County council's economic development committee is supporting Elora South Inc.'s request for a $930K grant that will be used toward part of its large redevelopment in the village.
The grant, which can be used on the commercial buildings, hotel suites, and the parking garage part of the development, comes through the County of Wellington’s tax increment equivalent grant (TIEG) under the county’s invest well community improvement programme (CIP). It comes in the form of tax incentives over the time span.
At Tuesday’s county economic development meeting, the majority of the committee members approved the grant proposal with only Coun. Campbell Cork being the only one opposed.
The grant proposal was expected to be finalized and approved during the county’s administration, finances, and human resources committee meeting later Tuesday.
Campbell does not believe that giving the grant to a private sector company is not a good use of taxpayer dollars as many county residents are struggling with food insecurity. He argued that one in 10 county residents are struggling financially and with food insecurity.
The rest of the committee members believe otherwise, with chair George Bridge explaining that the nearly $1 million grant would not be in existence without the investment from Elora South Inc.
“Had they not come in the original investment, the county wouldn’t be making the taxes we have now to give us the ability to do some of the other programs we do. I think people misunderstand – this isn’t a grant, per se, but what it is is money that wouldn’t be there if we didn’t have the development,” said Bridge during the meeting.
Pearle Hospitality, referred to as Elora South Inc. originally submitted a TIEG request under the Township of Centre Wellington’s own CIP program on July 26, 2021. Centre Wellington council has designated the location a priority site and approved the Elora South Inc. TIEG application.
The Elora South Inc. project proposal includes multiple buildings with residential, hotel, and commercial uses. The development covers 3.6 hectares or 8.9 acres, and the assessed property value is estimated to increase from $2 million to approximately $130 million upon full build out.
The proposal has six phases of development that will occur over a maximum period of 15 years.
However, not all phases of construction are included in the county’s TIEG such as the condo development as well as all the residential units like the mid-rise residential building with 136 residential units.
The only phases that are included in the grant request are commercial buildings, hotel suites, and the parking garage.
“We chose to go with the grant request due to several priorities that Elora South Inc. posed. Priority one is that the land is being used strategically and is developing on vacant and undeveloped lands,” explained Crystal Ellis, county’s director of economic development, during the meeting.
“Priority two is that it provides rental housing and it supports the intensification of the downtown core. Priority three is that it improves buildings and infrastructure, which supports the heritage component. Priority four is the diversification of the economy as it ultimately creates new retail and business opportunities. Lastly, it promotes tourism for the township.”
The county’s invest well CIP TIEG programme allows for a five-year term grant with 100 per cent of incremental taxes waived in year one, dropping by 20 per cent each year until taxes return to the full amount in the sixth year. This amounts to a total proposed grant value of $931,695 over five years.
“Essentially, the concept is you take the existing taxes and you figure out what the new taxes will be which is purely based on an educational estimate from consultants, and the difference is called the incremental tax,” explained county treasurer, Ken DeHart, during the meeting.
“With the county, our grant is only eligible on the commercial and industrial portion, so we only look at the increase in taxes for the commercial and industrial portions and then the difference of what they’re paying and will be paying is what the tax increment is. Then, that portion is over the five years.”
