As the city expands its tax-exemption policy in a bid to spur development downtown and in North Kamloops, a councillor’s bid to add conflict of interest rules to the process has been rejected, with fellow council members and the head of downtown business improvement group among those arguing such a move is not necessary.
Coun. Denis Walsh earlier this month failed in his bid to add conflict of interest rules to the terms of reference under which the city’s revitalization tax exemption engagement group works. The engagement group consists of various residents — some involved in developing properties — who provide input on the scope of the tax-exemption bylaw.
That input is then passed on to city committees. City councillors who sit on those committees vet the information before recommendations are sent to council for a decision.
The tax-exemption bylaw encourages development downtown and along the Tranquille corridor in North Kamloops by providing an incentive — a property-tax holiday for the developer and tenants.
After 10 years, the owners begin paying taxes.
Last month, council agreed to extend the tax-exemption bylaw to include commercial projects.
A day later, the multi-million-dollar, three-office-building Hive project was announced for property downtown, adjacent to the Delta Hotel.
Shortly thereafter, Walsh tried to have the conflict of interest rules added, but could find no support on council.
Walsh told KTW that he pushed for the change as a result of a meeting last September of the engagement group to review the bylaw. That meeting included developers of the Hive project. In attendance at the Sept. 23, 2019, meeting were A&T partner Gary Reed and National Hospitality Group director of leasing Tristan Armstrong, both of whom are involved in the Hive development.
Also part of the engagement group at that meeting were four city staffers, Kamloops Central Business Improvement Association executive director Carl DeSantis and director Robbie Tallon, North Shore Business Improvement Association executive director Jeremy Heighton, Venture Kamloops economic development specialist Clark Grieve and Kamloops Chamber of Commerce president Joshua Knaak.
Despite the fact Hive representatives were at the meeting and council five months later expanded the bylaw, leading to the Hive development proceeding, the city said a conflict of interest did not occur.
According to the city’s corporate officer, Maria Mazzotta, conflict of interest rules do not apply to engagement groups in the same way they apply to council under the province’s Community Charter because engagement groups do not make decisions.
Mazzotta said engagement groups — created during a rework of the city’s committee structure in December of 2018 — are a means of “temperature taking,” an opportunity to gain perspectives from the community. In the end, she said, any decision made — such as changes to the tax-exemption bylaw — is that of council.
SINGH SAYS MORE VOICES SHOULD BE SOLICITED
Coun. Arjun Singh said he empathized with Walsh, based on his past experience with the development cost charge engagement group. Singh noted that, once feedback and recommendations arrived at the committee level, the issue had already been largely parsed out.
Rather than create rules that would eliminate those impacted from the conversation, Singh suggested inviting neighbourhood associations to provide a citizen perspective and create more balance on engagement groups. The city is now recruiting members of the community to get involved in the tax-exemption engagement group, in an effort to provide a balanced perspective as the city takes a more holistic review of the bylaws.
City staff told KTW additional community members were invited to last September’s engagement group meeting, but did not show up. Also invited were Venture Kamloops executive director Jim Anderson, Kamloops Chamber of Commerce executive director Acacia Pangilinan and two other people involved in the Hive project: Frank Quinn of A&T Developments and Bryan Pilbeam of Delta Hotels and Invictus Properties.
City development director Marvin Kwiatkowski said the meeting was informal and city CAO David Trawin added that invitations were based on who had been invited in the past, as the bylaw has been amended multiple times.
“Typically, in the past, it has been the BIAs, the chambers, it has been developers that have typically done stuff downtown or maybe do stuff downtown,” Trawin said. “That’s generally what it was.”
Kwiatkowski called tax-exemption changes for commercial development a “no brainer” based on similar policy in other communities, noting the bylaws in Kamloops were implemented on a piecemeal basis and in need of review.
Council has sided with staff, arguing it is important to receive feedback from experts on any given subject matter and to hear from those who would be impacted by policy change.
MAYOR SAYS INPUT NEEDED FROM THOSE IMPACTED
Mayor Ken Christian noted if the city had been seeking input on dog licensing, it would have consulted dog owners.
“I don’t necessarily think that they would be in conflict by providing their input into how dogs should be licensed and that kind of thing,” Christian said.
“I think the ultimate decision that would come out of that engagement group would be made by us as council on the recommendation of the committee that they reported to. I guess I’m having a hard time to see that there is that conflict that Coun. Walsh has articulated.”
Coun. Mike O’Reilly has championed the bylaw changes, telling KTW the city will benefit from tax money in the long run, in addition to new jobs.
He pointed to the Sandman Signature Hotel, a development facing Riverside Park on Lorne Street currently valued at $20.5 million and built in the past decade. The hotel employs 150 people.
“That’s 150 mortgage payments, that’s 150 rent cheques a month, where people can pay to live in Kamloops,” O’Reilly said.
The hotel was built with help from the tax-exemption bylaw. O’Reilly said the hotel’s 10-year tax exemption will expire in the next year, resulting in about $350,000 in additional property taxes to city coffers.
The city has been collecting taxes on $4.7 million worth of assessed value, which is the land value of the property.
Without development, the city would have continued to receive a lesser amount of taxes. Soon, however, that hotel will result in $350,000 more every year to the city, he said.
“To equate that to what that means to local taxpayers, that’s about four snow plow drivers,” O’Reilly said.
“That’s what we increased our taxes last year, about $400,000, to have a whole snow-clearing crew.”
BUSINESS GROUP HEAD SAYS THERE IS NO CONFLICT
DeSantis of the downtown business improvement association, referencing Walsh’s focus on potential conflict of interest, cited the city councillor’s involvement in the downtown advisory committee that helped to inform the downtown plan.
“He’s a business owner downtown and he was having conversations regarding things that were inside the downtown plan,” DeSantis said.
“If he’s going to suggest one thing’s a conflict, well, I guess he’s in conflict. That’s not to say I think he’s in conflict. I don’t. I don’t think there’s a conflict here at all.”
DeSantis said the tax-exemption changes are good news, changes that will create jobs and quality office space, attract downtown development and contribute to the local economy.
“It’s unfortunate that somebody is trying to cast a shadow over what is an incredibly positive initiative for the entire city,” he said.
O’Reilly was asked why commercial properties were first tackled when the city is still seeking input on the bylaw.
“A lot of the reasoning behind that was it was a very simple and easy change,” he said.
“It was low-hanging fruit and easy to do, again keeping up with every other community in British Columbia. Now we’re taking it back to put essentially a Kamloops stamp on the tax exemption. Right now, we’re the same as every other community. Finally, we’re on that page.
“But now, we’re going to get to put that Kamloops stamp, that this is really what we want to encourage in certain areas. Whether it’s green initiatives, whether it’s accessibility for buildings, there’s lots of different things we can look at.”
KTW reached out to A&T Developments, one of the firms behind the Hive, but a representative declined to comment, saying the issue lies with the city.