A proposed city bylaw encouraging uptown investment and property development amounts to local business subsidizing competition against themselves, Best Western Barclay Hotel general manager Peter Muggleston said.
City councillors passed three readings of the Commercial Uptown Revitalization Bylaw at their Monday meeting.
More than a year in the making, the bylaw encourages property owners to create or improve commercial and multi-family spaces.
The crux of the bylaw is the investment required before it kicks in.
A $1 million investment entitles an owner to a 100 per cent municipal tax exemption on improvement costs for a maximum of 10 years. A $100,000 investment fetches a 100 per cent municipal tax exemption on improvement costs for up to a maximum of five years. But the total exemption cannot exceed 25 per cent of the total project budget.
In his presentation to councillors, Muggleston said that council didn’t consider the adverse impacts on existing businesses.
Council began soliciting interest in a hotel development at Harbour Quay last spring. A request for proposals is being put out later this fall. The development would be located within the bylaw boundaries.
The bylaw underwrites competition in a way that existing business can’t compete with, he said.
The Barclay has paid approximately $750,000 in taxes in the last 10 years. “We’re subsidizing potential competition for the next 10 years,” Muggleston said.
Hoteliers have their own niches and don’t fear competition but the bylaw imbalances the playing field in their favour, he said.
Muggleston suggested that a further study should be undertaken that examines the impact of the bylaw.
The bylaw makes city council look hypocritical, Hospitality Inn owner-manager Jonathan Cross said.
The bylaw would apply to a potential new liquor store in town that is larger than existing ones, equal in size to the government liquor store, and enjoying the benefit of a tax exemption for 10 years,
“Last month council sent a clear message it did not support any more liquor stores, now it appears ready to subsidize one,” Cross said to councillors. “Why is the City trying to increase competition in a regulated industry where operators all buy their product through the government at the same price?”
Outwardly, the bylaw doesn’t cost the city anything. But the city stands to lose $300,000 in revenue and there are hidden costs such as inspections, bylaw enforcement and fire protection, Cross said.
“Where does the $300,000 come from that you are going to lose, whose taxes will you increase or which services will you cut?”
Councillor Cindy Solda asked what public consultations had been undertaken about the bylaw and if the chamber of commerce had been consulted.
The draft bylaw was presented at the Sept. 9 council meeting, city clerk Davina Hartwell said. As well, council discussed it at several meetings previous.
City economic development manager Pat Deakin said he’d given several updates about it during presentations to council, and that information about it could be found in meeting material on the city’s website.
There are people who don’t want the bylaw to go through, but there are others who do. “And that includes us,” Mayor John Douglas said of council.
Public notice of the bylaw will be advertised as per the community charter, and the public will have 30 days to provide input, Hartwell said.
Council will consider the input and revisit the bylaw as early as Oct. 9.