Raise the Hammer
The downtown revival is exciting but remains constrained by parasitic property speculators and a transportation policy that continues to prioritize moving cars over accommodating people.
By Nicholas Kevlahan
Published May 06, 2015
this article has been updated
This past Sunday, I joined the Downtown Renewal Jane's Walk in Hamilton. It was led by Glen Norton, the City of Hamilton's Manager of Urban Renewal, and Hazel Milsome, the City's Coordinator of Urban Renewal Incentives.
The block of Main between Caroline and Bay under construction (RTH file photo)
The walking tour was long and extremely interesting. Almost all of the 30 or so walkers stayed for the whole two hours!
Glen and Hazel were enthusiastic, knowledgeable hosts who shared their wealth of experience in the City's incentive programs and their role in driving renewal and increasing property values downtown.
They also shared many interesting anecdotes about the how development projects actually happen. During the stroll criss-crossing the downtown core, I learned or confirmed some important things about downtown development.
First, real developers are starting to build serious projects, including some very large new builds. We may finally have reached the tipping point.
Unfortunately, however, I must observe that the success of these new projects has not led Hamilton's old guard of parasitic "developers", i.e. property speculators, to develop or sell many of the surface parking lots, used car lots and vacant sites they have been holding onto for decades.
Instead, the lift in property values has simply made them even greedier. Norton said the owner of a small used car lot downtown now wants at least $3 million for the property!
Meanwhile, the owner of another site, a huge gravel parking lot, does not have a serious plan for the site but occasionally muses about building a big one-storey strip mall. Such a land use is obviously not acceptable to the City. At the same time, the owner will not sell to someone who might actually move ahead with a good development plan.
The City is providing generous advice and financial assistance to encourage property owners along King Street to renovate and develop the upper floors of their buildings. Most of these units have sat empty for decades, and the City sees them as an opportunity to boost property taxes, jobs and residents downtown.
Unfortunately, there are several absentee landlords who have no interest in doing anything with their buildings except collect whatever rents they can get from marginal ground-floor tenants.
Norton and Milsome were very excited about all the new residents who will soon be moving in to the new buildings on Main Street between Caroline and Bay Streets. Interestingly, most of the units are rental, which is good news since almost no new rental has been built in the last 20 or 30 years.
I suggested that with close to a thousand new residents expected in that one block, the City should improve the very unpleasant pedestrian experience on the Main Street sidewalks - e.g. widen sidewalks, plant trees, add buffers.
Norton said, "I agree entirely". Milsome, however, added, "The city has no plans to change anything in the next decade, and because of LRT everything is up in the air."
It is infuriating that the City is quite happy to have huge density and millions in new taxes in a tiny one block strip, but will not make the smallest improvements to the immediate environment of those residents.
If this were a greenfield sprawl development, those residents would definitely warrant a new park (and the city would need to invest in new infrastructure). Downtown, the marginal cost to the City is close to zero and yet they are unwilling to even widen the sidewalk and plant some street trees.
Note that the north curb lane on Main has been closed for years now with no impact on automobile traffic - this is very low-lying fruit the City refuses to grab.
It is downright passive-aggressive for the City to use "possible LRT" as an excuse not to make various relatively minor street-level improvements for pedestrians and cyclists year after year, while simultaneously doing everything it can to ensure that Hamilton has as weak a case for LRT as possible.
If Hamilton is not going to be "ready" for LRT for at least ten years - even though we were actually "ready" for LRT back in 2008 - why is the City still using it as an excuse to avoid making modest improvements for all our new residents and hotel guests in the meantime?
This especially confusing since we're talking about Main Street and the LRT is planned to go on King Street.
Knowing that LRT is possibly coming did not stop the City from resurfacing King Street East a few years ago and repainting it exactly the way it has been for decades.
King Street East repainted (RTH file photo)
Overall, I got the impression that Norton and Milsome "get it" but are constrained by parasitic speculators and a few owners who do very cheap work on their buildings to get subsidies (they are thinking of instituting design and quality standards).
Their efforts are also hampered by a Public Works department that often works at cross purposes by keeping downtown Hamilton an auto-centric place rather than making it a people place.
The millions in new taxes generated by thousands of new residents should mean that their needs for an attractive, liveable local neighbourhood and excellent transit get taken very seriously!
Unfortunately, that's not happening yet, even though Council keeps approving new high-density developments with decreased parking requirements.
Further, while the City maintains lots of lucrative incentives for property owners to help pay for facade and leasehold improvements, the City is constrained by a Provincial tax policy that forces the City to give a big property tax discount to vacant buildings and an even bigger discount for demolishing the buildings altogether.
