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No help from council for Empire expansion

A Municipal Act clause prevents North Bay’s outgoing council from providing non-financial incentives to the company building the Empire Terrace Suites, city solicitor Michael Burke, left, told the Community Services Committee Monday night.
A Municipal Act clause prevents North Bay’s outgoing council from providing non-financial incentives to the company building the Empire Terrace Suites, city solicitor Michael Burke, left, told the Community Services Committee Monday night.

Company president Rod Mitchell had asked council last week to extend the benefits of the downtown Community Improvement Plan to the Empire development, even though the project is outside of the boundaries the CIP covers.

Mitchell said the company needs to reap CIP benefits including the exemption from development charges, planning and building fees rebates, and the phasing-in of incremental tax increases, if it is to proceed with the expansion. The request would mean a future savings to the company of more than $300,000.

The project is now “on the precipice,” Mitchell said, because the cost of development is 15 per cent higher in North Bay than in Southern Ontario.

Lame duck clause
Rather than deal with the issue Oct. 20, Coun. Susan Church, who also chairs the Community Services Committee, had it moved forward to Monday night’s committee meeting of council.

Burke told the meeting a so-called “lame duck” clause in the Municipal Act prevents an outgoing council from “making any expenditure or incurring any liability which exceeds $50,000 in budgeted money,” if less than 75 per cent of the council is not seeking re-election, as is the case in North Bay.

Empire’s lawyer, though, has a differing legal opinion, said North Bay architect Paul Mitchell, who was representing the developer Monday night.

“Our lawyer’s suggestion is that if this project doesn’t proceed there is no new tax revenue and if it does proceed that tax revenue is gained by the city and then granted back for the first five years,” Mitchell said.

“Therefore the net impact to the city of the project proceeding is zero, and if the project doesn’t proceed the impact to the city will be exactly the same, therefore it hasn’t met the threshold of the $50,000 impact on city budgets, which is what the Act is trying to prohibit.”

Remains on agenda
Burke said he talked to Empire’s lawyer Christopher Lewis, “to address the substance of the action, which is reducing the tax revenue and his opinion didn’t address that.”

After the committee voted to turn down Empire’s request, Church said the item would remain on the agenda for the next council to deal with once it’s sworn-in in December.

That would leave Mitchell’s client facing a "difficult challenge," the architect said, the project being under consideration “at a point in time where, in Northern Ontario, construction in winter starts to become a big issue, so he’s going to have to decide whether to proceed with this project at all.”

Not a lot of thought
Church wondered why the developer apparently did not take into account potentially higher development costs before embarking on the project.

“If this is the death of this project then there was not a lot of thought put into it from the beginning, and it was very unfair for the developer to now come forward, hold this council or any other, by the short and curlies and say, ‘you know what? Because of you we can’t go forward,’” Church said.

“I don’t buy that, and this isn’t the reason this development isn’t going to go forward.”

She added that if construction costs are higher in North Bay than Southern Ontario, the lower land costs more than make up for the discrepancy.