A proposed airport project for City of Powell River that requires approval of a lease and tax exemption bylaw moved forward at a regular council meeting on September 8.
A $600,000 offer from Gaoshi Canada Holdings to develop a new airport terminal and aviation facility at Powell River Airport was accepted on August 16. The deal comes with conditions that the city include a 99-year lease on the property and a graduated tax break.
In 2019, the tax exemption for Gaoshi will be 100 per cent. At the conclusion of a 10-year term with a 10 per cent increase each year the company will pay full tax on all land and improvements within the 4.6 hectare revitalization area east of the existing terminal building.
Councillor and chair of the city’s finance committee Russell Brewer said tax revitalization is a good incentive to attract light industry to Powell River that might not otherwise locate here because other jurisdictions in BC are competing for the same investments.
“It's a reduced tax for the period of the bylaw,” said Brewer. “Once we get to the end of the 10 years there is the full tax that likely wouldn't have happened otherwise. It's just one of the ways for local government to attract light industrial activity. It gives them some runway to set up and get established.”
At the regular council meeting on Thursday, September 20, council will consider adoption of the bylaw.
According to city chief financial officer Adam Langenmaier, a revitalization bylaw frees up cash in a business to reinvest.
“In the case of Powell River, there's nothing on this airport property and there can continue to be nothing,” said Langenmaier. “The revitalization, which in this case should be a vitalization, opens the opportunity for something to be there.”
Gaoshi’s plan is to build an aviation industrial park with a new arrival and departure terminal, maintenance and repair operations, accredited pilot and maintenance technician programs and, possibly, aviation manufacturing of small aircraft.
According to the offer, Gaoshi Holdings is committed to begin construction within two years and obtain occupancy permits by the fourth year of the lease. If either deadline is not met, the city will have the option to buy the lease out at the original price.
Mayor Dave Formosa said it is a good deal because the city-owned land is not currently bringing in any revenue.
“For the first number of years before the building is on there it's really nothing anyway,” said Formosa. “It's just on a chunk of land but it's something we'll get taxes on. Right now, we're getting nothing.”
Formosa added that he recently received an enquiry from a major corporation asking for a meeting with Gaoshi to discuss locating its facilities in Powell River. Formosa would not name the interested party.
The city has received a $50,000 deposit on the land and, if approved, the tax exemption bylaw will fulfill the city’s end of the deal and allow for transfer of the remaining $550,000 from Gaoshi.