August 11, 2015 - 2:30 PM
KELOWNA - A property tax break meant to encourage new development in part of downtown Kelowna has done what it was designed to do and there’s no need to extend the program.
However, results in two other revitalization areas downtown and one in Rutland have not generated the hoped-for increase in residential development and may have to be rethought, according to a report from long range planning manager James Moore.
Tax incentive area three, which offers 50 per cent off property tax for ten years, was capped at 200,000 square feet and is almost fully subscribed. The city will forego just over $900,000 in property taxes over the life of the program.
However tax incentive areas one, two and four, while they have experienced some commercial development, have not seen the type of large scale residential projectst the city was hoping would help anchor its downtown revitalization program.
Buildings such as the Okanagan Innovation Centre and developments such as Central Green are in tax incentive area three. The Kelowna Community Health Centre, under construction at Ellis Street and Doyle Avenue, is in tax area two, as is the new Westcorp Hotel, slated for construction this fall on the old Willow Inn site at Mill Road and Queensway Avenue.
Moore describes the tax incentive areas as a useful tool but says they must be used judiciously based on the prevailing real estate conditions.
“In a weak market they can bring new development into certain areas. In a strong market, they may not be needed and it results in loss of tax revenue."
Council voted unanimously to end program in tax incentive area three and to review the program on a regular basis.
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News from © InfoTel News Ltd, 2015