Wednesday, October 10, 2012

Local Daily Makes Case For Tax Exemption

 $300,000 Tax Exemption Not $30,000

The local daily (aka The Daily Snooze) is making a case for granting the train station a $300,000 tax exemption. In true Daily Snooze fashion they claim the exemption is only $30,000 over 10 years, when in fact it is $30,000 each year for ten years.

There is a valid argument for granting tax exemptions for the original intent of this program which was to encourage more residential housing in the downtown core. It was later expanded to include other end uses of what are called 'heritage' buildings which might otherwise become derelict in the downtown core.

The case of the E&N train station is rather unique in that it was not a building that would have been renovated had it not been for a fire, which nearly destroyed the building. The question which was never answered was why the owners did not carry adequate insurance to replace the building in the event of a fire? Why was such extraordinary public support needed to replace this historic building which should have been properly insured by the owners? Surely the $300,000 tax exemption would not have been the 'deal breaker' for the rebuilding of this fine structure. In the case of commercial buildings, it is the tenant and not the landlord who pays the freight on taxes.

To the question of whether this puts business operators in an unfair advantage in the marketplace. Why should a pub enjoy nearly a $30,000 per year advantage over a competitor who is not occupying a 'heritage' building? The inequality of this market place meddling seems lost on city staff, city council and scribes at the local daily.

You might wonder if this decision had any bearing on the shelving of the brew pub that was going to be built on the site of the old Co-op building just down the street. If they would be competing for the same dollars as the train station pub, they would automatically be facing a $30,000 disadvantage as they would not qualify for the 'heritage' tax exemption.

Council Did Approve This Tax Exemption

Despite the fact that some councillors seem confused about the tax exemption applying to the portion of the building being used for a bar, they did in fact vote to approve staff's recommendation that they do so, back in August of 2010, Councillor Unger was the only one opposed. You might be forgiven if you wonder if the council of the day, fully understood the exemption they were approving. You might also wonder why they chose the most expensive option presented to them by city staff.

City council of the day were presented with four options regards the $300,000 tax exemption:

a) provide a full tax exemption, as requested by the applicant (approximately
$30,000/year for 10 years, totalling $300,000) - option recommended by staff;

b) provide a partial tax exemption of 50% of the estimated taxes (approximately
$15,000/yearfor 10 years, totalling $150,000);

c) provide a tax exemption of $30,000/year for a 5-year period (totalling $150,000); or

d) provide no tax exemption for this project.

Why staff recommended and city council chose to pick the most expensive option is a question you might like to ask them one day. You might also ask, why the tax exemption has to apply to the whole building when for example the Curling Club does not get a tax exemption for the portion of their building used as a bar.

I suspect the scribes at the local daily, will continue to do the city's bidding of selling the soundness of this tax giveaway to the taxpaying public who is the one picking up the tab.


1 comment:

  1. Who benefits?
    The Restaurant,Fibber McGees, the landowner, The (not so) Young Professionals or Roger McKinnon?
    Needless to ask; who is the recipeint of free meals? lol; well not really.


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