Encouraging investment in Trail won’t be limited to downtown after council’s recent decision to expand a tax incentive program into other commercial areas in the city.
Last year in a bid to entice property owners to fix up buildings in the downtown region, the city introduced the Downtown Revitalization Tax Exemption Bylaw.
The goal of the bylaw is to offer a 10-year tax break on properties under construction or substantial renovations in downtown, the Gulch, and East Trail lots on the immediate block near Safeway.
Now that incentive will be offered to all commercially-zoned properties along Columbia Avenue in East Trail, Highway Drive in Glenmerry and those in the Waneta junction area, confirmed Michelle McIsaac, Trail’s corporate administrator.
“However, properties zoned for light or heavy industrial use will be excluded,” she said.
Terms of the downtown bylaw require a minimum new construction value of $10,000 on mixed use, commercial and institutional properties, to be eligible for up to a 100 per cent tax freeze over a decade.
Additionally, facade improvements and residential or commercial renovations topping $10,000 are eligible for a 100 per cent tax freeze for six years, followed by a sliding scale tax reduction until the 10th year.
However, the expanded program stipulates that at least $50,000 must be invested in new construction or renovation for that same eligibility.
“Smaller construction projects would likely have little impact on the assessed value of the property,” explained McIsaac. “So providing an exemption in those circumstances would not necessarily provide any benefit to the owner because the project wouldn’t increase the assessed value of their property.”
Properties that qualify for the tax exemption are subject to a 50 per cent reduction in building permit fees and in both cases, all projects must commence before Dec. 31, 2017.
“The building permit reduction provides an immediate incentive for application to the program,” McIsaac said. “Tax exemption programs are intended to stimulate private investment in property development and redevelopment for a given time period so they commonly includes an eligibility period.”
During the downtown bylaw’s development, the geographic scope of the program was discussed and a phased-in approach was suggested pending an assessment of internal resources required to support the processing of applications and agreements.
For each eligible project, an agreement between the city and the property owner is drafted and when the project is complete, a tax exemption certificate is prepared and filed with the BC Assessment Authority.
“Making the program available to all commercial properties in the community adds to the administrative burden for city staff,” said McIsaac. “Though a community-wide tax incentive program would encourage economic development in other areas which would indirectly benefit the downtown.”
Five applications have been made to the city in the downtown incentive program with construction values ranging from $15,000 to $650,000.