A City of Guelph Development Corporation

In August 2011, in an effort to strengthen corporate governance practices regarding the management of current and future City-owned assets, Guelph City Council directed staff to establish Guelph Municipal Holding Incorporated. Since its inception Guelph Municipal Holding Incorporated. has established a Board of Directors and developed the capacity to manage City-owned assets.

At its meeting of December 2, 2013, the Guelph Municipal Holding Incorporated Board directed staff to seek City approval for the incorporation of a development company which would be used to develop City assets within the Guelph Municipal Holding Incorporated structure and provide the municipality with greater ability and flexibility in addressing and responding to the business needs of the community.

At its meeting of March 31, 2014, Guelph City Council endorsed the direction of Guelph Municipal Holding Incorporated’s Board and directed staff to complete the requirements of the Ontario Municipal Act Legislation (O.R. 599/06) to form a development corporation for the City of Guelph.

The development corporation will:

  • Provide a corporate structure into which City-owned assets (both physical and knowledge based) can be transferred and incubated to achieve the desired returns.
  • Allow the City to pursue investors to stimulate the development of City-owned assets.
  • Create the synergies between the asset owned assets under the governance of GMHI.

Once Guelph City Council approves the business case the development corporation is established, the City will transfer all shares of the development company to Guelph Municipal Holding Incorporated followed soon after by City-owned assets.

The creation of a development company fulfills both the corporate strategic direction of innovation in local government and the objectives of Guelph Municipal Holding Incorporated.

  1. Guelph Municipal Holding Incorporated Board determines it wants a new corporation to develop businesses and hold assets.
  2. Staff develops a business case study to support the establishment of a development corporation.
  3. Guelph City Council provides direction to staff to incorporate a development corporation whose shares are intended to be transferred to Guelph Municipal Holding Incorporated.
  4. Staff consults with public regarding the proposal to establish a development corporation through the City of Guelph’s community engagement framework.
  5. Council approves the business case study and directs staff t incorporate a development corporation nd transfer the shares of the development corporation to Guelph Municipal Holding Incorporated for compensation equivalent to the cost to the City of incorporation.
  6. The development corporation is incorporated, the board of directors established and an organizational by-law passed.
  7. The development corporation issues shares to the City of Guelph.
  8. The City of Guelph transfers the shares of the development corporation to Guelph Municipal Holding Incorporated for consideration.
  9. The City of Guelph transfers assets to the development corporation for consideration.

Why is the City of Guelph creating a development corporation?

Like most other municipalities, the City of Guelph is experiencing financial challenges in delivering programs and projects that are intended to provide wide spread community benefit. The delivery of current and projected community based projects may be negatively impacted as a result of limited municipal financial and administrative resources.

In seeking solutions to these challenges some municipalities have focused their efforts on reducing municipal programs, services and resources to match their current municipal revenue levels. Others have considered the establishment of ‘Development Corporations’ for the purpose of attracting new revenue sources through the strategic placement of municipal assets.

What are other examples of development corporations?

Municipally owned development corporations are a common method of governance enacted by municipalities to manage public assets.

Other municipalities that have created development corporations include:

  • City of Calgary – Calgary Municipal Land Corporation
  • City of Toronto – Build Toronto, Waterfront Toronto, and Toronto Port Lands Company
  • City of Surrey, British Columbia – Surrey City Development Corporation

What kinds of assets are being transferred to the development corporation

Types of assets that can be managed by a municipal development company are:

  • Underperforming assets – Current lands or facilities owned by the City that have potential to generate a higher level of revenue.
  • Stranded assets – Abandoned Brownfield properties that are owned by the City.
  • Leveraged Assets – Current Greenfield and In-fill properties that are owned by the City.
  • Community Planned Assets – Assets that will address the community’s planned growth.

Who will be responsible for running the corporation?

A board of directors will be determined by a nominating committee appointed by Guelph Municipal Holding Incorporated.

What is the difference between the Development Corporation and Guelph Municipal Holding Incorporated?

Guelph Municipal Holdings Incorporated is designed to provide the City powers to establish and hold shares in a range of corporations, but is to participate in the operations of those corporations. Guelph Municipal Holding Incorporated will improve communication and information flow between the shareholder and the operating companies, capitalize on potential synergies, and help to maximize value provided to the community.

For more information

Public open house on Municipal Development Corporations – July 30, 2014

Regarding the establishment of a development corporation

Peter Cartwright
General Manager, Economic Development
Finance and Enterprise Services
519-822-1260 extension 2555

Regarding Guelph Municipal Holdings Incorporated

Rob Kerr
General Manager
Guelph Municipal Holdings Incorporated
519-822-1260 extension 2079