KELOWNA – Tax breaks. They help bring new life to certain areas and spur more development projects. But in some parts of Kelowna’s downtown, those incentives are coming to an end.
“We always envisioned this one as short-term,“ says city councilor Luke Stack. “Back in 2012 we were anxious to get downtown moving.”
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The area where tax breaks for developers are coming to an end is known as area three. It encompasses the downtown’s north end. Three years ago, city council implemented tax breaks for the area to help spur development. But with a number of new development projects in the area, city council has decided tax incentives there are no longer needed.
“It’s done its job,” says Stack. “We have been very successful in area three, there has been a lot of investment.”
While the tax break program in area three is costing the city about $900,000 in lost revenue, city staff say there is a major silver lining.
“The concept of tax incentives is you are inciting development that would not otherwise not happen, so there is actually a long-term financial benefit,“ says James Moore, manager of long range policy planning with the City of Kelowna.
While the downtown’s north end will no longer offer incentives, tax breaks will remain in place for other parts of downtown still in need of revitalization, that includes Leon and Lawrence Avenues as well as Bernard Avenue and surrounding streets.
“If someone is looking for an incentive they will now go back into the heart of our downtown and look at that as the best investment opportunity,” says Stack.
Tax incentives also remain in place for central Rutland as well as new rental housing projects throughout the city.