Re: “Rossland tax break bylaw called unfair, council mulling changes,” May 16
Having repeatedly expressed concerns surrounding the unfair competitive advantage that the issuance of revitalization tax exemptions to the Josie Hotel and Nowhere Special Hostel would have on the Rams Head Inn, its owner, Martin Lundh may enjoy a temporary vindication following the mayor’s admission that their provision “does give an advantage to the new business over a business that is established.”
In response, the City of Rossland now intends to add restrictions that would prevent the Rams Head Inn from applying for these exemptions itself should it choose to make any upgrades to its property in order to compete with its new neighbours.
Unfortunately, this was not simply a case of one business doing well and another coming in and competing with it as the mayor suggests. It was a matter of increasing the number of available pillows in hotel/hostel style accommodations within the Red Mountain base area from 40 to over 400 in one season, while making only one of these providers, the smallest and oldest, liable for underwriting the risk through their taxes.
But the damage done to date is only half of the issue. Beyond the unfair advantage already provided, there is in addition a now-recognized and admitted to ongoing advantage.
In relation to the Josie, what is presented as a simple five year exemption akin to those issued under the current Bylaw 2674 is in reality five years plus a single renewal of five years under Bylaw 2488 to which it is subject. There is a silver lining, however, and that is that the renewal of the Josie’s exemption is dependent on “the discretion of council.”
This means a resolution by the current council guaranteeing this extension will not be issued down the road would provide accommodators such as Mr. Lundh with the necessary reassurance that the city recognizes its mistake, and is genuine in its concern to ensure no undue future advantage is conferred.
Appreciating Nowhere Special’s exemption is another story altogether. Where the City of Rossland provided both rezoning and OCP variances to ensure the property would be built, and largely rewrote the exemption bylaw so it could issue an exemption that it either knew, or reasonably should have known, would provide an unfair advantage to a venture that directly competed with the accommodators that comprise its tax base, the City of Rossland should act to rescind the exemption.
Will it do so, when in writing Bylaws 2488 and 2674 the city intentionally bound itself to first provide and then maintain these exemptions? Or can it find a means of mitigating further damage by asking the majority owner, in this case Columbia Basin Trust, to request the cancellation?