Tax break for Porsche dealership gets green light
Kate Porter | CBC News | Posted: May 27, 2021 12:08 AM | Last Updated: May 27, 2021
Mayor Watson called for new taxes directed to affordable housing, but opponents decried 'political' move
After a week of commentary and criticism over the City of Ottawa's plan to offer a $2.9 million tax break to a future Porsche dealership, council approved the community improvement grant Wednesday in a 15-to-9 vote.
The Mrak family, owners of Mark Motors, are the first to apply under the city's two-year-old program aimed at revitalizing the Vanier neighbourhood's main street. The owners want to redevelop two existing luxury car dealerships into a "flagship" Porsche store, and staff said it would provide a "gateway" to Montreal Road.
Even though council members' email accounts were flooded with comments and some residents gathered at the site on the eve of the vote in protest, Mayor Jim Watson hasn't wavered in his support for the application or for community improvement plans generally.
Watson maintains the arrangement would bring in an extra $1 million over 10 years, once the redevelopment causes the site's property taxes to soar and the city returns 75 per cent to the Mraks under the program.
"I'm optimistic that this is going to kickstart other people to invest on Montreal Road," he said.
Council debated a flurry of motions and raised several questions about the Porsche grant, including whether it could have located somewhere else in the city.
Some councillors voted against the grant, saying the dealership didn't prove it meets the program's criteria, which require a project meet a need for "urban renewal" and clearly demonstrates it "would not otherwise proceed in the absence of the incentive."
Others, however, said the tax break would not have attracted the attention it did if not for the Porsche brand. West Carleton-March Coun. Eli El-Chantiry offered his apologies to the Mrak family for what he called the "shenanigans" of the past week.
"They've been through the mud on this file only because they're requesting something we've already given to other businesses," he said.
Money for affordable housing
Watson added a twist to the debate by moving to commit the extra taxes to affordable housing. He touted $6 million overall would go toward housing, with $5 million of that expected after the grant period elapses, more than a decade from now.
Yet, a handful of councillors, including housing liaison Catherine McKenney, didn't buy the commitment. Kitchissippi's Jeff Leiper called it "messy" and "political," while Gloucester-Southgate's Diane Deans called it "smoke and mirrors".
"I find tying the affordable housing crisis in the City of Ottawa to a grant to a luxury car dealership to be cynical, disingenuous, insincere, and a crass, politically-motivated move," said Deans.
The city clerk said the current council couldn't bind a future one to spending the money on housing, however, council approved Watson's motion 18 to 5 anyway.
Watson called it "unfortunate" that councillors who typically support affordable housing would vote against his "innovative" way of finding a funding source for it.
Cost-benefit analysis in 2023
Some councillors said they felt the issue was bigger than a single application on Montreal Road.
Rideau-Rockcliffe Coun. Rawlson King, whose ward encompasses where the dealership will be located, asked staff to do a cost-benefit analysis of the city's five community improvement plans, but the city manager said staff had their hands full in the remaining year before election campaigns begin.
Instead, council voted 18-to-5 to push that analysis to 2023, after the next municipal election.
In the meantime, more applications are expected to come in for similar tax breaks, especially as the city is planning a relaunch of its community improvement plans in Orléans.
Watson sees the financial incentives as successes and called the one that led to a $2.3 million tax break for a new Hyatt hotel in Bells Corners the "gold standard."
Yet, he also said the city should hold off targeting new parts of Ottawa for financial incentives because they will lose their effect if there are too many.