Buying our way to prosperity?

Ron Bolin: Nov. 8, 2011

Last Monday evening, in what could only be viewed as a stealthy move as the agenda material was only available shortly before the meeting, Council gave three readings to REVITALIZATION TAX EXEMPTION BYLAW 2011 NO. 7143.  This bylaw has the potential to cost taxpayers millions of dollars in extra taxes to fill the void made by the proposed exemption(s).  Tax exemptions do not reduce the cost of operating the City; they merely relieve a chosen few from that burden.  This bylaw gives Staff the power to negotiate and Council the power to finally approve property tax exemptions for 10 years to any hotel or motel which spends $2 million dollars or more in either new construction or improvements to the quality of rooms in Nanaimo.   Naturally enough, it has already caused considerable dissent from our existing hotels and motels: imagine having to subsidize your competition. 

It can be expected to cause yet more dissention among other segments of our economy who might also wish to build new facilities or improve the quality of those presently existing.  It is further a slap in the face to the new CEO of our Economic Development Corporation who appears to have been left out of the discussion, at least one hopes that subsidization is not her opening gambit for economic development in Nanaimo.

This entire spin is constructed around the proposition that the reason that our existing conference centre is bleeding cash is that there are not enough quality hotel rooms in town.  We have switched the object of our build it and they will come from the VICC to the need for a new hotel.  This farce is supported by reports that we have had contacts from large conference organizers who have turned us down due to a lack of sufficient hotel space. It is unfortunate that this list has never been made public.  One can anticipate that any new facility will get inquiries, usually in anticipation of cut rates to stimulate business.  Where did those who inquired eventually go?  It is unfortunate, but at the present time Nanaimo simply doesn’t have the amenity drawing power to equal our competition in Victoria, Vancouver, and Whistler, particularly given the additional cost of coming to and leaving the island.  This has been pointed out in numerous studies all the way back at least to the Main Street report and was noted in the documents prepared in the run up to the 2004 referendum.

The problem is NOT that we don’t have the hotel rooms. The problem is that the VICC is too big for the attractions that Nanaimo can offer to a large convention. The original idea for a conference centre was about half the size ( and about a quarter of the cost) of what was eventually built by those on Council whose eyes were so much bigger than our pocketbooks.  We need to find uses which can pay for the overbuilt space.  A City Hall Annex comes to mind, or VIU space, or perhaps a home and incubator spaces for our new Economic Development Corporation despite the high rent location. One suspects that the reason a dollar store is located in this space is not because it can necessarily pay first class space rent, but because the rent they pay is better than nothing. It’s time to re-evaluate this enterprise.

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