Hoping to attract a grocer to downtown

WEDNESDAY, 08 JANUARY 2014 02:00 JOHN MOORHOUSE Penticton Herald
Penticton city council hopes a 20-year tax exemption might be enough incentive to entice a grocery store downtown. The exemption is among several revisions included in a renewal of the Downtown Economic Investment Zone (EIZ) bylaw, approved unanimously by council Monday night. The previous bylaw, introduced in 2010, expired at the end of December. Economic investment zones, which are also in place in designated industrial and hotel/motel areas, provide tax exemptions on new or renovated building improvements as an incentive to spur development and jobs. Existing EIZ project deadlines for industrial and hotel areas are also being extended by six months to a final completion date of June 30, 2017. Anthony Haddad, the city's director of development services, said since economic investment zones were introduced in 2010, 10 projects with a total construction value of $5.5 million have been developed. Total tax breaks over five years will amount to $276,000. The largest project, the new $2.3-million Landmark Cinemas complex, accounts for about half of the total including $150,000 in reduced property taxes. Coun. Andrew Jakubeit said if it wasn't for the tax breaks, the new theatre likely wouldn't have been built."Without the incentive, it probably still would have been talked about or (built) at another location," he said. Several other projects, with construction values of more than $26 million, are in the works. This includes the $18-million Regency Retirement Village complex now under construction behind the former waterslide property near Skaha Lake Road and Yorkton Avenue. Haddad said a key change sees a longer tax exemption period Ð from 10 to 20 years. "We had five-year tax breaks under the previous bylaw," he said. "Now we're proposing some fairly aggressive targets. For a grocery store, for example, there's a 20-year tax break on the land and improvements." Haddad noted recent community consultation indicated a grocery store is among the strongest needs for the downtown core. Downtown Penticton has been without a full grocery outlet since the closure of the former Super Valu store on Martin Street in 2005. With a number of full-size grocery stores already located elsewhere in the city, Haddad acknowledged that attracting another store downtown won't be easy. A grocery outlet had been planned for the proposed P2 highrise development on Martin Street. However, that project has stalled with the recent economic downturn. "Maybe this is the trigger that will help us begin that discussion again," he said. "We're proposing to be fairly aggressive in trying to attract uses that the community wants to see downtown.” Tax incentives are also being offered for remediation of "brownfield" sites on former gas station and other contaminated properties. Coun. Helena Konanz said Penticton has a major problem with these sites and suggested council also consider penalties for owners of such properties. "We've been living with this problem for a long time," Konanz said. "We've got the carrot (through tax incentives) but we also need the stick." The EIZ bylaw puts a limit on the maximum number of projects eligible for certain tax breaks. Haddad explains this is designed to encourage developers not to postpone a proposed project. Final reading of the new bylaw will follow a public notification and consultation period.