Kitchener's Economic Development Investment Fund (EDIF)

[Spokes]

Kitchener's Economic Development Investment Fund (EDIF)
Website (http://www.kitchener.ca/en/businessinkitchener/EconomicDevelopmentInvestmentFundEDIF.asp)

Downtown Projects Supported by EDIF
University of Waterloo School of Pharmacy - $30 million
Wilfrid Laurier School of Social Work - $6.5 million
Downtown parking improvements - $5.5 million
King Street Master Plan - $3.3 million
Victoria Park improvements - $2.7 million
Downtown community centre - $1.7 million

[Spokes]

From the Your Kitchener Newsletter (March/April Edition page 3) (http://www.kitchener.ca/pdf/yourkitnews_2010_mar_apr.pdf)


EDIF investment paying off in downtown core

Change is evident in the new King Street streetscape, in the new facades on downtown businesses, in the reclaimed factories turned into stylish lofts and work spaces.

Five years into the city’s 10-year economic development investment fund (EDIF) program, Kitchener’s downtown, and areas surrounding it, are changing dramatically.

“It is rewarding to see this kind of planning and investment pay off,” said Rod Regier, the city’s executive director of economic development. “Assessment growth in the downtown is on par with the city as a whole. New developments that have come out of EDIF have helped stabilize that, and we expect this to continue as more projects move forward.”

In 2004, the city engaged the public in consultation about the direction of local economic development. At the time, two investment strategy options were considered.

The first was the possibility of creating additional industrial employment lands in the city’s south-west greenfield area, or invest strategically in developing new industries largely based in the city’s core.

The second option was bolstered by a new brownfield- remediation program, the city’s downtown strategic plan and the Region of Waterloo’s Growth Management Strategy.

Support for a $110 million economic development investment fund (EDIF) emerged, anchored by strategic investments in education institutions starting with the Waterloo Catholic District School Board offices and Downtown Community Centre, the Wilfrid Laurier University Lyle S. Hallman Faculty of Social Work, and the University of Waterloo’s School of Pharmacy.

The fund also included estimated allocations to the reconstruction of streetscapes, downtown parking solutions and green-field industrial land projects.

EDIF

The city set an aggressive economic development agenda, making it possible to bring partners to the table, Regier says, adding that when EDIF was first created, it wasn’t intended to be a quick fix; it was to be a long-term investment in the core’s future.

Several significant projects that are emerging from EDIF have stimulated assessment and employment growth. At the same time, they also increased the number of people living downtown and brought significant private and public sector investment to the city’s core since its launch in 2004.

Assessment growth

Property values for locations near EDIF investments in 2009 are assessed at about 15 per cent higher than values city-wide, and about 40 per cent higher than they were in 2004.

Growth in assessment values for properties adjacent to the University of Waterloo’s School of Pharmacy is $39.4
million above expected growth. This accounts for additional tax income of more than $1 million, including regional and provincial (education) taxes, compared to the expected value of these properties.

The Tannery District is expected to have an assessed value of $30 million when complete and fully occupied. Future taxes are estimated to increase by $244,000 (2009 dollars) per year.

The City Centre project (formerly known as Centre Block) will directly stimulate assessment in its own properties, with tax revenues to the city estimated to be in the range of $400,000 annually.

Employment

In 2004, the office vacancy rate in the downtown was 13.9 per cent, and has since dropped year by year to a rate of 7.4 per cent in 2009.

The 13.9 per cent rate in 2004 was 3.8 per cent higher than the overall rate for the city; this difference has reversed as of 2009, with 7.4 per cent downtown compared to 8.1 per cent citywide.

The redevelopment of the Tannery District and former Collins and Aikman plant at 51 Breithaupt St. will create an additional 550,000 square feet of office and commercial space in the downtown — housing as many as 1,800 employees.

Development of residential units downtown

Projects that have received support through the city’s upper-storey renovation program, which are either now underway or complete, have a total cost of $1.7 million — of which $489,250 was or will be loaned or granted by the city.

Andrin Inc.’s redevelopment of the Kaufman Lofts was a direct result of the city’s investment into the downtown health sciences campus, resulting in 270 new residential units — or approximately 486 residents — in the core.

The City Centre Condominiums, formerly known as Centre Block, will add 385 new residential units — and approximately 700 new residents — downtown.

