Warehouse developer discounts?

No thanks!

June 2, 2024 update

Thanks to the more than 50 of you who wrote to council asking for the

elimination of the 37% industrial developer discount. Councillors Alex Wilson and Craig Cassar tabled a motion to help reach a compromise but developer pressure ruled the day and the majority of Councillors voted to continue the discount but gradually phase it out by 5% over eight years. This will transfer eight years of DC developer discounts onto the shoulders of taxpayers, and hasten warehouse development on Hamilton’s wetlands.

April 27, 2024 update

The issue

Hamilton is currently giving a big discount on Development Charges (DCs) to industrial developers who want to build

warehouses on Hamilton wetlands. DCs are the fees that pay for roads, sewers, streetlights and water mains in and around new buildings. If developers don’t have to pay them, then taxpayers do! On May 2, 2024 Hamilton’s Audit, Finance and Administration committee will vote on whether or not to stop giving industrial developers a discount to pave our wetlands. The Staff recommendation is to CONTINUE with the discount so we need to say NO!

Send a quick email to council today to say no more discounts for industrial warehouse development in Hamilton wetlands!

The City of Hamilton's Audit, Finance and Administration Committee (AF&A) will vote on May 2, 2024.

Link to agenda and appendices is HERE

Take Action! Send a quick email asking Councillors to vote to scrap discounts for industrial warehouse developers. Here are some speaking points.

Eliminate the current 37% discount entirely, with no gradual phase out and no exemptions for industrial expansions.

Industrial developers who build on unserviced farmland should pay higher DCs compared to those that remediate and build on brownfields within the urban area where infrastructure already exists.

Hamilton taxpayers have not been consulted about DCs exemptions, which will transfer significant costs from developers straight to taxpayers. Developers, not taxpayers should pay for growth.

Link to agenda is here

Consultant slide presentation is here

Staff report with recommendations is here

Request to delegate or send a video here.

Deep dive:

Growth is supposed to pay for itself. That's why DCs exist. They should be paid by developers to cover the cost of infrastructure in and around new developments, such as roads, sewers, streetlights and water mains. Most of Hamilton's remaining wetlands are in the Airport Employment Growth District - AEGD - where new roads alone will cost the city at least half a BILLION dollars. If a developer wants to build, they should contribute financially to the infrastructure that accompanies that development. Note that the upfront costs of paying for infrastructure that the city is allowed to collect, don’t even come close to covering the lifetime costs of sprawl infrastructure which always fall the the taxpayer in the long run.

For several years Hamilton has given industrial development (warehouses) a big discount on DCs as an incentive to build. This means the discounted portion of those infrastructure costs, which should be paid by the developers, are transferred straight to Hamilton taxpayers instead.                                                           

Here’s the good news! The city is now renewing its DC By-law and is considering eliminating the Industrial DC developer discount and even going a step further by increasing the DC charge for some types of industrial development. The recommendation is to continue offering a discount (through a grant) for manufacturing facilities but scrap the discount for other warehouse development.

Remember, any shortfall in DC revenue must be funded through the property tax levy or rate (water) fees, so taxpayers will be on the hook for any discounts handed to developers.

The current guideline is for all industrial development to pay $28.01 for each square foot of gross floor area, but that amount is currently discounted to $16.70 per square foot. The new recommendation is for warehouse developers to pay a new higher rate of $41.48 per square foot of gross floor area.

The open house and public consultation were only posted on the city’s DC website so the only feedback to date has been from developers who are keen to maintain the status quo Industrial DC discounts.