The city is on its way to expanding the area downtown which, if built on, provides business owners with a tax exemption.
Council, at its Tuesday meeting, gave first and second reading to a bylaw that would nearly double the size of the area.
The Special Commercial Area currently encapsulates the area bordered by St. Ann’s to the south, city hall to the west, 11th Avenue to the north and Shoppers Row to the east.
The city wants to expand that to include all of Shoppers Row up to Roberts Reach between Cedar Street and the Island Highway, which would allow the new Berwick seniors home slated to be built on the property between Banners and McDonald’s to benefit from a tax exemption.
Ron Neufeld, the general manager of operations, said the intent is to help revitalize the downtown core through new business.
“The main objective is to use this tool as a way to incent investment specifically in the downtown core,” Neufeld said. “By providing the exemption for a five year per that enables the developer to make decisions about their investment, to do the development that’s required and to get them to a point where they’re beginning to see a return on their investment prior to being faced with the additional tax burning associated with the development.”
The exemption would only apply to new developments or to improvements done on an existing facility.
For example, if a building valued at $200,000 renovates and increases its assessed value to $3 million, it would be exempt from paying $34,766.10 over five years.
CR DanceXtreme & Fitness has already benefited from the existing Special Commercial Area tax exemptions. The dance studio is expected to save $2,897 each year over its five-year exemption for a grand total of $14,485.
Seymour Pacific, which is building a new headquarters building along St. Ann’s and Alder, also stands to benefit from the tax exemption.
How it works is the “existing commercial tax exemption for the Special Commercial 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 for the properties within the proposed expansion area,” wrote Kevin Brooks, the city’s senior planner, in a report to council.
Brooks noted that since the tax exemption only applies to improvements to existing buildings, tax revenue would not go down rather any increase to tax revenue will be delayed for five years.
Mayor Walter Jakeway said he likes the idea of extending the tax exemption area, but would like to go even further. “My concern is I think the downtown limits are too small,” he said. “I see downtown as from Pier Street to the bridge (in north Campbell River). I think our downtown core is going to be a lot bigger in the years to come and if someone wants to build a great big building in the middle of Campbellton, more power to them.”