When Wilson-Blanchard demolished the three-storey office building at 20 Jackson Street West, the annual property tax went from $77,000 a year to just $7,000.
This system of tax rebates with no expiry dates and permissive demolition makes it very easy for speculators to sit on land year after year at very little carrying cost or risk.
Meanwhile, it is detrimental to both the economy and quality of life for the downtown core and costs the City untold millions of dollars in foregone property tax revenue.
For just an example of what kind of property tax revenue we're losing, RTH editor Ryan McGreal noted last year that the property tax revenues for 123 James Street North, 68 George Street and 40 Bay Street South increased by between 10 and 20 times after they were developed.
| Location | Pre-Development | Post-Development | ||||
|---|---|---|---|---|---|---|
| Assessed Value | Property Tax | Municipal Portion | Assessed Value | Property Tax | Municipal Portion | |
| 123 James St N | $371,000.00 | $12,527.81 | $9,169.49 | $3,800,000.00 | $144,459.24 | $93,919.24 |
| 68 George St | $436,500.00 | $17,955.66 | $11,210.86 | $9,643,750.00 | $350,273.11 | $228,761.86 |
| 40 Bay St S | $760,000.00 | $28,434.02 | $18,122.86 | $13,000,000.00 | $473,796.18 | $309,996.18 |
There is no excuse for an ambitious and energetic downtown property owner not to improve their property and actively search for tenants.
Continued speculation is particularly antisocial and perverse, because the speculators' land value will rise only once other, more responsible and dynamic, land owners develop their nearby properties.
Update: updated to clarify that Norton and Milsome were not calling the absentee landlords and property speculators "parasitic".
By sminkster (registered) | Posted May 06, 2015 at 08:35:34
I also went on this walk and it was interesting to see how much skin the City is willing to put in the game to get developments moving. I was also disappointed by the number of speculators holding land for years, looking for a bigger payday, while adding no value. Those parasites are actually damaging the city in my opinion. Walking by the vacant lot at the corner of Hess and Main it becomes very obvious as the experience at street level walking pace is quite unpleasant. It was a great Jane's Walk though!
By jason (registered) | Posted May 06, 2015 at 08:54:07
if only there was a cheap/temporary way to enhance the public realm on Main Street....
https://walkablebrevard.files.wordpress....
Also a PB project I plan on submitting is to cut out small squares into the sidewalks for street trees along the length of Main and Cannon as shown in the above pic.
The city did this a few years ago on King in Westdale, and the sidewalks are ample wide along Cannon and Main to do the same. That one small addition of a new green canopy along with planters and parking protected bike lanes would bring Main St a giant step forward in livability and vibrancy on it's sidewalks. Traffic volumes through Bay St only warrant 2-3 lanes of traffic. 24-7 parking on the north curb with a few spots removed before intersections to allow for left turn lanes would still maintain 3 full traffic lanes, plus safe bike lanes, greenery in the planters, 24-7 parking for businesses and a safer environment on the sidewalk thanks to the buffer between high speed traffic and the sidewalk.
By mikeonthemountain (registered) | Posted May 06, 2015 at 09:49:36
The other day I was in town and saw two young schoolkids, riding bikes by themselves, in the on-road bike lane on York Blvd toward the city center.
It was striking - at least to me - I'd never seen that before. I though of an analogy to amphibians returning to a formerly polluted lake. A small but meaningful indicator that health is starting to return!
It was rush hour, I was on my way to an appointment, and the surplus lane was not missed at all. Traffic moved perfectly.
By jason (registered) | Posted May 06, 2015 at 09:54:26 in reply to Comment 111426
this is now becoming more common along that stretch of York. Previously, nobody rode their bikes on York. And this vast improvement isn't even with any physical barrier. Imagine if they added planters along those bike lanes in the buffered area. A great model to follow city-wide.
By ItJustIs (registered) | Posted May 06, 2015 at 11:08:17
"Continued speculation is particularly antisocial and perverse, because the speculators' land value will rise only once other, more responsible and dynamic, land owners develop their nearby properties."
"Unfortunately, however, that has not led the old guard of parasitic "developers", i.e. property speculators, to develop or sell many of the surface parking lots, used car lots and vacant sites they have been holding onto for decades."
Although I will be covering this in an upcoming Spec op-ed, I feel obliged to at least comment briefly (!), here.
We're in a (relatively) free-market, capitalist system. There absolutely are some ridiculous flaws, stuff that really needs to be dealt with. No argument here.
But developers, no matter what kind of brush you feel compelled to paint them with, operate within this system. In the end, not to put too fine a point on it, they will develop when they feel that the return on their investment is such that it benefits them. And not before.