Partnerships

The city has sought partnerships to contribute to funding for each project, with a target of securing 15 per cent overall from other sources.

Contributions from other sources toward EDIF- supported projects sit at $64 million, compared to the city’s investment of $48.9 million.

When future investments are taken into account, for every $1 the city has invested in EDIF projects, its partners will have contributed $1.78.

“Seeing all of the EDIF projects take shape in the downtown has given the private sector great confidence,” said Regier. “People are affirming and investing in the city’s priorities; in fact, our partners have invested more in projects than we have.”

Regier is pleased with the results of EDIF halfway through the 10-year program. “At the time, we were building something that
would take at least a decade to bear fruit and produce results,” he says. “Yet, only halfway through the program, we are seeing outstanding results — earlier than what we anticipated.’’

About 44 per cent of the fund has been invested and planning is underway for projects that will consume the remaining available funds.

For more information on EDIF, please see www.kitchener.ca

[UrbanWaterloo]

EDIF Impact Analysis 2011
REPORT TO: Planning & Strategic Initiatives Committee
DATE OF REPORT: December 30, 2011 | DATE OF MEETING: January 9, 2012
SUBMITTED BY: Rod Regier, Executive Director
PREPARED BY: Rod Regier, Silvia DiDonato, Cory Bluhm
REPORT NO.: CAO-11-030 (http://icalendar.esolutionsgroup.ca/Public/GetDocument.ashx?DocumentId=a3185e2a-2a8a-47b3-977e-9b468338fcf8&IsShare=True)

BACKGROUND:

Kitchener’s Economic Development Investment Fund is entering its 8th year of a 10 year program schedule. In 2009, City staff reported on the impact of EDIF on a number of variables for which data was available. During the budget deliberations of 2010, Council requested that staff consult with experts at the local universities to review assessment methodology. That review took place in mid 2010 and suggestions from those discussions have been taken into account in this subsequent analysis. In 2011, Council requested staff prepare a second assessment which reflects currently available information. The attached report summarizes the findings of this analysis.

REPORT:

When EDIF was established in 2004, Council articulated five key objectives.

Stimulate assessment growth
Stimulate employment
Stimulate the development of residential units in the Downtown
Seek maximum contributions in addition to the City’s funding for each project with a target of securing 15% overall from such sources, where possible
Strive to achieve a return on investment, both direct and indirect

These objectives are the primary focus of the report. The objectives are primarily quantitative. However, on the advice of academics from Wilfred Laurier’s School of Business and Economics, we have also begun a discussion of a number of related qualitative measures of the impact of EDIF. These include the perception of safety and investor confidence as a starting point. It will be possible to further refine the analysis over time as new data becomes available.

It is important to note at the outset that this report reflects a number of limitations in the availability and quality of data. First, while a Canadian Census was undertaken in 2011, the last census available for analysis is 2006. Other information, such as assessment data, also has significant time lags associated. Moreover, many of the objectives relate to real estate development which is characterized by long planning cycles and only results in increased assessment, tax revenue, and employment many years after projects are conceptualized. As a result, projects that are in the planning or development process right now will not have had a material impact on several of the measures for EDIF performance for some time to come.

That said, it is possible to identify a clear set of outcomes from investments made through EDIF. These outcomes were beginning to be apparent in the 2009 report, but they are even more clear at the end of 2011. It is expected that they will become even more pronounced after the conclusion of the program in 2014, and the 2016 Census should produce a clear statement of the impact of EDIF over the life of the program. EDIF investment decisions will continue to stimulate change until the end of this decade. However, after 2017 it is expected that it will be increasingly difficult to separate the impact of EDIF from other significant investment decisions such as the LRT and the opening of the multi-modal station at King and Victoria.

ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:

By providing a systematic and critical examination of the impact of a significant program, this report is directly aligned with the objective of providing efficient and effective government.

CONCLUSION:

EDIF has had a significant and growing impact on the City of Kitchener’s economy. Assessment, tax revenue, employment, and residential development all increased more than would otherwise have been expected in the period following the launch of the program in 2004. EDIF projects attracted significantly more partnership funding than was originally expected and with increased tax revenue, the fund is now generating a modest financial return for the City. This additional tax revenue is expected to increase overtime as additional projects are constructed, occupied and assessed.


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