem(s), we end up with solutions that are contrived to solve imaginary problems instead. Further, we ignore and dismiss the input from those who are in the best position to offer the best perspective and most cogent advice. Concerned, you say “A question I have is why has there never been a study or information released as to why so many new start up businesses have failed over the last 10 years . Surely this would shed some factual light on the picture.” Not that long ago there was a survey conducted by a group of ‘concerned’ and well-meaning but unqualified folks, which they believed would help to find solutions to the problems THEY felt were at play. I think they asked the wrong questions of the wrong people in the wrong places. Result…zero useful information, and a… Read more »

gerinator

Manfred please indulge me – “..they asked the wrong questions of the wrong people in the wrong places.” Whom is the ‘they’; what/which questions should have been asked; whom should have responded to these questions; and what places should have hosted the foregoing?

manfred s

there isn’t enough room here to answer all of your questions as fully as they should be but here are some. “they” essentially is the group that was set up to come up with a revitalization strategy, the formal name of which, escapes me. You can find the questions they asked by looking up the survey, again, they are too numerous to repeat here. The people that should have been asked are the ones who don’t frequent the downtown, that don’t consider it a place that’s important to them; the ones actually shopping in the secondary commercial nodes at the time they’re being surveyed. The questions that should have been asked would include ones like “why do you NOT shop downtown?” and “what do you feel is keeping you from going downtown more often?”, for a couple of examples. I believe the survey, for the most part, was taken downtown, of people who were already downtown, who already frequent the downtown and who would therefore have little in the way of offering insight into why others don’t do so. They were not the people who are the target of the survey if it was to find out why people don’t… Read more »

cornbread

Perhaps Main Street gave away to The Malls, who have now given away to Mail Order.

It will be difficult to reverse the new order of family life…2 parents working to have everything right away that the 60’s parents worked for and achieved much later in life.

Walter L. Luedtke

This from the AMO (Association of Municipalities of Ontario) “The Ontario government is investing $26 million to support and grow small business through the Main Street Revitalization Initiative. The fund has been designed to support small businesses within main street areas by providing funds to municipalities to implement local Community Improvement Plans and/or encourage strategic public investments in municipal and other public infrastructure within main street areas. The AMO now administers the programme. Municipalities may use funding to implement financial incentives programs in Community Improvement Plans. Financial incentives programs provide municipal grants or loans to property owners or small businesses to improve a designated area within a municipality. Financial incentives are provided for priorities such as façade improvements, signage, accessibility upgrades, community energy efficiency, etc. Municipalities may also use funding for public infrastructure that will improve the success of small business, including local tourism. Municipalities may choose to use this funding for downtown streetscaping projects, such as: sidewalk or parking improvements and new street furniture; installation of new signage and banners to improve wayfinding; and improvements to parks and recreation facilities.” Improving Main Streets with the help of provincial and municipal taxpayers is going on all over Ontario and it’s… Read more »

Frenchy

from page 12 of the original staff report:

“It is proposed that Cobourg Municipal Council allocate a total of $150,000.00 in the 2019 budget via the Holdco dividend for the implementation of financial grants and loans as part of the Downtown Cobourg Vitalization CIP.”

Does this mean it’s not being funded by Cobourg Taxpayers but rather Lakeshore Utilities customers? I bet the LUSI customers in Colborne love that idea.
Might be that some of us would rather see a drop in our energy bills and see Cobourg Council try to justify this giveaway using taxpayers dollars instead of the Holdco Slush Fund.

A couple of my favourite quotes on the subject:

“If council wants to fund a project, they need to make the value clear to the taxpayers, justify the tax support and stop hiding behind the public utility.”

“it still makes little sense to give out taxpayer funded grants for things that are rightly the responsibility of the property owners who, in most cases, have likely chosen their situation and should be aware of the inherent risks and costs.”

Cobourg Person

The dividend is paid by Lakefront Utility Services Inc, not Lakefront Utilities Inc. The dividend from LUSI has no effect on energy bills.

Frenchy

Geez, I even got the name wrong.
Where does LUSI get the money to pay that dividend?

Cobourg Person

Call Lakefront and ask. You might actually learn something.

Frenchy

The dividend actually comes to the Town of Cobourg from Holdco, not LUSI as you stated.
There, we both learned something.

Cobourg Person

The dividend goes to Holdco via LUSI. The important lesson for you to learn is that the dividend has no effect on electric rates.

Frenchy

Where does the money originate from if not electric and water rates?

Cobourg Person

LUSI operates the water system for Colborne and Grafton. LUSI also has a fibre network. I expect the dividend comes from the profit.

Fact Checker

Neither LUSI or LUI pay dividends to the Town.
LUI pays $507,500 in interest to the Town and pays HOLDCO a dividend.
HOLDCO then pays a dividend to the Town.
Part of the interest paid by LUI and the dividend paid to HOLDCO come from the revenue that LUI charges its customers for electricity distribution.
If LUI didn’t have to pay interest to the Town and a dividend to HOLDCO, its distribution rates could be lower.

Read the Town’s Audited Financial Statements and the HOLDCO Annual Report to learn more.

