DRTEP and YOU and ME

Posted by on May 7, 2018 in CITY GOVERNMENT | Leave a comment

 

Ron Bolin: May 7, 2018

“FURTHERMORE TAKE NOTICE THAT, the program is intended.to accomplish its objectives by providing tax certainty to parcel-owners and reducing the municipal tax burden on parcels where a project is being undertaken. The properties that will be eligible for a tax exemption under the program are new multi-family residential developments, new commercial developments and additions or renovations to existing buildings for commercial development.”
From: Notice of Intent: Revitalization Tax Exemption Bylaw 2018 No. 7261 which appeared in the Nanaimo News Bulletin on May 3, 2018 on page 5.

Reading between the lines of the Notice, it means that for each property within the “Downtown” area described by the map which forms part of the bylaw and which meets the conditions described in the bylaw (primarily the investment of $500,000 dollars or more in new construction or structural “improvements” on any eligible parcel), that that improvement will not be taxed for up to 10 years. This, of course, does not mean that the City will be able to pluck the tax dollars not collected from the air, but rather that they will be plucked from the pockets of all other Nanaimo taxpayers.

Interpreted, it means that we are offering discounts -which might otherwise be described as bribes- to those with more than a half million dollars to spend on construction in downtown Nanaimo. I don’t know about you, but to me a discount tells me that the product you are selling is overpriced and represents a deficiency of belief in the value of the product itself: to the conscientious buyer it is a flag that all is not as it might seem. Serious players may be offended, while risk takers will be attracted. This is all part of the usual economic game in business… But in this case, the catch is that the winners and the losers in this part of the business game are not those playing it, since the tax difference doesn’t affect either of the two parties directly involved, but rather falls on the taxpayers who must make up the difference.

I find it curious, after chiding the Nanaimo Recycling Centre for not presenting a business plan with their ask, that this bylaw should come forward with no estimates of the potential costs to be borne by Nanaimo taxpayers as a result of it, i.e. no business plan. Despite the serious budgetary expenditures on our City computer system and data collection, no estimates of the number of properties which could, as matters now stand and with an investment of $500,000 or more, be eligible to take part, or, as an extension, the taxes which could be shifted to general taxpayers to make up the difference. Nor does it examine the effects of changes in zoning, site requirements, etc. which could modify the liability of taxpayers under this scheme.

It strikes me that sauce for the goose, is sauce for the gander and that a long hard business plan look at this bylaw and its effects, not only on the downtown, but on the whole of Nanaimo should be undertaken before it is passed.

NOTE: The shorter version below was put on Facebook, I’d be interested in your comments and questions on the two versions… Facebook does not include much in the way of text format discrimination.

After coughing up $17+ million dollars for the Fire Station downtown, what’s the next task for the taxpayers of Nanaimo?
Taking from Peter to Pay Paul
“FURTHERMORE TAKE NOTICE THAT, the program is intended to accomplish its objectives by providing tax certainty to parcel-owners and reducing the municipal tax burden on parcels where a project is being undertaken. The properties that will be eligible for a tax exemption under the program are new multi-family residential developments, new commercial developments and additions or renovations to existing buildings for commercial development.”
From: Notice of Intent: Revitalization Tax Exemption Bylaw 2018 No. 7261 which appeared in the Nanaimo News Bulletin on May 3, 2018 on page 5.

Got a half million or more burning a hole in your pocket? If you own or buy a downtown property which meets the criteria of the DRTEP (Downtown Revitalization Tax Exemption Program) you can get 18% of your structural improvements paid for by the citizens of Nanaimo over the 10 years of the exemption (mil rate for business is .0178). This works out to about $8900 dollars per $500,000 investment per year or 89,000 over the ten year period. Put all the possible such exemptions in the downtown together and you will get the sum which the rest of us will have to come up with to make up the difference. (The Conference Hotel by itself should be about 40 times the half million dollar figure.) Does this make sense if you have $500,000 or more to invest?? Does it make sense if you don’t have a half million, but will pay for it anyway?? Where is the business plan?? What are the stakes?? Qui bono??