Proposed Capital Pointe developer says no deal unless city pardons $700K in taxes owed
Administration recommending against the request
The developer hoping to buy the former Capital Pointe site in Regina is requesting a property tax reduction for the land.
City administration received a request for the reduction on 1971 Albert Street from Smith Street Lands Ltd. on Nov. 30.
The request was to eliminate property tax penalties that have been accumulating since July 2018. The penalties are from the current owner not paying annual taxes and amount to $692,562.60.
City administration said Smith Street Lands indicated that without an agreement to eliminate these penalties, the sale of the property will not close on Jan. 18, 2021. Smith Street said in its submission to the city that without this decrease, the purchase price would "far exceed" the appraised value of the property.
The property has outstanding taxes of $2.9 million as of Dec. 1, 2020. The property is assessed to be worth $4.3 million.
Administration is recommending city council deny the request when it debates the proposal at its Dec. 16 meeting, saying that Smith Street has not identified a basis for its request that meets the city's criteria and Smith Street hasn't claimed any financial hardship that would make it unable to pay.
"By law, all charges and penalties applied to a property tax account become part of the outstanding property taxes," city administration said in a report.
Administration said there is another option. Council could approve a conditional grant equivalent to the partial property tax reduction for a permanent structure on the property. It would be paid only if the property taxes were paid in full in January 2021 and if a permanent structure was built by the end of 2024.
This is the latest in an ongoing saga with the property. It was sold by a court order in May to Magnetic Capital Group Inc. At the time, the court ordered Magnetic to pay the city all property taxes, arrears and penalties on the account.
The sale was expected to close in August, but Smith Street Lands and Magnetic recently entered into a partnership, so now the property would be owned by Smith Street Lands if the sale is confirmed. Smith Street told the city it plans to close the sale Jan. 18, 2021. The city doesn't have control over whether or when the sale closes.
At the Dec. 2 city council meeting, councillors voted six to five in favour of allowing Smith Street Lands to have the land be a partial parking lot for one year.
If the sale doesn't close, the city can be given the land to then tender and try to sell. The city has already spent more than $2 million to backfill the hole left on the property from a previous owner.