Wyatt in tiff over bill's delay

With the spring legislative session to wrap up Thursday, a piece of legislation touted to be vital to rebuilding inner-city Winnipeg won't be passed -- it's being held over until the fall for possible tinkering by the Doer government and the Opposition Tories.

Transcona Coun. Russ Wyatt said the delay in passing the tax-increment financing (TIF) bill means the city won't be in a position to take advantage of the summer construction season. According to city staff, 300 new residential units that could have been developed downtown this summer are likely on hold until next year, when provincial tax credits are in place.

"I'm extremely disappointed with both Her Majesty's loyal opposition and the government," Wyatt said. "I know it's nice to go on holidays a few weeks early, but I think this is far more important than going to the lake."

The city introduced its multi-family and mixed-use tax credit in 2007 to offer up to $20,000 worth of property tax credits per unit for residential projects in the inner city and selected older neighbourhoods. Provincial TIF legislation could have doubled the potential tax credits to $40,000 per unit -- enough to make marginal revitalization projects viable, Wyatt said.

"It would have closed the gap and got the ball rolling," he said.

The 300 new units also would have placed a dent in the city's housing shortage, which realtors and social activists describe as a crisis. Residential vacancy in Winnipeg hovers at approximately one per cent. TIF was announced by the Doer government a year ago to create special zones or parcels of land in the city, where developers could receive upfront financial help with the added costs of building or renovating in neglected neighbourhoods. A TIF zone diverts increased property and education taxes from reassessments on any new additions or redevelopments into a separate account. That money is used to pay for grants to developers for further improvements in the zone.

But the Tory Opposition immediately demanded the government put the brakes on it, saying it could evolve into a slush fund for NDP pet projects. Tory Leader Hugh McFadyen said he wanted the TIF bill rejigged so it can only be used only for specific urban renewal projects.

Another worry of the Tories is the possible impact on school funding and what any shortage could mean in increased school taxes.

The TIF bill was put on hold along with several other bills under an agreement between the NDP and Tories to see the spring sitting end Thursday with the most important bills being passed. Under the agreement, it is scheduled to be passed Oct. 8.

bruce.owen@freepress.mb.ca bartley.kives@freepress.mb.ca

What is a TIF?

Tax-increment financing is an economic tool cities can use to kick-start the revitalization of rundown neighbourhoods.

How does it work?

Owners of properties in blighted areas have no incentive to fix up their properties because they get hit with higher property assessments -- and higher taxes -- if they improve those properties. Tax-increment financing allows any new taxes that result from improvements to flow into a fund to improve the same neighbourhood -- or even flow back to the property owners as tax rebates.

What's in place right now?

In 2007, the city created a multi-family and mixed-use tax credit that more or less functions like a TIF. Developers of residential apartments, condos or mixed residential/commercial buildings in downtown Winnipeg and designated older areas are eligible for property tax credits of up to $20,000 per unit, over 10 years. This helps bridge the gap between the cost of redevelopment and the potential profit.

What's coming?

Provincial TIF legislation could sweeten the development pot by offering education tax credits. But the legislation isn't coming until the fall - and may not involve tax rebates.

Republished from the Winnipeg Free Press print edition June 9, 2009 A4