Trick or Treat!
Ron Bolin: October 31, 2011
Tonight is the goblins big night and at tonight’s Council meeting, we can find a belated report and draft bylaw for first and second reading on the topic: “REVITALIZATION TAX EXEMPTION BYLAW 2011 NO. 7143”, which fills their bill. It is appropriate that this is Halloween. This bylaw proposes to make motels and hotels that spend at least $2 million in either approved construction or renovation free from property taxes for up to ten years. In effect, they come to council with their goody bag saying “Trick or Treat” and Council can, at their discretion, give them a treat from those they collect from you and I.
I was curious when I read our Mayor’s statement that his big wish for Nanaimo was a new hotel to go with the conference centre. I was puzzled when I saw that the Maffeo Sutton and Piper’s Park goodies were taken off the table. Now the other shoe has fallen. We see that cash is king. I need wonder no longer.
What ever happened to capitalism? The idea of profit has been taken over by the idea of subsidy. The government is in charge of winners and losers: and we know who the losers are. It is impossible to run an economy for any length of time on subsidies as we are finding all over the world to our sorrow. If the corporate, often very large corporate, owners of a hotel or a motel can’t afford to build, renovate and operate it, how can we, in a city with one of the highest child poverty rates in the province, afford to subsidize it? Tax exemptions are not free. They simply divide the expense of the gift among the rest of us making our taxes higher and pushing those already on the margin over the edge.
This is not a game in which we should be playing. We are already heavily subsidizing the Conference Centre. What comes next a Multiplex? How gullible are we?
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How guillable are we..
The answer is VERY; just look at the current raft of potontial councillors & mayor!
Manhas,Korpan,McKinnon Bestwick.
All dreaming of a byegone age when people in this town had good jobs & the income to feed the greed.
Approximately 30% of us will vote, the winning candidates will win with about 2500 votes & we will call it democracy.
No wonder there are those that still occupy the Krawlspace.
Fortunately or unfortunately depending on your perspective a Conference Centre hotel will require a larger subsidy than a ten year property tax holiday. The Revpar (revenue per available room) in Nanaimo is south of $50.00 – the Conference Centre hotel is an expensive proposition and won’t go ahead until local rental and occupancy rates increase substantially. The Conference Centre is not attracting a whole lot of small conventions that can be serviced by the existing hotel space. There is no reason to believe that it will attract enough large conventions to make an adjoining hotel a viable proposition.
Aside from the objective of bringing about a Conference Centre hotel, a special tax exemption for hotels and motels is an odd economic development proposal. More hotel rooms just divide up the pie evermore and result in even lower Revpar rates. It is simply not a case of building it and they will come. It would make far more sense to give a tax holiday to a traditional employer like sawmills.
Unfortunately this proposition providing tax relief to hotels and motels either constructing, demolishing or renovating for $2 million or more and which was brought to the table at the last minute and certain to end up, as you say, costing more than the mere millions in tax relief proffered, was passed unanimously this evening with virtually no discussion. One can note that the Staff report contains neither a business plan nor a cost benefit study for such a venture. It was simply accepted as so good for us that no public discussion was required. Transparency be damned.
It was particularly ironic that this late item passed after considerable discussion about the lack of public transparency in other city actions.One can watch the evening unfolding on the internet at the city’s web site as the meeting was not televised by Shaw. I thought the notion and the timing of this tax relief bylaw so preposterous that I believed it would be laid over for another meeting -or perhaps for the new Council. I was again reminded that there are those who are born to rule -and unfortunately those who will be ruled by them.
David: You refer to a “Conference Centre hotel”. Wouldn’t any new development more than likely be the type that offers suites for sale on a quarter-ownership basis? Or something similar? Don’t think that it would be a regular “hotel room” hotel.
Appears that Nanaimo’s voters were “tricked” (again?!), in that they were not “treated” to the benefit of a live broadcast of tonight’s council meeting on Shaw TV, and I understand that it was not going to be livestreamed on the ‘net …. It also appears that candidates for council were “treated” tonight, to the opportunity of addressing council during this time of election campaigning!!
Who makes these decisions that deny the voting Public of transparicy??
Is it Council or staff.
Staff proposes and Council disposes.
On Tuesday morning, November 1st, the City’s website advises:
“The Council Meeting from Monday, October 31 was not televised, however the meeting was recorded and will appear for viewing after it is converted for display.”
I have to agree with David. The timing of this ludicrous tax relief suggests we are missing something. In this market, in normal circumstances, we would be more likely to want to remove rooms from the market. This would make the occupancy rates look more attractive to investors. Instead we are going the other direction.
Something stinks here and its not the fish.
