Tonight at their regular council meeting, councillors will be asked to vote on approving a nearly $1.2 million dollar grant over ten years for developer John Lafford, for his proposed six-storey apartment building at 131 Main Street.
When John Lafford spoke to Tantramar council in favour of bylaw amendments that would make way for his 71-unit residential development, he floated mid-July as a possible start date for the project. The developer even requested a special meeting of council on July 19 for accelerated second and third readings of his requested zoning changes. Those changes were approved on July 19, but as of the end of last week, Plan 360 has yet to receive a building permit application for the project.
Instead, the project will be back before council on Tuesday night, to ask for approval on a grant that will rebate roughly 50% of the property tax on the new development over 10 years. The estimated financial cost of the grant is not included in the staff report to council, but after a media request, Tantramar’s director of Corporate and Community Services Kieran Miller shared the estimated cost of $1.185 million over the next decade.
The grant falls under the former town of Sackville’s Economic Development Incentive Program, passed in March 2020, which aims to attract and spur on new commercial, industrial or multi-unit residential projects.
Miller wasn’t yet hired when the incentive program was passed, but it now sits in her portfolio at town hall. She says the incentive program is based on similar ones in Moncton and Riverview. “We’re obviously a different scale,” says Miller. “They’re seeing significantly higher and larger scale developments. But we did use them as a guide when developing our program.”
Miller says the program is intended to, “accelerate investment in specific areas of the community where new growth and redevelopment can be accommodated, and where we’re really hoping to see development.”
Local residents Sharon Hicks and Percy Best have pointed out that unlike its regional counterparts, the Sackville program includes strictly residential projects, like the 131 Main proposal. That’s because Sackville’s incentive applies to projects in the R3 zone — a multi-unit residential zone which includes over 108 acres of undeveloped parcels, mostly outside the downtown area. The incentive programs for Moncton and Riverview are focussed in each municipality’s downtown, commercial zones.
Riverview’s program was first passed in 2018, and was actually amended in 2021 to add in requirements for ground floor commercial space. The town’s economic development manager Shanel Akerley says four projects have been approved since 2018, but the program has received 20 enquiries in the last year alone.
Like Sackville, projects in Riverview must increase the assessed value of a property by at least $500,000 before they will be considered, and then the grant amount is calculated as a percentage of the increase in property assessment value. That percentage is on par with Riverview’s residential tax rate, about $1.48 per $100 of assessment. The rate for Sackville’s incentive is $1.50 for $100 of assessment.
Though the Riverview grants are approved in public decisions of the town’s council, Akerley is not willing to offer up the grant amounts for each of the four projects that have been approved since 2018.
Over in Moncton, the city’s program offers grants based on 50% of the residential and commercial tax rates as well. Like the Sackville program, the rebate amounts start off very high in the first year, and then decrease each year after that. Based on the examples in Moncton’s policy, the grant amounts are similar levels to what Tantramar has on offer, and is considering approving for the Lafford project.
Unlike the Sackville plan, the incentives are concentrated in downtown zones, with higher grants for designated heritage properties and properties in a community improvement plan area. The rest of the central business district also qualifies for grants, but only for larger projects, and with less payout over fewer years.
Akerley says the Riverview program, “is really business first… We’re looking to promote the town as one that is open for business.” That said, the multi-unit residential projects qualify, as long as they have some commercial space on the ground floor. “The standard guide for us would be that at least 50% of the ground floor would be developed for commercial use, while the rest could be of other use,” says Akerley.
In Tantramar, the incentive program has a broader application, and includes properties in the industrial parks along Crescent Street and Walker Road, as well as the Mixed Use zone in downtown Sackville, and the many R3 zones around the outskirts of the town.
One recent project at the Walker Road industrial zone could have been considered for the incentive program, but the company involved, AIL Group, did not submit an application.
When it comes to economic development incentives, the question is, do they make a difference? That is, would the same projects be proposed and built in Sackville, Riverview or Moncton with or without an incentive program, and one that offers a 50% discount on property taxes over a decade?
“We can’t know for sure,” says Akerley. “There’s a multitude of factors that goes into why developers choose a certain area or a certain property to do their project. We’re hoping that through this program that it makes the area of Riverview more attractive compared to maybe some other municipalities where they could also expand.”
Two weeks ago when council first heard about the proposed incentive for the Lafford project, Councillor Michael Tower was the lone councillor to weigh in.
“I love this,” said Tower. “It shows that the incentive program has worked like it’s supposed to. We want development, and this is definitely an encouragement to have a really beautiful building built.”
Tower framed the incentive as a “delay in getting the whole tax back,” since the grant is tied to tax revenues, heavily decreasing them in the first year by nearly 90%, and then increasing the taxes paid over the grant period of five or ten years, eventually reaching normal tax levels. “We also pick up a fair chunk on permits,” said Tower, “and when it’s up and running, then we also have increased utility [fees] on the water and sewer.”
Tower said he hoped that the program would also work to incentivize development on York and Bridge, where fires have destroyed two buildings in recent years.
