Ever watch old western films as a kid and start wondering how great it would be to live in a ghost town? Well, after the cameras stopped rolling John Wayne got to go home, but we’re stuck with this mess.
In July of 2014 - by my count - there were 94 commercial vacancies in the Downtown Windsor Business Improvement Association district alone. What you may or may not know is that a landlord can receive 30 per cent back for a commercial unit as per a tax rebate that is unique to Ontario.
Many of the vacant spaces, particularly those downtown, have been empty for years - like the old HSBC at 176 University Ave West (across from Phog Lounge) or 98 University Ave West, (last known as Light Bar) which closed approximately five years ago.
The program, which is a provision in Ontario’s Municipal Act, is currently under review for the 2016 provincial budget.
“The review responds to municipal and business stakeholder concerns regarding the appropriateness of the lower tax level provided through these programs and any unintended implications this has for local economies,” said Ministry of Finance spokesman, Scott Blodgett.
“A Municipal Reference Group and a Business Reference Group were established to support the review, ensuring an inclusive, comprehensive, and meaningful consultation process.”
Blodgett went on to say that amendments are being introduced in a spring bill for the Minister of Finance to prescribe a percentage to the rebate other than the current 30-35 per cent of the property tax for commercial and industrial vacant units.
Ward Four City Councillor Chris Holt campaigned on a platform of lobbying the province to rescind the provision, but recently called the possibility a ‘long shot.’
“That rebate doesn’t go back into making the property viable in whatever market they’re running it. It takes a little control out of the municipality’s hands, it drags down neighbourhoods and it’s not a good thing,” said Holt.
Holt believes that the province holds all the cards so municipalities are unable to do much. At the time we spoke he had only just heard that the provision was under review.
City Planner Thom Hunt has said the program can be questioned as to whether it is an incentive or disincentive for property owners.
“From a perspective of not encouraging demolitions, there’s a pro and con to the program. Some sentiment that’s out there is that it’s not an incentive to get someone to move in if they get a rebate,” said Hunt.
“The other part of it is, more from a building stock standpoint, while you have an economic downturn or you don’t have a person or viable tenant to come in you don’t suffer a substantial loss that puts you in a situation economically where you have to think about demolishing the building, which would be the worse case.”
Some buildings are of course more easily taken down than others. Multi story buildings are harder and more expensive to demolish, according to Hunt, meaning if the provision is cancelled it may be unlikely that such an action would be taken.
While the city collects data like the amount of claims, and how longstanding they are, it does not distribute it without the filing of a Freedom of Information request.
It has long been a matter of speculation that this is a system which is being abused. Downtown Windsor Business Improvement Association chairman Larry Horwitz thinks it’s just a red herring.
“There might be a minimal amount of landlords that use that deal. I would never use it,” said Horwitz.
“None of my friends that I know would use it. It doesn’t make sense to use that, maybe if you’re a landlord that’s living out of town in Toronto… because you don’t understand real-estate in Windsor, but no people who own property in Windsor would take advantage of that because it makes no sense.”
His reasoning is that the amount of money would be too low to make this a profitable strategy.
I called Rosario Cosco-Pizzuti, who owns several buildings downtown including 98 University Ave West, and posed as a potential tenant saying I wanted to open up a camera shop. For the price of $17 a square foot on 3100 square feet I was told I could rent the space month to month, no lease would be provided and that I could not open a bar.
Not offering a lease is legal.
“Is it ethical? That’s an agreement between a private owner and a tenant so it’s difficult for me to judge,” said Holt.
“If I was told I was only going to be offered a month to month investment I’d walk away from it because there’s no way I’m going to be investing in any leasehold improvements or my business reputation when I don’t have any guarantees I’m going to be staying in that space,” said Holt.