So what’s my problem with the city’s position on Section 226 – Revitalization Tax Exemptions – of the Community Charter?
Primarily that its reason for rejecting it seem, by the wording, to focus on industry.
And in doing so completely misses the point on the intent of the legislation.
That section states, “A council may, for the purpose of encouraging revitalization of an area of the municipality, designate an area as a revitalization area.”
Having done that, a council may then establish a revitalization tax exemption program for that specific area.
That would allow the city to grant a limited tax exemption for a specified period for “construction of a new improvement” (improvement means a building) or “alteration of an existing improvement” (for alteration, read upgrade).
It also gets to apply conditions on what will and will not qualify for an exemption in that designated area, even set different exemptions based on different uses.
The exemption doesn’t mean the city gives up any existing tax revenue because the exemption applies only to the difference between the taxes before and after the construction or upgrade.
The exemption can be for up to five years with an option to extend it for another five years.
In short, section 226 offers a significant amount of flexibility.
And clearly, it can make for a very nice incentive when it comes to encouraging development or improvements.
Take a simple upgrade, for example: you improve your commercial property, your assessed value soars and, as a result, so do your taxes.
That’s a scenario that can actually discourage improvements because you end up paying twice – once to do the work and again when tax time arrives.
But if you were located in a revitalization zone, you could carry out the upgrade in the sure and certain knowledge that for a few years at least you would not be dinged by the local tax man.
Right now we have a task force looking into ways to crack down on unsightly premises – in other words, the stick.
Perhaps it should also take a look at the revitalization exemptions as a method of offering a complimentary carrot.