City providing rent-free parking lot for Charlottetown hotel

The City of Charlottetown says a local business is using city-owned property as its private parking lot, an arrangement the city says goes back decades.

According to posted signs, most of the parking lot behind city hall is reserved for guests of the Rodd Charlottetown Hotel, with 13 of the 60 spots identified as reserved for city hall staff during working hours from Monday to Friday.

But according to provincial records the city owns the entire property. 

"There has been a long-standing arrangement with the Rodd Hotel for decades that allows them to use of the property provided they are responsible for plowing and general maintenance," the city's communications officer Jennifer Gavin told CBC News via email.

"While they don't currently pay a rental fee, they are also responsible for the property taxes annually."

Provincial records show property taxes on the two main parcels of land that make up the parking lot amount to $4,584.15 for the current year.

36-year-old lease

While it's not clear how long the current deal has been in place, the provincial property records also contain a lease agreement dated June 23, 1983, between the city and the Dale Corporation —  the then-owners of the Charlottetown Hotel.

That five-year lease, with an option to renew, allowed the hotel to use the land for parking in exchange for annual rent of $1. The city was responsible for demolishing existing buildings on the land and prepping the site for paving. The Dale Corporation was responsible for the paving.

Two years later Rodd Investments Ltd. bought out the Dale Corporation's interest in that lease. That price was also $1.

Not fair to other businesses, says councillor

Coun. Bob Doiron, who has been pushing for closer scrutiny of financial dealings at city hall, said the current council was provided with information about the decades-old deal in January.

Doiron told CBC he felt it wasn't fair for one business to be allowed to use city property rent-free, while competing businesses don't get the same deal. 

Doiron agreed to a follow-up interview on the topic, but hours later told CBC that councillors had been instructed by the city's CAO not to speak to the media about the issue, but to refer calls to the city's communications officer.

"As the city and the Rodd have been in negotiations for some time with respect to this property, the city will be making no further comment at this time," Gavin told CBC via email.

Mark Rodd, president and CEO of Rodd Hotels and Resorts, declined to comment on this story.

City says arrangement not a grant

P.E.I.'s Municipal Government Act allows for "the selling or leasing of land for nominal consideration or making a grant of land," but councils are required to satisfy certain conditions, contained in each municipality's grants bylaw.

According to Charlottetown's grants bylaw, "council must publish the amounts awarded and the recipients of each grant on its website."

The city said the arrangement with Rodd does not constitute a grant. 

The city's grants bylaw does allow for "in kind" contributions involving city facilities or assets.

But a separate policy on grants stipulates the maximum term for a grant is five years, and says that "city support is not for the purpose of adding to the profit margin and/or [to] assist profit-making organizations/persons."

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