Bring More Business To Windsor By Cutting Fees? Mayoral Candidates Think It Could Work
Thursday August 14th, 2014
Posted at 9:45pm
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On the heels of Leamington’s plan to entice new development to the town by eliminating development fees for new residential, commercial and industrial construction, some of Windsor’s mayoral candidates think a similar plan could do wonders for the city’s economy.
“New homeowners in the Windsor area are paying $18,789 in development fees,” says mayoral candidate Mike Tessier. “In a city with a population of approximately 218,000 this amount in fees paid is abnormally high.”
Tessier said he’d cut the taxes investors pay to generate growth. “I would slash the amount of taxes new investors would pay to entice them to relocate here.”
Larry Horwitz, who’s also running for mayor, thinks Windsor has a hard time compared to other cities and towns nearby.
“While Windsor maintains development charges that are far below provincial norms, they are high relative to neighbouring municipalities and could conceivably be a motive for new developments to relocate to other areas of Essex County,” he said.
Horwitz said he thinks it’s “of public interest to investigate a reduction in development fees to reflect those of surrounding municipalities without raising municipal tax rates.”
Candidate Robin Easterbrook said he liked the Leamington approach where fee cuts were restricted to three years, but added he’d like to see “responsible parties pay a fair fee when appropriate.”
“Development charges overall should be tied to the actual cost of servicing incurred by the community and not just a money grab,” he said. “I am in favour of partial elimination of economic development fees although I believe that one would be best to look at what the economic development actually is (for example, Leamington is excluding greenhouses from a complete development fee holiday) and what it promises for the community in the long run before just making a blanket policy that may not be appropriate in all circumstances.”
Any city or town cutting the fees associated with new development will likely take a hit to revenue to pay for other important projects and services. Under Leamington’s plan, lost revenue from the elimination of fees would be made up by the town’s contingency reserves.
“Windsor only makes around 3 million yearly in development fees, which gets rolled into the capital budget, under legislation only to be spent on growth-related infrastructure,” said Tessier.
In the short term he said Windsor could allocate the 3 million and easily absorb the cost. In the long term, Tessier said cutting development fees would pay for itself.
Horwitz had a similar response to how lost revenue could be dealt with.
“The short term loss of development fees represents a long term gain in greater economic activity in the city, such as an increased tax base, increased employment opportunities, and greater economic prosperity for local residents,” Horwitz said.
Lost revenue might not actually be lost if there’s not a whole lot of development to begin with, noted Easterbrook. “Without some type of economic development incentive – whether it is cutting development fees or some other incentive – that revenue would not necessarily be accruing to the City anyway.”
“If the City can change the business case for development through changes to development fees or other incentives, then we will have revenue – today or tomorrow – that we wouldn’t otherwise have at all,” he said.
windsoriteDOTca was unable to reach other registered mayoral candidates for comment.