Ottawa Citizen - Tax break for Porsche dealership makes sharp turn to 'messy' payoff for affordable housing

The tax break is under a Montreal Road "community improvement plan" (CIP). The city uses CIPs to generate economic activity in targeted areas

By Jon Willing


Political manoeuvring was in overdrive on Wednesday, when Mayor Jim Watson won support to tie a controversial $3-million tax break for a Porsche dealership to a multimillion-dollar long-term investment in affordable housing.

With a vote of 15-9, Ottawa city council approved an application from Mark Motors to receive property tax relief for a new Porsche dealership planned for 458-470 Montreal Rd.

The tax break is under a Montreal Road “community improvement plan” (CIP). The city uses CIPs to generate economic activity in targeted areas, giving property owners relief from the expected increases in property taxes that will come from new development.

CIPs have been around for years, but a municipal tax break for a new Porsche dealership on the edge of Vanier has drawn heavy criticisms from the community.

Watson likely had enough votes to approve the application, but he tried enticing others by proposing to use $6 million in increased property taxes generated by the development over 20 years for affordable housing projects.

After the council meeting, Watson said he thought it was an “innovative way” to provide more money for much-needed affordable housing during a city-declared housing and homelessness crisis.

Councillors already questioning the tax break didn’t appreciate the mayor’s move.

Coun. Diane Deans called it a “crass politically motivated move” that shouldn’t be accepted by council.

“This is not about affordable housing,” Deans said. “This is about trying to confuse the public.”

Coun. Jeff Leiper called it “messy” as he tried to wrap his head around using property tax money from a specific location to fund a municipal program.

However, 18 of 24 council members liked the affordable housing angle and threw their support behind the mayor.

The decision to use increased tax revenue generated by the property for affordable housing isn’t binding on future councils.

According to the city’s calculations, the new Porsche dealership would bring in an extra $3,880,228.31 in property taxes over 10 years.

It means the project is eligible for a maximum of $2,910,171 in property tax relief over that time under the rules of the CIP.

The Porsche dealership is the first approved application under the Montreal Road CIP. The Quartier Vanier BIA and local councillor Rawlson King supported the application.

The city estimated the construction value of the dealership at $17 million.

Coun. Eli El-Chantiry said he felt bad for Mark Motors being dragged into a controversy after simply submitting a CIP application that met the city’s conditions.

“They’ve been through the mud on this file only because they’re requesting something we already give to other businesses,” El-Chantiry said.

Coun. Scott Moffatt said a car dealership could generate spinoff economic benefits when people are dropping into local businesses while waiting for vehicles to be serviced.

Other councillors pleaded with colleagues to listen to opponents and pay attention to jokes being made at the city’s expense.

“It will do nothing for urban renewal,” Catherine McKenney said, making a land-use planning argument against allowing a car dealership on a community main street.

Watson said a car dealership wasn’t excluded in the CIP prerequisites and he acknowledged “challenges” with the application for a new Porsche dealership.

But the city has limited tools to spur economic development and the tax break for the Porsche dealership is a “good deal” for the municipal government and property taxpayers, Watson said.

There was an effort to put more scrutiny on CIPs approved by council.

King wanted staff to review CIPs to determine their economic effectiveness, but city manager Steve Kanellakos said staff were unable to handle additional unplanned work for the rest of the 2018-2022 council term. A review of the brownfield grant program also needs to be pushed to 2023, Kanellakos said.

Voting in favour of the tax break were Watson and councillors King, El-Chantiry, Moffatt, Matthew Luloff, Allan Hubley, George Darouze, Jenna Sudds, Glen Gower, Jean Cloutier, Jan Harder, Tim Tierney, Laura Dudas, Catherine Kitts and Mathieu Fleury.

Voting in opposition were councillors Deans, Leiper, McKenney, Riley Brockington, Carol Anne Meehan, Keith Egli, Rick Chiarelli, Theresa Kavanagh and Shawn Menard.

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