School tax bill a deal-breaker

Hey there, time traveller!
This article was published 15/07/2015 (3762 days ago), so information in it may no longer be current.

Council’s last meeting before summer break turned into the gong show many observers expected — the strife over the city’s bike/walk strategy set the tone as councillors jousted with dueling amendments. Rabble-rouser Russ Wyatt (Transcona) did not go quietly from his failed challenge to the strategy, taping the motions he couldn’t get on the floor to Mayor Brian Bowman’s door with the words “democracy denied” scrawled across them.

So much for decorum.

The bike/walk plan was not the only burr in Mr. Wyatt’s pants Wednesday.

He was the lone holdout as council rescinded a proposal to jointly develop more than 230 acres of unserviced land in St. Boniface’s Prairie Industrial Park with Terracon. City councillors took the administration’s advice and opted for a last-minute deal with Parmalat that will see the firm build an expanded milk-processing operation on 15 acres at the site.

The deal requires the city to cover the bulk of the costs to lay down roads, sewer and water on the site. The tab is expected to be $8.2 million; Parmalat, which is buying the land for $2.6 million, will put another $1.5 million toward servicing.

The province, also anxious to keep the milk processor from leaving town, will reimburse $2 million of the servicing tab to the city over 18 years, as development levies flow into its coffers.

The deal nets the city relatively little cash. But Parmalat’s $50-million investment is expected to spin off longer term economic benefits to Winnipeg. That’s the kind of cost-benefit rationalizing that is done in a city where 50-plus jobs still mean something.

Parmalat’s expansion will add to its workforce, and move it off its current site in a St. Boniface neighbourhood, which then becomes open for purposes more in tune with a residential area. And once the sewer and water pipes are pushed in to the new site, other businesses will look at the industrial park with renewed interest.

The city administration says there may be lots of interest. The Parmalat site sits just south of the aqueduct in St. Boniface. The city administration says that before the Terracon deal was put on ice, “the private brokerage firm that was marketing the industrial park without the prior knowledge of the Winnipeg public service (had) revealed that over 40 parties may be interested in locating in the industrial park with at least five potential purchasers interested in specific sites.”

The city’s new chief administrative officer, Doug McNeil, said the Terracon proposal, hammered together under the Katz administration, was too expensive for Winnipeg: the city was to assume the obligation to pay not just the municipal property taxes but also provincial education taxes of $3.2 million, until all the property in the development was sold.

Coun. Wyatt argued there’s no telling how long now it will take to get businesses into the remaining acreages. But covering education taxes is an extraordinary perk to offer a developer. Echoing Mr. Wyatt, Mr. McNeil points out it’s unclear when the property would be fully sold.

And while the city can control the inherent implications of property tax costs to business, it has no influence over rising education taxes which have rarely, if ever, been constrained.

This Parmalat deal is not without its risks. The estimated costs of servicing are just that, subject to rise as the shovels hit the ground. But it will open new tracts of land for growth, which can further boost tax revenues to the city and the province.

Mr. Wyatt’s concerns are not entirely without justification. The Terracon deal was approved in principle in 2013 and now the developer is empty-handed. The real villain in the muck-up was the education tax, which should not be levied on property owners. And that is a fight Mr. Wyatt, and the rest of council, should take up with the provincial government.