The city is considering sweetening the pot even further for developers who choose to build in the downtown core.
Currently, developments within what’s identified as a special commercial area are eligible for a commercial tax exemption of 50 per cent on building improvements for three years.
City staff are recommending council increase that to 100 per cent for five years to encourage downtown revitalization.
“It is believed that increasing the tax exemption incentive will further promote additional development in the city core,” said Kevin Brooks, the city’s senior planner, in a report to council. Brooks also noted that the city’s current exemption process has been confusing and needs some clarity.
“Two downtown tax exemptions have been granted,” Brooks said. “Through the administration of these applications, staff has learned that the process can be confusing and may deter prospective developers from utilizing this incentive program.”
To clear things up, text has been added to clearly outline the submission requirements and processes for the tax exemption which was adopted by council in October, 2009. In January, 2012 council made a change to the bylaw to create a special commercial area which runs from St. Ann’s to the south, Highway 19A to the east, 11th Avenue to the north and Cedar Street connecting to Alder to the west.
One significant project – Seymour Pacific’s new headquarters building – has been proposed in the area since it was created.
City staff are recommending council adopt the new incentives to encourage more downtown growth. Under the proposed bylaw amendments, Brooks said “any new multi-family or commercial development within the special improvement area will increase the tax incentive from 50 per cent exemption for a three-year period to a 100 per cent exemption for a five year period.”
A LEED (Leadership in Energy and Environmental Design) Platinum or Gold-rated building in the special commercial area would be eligible for a seven year exemption.
Developments eligible for the new incentives would be: new and re-developed multi-family (apartments) complexes, and new or re-developed commercial (office, retail).
To give an example of how the tax incentive works, imagine a building worth $200,000 is renovated which increases the value of the building to $3 million. Under the current incentive program, the building would receive a tax exemption worth $17,383 over three years. With the new, proposed incentive, that break would jump to $34,766 for five years.
Brooks recommended council move forward with changes to the incentive program.
“Adoption of this revision will further assist staff in focusing strategic capital improvements in the near term, with the greatest chance of stimulating downtown revitalization,” Brooks said.
Council was expected to consider the new incentive program at Tuesday’s council meeting after the Mirror went to press.