Council drafting tax relief policy to help developers

Mac Olsen
South Peace News

A High Prairie developer has town council’s support in his bid for temporary tax relief in constructing a commercial building. Council is currently drafting the Commercial Development Incentive – Tax Relief Policy after hearing from Darrell Shewchuk at its Aug. 8 meeting. Shewchuk, who plans to build a 3,360-square-foot, two-bay building at 4910 – 51 Street, wants town council to provide tax relief for the unsold (or unleased) portion of the building, because it’s being built on speculation. “It gives you the incentive to invest your money and to take a risk,” says Shewchuk. “If you don’t give a little, you won’t get anything. It’s short-term pain, but then you’ll have 50-60 years of tax base on there.” Shewchuk adds that installing water and sewer connections, and asphalting the parking lot, are very costly. But having temporary tax relief would offset such costs. Town manager Larry Baran is drafting the policy, following a motion passed by council Aug. 8. Baran says the policy would give the developer tax relief for up to two years. However, not all developers would qualify. He says they may start the construction project and, before it’s completed, they’d have a buyer for it. So they’d have no need for the policy to kick in. “Certainly, if the property isn’t immediately sold, and for some reason it sits unsold for more than two years, the developer is responsible for the full taxes come the third year anyway,” says Baran. Mayor Rick Dumont says he supports a policy that helps commercial developers like Shewchuk. “If it’s going to give them a little bit of relief to get the development going and help out that way, I’m all for it,” says Dumont. Councillor Mike Daubert also supports the policy, but suggests the inclusion of a sunset clause. It gives council the opportunity to review the policy every so often and ensures it does not continue indefinitely. Daubert adds he also wants to ensure that preferential treatment isn’t being given. “Anytime we are giving any type of incentive, we have to be careful that nobody can take advantage of it,” says Daubert. A similar policy has been devised for new residential developments. In a memorandum to council, Baran explains that council established a Subdivision and Development Tax Reduction Policy in 2005, to reduce property taxes on newly-created residential properties resulting from the subdivision process. But, this policy does not apply to Shewchuk’s situation because his property is being developed, not subdivided.

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