Penticton council approves extension of economic incentive worth $500,000

PENTICTON – A request by a developer to have the city extend its economic incentive zone didn’t sit well with some council members at today’s meeting.

Wildstone Engineering & Construction approached city staff to have the economic incentive plan extended for three months because of setbacks on the construction timetable of its mixed-use, 48-unit six-storey building being built at 120 Ellis St.

The project is eligible for approximately $500,000 worth of tax exemptions under the investment zone bylaw.

The company cited unseen delays such as weather, challenges with the local labour market and professional services for putting the completion date behind schedule.

The city’s economic investment zone initiatives were abandoned by the present council, with projects currently eligible requiring a completion date prior to the end of December 2019.

Wildstone requested an extension of three months to March 1, 2020, to ensure the building could be properly completed.

Staff supported the request, calling the proposal consistent with council’s priority of community design. They said extending the program to projects this far in the development process would also ensure the projects were completed.

Staff actually recommended an extension of six months to ensure the building was completed without any additional stressors on construction.

“My sympathies are with people who are buying into that development. We’ve got probably 25 to 30 sales where people have budgeted for the deal they thought they had,” said Coun. Julius Bloomfield. He said developers wouldn’t pay the price for council’s refusal to extend the deadline, but buyers would.

“I’m also going to support this because I think what we are talking about here is not a loss in tax revenue, it’s a delay in it. I think people who bought into this bought it with the intention that’s what’s happening,” said Coun. Campbell Watt, who suggested three, not six months was an appropriate extension.

“We have to stop looking at it like we are supporting an economic zone, because we’re not we’re supporting an extension of it,” he said.

“As you know, before I came onto council, I was very outspoken about these economic incentive zones, and giving tax dollars to development. I was totally opposed to it. It does not encourage development, per say. Development only occurs when there is a market… tax exemptions do not create development. This is just a farce. We’ve given away millions of dollars on this program. I can’t support this,” Coun. Jake Kimberley said.

He said it shouldn’t be an issue for the 48 purchasers to make up the $500,000 incentive.

Mayor John Vassilaki also opposed the request, saying he knew the contractors as “great people, good corporate citizens for the City of Penticton.”

He said there was an obligation for both sides to maintain the promises made to each other.

“They have to continue with those decisions they made,” he said. The mayor also questioned the length of time it took for the proponents to apply for building permits after applying for footings (14 months).

Council agreed to the staff recommendation to allow an extension of the economic incentive. Vassilaki, Kimberley and Coun. Frank Regehr were opposed.

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