October 22, 2015 - 9:03 PM
PENTICTON - City hall staff hope to build on the success of Penticton’s Economic Incentive Zones with the introduction of a new city-wide tax break for developers which is aimed at keeping Gateway Casino in town.
After hearing the Penticton Lakeside Resort will not renew the Lake City Casino lease when it expires in May of 2017 forcing Gateway to find a new home, the city is looking for ways to ensure the casino relocates within the city’s boundaries. The Major Development Projects Economic Investment Zone is one of those ways.
Economic development officer Colleen Pennington told council this week the city’s two economic incentive areas in the downtown core and in the industrial area have been very successful attracting revenue and jobs.
The tax incentives assist new and existing businesses to locate and expand. The size of the tax break depends on the size and type of investment.
Pennington used two examples to illustrate her point, citing Landmark Cinemas’ seven theatre development downtown. The $2.3 million project resulted in 15 jobs and an increase in annual property taxes from $12,374 to $37,000. The tax hiatus given through the economic incentive was paid back in three years.
Meanwhile, the construction of the $18 million Southwood Retirement Resort Ltd. on Wilson Street has created 30 jobs that could expand to 40 positions. Pennington said the project has resulted in an increase in property taxes from $17,000 to $160,000, with a payback on the tax hiatus in one year.
“Those two examples really highlight the value of an economic incentive zone,” she said. “Accordingly, we want to move ahead with a major economic incentive that can be used to create more of this investment within the city limits.”
She pointed out the casino is as an example of the type of investment the incentive might attract. She said the gambling operation is very important to the city and a major economic incentive may help ensure Gateway keeps it in Penticton.
The new incentives would be limited to two projects and they must happen between Dec. 1, 2015 and Decc 31, 2018, but would apply to a development anywhere within city boundaries. The projects would be expected to have a building permit value in excess of $17 million.
“If you’re going to invest $17 million you’re probably going to create a fair number of jobs," Mayor Andrew Jakubeit said. "I commend staff for putting this together, trying to ensure there are opportunities for the casino to stay in town here. It’s of significant importance to us, not just for the revenue, but for the jobs it creates."
Council has given the bylaw to create the new tax break first, second and third reading and now it goes to a public hearing.
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News from © InfoTel News Ltd, 2015