City council approved in principle a 10-year property tax exemption program for developments downtown on Monday.
A bylaw to formalize the tax breaks is expected back before city council next month. Northern Development Initiative Trust has partnered with the city to give developers the option of receiving the tax exemption in the form of an upfront payment, which would then be paid back to Northern Development over the 10 years.
Currently new developments downtown are exempt from property taxes on the improvements for five years, with possible extensions of five years.
Coun. Shari Green said the exemption program is needed to draw new investment downtown.
"You can't tax what you don't have. We won't have less [tax revenue] than we have now," Green said.
New developments and exterior improvements downtown will drive higher property values, and in turn higher property taxes, she added.
However, not all members of council were convinced that 10-year exemptions are necessary.
"I think going from a five-year to a 10-year [exemption] was pushing it," Coun. Brian Skakun said. "But since we were originally talking about 20 or 30 year exemptions, I guess I'll support it."
The proposal plan breaks the downtown into two areas.
Area A includes downtown from Queensway to Vancouver Street and Patricia Boulevard to First Avenue. It also includes Third Avenue from Winnipeg Street to Queensway.
Area B runs from Fourth Avenue to 11th Avenue, and between Winnipeg Street to Vancouver Street.
Under the proposed exemptions in Area A, multifamily residential and commercial developments worth $50,000 or more would be exempt from property taxes on the development for 10 years. Projects valued over $500,000 would also receive a tax exemption on 100 per cent of the land value for residential developments and 50 per cent of the land value for commercial developments.
Exterior building improvements valued at $20,000 and more would be 100 per cent exempt from property taxes on the improvement for 10 years.
In Area B, only residential developments would be eligible for tax exemptions and only on the development itself, not on the value of the land.
LEED certified projects valued at $500,000 or more in both areas would receive a 100 per cent tax exemption on the development.
On a $5 million condominium development, that tax exemption could total more than $500,000 over 10 years. On a $5 million commercial building, the tax exemption over 10 years would be valued at over $1.1 million.
The city conducted public consultation on the proposed exemptions from April 11 to May 20 and received only two letters in response -both generally in support.