Amazing that it was rubber stamped just like that. Where is Fred Pattje on a proposal like this. Property tax relief programs are not uncommon for new manufacturing plants that bring new jobs to a community (eg. virtually every town and city in south-eastern U.S.) . Tax relief programs are often used to encourage the revitalization of the upper floors of old buildings in downtown areas (eg.Victoria). Tax relief was also used to promote the construction of rental housing a few years ago when no one was building rental housing because the rates of return were too low. But for motels and hotels in Nanaimo with its anemic occupancy rates? Doesn’t make sense other than as an inducement (that won’t necessarily work) for a Conference Centre Hotel. As to the possibility of a pooled room condo type hotel – these do exist but they don’t work all that well. Professional hotel people don’t like them particularly and it probably wouldn’t satisfy the needs of the Conference Centre.
I may be assuming too much, but it seems to me the examples of tax relief David referred to where precisely directed at achieving goals that benefitted the community as a whole.
Here we have tax relief that seems to undermine the stated objective of procuring a hotel deal for our conference centre. Setting aside the fact that the stated objective has only a limited emotional appeal to the electorate, and no real value to the community as a whole; we seem to be subjecting ourselves to yet another hidden agenda.
This tax relief is only the little morsel we have to swallow before the election. It is made edible by granting this relief to all hotel/motel operators. I suspect the real deal, the truly bitter pill we have to swallow will be announced after the election. I can’t say I’m looking forward to that.
I’d forgotten about Jacques Derrida until I read this . . .
http://theautomaticearth.blogspot.com/
. . . today.
Back in the ‘70’s Derrida was the philosopher de jour who led, among other ridiculous fads, the great planning movement New Urbanism, turning good design into faux Victorianism, essentially, sentimental real estate marketing.
As the article points out we have progressed from lying to ourselves about real estate typology to lying to ourselves about financial typology.
Which brings me to Nanaimo, November 19.
Mayor John Ruttan wants us to return him on the platform anchor “complete VICC’s hotel”, (the last things Nanaimo need at this time) revealing the paucity of his imagination and political courage, but also a complete lack of understanding of current financial dynamics.
But fear not, as we gossip vigorously and irrelevantly, his FIRE, finance, insurance, real estate, supporters will run away with our ball.
And don’t be surprised if the cause of the debacle VICC, Gary and Jeet (revealing crusts like dead Rhinos) make it back too.
So much for VISIONING à la . . . all you need is C$12.50 and yunno, you too can fly . . . some where over the rain bow . . .
Read the linked article: it tells us all about what Nanaimo’s MSM wont! We don’t need Jacques to destruct this town.
We do it to ourselves!
The biggest fiasco in Nanaimo was the severance package given to Jerry Berry, the former City Manager. Had that been my decision, I would have put Mr Berry on special assignment; to find a developer to build that damned hotel. That would have stopped him from bragging about his windfall package at the gym. It is a disgusting episode in the history of this city.
Otherwise, what DO we do with the conference centre building and the hole-in-the-ground? It took 10 years to do something with the Malaspina Hotel site, and I am not sure if that is really finished.
Four cruise ships per year is not enough to build a viable industry. Nanaimo is not now a choice location for a conference centre. The hotel would have to be part-residential. The Inn at Denman Place was just that in the 1970’s and it worked tolerably well.
We need a marque attraction downtown and it had better be a darned good one. Being biased towards natural history, I suggest we build a Natural History museum similar to the Royal Alberta Museum in Edmonton or the Royal BC Museum in Victoria. We could feature our wildlife and moutain scenery, wih a walk-through coal mine and a re-creation of the Snuneymux’w community in Departure Bay prior to 1850. It might not be economically feasible, but it is better than paying to heat an empty building.
Mayor John Ruttan wants us to return him on the platform anchor “complete VICC’s hotel”, (the last things Nanaimo need at this time) revealing the paucity of his imagination and political courage, but also a complete lack of understanding of current financial dynamics.
…..
Rotten choices; Ruttan or McKinnon!!
Both well financed & dangerous.
Frank Ney is alive & well..,
It still takes four other councilors to agree with the Mayor, so perhaps who makes up council is more important than who is Mayor?
“Amazing that it was rubber stamped just like that.” Not at all David. For the decades I have been involved in Nanaimo business, not at all.
We all deal with issues to the level of our intellectual capacity even if we profess dormant leadership experience. (Which I do not!)
This . . . http://www.rudemacedon.ca/fhtt/debtscam.html . . . should raise the level of conversation to a more potent level.
Given the looming election, may I hope . . . ?
Click to access bc-111104-occupy-vancouver-demands.pdf
What troubles me, is how much more the taxpayer will be asked to kick in to make what is clearly an nonviable business, viable?
The conference business is likely becoming another buggy whip enterprise with fewer and fewer companies funding ‘perk’ holidays in the form of conferences.
Tele-conferencing is a cost effective and quite useful way to conduct real business conferences.
When the current Mayor calls building a hotel a piece of unfinished business, it reminds me of the same mentality that built the conference centre in the first place. The bunch at city hall is so hell bent on making the conference centre not look like the failure it is, they will throw all logic out the window.
Doesn’t the present mayor have avested interest in tourism hence the push for the hotel?