Few takers for tax incentive program
Oliver has no plans to resurrect a program that offered tax exemptions to developers who built in coveted locations around town but produced dubious results.
The program – versions of which operated in Penticton and still exist in some other communities – was launched in 2013 and offered 10-year tax exemptions on new projects in five areas of Oliver: downtown commercial, core area residential, industrial, airport, hotels anywhere.
But by the time the program expired at the end of 2023, developers of just five projects had signed on.
Those projects – the largest of which was the $9-million Coast Hotel, which opened in 2018 – resulted in construction value of $18 million, said John Kurvink, chief financial officer for the Town of Oliver, during a presentation to council Monday night.
The other four projects were the new Dairy Queen on Main Street, plus a pair of storage facilities and one fuel cardlock in the industrial area. The foregone tax revenue is estimated at $80,000 per year.
Nonetheless, Kurvink recommended council keep the program alive in a bid to attract new construction, but suggested cutting the exemption period from 10 years to five and only offering incentives on downtown properties.
“The rationale for that is… to help spur development in the higher-profile areas of town. The hotel, industrial and airport (zones) are excluded because they’ve had recent builds, and the airport’s a little bit more restrictive in terms of what can be done there,” explained Kurvink.
Council instead voted unanimously to let the program die a natural death, although some expressed an interest in coming up with a new model focused on Main Street.
“If we were going to have one anywhere, Main Street might be the one I might be enticed to consider at this time because we do have empty lots there and some incentives may help,” said Mayor Martin Johansen.
Coun. Aimee Grice was similarly reluctant to reinstate the program, but noted the opportunity left by the expiry of Penticton’s version in 2019.
“Penticton pulling back on theirs almost makes me want to go ahead with it because I feel like that maybe would give us the edge for a developer on Main Street,” said Grice.
“Main Street is struggling and it would be nice to see the holes filled.”
Finally, Coun. Dave Mattes was skeptical about the value of the incentives in the first place.
“It would be interesting to go to the proponents… and ask them the question: Was (the incentive) a factor in their decision? And if it hadn’t been there, would that have precented them from moving forward with the project,” said Mattes.
Randy Houle, the town’s planning manager, confirmed most of the developers who received exemptions only learned about the program from municipal staff.
“In most cases, anecdotally, they’re not aware of the bylaw,” said Houle.
Penticton launched its economic incentive zone program in 2010. The final intake was available to projects completed by Dec. 31, 2019.
“At the end of the program, once construction has been completed on all projects, approximately 40 projects will have qualified for exemptions and generated more than $70 million in construction activity and more than 400 new jobs,” states a profile on Penticton’s project published just last year by the B.C. government.
“About 20% of the projects are new investments and the others are reinvestments in existing businesses and industry.”