Revitalization tax exemption set to spur commercial growth in city
Some city businesses may even qualify retroactively for a tax exemption aimed at encouraging local businesses to renovate and upgrade, if council gives the bylaw third and final readings.
The bylaw, first presented to city council at its regular meeting July 10, would see business owners pay far less tax on increased assessment value of properties they’ve improved. The bylaw was presented to residents in a public meeting Tuesday night by city financial director Andre Buss.
“Early in 2012, city council held strategic planning meetings and established new strategic priorities for the community,” Buss explained. “Some of these include: enhance the appeal of the downtown area; review and establish enhancement initiatives that will benefit other areas of the community, and; undertake initiatives that will lead to greater business retention within the city.
“The bylaw will provide a tax exemption, on the increase of municipal taxes only that is attributable to the improvement, for a period of six years. The tax exemption will be provided on a sliding scale (ie: year one to three:100 per cent, year four: 80 per cent, year five: 60 per cent, year six: 40 per cent, year seven: 0 per cent),” he explained. “The bylaw comes into force when adopted by city council and properties can apply for an exemption up until Dec. 31, 2014. After Dec. 31, 2014, the effectiveness of the bylaw will be analyzed, and if council considers it appropriate, the bylaw can be extended.”
He said the purpose of the exemption is to encourage capital investment, expand the city’s commercial tax base, increase the esthetic appeal of commercial properties within the city and create economic growth opportunities.
The bylaw, if adopted, will not apply to new construction.
Councillor Russ Hearne, chair of council’s finance committee, said he’s all for the exemption.
“It encourages business owners to invest in themselves and, by extension, the community,” he said. “The economy has been hard on all businesses – if someone’s been wanting to expand or upgrade, maybe this is the little bit of help they need to do it now.”
The sole attendee, aside from council, city staff and media was chamber of commerce president Stuart Ady, who said he is very much in favour of the plan, but thinks it should apply to new construction as well.
“The goal is to attract new business development in Castlegar, why not open it up to everyone?” Ady asked. “It would encourage new businesses to come to town, and encourage existing businesses to step up their game.”
Hearne later responded to Ady’s concerns by explaining the tax applies, not to overall assessed value of a property, but only to new construction on said property, ie renovations or upgrades. That would mean newly-constructed businesses would pay no taxes whatsoever, which Hearne said would be unfair to existing (and possibly competing) businesses.
Councilllor Dan Rye also pointed out that one goal of the bylaw is to encourage new businesses to look at existing commercial properties and fix them up, rather than erecting new locations.
“I’ve always been concerned about the empty storefronts and how they look,” Rye said. “I’d like to see them rented and repaired – there are a lot of empty buildings in our downtown core that are quite unattractive.”
Ady concluded his questions to council by saying he thinks the exemption is a great start, and long overdue.
“I think it’s going to be a really good thing for the business community of Castlegar to be able to invest and get a little back,” he said.
Buss said, if all goes forward as anticipated, the bylaw will get third reading at council’s next meeting and adoption at the subsequent council meeting … but business owners wishing to apply for 2012 should begin the application process now (packages with the bylaw and application forms are available at City Hall), as the applications have to be submitted by Oct. 31.
It’s unclear how this will impact renters, as who benefits from the exemption will depend on the lease agreement. Buss said applications will be considered on an individual basis before any final decisions are made.
For more information, contact City Hall at 250-365-7227.