Cobourg Person

LUI pays interest of $507,500, no dividend. The interest paid to the Town of Cobourg is based on the promissory note that LUI has with the Town of Cobourg. However, the amount included in the electric rates is based on the Ontario Energy Board interest rate of 3.72%, not 7.25%.

LUSI pays a dividend to the Town of Cobourg but it doesn’t affect electric rates.

I have read the Town’s audited financial statement. However, I prefer to read the LUI submission to the CTA during the Cost of Service in 2016:

“LUI also made arrangements with the Town of Cobourg to suspend dividend payments to its shareholder and instead reinvest the funds into maintaining its distribution system and meet its infrastructure needs.”

http://www.rds.oeb.ca/HPECMWebDrawer/Record?q=CaseNumber=EB-2016-0089&sortBy=recRegisteredOn-&pageSize=400

Fact Checker

HOLDCO is LUI’s shareholder, not Cobourg, so the quoted statement doesn’t make sense. If LUI wanted to suspend it’s dividend to HOLDCO, it needs to make an agreement with HOLDCO, not Cobourg.
Further, Cobourg is not LUSI’s shareholder, Therefore LUSI can’t pay Cobourg a dividend. LUSI’s shareholder is HOLDCO.
Cobourg’s 2017 Audited Financial Statements, Note 4 pg 13 clearly show that HOLDCO paid a $200K dividend to Cobourg
Holdco’s revenue is from dividends from its subsidiaries: LUI and LUSI.
The 2017 HOLDCO Annual Report shows HOLDCO revenue at $431K and LUI net income at $239K, indicating that LUSI’s net income was $172K, which is not sufficient to fund a $200K dividend..

Frenchy

Well I guess we are all learning something today, eh Cobourg Person?

Cobourg Person

i learned that Fact Checker should check their facts 🙂

Fact Checker

From this thread, which facts do you believe require checking?

Frenchy

Tell us what facts a fact checker should check if a fact checker should check facts?

Mrs. Anonymous

I suppose that using the term “leverage” is a more marketable word than calling it a taxpayer funded subsidy to private business.

Durka

Private business are not always great stewards of historic buildings. The buildings on King are worth town investment if you ask me.

cornbread

If the Town invests, the Town should become part owner!

manfred s

cornbread, sometimes investment is more about getting a good return on investments rather than about ownership, something that doesn’t necessarily produce a valuable return.

cornbread

Years ago, Cobourg invested in Northam Industrial Park…they bought it. Turned out to be a good investment. Investment means you have some “skin in the game”…don’t try to confuse the issue.

manfred s

oh my, did my comment confuse you, cornbread? 😉

cornbread

Manny, you are really getting smug now.

Frenchy

The history buffs here know the full details, but wasn’t it public officials that almost had historic Victoria Hall torn down until private citizens jumped in to save it?
Government doesn’t always know best.

Walter L. Luedtke

Half baked as usual.
At the time, the estimated budget was $1-million for the first part of the job of restoration,
“Town council could not possibly do anything that was going to cost $1-million. The population was 15,000, and there was not enough industry. That tax base would never support it.”
And, under the Municipal Act, the town could not solicit funds.
It was Councillor Fisher who went to work putting a committee together that could solicit donations from citizens.

Frenchy

aaa

Frenchy

“wasn’t it public officials that almost had historic Victoria Hall torn down until private citizens jumped in to save it?”
Half baked?

“A motion in Cobourg Council called for demolition. However, there was one vote in opposition – recorded by Lenah Fisher, Deputy Reeve.
Lenah’s belief in the building led to the founding of the Society for the Restoration of Victoria Hall, a citizen’s group that would repair and restore the building and then return the building to the Town. It was a gamble. The Society began its work in 1971, raising funds from Federal, Provincial and private sources. The first task was to stabilize the building, and from there the Society went on to repair and restore every element and detail of the building. It took twelve years, with costs passing the seven million dollar mark. The restoration was done utterly without compromise, bringing the building into the 21st century.
The largest privately driven heritage project in Canadian history was a successful gamble.”
https://www.cobourginternet.com/cobourg-news/news-2014/357-documentary-about-victoria-hall-planned

Stewey

I suppose that if you have a philosophical stance against offering public money to private businesses at any level of government (CIP’s, government grants and loans, tax breaks, or other means), not much will change your mind, however a CIP is one avenue that the local Council can take to help improve and make a difference in their community. This is used A LOT in Ontario….just Google “Community Improvement Plan” and you will find dozens of Ontario examples.

Mrs. Anonymous

I fail to see how “this is used A LOT in Ontario” rationalizes the use of CIPs. I have no doubt that it works well for the people who own this real estate. Not so much for the ratepayers who have to subsidize someone else’s investment choices.

Walter L. Luedtke

Guess you prefer this for Cobourg.

comment image

A “High Street” in the UK.

Frenchy

No, I prefer this for Cobourg.
Here’s another streetscape from a town that didn’t have a CIP program.
comment image
A “High Street” in the USA.

This picture is as ridiculous as the one you posted in a discussion about Cobourg’s downtown