Council approves up to $12.03 million brownfield grant to clean up former psychiatric hospital lands for 512-bed long-term care home

What Council approved

Hamilton City Council approved an Environmental Remediation and Site Enhancement (ERASE) Redevelopment Grant application from Schlegel Villages Inc. at its October 7, 2026 meeting, according to a City news release issued October 8. The grant is for 290 Fennell Avenue West, part of the former Hamilton Psychiatric Hospital lands, and is meant to offset the cost of cleaning up historical contamination so the site can be redeveloped.

The staff report, PED26153, recommended a grant "not to exceed $12,030,686" for estimated eligible remediation costs, provided over a maximum of 10 years under a grant agreement. The General Issues Committee approved those recommendations on September 28, 2026, by a vote of 10 to 0, and sent them on to Council.

The site and what is planned

According to the staff report, the site sits at the northwest corner of Fennell Avenue West and Juravinski Drive and was acquired by Schlegel Villages from Infrastructure Ontario in August 2024. It covers about 5.97 hectares, made up of general market lands (2.3 hectares), the Schlegel Villages lands (2.19 hectares) and lands for a new public road network (1.48 hectares). Several vacant institutional buildings on the site are proposed to be demolished.

The report says the long-term care facility is to consist of two eight-storey buildings sharing a one-storey common area, with a total of 512 beds, and has received conditional site plan approval. A provincial Minister's Zoning Order covering the lands requires the owner to build the long-term care facility before developing the rest of the site with housing. The report notes that other parcels covered by the order are to accommodate affordable housing by Indwell in the existing Century Manor building, and uses associated with Mohawk College.

The contamination

Environmental investigations between 2009 and 2025 found elevated levels of contaminants in shallow soils across substantial parts of the site, the report says. The main contaminants are metals including lead, arsenic, mercury, cadmium and zinc, and polycyclic aromatic hydrocarbons. Testing confirmed that lead-based paint chips and painted brick fragments in the fill are the main source of the widespread lead. Groundwater testing did not find concentrations above provincial standards.

• $5,519,276 for the Schlegel Villages and road network lands, including removal of an estimated 63,805 tonnes of contaminated soil and debris. The report says this is an actual cost, because remediation of that portion has concluded.
• $6,511,410 for the general market lands, including removal of an estimated 40,000 cubic metres of contaminated soil and debris.

Staff say only the extra cost caused by contamination is eligible, not excavation the project would need anyway, and that the applicant must submit invoices and supporting documents, which will be audited before payment.

How the grant is paid

ERASE is a tax increment grant: the City pays the owner 80 per cent of the increase in the municipal portion of property taxes that the redevelopment generates, until the eligible costs are recovered or 10 annual payments have been made, whichever comes first. The City's release says grants are paid only after redevelopment has occurred. Staff say no new funding or staffing is needed because the grant is funded by taxes the development generates.

The report estimates the eligible annual tax uplift used to calculate the grant at about $1.93 million, and the full municipal tax increase at about $1.98 million a year. While the grant is being paid, the City keeps the remaining share, estimated at $438,537 a year, for its Brownfield Pilot Project account, which funds brownfield acquisitions and grants for affordable housing on contaminated sites. Once payments end, the report says the City receives the full increase for the life of the development.