Tantramar Town Council seems certain to approve a $1.5 million property tax rebate for the seven storey apartment building that John Lafford and Mike Wilson are planning to build on York Street in Sackville.
It’s also mulling over a more controversial tax break of up to $179,833.09 for AIL’s new plastic pipe factory on Walker Road that Mike Wilson built in 2022-23. (The council debate over this proposal will be covered in Part II of this series.)
The two hefty tax-rebate proposals under Sackville’s Economic Incentive Development Program were discussed at today’s Committee of the Whole meeting, but council will not make any final decisions until it meets again in February.
York St. bldg.
Ron Kelly Spurles, Tanatramar’s manager of tourism and business development
In recommending that council approve the $1.5 million tax rebate for the building on York Street and Ford Avenue, Ron Kelly Spurles, Tantramar’s manager of business development, told council the incentives program is meant to convince developers to build locally.
“These types of incentives are intended to act as a catalyst for increased development activity in the community, which will in turn, help attract further businesses, residents and employment,” he said.
He added that the project, estimated to cost $23 million, would provide a total of 97 apartment units, underground parking and about 10,000 square feet of commercial space.
If council approves the incentives, the developers would get a 50% reduction in their property taxes over a 10-year period starting in 2028 when the completed building is fully assessed at its market value:
Tax table that Kelly Spurles presented to council (click to enlarge)
“I used to be really against these [incentives],” said Councillor Josh Goguen.
He added, however, that the new building would generate far more tax revenue than the town is currently receiving.
“We’re not actually giving the developer money, we’re just saying you only have to pay us a certain amount for the next few years,” Goguen said.
“I think that’s what a lot of people hear is, ‘Oh well, we’re giving them money.’ No we’re not. We’re going to be generating this income, in this case twice as much in the first year than what we would have been [getting] if we didn’t give them [the incentive] and then, he wouldn’t build the building,” he added.
Councillor Allison Butcher
Councillor Allison Butcher argued that because the tax incentive program has been in place since 2020, council is obligated to grant it to any developer who meets the criteria.
“I don’t think that we can cherry pick who is allowed if they meet the criteria, then we are bound by the law that we have in place to do it and if we don’t like the way that is, then we need to revisit the incentive program, not pick and choose who will be eligible if they meet the criteria,” she said.
“It’s a good point,” said Mayor Andrew Black. “Why have it, if you’re not going to give it.”
Council then voted unanimously to consider approving the tax rebate plan at its regular meeting on February 4th.
Why is incentive program needed?
Later, during the public question period, I asked why the incentive program is needed when vacancy rates are low and there’s already a long waiting list for apartments.
“You’re right, the new seven-storey building, if it gets built, would be filled fairly easily,” Mayor Black answered.
“But it’s still to spur development,” he added, “and if it’s not about this current development, it’s painting a picture of anyone who would want to come to Tantramar and see us as being open for that kind of development.”
When I asked if, as many argue, a tax expenditure of $150,000 a year over 10 years, couldn’t be better spent on more affordable non-profit or co-op housing, I received these responses:
Tantramar Treasurer Michael Beal
Treasurer Michael Beal: “We’re not giving back anything we wouldn’t get in new revenue, so if we say $150,000 should go towards something else, if this development wasn’t happening, we wouldn’t have that $150,000 to put towards something else. So, we’re not giving away existing taxpayers, the rebate isn’t existing taxpayers’ money, the rebate is new taxpayer funds.”
Mayor Black: “The other thing to note is that you were talking about non-profit housing development…if a non-profit housing developer was to build something within Sackville as long as it was within the dollar-amount thresholds that are in the economic incentive program, they can apply for that as well.”
Councillor Michael Tower pointed out that the building that Lafford is currently constructing at 131 Main Street and the one planned for York Street will free up housing in Sackville as older people sell their homes to move into his apartments.
“That’s the kind of developer you want to come and invest their money in our town, to create more housing” he said.
“That would alleviate a lot of the shortages,” he added.
“We can’t make developers make it more affordable, but there are other projects that could be funded.”
For coverage of Lafford’s previous $1.1 million tax break, click here.
A key argument from the Town that I’m not hearing is that this is common elsewhere in southeast NB. If so, and if everyone has a housing shortage, then developers can build where they find the best deal. If it’s not common, then it is an unnecessary give away because developers will develop in the Sackville market anyway. The provincial government wants to see these incentives offered because they favour private development and the rentier class or else they wouldn’t be allowed at all. Local tax concessions do go against the spirit of Equal Opportunity because it is the haves like Tantramar than can afford to offer them.
I’ve grown weary and cynical with Council’s total lack of interest in a larger vision for this town beyond simply “Build, baby, build!” (with no apologies for borrowing from The Golden Maned One down south)
There seems to be no sense of scale or historical sensitivity, to say nothing of a vision regarding what should be the optimal “size and shape” of Sackville, beyond that of yet another bedroom suburb of Moncton, anxious to cash in on development gone wild. There’s a gold rush on, and we gotta get in! The more, the bigger, the sooner… the better.
And the developers, meanwhile, are “Laffin’ all the way to the bank.” (misspelling intentional)
[sigh]
Pretty much agree with all this.
The thing is, the buildings in the downtown core – the older ones – are not kept up, at all. To the point that they’re a fire hazard and it’s only a matter of time before we have another fire, or one of the owners gets an offer they ‘won’t refuse’ and then the buildings will be demolished.
We SHOULD be acting with those two possibilities in mind and start planning FOR changes to the downtown core.
As much as Moncton/Dieppe/Riverview is growing, I don’t want us to be an ‘echo’ of them. We should have our own look, our own aesthetic, to make us distinct enough even if in the future, “Tantramar” is just another burb of Moncton.
“…and then, he wouldn’t build the building.” – Goguen
What evidence is there that the building wouldn’t be built without tax breaks?
“Why have it (tax break program), if you’re not going to give it.” -Black
Because you can use judgement to determine whether or not to use is. If buildings are financially viable without tax breaks, giving the tax break is throwing away money to enrich developers, not encourage building, and putting more of a tax burden on other residents for services and infrastructure.
“So, we’re not giving away existing taxpayers, the rebate isn’t existing taxpayers’ money, the rebate is new taxpayer funds.” – Beal
Beal’s illogic here is obvious when you look at how property taxes have risen dramatically in the last ten years. The town will provide the services and infrastructure needed for new residents and apartment buildings because everyone else is paying for those services through rising property taxes. Council is throwing away revenue that could have been used for services and maintenance, and instead using higher property taxes on other residents to pay those bills. As a result of which, Lafford and Wilson will get richer while the rest of us pay the cost.
“But it’s still to spur development,” he added, “and if it’s not about this current development, it’s painting a picture of anyone who would want to come to Tantramar and see us as being open for that kind of development.” -Black
The mayor is saying that giving away 1.5 million dollars in tax revenue to a developer who is going to build anyway, and make a profit anyway, is an advertisement to other developers. That’s totally irresponsible. New development, without tax breaks, is proof enough that the town is open to new development. Throwing away tax revenue with an excuse like this does nothing except demonstrate that Black is unfit to be in charge of the municipality.