REPORTING · 7th June 2012
Council returned to the Revitalization Tax Exemption Bylaw on Monday, May 28th. Deputy Treasurer Lyle McNish presented to Council about the topic.
“As for section 226, it does state a municipality has to have a defined reason for this program. What they are trying to avoid, of course, in regards to section 25 which prohibits incentive to business, the program has to be done in such away that it is non discriminatory and is targeting one business over another one,” said McNish.
The options Council can choose from include environmental, to encourage green sustainability, economic, to encourage employment, social, to create affordable housing and beautification projects such as façade improvements.
He stated the Revitalization Tax Exemption could not go against the Official Community Plan (OCP) or the financial plan. They would have to update their policies when this comes into place.
McNish suggested applying this to the Downtown Revitalization Area, which is already listed in the OCP. However, this option would not apply it to Service Centre or Nechako Centre. It could be done by taxation class, land, improvements or zoning.
“There are other terms and conditions, one of which is the maximum term for the exemption bylaw is ten years. It can be carried forward as the time goes along and for the exemption to a property; the exemption can last as long as 10 years. Most that I saw in my research were 5 years,” said McNish.
Traditionally, the property taxes have to be up to date so the exemption is given to ‘upstanding’ citizens. The construction value does not equal a level of change in the assessed value.
“There is flexibility on the amount of the exemption, it could be 100% annually for a 5 year term or a three year term, whatever Council decides. Or you could have a scenario where you decide it’s going to reduce over time. 100% the first year, then 80% of that, 50% and so on,” said McNish.
To proceed, they need the reason and objectives of it. Terrace established the objectives to revitalize the downtown core and secure the economic health of the City. Port Alberni has a program where they could revitalize the older section of the town to improve their facades. Salmon Arm had a downtown revitalization priority. Nanaimo had a program for hotels to improve their rooms.
“The Northern Development Initiative Trust (NDI Trust) Program is one where money is dispersed to the property owner, developer, at the start of the program. When I say the start, there is still going to have to be the application process but at the timeframe where the application process has been approved, and then the construction program has taken place and they are at occupancy permit has been granted, at that point, [NDI Trust] would then cut a cheque to the property owner or developer. [NDI Trust] recovers directly from the municipality. The Municipality taxes in the normal way, there is no exemption at this point and time because the developer got the money up front and in terms of [NDI Trust] collecting from the District,” said McNish.
He explained NDI Trust would take it from the Districts allocation of funds. Councillor Corrine Scott clarified all the District would lose is allocation. The municipality would still be out the money, but the business would get the money up front.
As for the bylaw, there is some timing issues. There would have to be a public hearing. An Applicant would need to have their certificate no later then October 31st of the year before they are exempt. This would make it difficult for the Council to complete a bylaw for it by September 30th.
It starts with a submission, documentation is reviewed, it is prepared, sent to Council for approval, the agreement is signed off by the municipality and the certificate is issued to the property owner. A copy is issued to the BC assessment authority and they assess the improvement.
McNish suggested getting some legal advice to ensure there were no loopholes which could be challenged by future commercial and industrial developments in the community. He suggested targeting commercial businesses.
McNish recommended a large number for the amount required to apply. He pointed out if some of the business owners were to start investing in their businesses; it shows there is a will to invest in Kitimat.
Councillor Mario Feldhoff stated there was a lot of flexibility as to how a community could use this. He said it would require some discussion over where and what types of classes should be accommodated by this bylaw. He made a motion to have staff to come back with a series of questions for the Council to work through and determine what the revitalization bylaw might look like.
Councillor Phil Germuth stated he wanted to support the creation of this bylaw for Service Centre and Nechako Centre so they could do something with it. He supported the motion and wanted to create some questions as well.
Councillor Corrine Scott agreed. She stated when she first brought forward this motion, it was to improve the retail businesses and her idea was to improve the facades and encourage investments.
“Depending on where your driving in Kitimat, it looks like the town is dying because there are so many, derelict, old boarded up buildings. Whatever incentive we could put in place to eliminate that so it will encourage investment, I would be for it,” said Scott.
The motion was called and carried. Mayor Joanne Monaghan stated she has seen a lot of buildings which have been improved in service center. It was attributed to the District of Kitimat’s Business Recognition Program.