What Does DRTEP Mean to You?
Ron Bolin: March 22, 2018
If you are like me you didn’t have an inkling about DRTEP until you went to look at the agenda or video of the Finance and Audit Committee (another name for City Council) meeting of March 14 of this year or looked at the agenda for next Monday’s (March 26), Committee of the Whole meeting (another of the names for our tri-partite City Council).
For those of you who did not examine these sources and were not privy to DRTEP’s existence prior to these events, DRTEP is the acronym for the Downtown Revitalization Tax Exemption Program, this is yet another noble plan to revitalize our downtown. You can read the presentation made to the Finance and Audit Committee here:
The gist of the plan in that presentation is found here:
10 year tax exemption on municipal portion of property taxes
· New multi-family residential ≥ 4 units & value of BP ≥ $500,000.
· New commercial buildings with a permit value ≥ $500,000.
· Additions or renovations (improvements) to existing commercial buildings with a permit value ≥$500,000 and the value of construction must be at lease (sic) 50% of the current assessed value of the building.
Downtown revitalization has been a topic of both concern and frequent piddling since a previous Nanaimo Council decided to allow shopping malls to proliferate over the City, some of which eclipsed the downtown in both size and variety.
Downtown revitalization is as valid a goal for our downtown as personal revitalization is for any of us. The big question comes down to who is to feel the pain that is associated with revitalization. If it were easy, we would all be vital and wouldn’t need revitalization.
If you examine the DRTEP presentation linked above, you can see an outline of program. What you do NOT see are any facts about the costs to date borne by Nanaimo taxpayers for Downtown Revitalization either directly, by means of the DCC exemption program that has been in place for some time but is about to end, or through the downtown tax exemption program which likewise has been in place for some years. Even more striking is the absence of any estimate of the possible/probable value of tax exemptions which will/may arise from this program and which other taxpayers will have to make up.
Critical to the understanding of exemption programs is the understanding by citizens that an exemption is not a gift: it is a transfer of costs from one taxpayer to another… in this case from the enterprises getting the exemptions to the taxes to all other taxpayers. They do not reduce the costs of municipal operation -quite the contrary. In short it is a forced investment by taxpayers in some entrepreneurs business without return for ten years. Could this be a good investment given that after 10 years tax will be paid on a structure which might not have existed without the exemption, but may also be reduced in value after 10 years of depreciation? It’s possible… But among the other failures of the report, there is no indication of a record which might indicate the probability of this happening. In short, it is gambling with other people’s money, without the advantage of knowing or even estimating either the odds on payback or the size of the prize to be gained.
These conditions lead me to believe that DRTEP needs a lot more critical examination on behalf of Nanaimo’s taxpayers. I think that we can take it for granted that those who could directly benefit from the exemptions are already in favour: — Except, of course, perhaps for those who stop to ask why, if investing in Nanaimo is a good bet, do they need to bribe me and others to come here? or Should I wait for a better offer?: or if they are ready to bribe me, will they be just as anxious to bribe my competitors?
I look forward to your thoughts on this matter.