HEADING DOWNTOWN
CBRM looking for input on potential tax assessment incentives for eight communities
CBRM looking for input on potential tax assessment incentives.
A proposal to offer commercial property owners an incentive to renovate, rebuild and expand businesses in the downtown areas of eight communities will seek public comment at two open house sessions on Monday.
The Cape Breton Regional Municipality is looking at ways private business owners could reinvest in their properties without feeling the sting of a dramatic jump in property assessment that would accompany it.
There are no plans to lower the commercial tax rate — currently pegged in Sydney at $5.557 per $1,000 of assessed value.
CBRM senior planner Rick McCready said the idea is to phase-in jumps in assessment over a time period as long as 10 years. It would result in a “tax reduction of no more than 50 per cent over that period,” according to an issue paper presented to council in November.
The program would cover the downtown areas of Sydney, Glace Bay, North Sydney, New Waterford, Sydney Mines, Whitney Pier, Louisbourg and Dominion.
CBRM council rejected the staff recommendation at the November meeting, which would have focused the tax incentive on downtowns in Sydney, Glace Bay and North Sydney, and instead chose to include all downtown areas in the municipality.
The proposal was also extended to CBRM’s three business parks — Sydport, Harbourside and Northside — to increase the likelihood of development.
“What has happened in the past is someone has built a new building downtown or they’ve completed a major renovation and once they’ve done that, of course, their tax bill is so high initially and if they have a mortgage and other expenses, it’s just overwhelming,” McCready said in an interview on Wednesday.
“The reaction is, ‘Gee, why would I do that? The tax bill would be so high if I upgrade my building so I’ll just leave it the way it is. If it’s a vacant lot, just leave it vacant because I’ll be dinged with such a high tax bill.’”
McCready said it’s about encouraging development in downtown with a tax deferment rather than introducing a total tax exemption.
The provincial government amended the Municipal Government Act in 2016 allowing municipalities the option of passing a bylaw that would phase in tax increases resulting from a significant hike in assessment.
The town of Yarmouth was the first municipal unit in the province to develop its own bylaw based on the changes in the MGA. The Central Business District Improvement Plan bylaw was implemented in December 2016.
It’s too early to draw any conclusions
on how successful it may be, however Yarmouth’s economic development officer Natalie Smith said the town has signed six development agreements so far with business owners.
“Most of them were buildings that were in a pretty bad state of repair. These applicants basically overhauled the whole buildings so not only façade but structurally, roof, electrical, plumbing, and then created an opportunity for new businesses,” she said.
Each property owner participating in the program receives a rebate at the end of the year after the commercial taxes have been paid in full, Smith said.
In order for property owners to participate in the program and reap the benefits of the rebates, the total increase in taxes payable during the phase-in period must be more than 50 per cent of the total increase in taxes that would be payable during the same period in the absence of the program, according to the town’s bylaw.
“The trigger for an agreement is a development permit, and a development permit is only valid for six months so it’s a real project. If the project didn’t go forward, well, the agreement becomes null-and-void,” Smith said.
She noted the bylaw also permits the agreement to transfer to a new owner of the property and the initial recipient of the rebate can see it transferred to another individual as well.
CBRM staff has recommended the tax incentive plan be implemented for a five-year period starting this year.
McCready said the public participation sessions on Monday at the community round room at the back of city hall will be held from 3-5 p.m. and 6-8 p.m. It will include a brief explanation of the purpose of the open house and PowerPoint presentation by municipal planners.
A report will go back to council where a formal public hearing must be held before moving ahead with the drafting of a proposed bylaw.
“We want to talk to people about this,” said McCready.
“Council hasn’t decided to do it but we do want people to give us some feedback. Do they think this is a good idea? Should we be doing this? And what areas should it apply?”