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Welland proposing for-profit municipal corporation

Laura Barton

By Laura Barton, Tribune Staff

The former Atlas Steel lands on East Main Street, seen here in this September photo, are just one of many sets of brownfield lands Welland has. File photo

The former Atlas Steel lands on East Main Street, seen here in this September photo, are just one of many sets of brownfield lands Welland has. File photo

The City of Welland is exploring the idea of creating a for-profit municipal services corporation in the hopes of attracting new industrial and residential development.

The matter was up for discussion at Tuesday night’s general committee meeting, and included a presentation from Steve Zorbas, general manager of corporate services and chief financial officer for the city.

He explained that this would be a separate entity from the city that could act as an investment partner for companies interested in coming to the area, while also generating profits because of that partnership.

“We believe that (the MSC) could be a tool to help the city achieve three million square feet of industrial space by the year 2030,” Zorbas told council.

“We’ll be using this corporation to continue to present Welland as an attractive alternative to relocate, to expand or to build new industrial and manufacturing premises in our fine city.”

He said he is also confident that it would help with the city’s mandate to create new housing and revitalize downtown.

Through this, he also sees job creation and retention of locally trained and taught tradespeople.

He compared a municipal services corporation to a company such as Welland Hydro. He said, like Welland Hydro, it would be incorporated as an Ontario Business Corporations company and a for-profit share capital corporation. This corporation could then pay dividends to the shareholder — in this case the city — and funds could be moved between subsidiaries.

Zorbas told council this is an opportunity to create a new source of sustainable non-tax revenue for the municipality and to transfer assets, such as land, into a new revenue stream.

With land transferred to the municipal services corporation, Zorbas foresees a higher turnaround time in closing deals to develop industry on those lands.

Councillors had many questions about this potential corporation, such as whether it is even needed because the city does conduct business like this.

Zorbas said it comes down to financing and how people want to conduct business.

“This corporation has a lot more flexibility in terms of how development projects get financed,” he said as it won’t have to adhere to the same financing rules that the municipality would.

Basically, it’s a way to cut red tape.

He said the private sector in particular would be interested.

The municipal services corporation wouldn’t be in competition with the city, however. It will instead be guided by it. Zorbas recommended both the mayor and a councillor sit on the board, in particular during incorporation to ensure things operate to council’s liking.

“After all, it’s your corporation,” Zorbas said.

He also recommended having Ross Peever, former CEO and president of Welland Hydro, on board to help guide the process because he has experience in this area.

Welland wouldn’t be the first municipality to form a for-profit municipal services corporation.

Zorbas highlighted four other municipalities across Canada that have successfully implemented the model, including Toronto, Brant and Scugog, Ont., and Surrey, B.C.

A report presented to council indicated that in the case of Toronto, its Build Toronto has returned to the city a total dividend of $70 million since it began in 2010.

Council will be discussing the matter further at a future meeting. Councillors requested copies of legislation involved in the creation of such an entity, as well as further clarification about what powers the corporation would have.

Should this move forward, Zorbas said, a public meeting would be held in December and a report brought back to council from that meeting in January or February of the new year.

lbarton@postmedia.com

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