540 King Street East was one of Hamilton’s more affordable apartment buildings before its purchase by Malleum Real Estate Management in 2018.
Malleum specializes in purchasing older buildings and conducting extensive renovations to ‘reposition’ the units into higher rent apartments.
On Monday, Council will vote on Malleum’s Hamilton Tax Increment Grant Program approval for $169,801.83 over five years.
HTIGP approvals are usually a rubber stamp. Once a government offers an incentive,
Four members of ACORN, and a fifth citizen, are asking to speak to Council in opposition to the grant.
Malleum’s business strategy is gentrification.
ACORN states the City must stop supporting all forms of gentrification by ending incentives for projects which result in renovictions for existing tenants and substantially increased rents for post-renovation tenants.
The HTIGP gives developers tax rebates based on increased municipal property taxes resulting from renovations or redevelopment.
Malleum spent approximately $2,775,000 on the renovation, which is expected to increase the property’s assessed value to $4,643,000 from $2,542,000.
The result is an increase of $55,600.61 per year in municipal property taxes.
The HTIGP rebate will be $56,600.61 in year one, $45,280.49 in year two, $33,960.37 in year three, $22,640.24 in year four, and $11,320.12 in the final year.
Council will likely approve the grant as they offered the program, deciding not to approve risks creating uncertainty for new developments.
In June 2021, Council voted to eliminate the tax incentive program during its next review. The rationale is that approving the B-Line LRT creates the economic conditions for development without the need for HTIGP.