The old Dairy Producers property on York Road appears poised for a major upgrade, and the City of Yorkton will provide some initial tax relief if the work proceeds.
The property on 41 York Road West has been mostly vacant since Saputo Foods Ltd. ceased operations around 2004, detailed a report circulated at the regular meeting of Yorkton Council Monday, adding in 2008, they sold this building to 101068682 Saskatchewan Ltd. company who used it for storage and other nominal purposes.
City Director of Finance Lonnie Kaal explained that the problem has been that improvements are required, including roof repairs for some $400,000. A significant investment is required to make the building useable.
In May 2011, new shareholders took over the company and are looking to spend $1.3 million in building improvements. They have a project manager who has put together the financing and business plan. They expect to commence in November 2011, with the majority of improvements to be completed in 2012, said Kaal.
Kaal said the new owners do have some concerns over taxes, including the $107,572 outstanding from 2009, 2010 and 2011.
"They are not looking for the City to waive penalties and taxes that have accrued in the past, but are hoping for some tax relief going forward. The annual tax levy in 2011 was $25,100 City, $11,400 School, equalling $36,500," said Kaal.
In terms of arrears, the new owners proposed providing a lump sum payment equivalent to 2009 taxes and penalties of $34,837.02, and setting up a payment schedule to satisfy all taxes owing within 36 months. Payments estimated at $2,020/month plus penalties starting January 2012, said Kaal.
Since this does not include waiving any penalties or tax levies, Council approval is not required. Administration will set up the payment agreement, and as long as payments are made as scheduled, "we will not move forward with regards to taking title," she added.
The new owners were also looking for a tax abatement going forward, most likely under the City's Enterprise Zone Incentive Program, using the Vacant Property Tax Abatement. The program will abate taxes for vacant buildings that are under new ownership. The building must have been vacant for the three years prior to possession date. The intention is to offset to the new owners the cost of bringing the property up to building code standard and to stimulate economic activity within the EZIP zone
"Technically, the building does not qualify under the policy, but we can acknowledge that a large portion of the building has not been used for three years. The new owners are willing to put in a significant investment (1.3 million) as well as looking after the existing $100,000 in tax arrears. Given these considerations, we are of the opinion that this property should be included in the incentive bylaw going forward," explained Kaal.
We propose to include this property in the Enterprise Zone bylaw providing permit and inspection reports indicate that over $1,000,000 has been spent on the property. The reason for the qualifier is that some improvements were done by the previous owners but not enough to make the building viable over the long term. Also, the tax agreement regarding arrears must be progressing as planned before we would include this property in the incentive bylaw.
Council unanimously supported Administration's recommendation to provide the tax abatement under the conditions outlined.
