Councillors vote down tax relief extension for The Nest

Yellowknife city councillors have narrowly rejected a proposal to extend tax relief for the owners of The Nest.

Borealis Development Inc renovated the former empty office building in the city’s downtown and the first tenants have since moved into the 72-unit apartment building.

The company has said eight of those units will be provided at an affordable market rate.

The city previously granted a tax abatement for the property for five years and Borealis Development recently asked City Hall to fully extend that tax relief for another five years.

City staff had recommended that councillors extend the tax abatement at a decreasing rate, starting with 100 percent in the sixth year and ending with 20 percent in the 10th year.

During Monday night’s council meeting, councillors Rob Warburton, Tom McLennan and Garett Cochrane voted in favour of that proposal while Stacie Arden Smith, Steve Payne and Rob Foote voted against it.

As the vote on the motion was a tie, it failed to pass.

Incentivizing developers or too good a deal?

The tax abatement is one of a number of incentives the city offers to developers with the aim of increasing available housing.

Charlsey White, the city’s director of planning and development, told councillors at a previous meeting that extending tax relief for The Nest at a declining rate would strike a balance between incentivizing downtown development while ensuring the municipality receives some tax revenue from the property.

She said the city has not previously granted a five-year extension of its tax abatement. On Monday, she added that while the city does not offer 10-year tax abatements, declining tax abatements over 10 years are common elsewhere.

While there was little discussion on Monday night before councillors voted on the proposal, Warburton, McLennan, Cochrane and Ryan Fequet – who was not present at Monday night’s meeting – had spoken in favour of extending the tax abatement during the previous meeting at City Hall.

McLennan said he was grateful for the project and supported an extension at the declining rate, “just for the excellent reuse of the facilities” and the commitment to offer affordable housing units.

Cochrane said he supported extending the abatement in recognition of Borealis’ efforts and to give “a clear indication and incentive to future developers to try to aim for something like this in our downtown core and beyond.”

Foote said at the time he wanted to “look at the economics a little closer” before making a decision.

“Preliminarily, it seems like it’s a really good deal for the developer and I would just like to close that gap up a little bit if we can,” he said, before going on to oppose the measure on Monday.

Mayor’s salary and winter games

Also at Monday night’s meeting, councillors unanimously voted in favour of directing city staff to review Yellowknife’s council remuneration bylaw by the end of April, particularly how much the mayor is paid.

McLennan, who proposed the motion, said he wants city staff to provide advice on whether council should increase the mayor’s compensation to remain competitive with other public service jobs in Yellowknife “to ensure the mayor’s role continues to attract the best possible candidates.”

Under the bylaw, the mayor, which is a full-time role, receives an annual indemnity of $116,884, four weeks’ vacation and benefits. The deputy mayor receives an annual indemnity of $33,699 and councillors $31,320 – all of those being part-time positions.

Payne said he supported a review of the bylaw as the previous council had raised wages for councillors but kept the mayor’s compensation the same.

“I’ve always thought that was a bit unfair,” he said.

Councillors further voted in favour of having city staff establish a working group and work with the NWT government to investigate the feasibility of hosting the 2035 Canada Winter Games.