City staff suggests ending vacancy rebate

Nick Seebruch
City staff suggests ending vacancy rebate
Pictured from left-to-right: front: Blake Bingley

CORNWALL, Ontario – City administration made a recommendation to council that the Vacancy Rebate Program be phased out over three years.

Under the program, the City pays back taxes collected on vacant properties. Property owners eligible for the program can apply for the rebate after the property has been vacant for 90 days.

Commercial properties receive a 30 percent rebate and industrial receive 35 percent.

The City budgets about $250, 000 each year for this rebate program. Until 2016, the cost of this rebate program has not exceeded $260, 000. For 2016 however, the cost of the program jumped to $873, 000.

The reason for the large jump in the rebate is due to the vacancy of the old Eleven Points Logistics warehouse in the business park. Now owned by Wal Mart, the City paid Wal Mart over $400, 000 as a rebate for that vacant property alone.

A serious problem with the program cited by the City was that taxpayers are subsidizing property vacancies.

“Another issue with the present program is that the required budget to fund the program is taken from all classes,” the report reads. “As such, the current VRP creates a situation where the program is being subsidized by all property classes, including residential and multi-residential that are not eligible for the benefit.”

In total there are 80 properties that received a tax rebate in 2016.

Staff recommended to council that the program be phased out over three years.

“Administration’s preliminary recommendation, prior to having engaged the business community, would be to phase out the program over a 3 year period,” the report reads. “This would allow for current commercial and industrial properties that depend on the VRP, time to adjust to the program being discontinued. A phase-out would also allow the City to begin redeploying the annual budget required to support the VRP to other areas of need, including initiatives that would be applicable to all classes and not just the commercial and industrial classes.”

City administration will be engaging with the business community before a final decision on the rebate is made at the beginning of June.

“We’d like to have a focus discussion with the Chamber of Commerce, the BIAs as well as a general open house,” said Tracey Bailey the City’s Chief Financial Officer.

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