Photo: Contributed

Renders for a completed 120 Ellis Street

The City of Penticton is considering extending its downtown development tax break scheme so a developer hamstrung by construction delays can benefit from it as originally planned. 

The city’s downtown economic investment zone — a program launched in 2014 with a sunset clause at the end of this year — provides a property tax exemption on the assessed value of the building for a decade after construction. The property still pays tax, but only on the bare land value. 

The municipality says the program has encouraged 19 developments in the neighbourhood worth $32M.

The company behind the condo-commercial development currently being constructed at 120 Ellis Street, Wildstone Construction, has written to the city requesting the end of program be extended by three months.

Projects are required to obtain occupancy by the end of 2019 to be eligible for the tax break, something Wildstone was planning on, but may fall short of due to construction delays associated with a cold snap in the winter and struggles finding architectural services in the small community. 

“Having a few months grace would allow us to finish in a more orderly fashion and avoid costly mistakes,” said Wildstone CEO Jim Morrison.

City staff are recommending council accommodate the request and bump the deadline to the end of June 2020 to mitigate any further unforeseen delays. 

"The success of the subject project will ensure further development in this area – an area currently undergoing revitalization,” planning manager Blake Laven says in his report to council.

The estimated construction value of the building is $13.4M, meaning over the life of the 10-year benefit period the project would receive about $500,000 in tax exemptions. This would be split amongst the 48 strata units.

City council will discuss the matter Tuesday.