$120M tax break urged for Woodbine project
Toronto should offer a $120 million tax break, spread over 20 years, to the developers of a proposed entertainment, restaurant and shopping development beside Woodbine Racetrack, says a report from city staff.
While offering tax breaks to spur development in disadvantaged communities is commonplace in the United States, the proposed incentive for the Woodbine development would be the first ever offered by Toronto under a new program just approved by city council in May.
The report, which will go to the economic development committee for discussion next Tuesday, says the development would boost the economy of north Etobicoke, which suffers from high unemployment and low incomes.
The report doesn't cite any explicit "community benefits" deal with the developer to ensure more local jobs, affordable housing, transit, child care and community space, as some American communities have secured – an idea that energized a coalition of Rexdale community groups called CORD (Community Organizing for Responsible Development) when the project was announced more than a year ago.
But it does note that "Woodbine Entertainment has a policy of hiring locally for its existing 3,000 positions and regularly holds job fairs in concert with local agencies."
The proposed development, called Woodbine Live, is a $707 million project that would feature live entertainment venues, bars, restaurants, shops and a skating rink just north of the racetrack.
A second phase just to the west would include 1.5 million square feet of office space and 2,500 residential units. The proposed tax break is limited to the first phase of the project.
Under the city's new rules, developers in designated areas where the economy is struggling can get a tax break when development drives up a property's value – and therefore its tax bill.
The city continues to collect taxes based on the property's original value, but forgoes the extra amount that would normally accrue because of the property's rising value.
The staff report says Woodbine Live had asked the city to forgo $147 million in taxes over 20 years, but city officials are recommending a lesser figure of $120.4 million in tax forgiveness over 20 years.
The city will still receive $179.3 million in new additional revenue – through development charges, $76.3 million in new taxes, and the city's cut of additional slot-machine earnings, worth an extra $75.5 million over 20 years.
Woodbine Live is a partnership between Woodbine Entertainment Group and a U.S. developer, The Cordish Company.
Woodbine Entertainment Group now employs about 3,000 people, but the first phase of the proposed development could create as many as 6,400 new jobs, according to the report.
The city hired a consulting firm, Hunden Strategic Partners, to evaluate the proposed tax break.
Hunden reported that the tax break proposed for Woodbine Live is "significantly less" than incentives available in many U.S. cities. Toronto's contribution will be about 12 per cent of the cost of the first phase of Woodbine Live, Hunden calculates, while a dozen similar projects in the U.S. received incentives worth 30 per cent of the project costs on average.
The report stresses that the risk for the city is minimal, because it's not contributing any upfront money.
"The risk to the city is actually greater if the project does not proceed and Woodbine Racetrack continues its slow decline," the report says.
"The city will forgo additional tax revenues, slot revenue, development charges and will lose opportunities to develop local employment programs.
"The city will also lose the opportunity for a new tourist attraction."