After a heated discussion on the fairness of “revitalization” tax breaks, District councillors voted to continue an incentive program for commercial development on the oceanfront project.
Councillors Karen Elliott, Doug Race, and Peter Kent and Mayor Patricia Heintzman supported the policy in the Dec. 5 vote.
Coun. Susan Chapelle opposed the policy, while Coun. Jason Blackman-Wulff was absent from the meeting.
During a discussion of the topic at a meeting on Nov. 21, staff recommended keeping the current policy, which gives developers a break from municipal taxes on buildings for commercial or industrial use, but not on residential construction.
The bylaw was part of the agreement signed when Newport Beach Development purchased the oceanfront lands, but council does have the option to discontinue any Revitalization Tax Exemption.
During the discussion, Coun. Doug Race said not honouring that original agreement would be dishonest.
“A contract is a contract,” he said. “I think it would reflect very badly on this community if this council made the decision to repeal that bylaw under the circumstances.”
Projects that apply can only take advantage of the program for five years, and the bylaw expires in 2026. So far, according to district manager Gary Buxton, no projects have applied.
Newport Beach developer John Matthews encouraged council to continue the tax policy.
“We do see it as a tool to pull tenants to the oceanfront,” he said at the November meeting. “We see it as a great way to reach out to people and say ‘This is the benefit you get from moving move early onto the oceanfront.”
Matthews said the goal is to fill office buildings and encourage the area to become a green technology hub, but the policy could also benefit small business owners who want to move in.
“In my eyes, it’s a bit myopic to kill it early,” he said.
Coun. Blackman-Wulff and Chapelle both disagreed.
Coun. Ted Prior recused himself from the meeting due to his ownership of nearby land.
Chapelle pointed out that the oceanfront location is already desirable, and in her opinion, doesn’t need to be incentivized further.
“Taxes are the only way we can afford our community, and we don’t have a robust budget. People that get tax incentives are not small businesses, or businesses that are startups. The people that pay are the small businesses,” said Chapelle.
A similar policy for development of the downtown area expired in 2016.
As part of the decision to continue the policy, council voted to bi-annually receive a report from staff on the effectiveness of the Revitalization Tax Exemptions.
