Developers of a new apartment building that will replace the former SuperValu in Tyee Plaza will receive a break on their property taxes.
Council, at its May 9 meeting, approved the incentive as part of council’s downtown tax exemption initiative.
Sara Brodie, the city’s development engineering and building supervisor, said the property owner will receive a 100 per cent municipal property tax exemption for five years on the value of improvements on the property.
“Only the estimated taxes based on new construction is eligible for exemption,” Brodie said. “Based on the 2016 residential tax rates and new construction of $5 million, the estimated tax exemption would be $27,446 per year for a total five year exemption of $137,228.”
Brodie said the BC Assessment Authority has determined the value of the land on which the apartments will be built is $1.4 million.
Throughout the five year exemption period, the city will continue to collect property taxes based on the value of the existing land and improvements which will total $7,685 annually or $38,424 over the five years.
Brodie added that once the exemption period expires, starting in 2022, the city will collect $35,131 of taxes annually on the property.
The new development is expected to be built on the site of the former SuperValu which sat empty for more than half a decade before being demolished March 7. The deteriorating building, which was built in 1972, and an adjacent commercial building, will be replaced with a four-storey, 46 unit multi-family apartment building. The new apartments are the latest in a string of new downtown developments, including Berwick, CR Dance Xtreme and Tyee Chevrolet, that have taken advantage of the downtown tax exemption.
Mayor Andy Adams said he believes the initiative, created by council in 2013, has gone a long way in attracting development downtown.
“This downtown revitalization and tax exemption is proving to be a very effective tool in our downtown initiative, as even though it is deferred tax revenue, it is providing construction jobs and revitalization now,” Adams said. “And I think that’s a good thing.”