In adopting an amendment to its Urban Centre Community Improvement Plan (CIP), Centre Wellington council has approved a tax break of $640,000 over 10 years to Pearle Hospitality.
On Dec. 12, council first held a public meeting to allow Wellington County’s involvement in the Tax Increment Equivalent Grant (TIEG) program, and then approved grants totally $640,651 over a decade.
Of that, $355,790 would come from Centre Wellington and $284,861 from Wellington County.
In his report to council, director of planning and development Brett Salmon clarified the TIEG agreement is for Elora North Inc., the portion of Pearle Hospitality properties on the north side of the Grand River.
Elora North Inc. made an application for a TIEG under Centre Wellington’s CIP. The site was previously designated as a priority site by Centre Wellington council.
Salmon stated that as a result of the redevelopment of the Elora Mill, the assessed property value is expected to increase from $1,759,000 in 2016 to $11,933,000 after ten years.
A TIEG is a grant equal to the full amount (or a portion of the amount) that municipal property taxes increase after a property is reassessed.
In this case. Centre Wellington grants will equal 80% of the township portion of the tax increase for a ten-year period.
The property owner would still be required to pay the education portion of the taxes.
Wellington County also agreed to participate in a TIEG in partnership with the township, albeit under different terms: a 100% grant in year 1, 80% in year 2, 60% in year 3, 40% in year 4 and 20% in year 5.
This equates to a total county grant of $284,861.
Salmon said he was pleased this was finally before Centre Wellington council. He noted the rebate happens after the taxes are paid.
Salmon added there are also a number of conditions to the TIEG funds, one of which is a requirement that work begins within a six-month period.
He also pointed out this particular rebate is only for the Elora Mill development on the north side of the Grand River.
Further, the rebates only begin once the work is completed and the property is reassessed for taxation.
