Commercial property owners city-wide could get a break on taxes if they spend at least $100,000 on improving their buildings.
The City of Port Alberni has given three readings to two commercial revitalization tax exemption bylaws that will encompass all commercially zoned areas within the city—including city owned buildings at Harbour Quay.
The city’s current bylaw applied only to Uptown and allowed building owners to receive a property tax break on any building improvements they did.
That bylaw, adopted by city council in 2013, had two options:
• “With a minimum $1 million investment the owner is eligible to apply for a 100 per cent municipal tax exemption on the assessed value of improvements (buildings) for maximum 10-year term. The accumulated exemption amount cannot exceed 25 per cent of the total project budget.
• “With a minimum $100,000 investment the owner is eligible to apply for a 100 per cent municipal tax exemption on assessed value improvements (buildings) for a maximum five year term. The accumulated exemption amount cannot exceed 25 per cent of the total project budget.”
Council agreed with economic development manager Pat Deakin’s proposal to expand the bylaw to both private and city owned properties at Harbour Quay that had previously been excluded. When the previous tax exemption bylaw had been passed, private properties in Harbour Quay were thought to be in a good position to benefit from improvements to the Uptown commercial area indirectly, thus eliminating the need for them to receive a tax exemption for improvements.
“There was a belief that the private sector properties in Harbour Quay also would enjoy an advantage in that it was a commercial area where most residents brought their visitors to when they were here in the city and arguably it was seen as the most desirable area of the city,” Deakin said.
But that hasn’t proven to be the case, he added.
Deakin also recommended a new revitalization tax exemption bylaw to cover the rest of the commercially zoned buildings in the city not incorporated in the previous ones.
“[The new bylaw] applies to every commercial area in the city that is not currently covered and it provides a five-year tax exemption on the differential,” said Deakin. City planner Scott Smith added that it would apply to some light industrial properties on upper Johnston as well.
Commercial building owners city-wide won’t be taxed on the increased assessment value caused by making improvements for up to five years.
“It’s making sure there’s no disincentive,” Deakin said.
“If the money that had been invested in the building had increased its assessment from $500,000 to $700,000, you would forego the taxes on the differential between the $700,000 and the $500,000 but you would continue to get the taxes from the $500,000.”
The threshold on the new bylaw is $100,000 worth of improvements.
The current tax exemption bylaws have generated some success, Deakin added.
“There are some businesses that have taken advantage of them and improved their buildings and in doing so, improved the look of Uptown a great deal.”
The new bylaw could improve the look of the entire city, he said. The bylaws will be subject to a public hearing before they can be adopted.