(JENNIFER STAHN / iNFOnews.ca)

Developers buying up properties in Kamloops can forego city taxes in even more areas of the city after council approved a bundle of both revised and new bylaws this week.

Dubbed the "revitalization tax exemption," the bylaw aims to spur developers looking for properties to build on, which has some success in the past. Now it will be expanded to include more downtown space along West Victoria and several blocks further east.

Councillor Denis Walsh called the expanded boundary a "shotgun approach" without giving the ten-year tax exemption a "set goal."

"We need a tax base in this city to continue growing," Walsh said at the Feb. 15 council meeting. "Can somebody help me understand why we would forego a large tax base?"

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He pointed to ongoing residential developments in the downtown core of the city that can house hundreds of tenants, concerned that they do not pay a fair tax share for city services. He also said the policy seems to "gift" developers with tax savings without a set goal, which he suggested could include a minimum addition of new residential units downtown.

The tax exemption was already in place downtown since 2009, which accounted for nearly $500,000 in exempted city taxes in 2020. Northland Properties was exempted for $254,000 of the tax exemptions for the Sandman Signature Hotel on Lorne Street.

On the North Shore, $336,700 in tax was exempted for developers that year.

Twenty-six developers have applied for exemptions since each bylaw was adopted, with 12 in the North Shore since 2006 and 14 downtown since 2008, according to a report by City staff.

Up to 2021, $6.9 million in property taxes have been forgone.

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"The revitalization program is designed based on other community's initiatives to make sure their downtowns are, and remain, viable," Mayor Ken Christian said at the council meeting.

The City of Kelowna, for example, has a multi-faceted tax exemption program for developers, incentivizing growth in some core areas, rental-focused housing across much of the city.

The incentive program for developers works by taxing the developer on its value before improvements are made. This can include new builds or renovations that meet cost requirements. Each developer must apply to the City before the exemption is approved.

The Sandman Hotel on Lorne Street, for example, was valued at a total $23.8 million by B.C. Assessment in 2021, but it is only taxed for the $5.4 million land value. The hotel was built in 2012 and nearing the end of its ten-year exemption.

For the overall budget, the City must make up for those tax shortfalls elsewhere.

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"When reports come back showing Kamloops has the highest amounts of empty parking lots throughout B.C. in the downtown core, outside of Prince George, that shows to me that we need to do more to help get development done," councillor Mike O'Reilly said, voicing his support for the program.

"There's a lot of discussion throughout B.C., and Canada, frankly, is that we have a housing crisis, and I strongly suggest we have an inventory crisis."

The downtown exemption area once roughly covered the area from Lorne Street to Columbia Street and 7 Avenue west to the B.C. Lottery Corporation property.

With council approval, it's been expanded to include nearly all properties along West Victoria Street, Victoria Street and Battle Street from 6 Avenue past 13 Avenue. It also includes more properties along Lorne and Seymour streets than previous.

City council voted in favour of the downtown exemption bylaw on Tuesday, but Christian and Walsh voted against it.

Council also approved three other tax exempt areas including the North Shore tax exemption, focused on the Tranquille Corridor. The other approved exemption applies to commercial daycare spaces and can be applied city-wide.

A fourth exemption for motel properties along Columbia Street West and in Valleyview was considered but will be amended by staff before it returns to council at a later date.

The 67 page report to Kamloops city council can be found here.

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