Connaught

Council Should Repossess the Connaught

By Ryan McGreal
Published September 16, 2009

Dear Mayor Fred Eisenberger and City Councillors,

I urge you to reject the current proposal to redevelop the Connaught Hotel.

Personally, I like the idea of mixed income developments and am not dogmatically opposed to the idea of providing an additional 100 units of subsidized housing - though there is a real danger of ghettoization when too much poverty is concentrated in one area.

However, the current proposal does not seem to provide good value for the public investment.

1. The developers are asking for $18 million in public funding, or two-thirds of the total redevelopment cost, to provide subsidized rental prices on only half of the units.

In other words, it looks like some of the public funds ostensibly going toward subsidized housing would actually apply to the market-priced component of the development.

2. $18 million for 100 units works out to $180,000 per unit. At current downtown property values, that money could be used to buy a hundred four-bedroom houses and give them to people.

Alternately, the $18 million could provide a 20% discount on the purchase price of 500 homes.

3. The owners of the Connaught property have neglected to pay their property tax for the past three years, despite the fact that they pay a reduced rate for the vacant property.

(Aside: vacant properties should be charged at a higher rate, not a lower one. Why does the city provide a financial incentive not to invest?)

Instead of rewarding the Connaught owners for years of negligence by approving $18 million in public money, Council should vote to repossess the property for tax arrears and sell it to developers who are actually prepared to risk their own money restoring it.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal. Recently, he took the plunge and finally joined Facebook.

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By jason (registered) | Posted September 16, 2009 at 10:32:10

if this is how we punish people who don't pay their taxes, I'm going to stop paying mine.

This is a joke.

Ryan, these deals are never good value for the public investment. It's why they get made in the first place.

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By Tammany (anonymous) | Posted September 16, 2009 at 10:51:45

The fact that the arrears haven't been enforced, and that there can be absolutely no question of the City even considering repossessing the property as it is legally entitled to do, speaks volumes in support of the argument that municipalities should be given fewer powers rather than more. City councillors and administrators just can't be trusted to abide by the most basic principles of democracy like rule of law. Sure, if the average resident doesn't pay property taxes the City will take action against him or her. But if you are a well connected property hoarder - and every property hoarder in this city is well connected - you know you can act (or rather, fail to act) with complete impunity. It's disgusting. I wish there was some mechanism whereby the province could dissolve council and appoint unelected administrators for a fixed term to completely scour the city bureaucracy. Hamilton needs some way to start over from scratch before there can be any real hope.

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By jason (registered) | Posted September 16, 2009 at 10:53:34

found out yesterday that council has known about this plan for a few months. RTH was the first media outlet to break the story on Sept 4 by digging around in a city meeting agenda.

The fact that such a prominent project was hidden from view also makes one wonder what's going on. Perhaps nothing, but as is always the case in this city, something doesn't look right.

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By highwater (registered) | Posted September 16, 2009 at 11:10:41

The Spec obviously knew about it too. They had the spin machine up and running before the story even broke. I cannot fathom why they are so hot for this project. They have shown utter contempt for their readers, and all the law-abiding citizens of this city.

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By highwater (registered) | Posted September 16, 2009 at 11:15:14

Another Spec Connaught poll:

http://thespec.com/

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By seancb (registered) - website | Posted September 16, 2009 at 12:23:00

I sent my letter in this morning:

Mayor and Council,

The new light shed on the Connaught debacle shows us that we absolutely cannot trust this consortium with our public funds nor our heritage buildings.

Battaglia says the tax arrears will be paid as soon as they get rolling on the project. On what should our trust in his word be based on?

If we reward this group for their failure to pay taxes by tossing millions of public dollars their way, we are sending a message to future developers that we are eager to give in to such bullying.

Speculators who sit on prime downtown buildings and operate surface parking lots on premium land - all the while not paying taxes - are contributing to the decay of the core. To reward them is ludicrous. Now is the time to repossess these properties and sell them to someone who will actually build to the standard that our city deserves.

We need to keep the Connaught a hotel. If we truly want to provide affordable housing, the $18,000,000 could be spent on one hundred houses spread throughout the city at $180,000 each, and offerred to those in need at 80% of market value.

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By ditto (anonymous) | Posted September 16, 2009 at 14:11:30

I sent my letter into the Mayor and City Councillors just now too. I encourage others to do the same!

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By Really? (registered) | Posted September 16, 2009 at 14:24:01

Very well said, Ryan! I really hope Council actually pays attention to this, but am not holding my breath.

Why ISN'T there a mechanism-of-sorts that would allow the Province to take over? It's clear Hamilton's Civic Gov't is not qualified for the job, and are constantly begging (literally) McGuinty for tens-of-millions-of-dollars each year in Budgetary (Financial) Aid.

Does that not raise any red flags as to where the City's money is REALLY going!?

Please... McGuinty, ANYBODY, disolve Hamilton City Council and get some REAL representatives in our City Hall, err, Mall!

What an embarassing City... no wonder we're the lauhing stock of the entire Country!

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By Robert D (anonymous) | Posted September 16, 2009 at 14:31:09

Tammany has it right. This city is rotten and needs some new leadership.

Grassroots organizations like Raise the Hammer are a great way to develop those leaders as well as a civic movement to create awareness of issues and support these leaders of tomorrow. Keep up the good work.

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By rusty (registered) - website | Posted September 16, 2009 at 14:52:12

I once met a friend of a friend who worked for the Infrastructure Minister. He said Hamilton council was 'well known' for it's backwards mentality and stubborness... the reputation is well earned!

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By frank (registered) | Posted September 16, 2009 at 15:48:54

They apparently can't repossess until 4 years of tax "evasion". Three years of tax arrears after which they put a lien on the property which lasts for one year and if they haven't paid by the end of that year or come up with a payment plan, they can repossess the property. That's Ontario law, not Hamilton's and that's what Chad Collins told me when I asked him.

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By jason (registered) | Posted September 16, 2009 at 18:28:51

Rusty, I don't need to meet a friend of a friend of a transport minister to figure that out. Lol.

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By FenceSitter (anonymous) | Posted September 17, 2009 at 09:50:07

"1. The developers are asking for $18 million in public funding, or two-thirds of the total redevelopment cost, to provide subsidized rental prices on only half of the units."

Great point. But do not forget there is also a commercial component to the redevelopment. The subsidized portion would amount to less than half of the units (when commercial space is included).

Like many I have followed this debate and had trouble at times knowing if I object to this project for the right reasons.

It does seem that a few developers will make a great sum of money of the back of the taxpayers of Hamilton. If the city of Hamilton needs more subsidised housing, then fine. But there has to be better ways to spend $18m.



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