City council has agreed to take the first step towards establishing a taxation incentive for the development of Salmon Arm’s industrial properties.
Municipal staff will be working with the Salmon Arm Economic Development Society (SAEDS) to develop an industrial taxation incentive program.
In a presentation to council, economic development manager Lana Fitt likened such a program to the city’s Revitalization Tax Exemption program, which offers a five-year, 100 per cent tax break for revitalization projects of $75,000 or more. She proposed an industrial taxation program that would apply to undeveloped industrial properties in Salmon Arm and at the airport.
“We would like to see a 100-per-cent exemption to the municipal portion of property taxation on the assessed value of any new construction project for a period of five years,” said Fitt. “We would like to see a defined program end date, so this would look out to three to five years after the program was established.
“We feel it’s important to have a firm end date to the program in order to encourage development in the near-term. At the end of the program, council could then evaluate and determine if they wish to continue or not.”
Other proposed stipulations include a $300,000 minimum investment threshold, and the creation of a marketing plan that would be initiated by the economic development society.
Fitt said the primary reasons to consider the program are to give Salmon Arm a competitive edge for attracting new industrial development, and send a clear message to investors “that we want their business in our town, and we have a forward-thinking council prepared to support them along the way.”
Fitt said the timing is right for the program. She explained the city has sufficient developable industrial land, and a survey of half-a-dozen large employers in the industrial park shows each company experienced job gains in 2013 as high as 37 per cent.
“What we’re hearing from our manufacturing firms is that they’ve returned to pre-recession employment levels, and many are now exceeding those levels, which we have not seen in our community since 2006,” said Fitt.
Asked if she knows of any other communities with a similar program, Fitt said she looked at 19 with some sort of incentive program, but only three with a focus on industry. She recommended the city not necessarily match what other communities have, but set the bar higher.
City administrator Carl Bannister said the cost to the city to get involved would come in staff time, implementation and administration, depending on the uptake of the program. He suggested it could be about six months before a report is completed.
Coun. Alan Harrison said he liked the philosophy of the proposed program, and agreed the timing is right for its introduction.
“If you don’t offer the incentive, you don’t ever know what taxation you might have lost because you might not attract industry at all,” said Harrison.