Brings in local real estate firm after failed public auction
The properties on Fielding Road are listed for sale by a local Realtor for $1,980,000, $210,000 and $160,000 respectively. The same properties have failed to attract bidders in public auctions over the years, as the city has tried to recoup millions in back taxes.
The most recent attempt was in May, when the properties were available for a minimum bid of $2,236,658.79, $249,568.06 and $190,107.68, but failed to attract a suitable bid. Under provincial rules, the land can’t be sold for less than what the city is owed in back taxes and other fees.
While located in a busy industrial area, the properties are brownfields, which means whomever buys the land becomes responsible for any environmental issues that arise in the future.
While the city can take ownership of any property once tax arrears reach a certain point, brownfields can be particularly risky. Taking ownership could mean the province or a future owner could hold the city liable for any environmental problems that arise long-term.
“We’re cautious about getting on a property that we may be ordered by the Ministry of Environment to clean up,” Derro said in 2013. “We’re very, very careful about that. Because once one is on the title, one could be a potential cleaner.”
David Petrie, an operations assistant with the Canadian Brownfield Network, said municipalities across Canada are struggling to deal with the issue of brownfields and the problem of collecting delinquent taxes from their owners.
So, for example, if Sudbury took title of a brownfield because a property owner failed to pay taxes, cleaned it up and then sold it to someone else, they could still be liable for problems in the future, Petrie said.
“Say 10 years down the road they discover that, whatever the original environmental problem was, it has caused leaching into the water table and nearby businesses and homes are affected,” he said. “Those businesses and homeowners can go back, as far back as they want to, really, to find somebody to hold liable. And municipalities are seen as a good target, particularly when the earliest owner is no longer around or doesn’t have the resources to pay.
“It becomes very, very difficult for municipalities to avoid liability.”
Rather than taking ownership of brownfields, the city has implemented a brownfield strategy that offers buyers a number of incentives to make the properties more attractive.
They include municipal tax forgiveness while the new owners are rehabilitating the property; reduced tipping fees for soil being removed as part of the cleanup; rebates for building and other permits; and grants to help pay for remediating the land.
The strategy won the 2013 Federation of Canadian Municipalities Sustainable Communities Award. In February, a former welding shop in Chelmsford that's being redeveloped into a four-unit residential building received $44,792 in assistance through the brownfield strategy.
While resistant to take ownership of brownfields, the city did vest the former Kingsway Hotel earlier this year. The building was demolished and the land levelled this spring. It's being offered for $525,000.