Tax breaks could help city attract investors, committee says

JOHN MOORHOUSE Thursday, November 19, 2009 Penticton Herald:

Penticton council should introduce tax breaks and other benefits to attract new hotels, industries and downtown upgrades, suggests the city‘s economic development advisory committee. Committee chairman Jim Dunlop said in a report to council this week the city should create three “economic investment zones” to attract new investment for the hotel/motel sector, downtown and the industrial area. The proposal calls for a 100 per cent tax break for five years for any new three-star or better hotel with a minimum of 50 rooms, or renovations exceeding $100,000 to an existing hotel or motel. The committee suggests a 50 per cent reduction in building permit fees and development cost charges payable on a project. Developers should also have an opportunity to defer payment of DCCs to a later stage in the city‘s building approval process.

Similar breaks are recommended for upgrades to downtown buildings, with a 100 per cent exemption of DCCs proposed for the industrial zone. Dunlop noted the proposed tax relief would only pertain to the increase in value of a property, not the current tax bill. Construction would have to begin by Dec. 31, 2011 and be completed by the end of 2013. “The main purpose of this is to develop a competitive environment and an investment strategy for the revitalization of existing businesses and to be able to attract new investments into Penticton,” Dunlop said. Pointing to a need for more high quality hotel rooms in the city, Dunlop said the tax breaks could provide incentives for improvement of existing facilities and possible a new hotel. Downtown building upgrades would improve the entire city core, he added. “We wish to attract new businesses to downtown, new customers to downtown and to be able to create a more vibrant downtown.”

Dunlop said industrial area tax breaks would provide incentives for new construction and businesses, as well as significant renovation to existing facilities looking to expand. “We would really like to support the retention, enhancement and attraction of new jobs and opportunities within the community,” he said. Council voted unanimously to accept the report in principle and refer its recommendations to city staff for further review. Mayor Dan Ashton lauded the work of the committee, but noted there may be some adjustment to the percentages of the proposed breaks once it comes back for debate during council‘s 2010 budget deliberations.