Let me be clear: I mourn for the downtown every time I'm there, which is often every day of the week. I'm old enough to remember two interludes in its history when it was thriving. (The mid-60s and from about '75-85, each era with its distinct profile.) I mourn the loss of The Century theatre (a building that did not need to be torn down), especially in light of the fact that this was done in 2011, and it's still laying fallow. I still mourn the loss of The Capitol and The Palace, two Thomas W. Lamb buildings, two architectural gems. And I'm constantly enraged when a situation like the Blanchard non-development unfolds. However...
It would behoove anyone who, constantly tending to their high dudgeon, rants about this intolerable set of circumstances, to do as much research in development as they tend to be inclined to do towards something like, for example, LRT, a subject that at least a few on this blog unconsciously believe they're 'experts' on. (Throw in 'urbanism' as another example.)
These 'evil developers' are people, plain and simple. (No matter their legal status as, say, corporations.) Their morals may be suspect in your eyes, but they're not sitting around rubbing their hands together laughing maniacally at how their despicable speculations are panning out. They're looking at maximizing their investments. You may feel that what they engage in is reprehensible. The stuff deserving of damnation. But to do so without generating a solid understanding of how things work is, at the very least, disingenuous.
The downtown...you know, as in Raise the Downtown...will morph pretty much within the circumstances it's meant to. That is, beyond any controls that some would prefer to be in place. In the meantime, energies currently projected onto Those Who Will Not Behave As We'd Like could be better used in efforts to effect change in aspects of Life in Hamilton towards the eventual development of the properties currently laying in wait.
Comment edited by ItJustIs on 2015-05-06 11:08:45
By redmike (registered) | Posted May 06, 2015 at 20:37:19 in reply to Comment 111428
this person sounds a lot like the "my phoney creek" fella bassington.
By AlHuizenga (registered) | Posted May 06, 2015 at 14:30:13 in reply to Comment 111428
I mourn the loss of your point.
By z jones (registered) | Posted May 06, 2015 at 12:41:31 in reply to Comment 111428
New Rule: the ever scolding, always finger-wagging "ItJustIs" does not get to accuse other people of "high dudgeon", ever.
By CharlesBall (registered) | Posted May 06, 2015 at 13:43:36 in reply to Comment 111431
I had to look this up. It means "righteous indignation" does it not? (As opposed to self-righteous indignation.)
By Pxtl (registered) - website | Posted May 06, 2015 at 12:08:40 in reply to Comment 111428
The point is that developers should not be incentivized to tear buildings down or leave them unoccupied. Developers work within the structure the laws and the tax-code build for them, and so the laws and the tax-code should encourage them to develop their properties or sell them to somebody who will.
The free market is about game theory, and if you build a game that encourages bad outcomes for the city, the players will accomplish exactly that.
By John Neary (registered) | Posted May 06, 2015 at 18:31:40 in reply to Comment 111429
It's depressing that we use the word "developer" to describe someone who tears down a building or leaves it vacant. Not criticizing you, Pxtl, just pointing out how bizarre the word is in this context in which it is frequently used.
By mikeonthemountain (registered) | Posted May 06, 2015 at 19:07:36 in reply to Comment 111437
The dictionary definition of a developer is someone who builds or innovates.
In the case of land development, it is someone who invests in raw land and transforms it into usable real estate, or modifies or expands existing buildings.
That may be what they're calling themselves, but it's not what they're doing. The examples you are concerned about is the reverse. If we're going to be pedantic, 'squatter' is the definition they are closer to. Actually some hybrid of speculator + squatter. For comparison, consider 'domain squatting' versus 'web development'.
By Pxtl (registered) - website | Posted May 06, 2015 at 12:09:54
A reminder: the Minister for Cities is Ted McMeekin, a Hamilton MPP. In every case where we have perverse incentives for developers to demolish or sit on properties, we should remember that those incentives are run by his ministry.
By KevinLove (registered) | Posted May 06, 2015 at 13:12:24
Perhaps the property tax system needs to be made more like child support. Someone can’t just say, “Between income tax and child support it’s not worth it for me to work so hard,” drop from full-time to half-time hours of work and expect their child support payments to suddenly drop in half as well.
In just the same way, if a property owner does something to reduce the value of his property, then his municipal property taxes should not be reduced.
By fmurray (registered) | Posted May 06, 2015 at 23:33:51 in reply to Comment 111432
Unfortunately, the child support system works exactly that way: If the non-custodial parent decides to earn less for the duration of their child's childhood, their obligation for support payments decreases. It's a federal table, written in stone. The custodial parent has to suck it up.
Been there.
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