EDITORIAL: Tax exemption a tricky offer
Offering a 10-year tax exemption on any new hotel development might be the only way to get more high-quality rooms built in Nanaimo.
But what about the hotels that have successfully operated here, and therefore supported the city through property taxes, for decades?
City council is offering the exemption as a cherry to entice developers to commit to a new downtown hotel, needed to bolster the operation of the Vancouver Island Conference Centre, which opened in 2008 and is unable to attract larger events due to the dearth of nearby rooms.
A previous council committed a chunk of land from a corner of Maffeo Sutton Park for development of condos, but after the ill-fated deal with Millennium was finally laid to rest, that enticement was put aside.
With city taxpayers injecting $1 million annually into the conference centre, it makes sense to continue pushing for a hotel, or any other amenities, that might help put the conference centre in a better financial position.
But this tax break must be a slap in the face to all the hotel operators who have dutifully gone about their business for years, and just as dutifully paid their property taxes every year for the right to do that business.
Many have also undergone major renovations and upgrades, increasing the value of their properties, thereby increasing the taxes paid to city coffers.
Council’s efforts to bring a new hotel development to shore up the conference centre’s viability are to be commended, but this move appears to ignore a key portion of the commercial tax base, a portion that will face increased competition if the gambit works.
Offering incentives is a dicey game, in that it’s tough to ensure all affected are treated fairly.