On a steamy pre-summer evening this week, Councillor Joe Cressy stood beneath the raw wooden beams of a common space at 401 Richmond St., looking grave. He had every reason to.

A hopeful late winter had given way to a stagnant late spring, with the fate of the building, a long-time sanctuary for dozens of the city’s non-profit cultural organizations, hanging in the balance. And he wasn’t the only one feeling anxious.

All around, dozens of the building’s tenants had gathered. At issue was the building’s tax bill, a figure that has more than doubled since 2012, putting pressure on tenants and UrbanSpace, the building’s owner, alike. This year alone, taxes will jump another 21 per cent, due to an assessed value that reflects the overheated property market surrounding it. UrbanSpace has borne the brunt of the increases, shielding its thinly funded tenants as much as it can. But with the new tax bill due in July, time is running out.

“There’s no question: There’s a fierce urgency of now,” Cressy said. It’s the full boil of an issue that’s been simmering publicly since December when it was first revealed that the building, an unofficial cultural landmark, was near the breaking point, holding the line on modest rents for its tenants while its tax burden expanded.

In 2012, UrbanSpace, the building’s owner, paid close to $447,000 in property taxes, with its rate increasing steadily to that point at 1 per cent per year. Then in 2013, it jumped to $520,280. By 2016, the bill was within a few hundred dollars of $700,000. Without some kind of intervention, the building’s 2017 tax bill will be $846,210.73.

While UrbanSpace has absorbed the worst of the increases, tenants have shared some pain. And with taxes projected to go as high as $1.29 million by 2020, there’s only so much that UrbanSpace can swallow and ample reason to be concerned.

An oasis of difference now walled in by high-end retail condominiums and office space, 401 — with its modest rents and non-profit tenants — is a holdout in a commercial property market driven sky-high by rampant development.

That difference, though, is not reflected in its tax assessment, which considers only market value, not use. Cressy, acknowledging the building’s significance to the city’s cultural life, exhausted all of the city’s tax-relief measures earlier this year, but they’re stopgap at best. His efforts to broker a permanent solution with the province — a new tax class for “cultural incubators” like 401 — have dragged on. He had come to the building this week to offer an update: he had spoken with the premier’s office and had received an encouraging but worryingly imprecise response.

“The message from the premier’s office is, ‘We’re on it, we’re working with you, we’re prepared to solve this and can you hang on a couple of months?’ ” Cressy told the group. “My answer was, ‘Not really.’ But we have to give them that.”

Patience, along with tenants’ finances, have frayed. “We had a board meeting and everyone’s wants to know how much longer we can hang on,” said Bruce Pitkin, the executive director of Theatre Ontario, one of dozens of non-profit arts organizations in the building. “We had to cut a program to pay our taxes. If this is going to drag on for another two years we need to act now.”

Acting, in Pitkin’s case, means the organization, like many long-term tenants here, would move on.

If no relief comes, it will cripple not just organizations like Pitkin’s but the building itself. The tax increases would likely spell the end of the lifelong vision of its owner, Margie Zeidler, who rehabilitated the decrepit hulk of an old factory in 1994 into an affordable refuge for its arts-minded tenants.

In a spiralling property market, a one-size-fits-all model for property assessment endangers countless other such buildings. Artscape, a non-profit that owns and manages dozens of affordable spaces for cultural activity, is facing a similar tax crunch.

A new tax class would not just assure their survival but could encourage the blossoming of like-minded ventures, thanks to a tax regime based on a building’s actual use, not its potential maximized value. (The province currently assesses properties based on a “highest and best use” measure: the value of a maximum-envelope condominium tower, say, regardless of the actual structure on the site.)

“For this building, we can’t wait,” Cressy said. “But this was never intended as a get-out-of-jail-free card for one good building. It was about 401 Richmond as a model and encouraging others all across the province to do the same.”

For the city, the new tax class could cure many development ills; as things stand, highest-and-best-use assessments put pressure on landlords to crater older properties for new, high-priced developments to satisfy tax demands.

“If there’s one crosscutting issue for us, it’s access to affordable space,” said Pat Tobin, the city’s head of culture and economic development. The city was “really in tune with the idea that market forces are balanced by a public-good argument,” he said. “Dealing with the (tax) assessment issue further upstream would of course be a huge help with that.”

401 has always been an anomaly in the private commercial real estate market. Motivated by building the community over profit - “the Zeidler family’s patience and benevolence as landlords is really quite unique,” Tobin said - UrbanSpace has always carefully hand-picked tenants that enhance the building’s cultural ecosystem.

Leaving 401 “is not an option that we want to pursue, given the richness of the collaborations that we have had in this community,” Pitkin said.

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Speaking in front of her tenants this week, many of whom applauded, Zeidler made clear that the situation was dire. In July, when the new tax bill comes due, UrbanSpace, which hasraised rents only a few percent per year while facing annual tax increases of 10 to 16 per cent, will be struggling to hold the line.

“We’re not going to pass the increase on to tenants, because we don’t think we can do that without destroying the building,” said Zeidler. “But we’re going to have to pay (the tax bill) somehow.”

It feels very much like a last gasp. After exhausting the city’s tax relief measures, Cressy put forward a motion to city council in January, to ask the province to change Ontario’s tax code for heritage properties, particularly those used to house cultural activities. It passed at council unanimously.

Through February and March, Tobin had his staff draw up a set of recommendations for the province about what a new tax class for “cultural incubators” like 401 Richmond might look like. Shortly after, fruitful conversations with staff at the provincial ministries of Finance and Tourism, Culture and Sport began.

John Sewell, the former mayor and a 401 tenant, joined the tenants’ steering committee. In April, he described the conversations with the province as “encouraging.” Optimism seemed reasonable. Cressy expected that a cultural incubator property tax class might be included in the provincial budget, released on April 27.

Then, on April 11, Finance Minister Charles Sousa responded to a direct question in the Legislature about the tax class by throwing it back to the city, saying the “approval of the province” wasn’t needed to solve the issue.

When a new tax class failed to appear in the budget, it was no surprise. Promising conversations appeared to have been swiftly deflated. What had become of the productive exchange between the city and the province?

Zeidler wrote a letter to Sousa on April 28, critical of the minister’s “inaccurate” dismissal of the issue. The city has “bent over backwards” in its efforts to keep the building alive, she wrote. “It would be so nice” to know the province had the same commitment, she wrote, “given that our fate lies in your hands.”

Conversations between city and provincial staff continued but stagnated as the Ministry of Finance took the lead over the Ministry of Culture. (The Ministry of Finance, responding to a request from the Star, repeated Sousa’s line from April; a new tax class is not on the table, it said, and its staff are encouraging the city to “use the range of existing property tax tools to address this issue.”)

“The fact is, there are differences of opinion between ministries, so it’s going to take some political will to make this happen,” Cressy said.

Cressy says he turned to Premier Kathleen Wynne’s office and stressed the urgency of the situation — to receptive ears — and a glimmer of optimism has returned. But he wonders if it can happen fast enough.

“I’m optimistic, in that we have a real interest expressed at the political level to resolve this,” Cressy said. “But this has already dragged on too long. And if we drag into September or later, for 401 Richmond it might be too late.”