Vancouver Mayor offers big tax breaks to developers

Post by Daniel Fontaine in

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Board of Trade loves the Mayor

"Only left wing mayors can offer these types of corporate tax breaks"

In what could easily be described as one of his better speeches, Mayor Gregor Robertson was sporting a conservative blue tie as he addressed the Vancouver Board of Trade for his first annual state of the city address. Tables for the event sold for over $500 a piece, and the business community was lapping up what the Mayor had to offer.

Firstly, he committed to providing "expedited processes, tax incentives, density, parking, zoning and easements that will encourage and incent multi-use developments." Is it just me, or don't you find it a bit ironic that only left wing mayors can offer these types of corporate tax breaks without it barely mustering a single protest from the radical fringe in Vancouver...I digress.

In what must make his former leadership rival Raymond Louie cringe, he also committed that the City would continue with a previous NPA policy to shift taxes off of the corporate tax roll and onto the back of residential taxpayers. Louie was a vociferous opponent of the tax shift while in opposition, but has grudgingly indicated he will vote in favour of it now that Robertson is the boss.

The Mayor even made a point of singling out the tenacious Bob Laurie, volunteer lobbyist for the Vancouver Taxpayers Coalition for his efforts to reduce the tax burden on corporations and small businesses. I'm sure Bob was smiling throughout the whole lunch! Every corporation and business owes Bob a huge debt of gratitude for all his efforts to convince Council of the merits of the tax shift policy.

The Mayor also stated that he will "provide tax incentives and expedited approvals at City Hall for projects that prepared to be shovel ready in 2009." Now what would a Robertson speech be without the announcement of Yet Another Task Force (YATF) - how does a new Mayors 2010 Economic and Investment Strategy task force sound to you?

In what will be music to the ears of Air Canada, the Mayor announced he plans to rack up a few aeroplan points by helping to promote Vancouver businesses abroad. He plans to visit San Francisco, LA, Portland, Seattle and New York as well as emerging markets in Asia. Let's hope he at least sends back a postcard! On the environmental front, there was no mention as to whether he will be purchasing any carbon credits to offset all that burned jet fuel.

Thankfully, the topic of backyard chickens or vegetable plots on the front lawn of City Hall didn't make it into the speech. As a result, give the Mayor full credit for reading his audience well.

Despite the fact the Mayor claims homelessness is his top priority, the first time he delves into the topic is about half way through his speech. He touts the Streetohome Foundation initiated by former NPA Mayor Sam Sullivan as one of the reasons why he was able to get 500 new shelter beds open in Vancouver over the last 90 days.

Overall, the speech lacked content in many key areas, however the Mayor did carefully outline some of the serious issues facing Vancouver over the next year or so. His emphasis on providing corporate tax breaks and getting City bureaucrats to ease up on all those pesky rules and regulations, is bound to please his key donors and supporters in the business community.

Here is a copy of his speech delivered earlier today:

Thank you Henry, and thanks to Concord Pacific, KPMG and the Women’s Leadership Circle for sponsoring this forum here today at the Board of Trade.

I also want to acknowledge and thank other members of Council who are with me today. As well as senior City staff members.

I’m honoured to be here as your Mayor, and certainly looking forward to a close working relationship.

When I was sworn in 3 months ago, it was clear that Vancouver wasn’t going to escape the dramatic economic downturn. We all had hopes of staving off the inevitable, as one of the last cities affected, but we’re certainly feeling the impact now.

As we sit here today and enjoy our lunch, the global economy has changed radically — economic heavyweight are humbled and a new economy will inevitably emerge from the chaos.

We are witnessing incredible changes to the world in which we live in. New rules are being written as we speak, in the United States, Europe, Asia, and around the world, that will have major implications on how we as a City compete in the global economy.

The current global economic challenges are visible right here in our city, whether it’s declining real estate sales, idle building sites, rising unemployment, or simply extended caution when it comes to investing.

The new council stepped into a perfect storm of financial challenges: rising expenses, revenue projections lower than expected, a decline in development permits, and a possible double-digit property tax increase. Not to mention a full-blown recession hammering our largest trading partner and commodities markets plummeting.

It hasn’t gotten any easier. Throw a financing meltdown with the billion dollar Olympic Village project, the most snow in 44 years, and a gang war into the mix. It’s probably a good thing that I don’t know any other pace or circumstances in the Mayor’s office. This is business as usual for me…

But I’m sure your all dealing with similar versions every day in your businesses, your investments, your clients. I know from my time as CEO of Happy Planet that in any situation, bear or bull market, you play with the hand your dealt and make the best of it.

So I’m here today first to tell you my approach at city hall.

I campaigned on a platform of changes. I believe very strongly that we need a major change in the way City Hall conducts business – with taxpayers, with the private sector, and with other cities. I want the phrase “City Hall” to be used in the same sentence as “adaptable” and “responsive” and even entrepreneurial.

Nowhere do we have to be more adaptable than with the current economic landscape. Efficiency is the name of the game at City Hall now. We’ve seen a steady string of spending and taxes over the past several years, and the city has been able to get away with it. Development was booming, the city’s coffers were filling up, and some thought it would just keep going. Now, with these lean economic times, we’re learning what’s necessary and what’s luxury.

The new city council has already taken significant steps to try and stay on top of a very challenging situation. We have a hiring freeze in place. Between December and January, we shaved $26 million off of the budget, or roughly 5% in property taxes, and we’re looking for more. We’re undertaking a major review of operations. And later this month, councillor Raymond Louie, our City’s Finance Chair, will be initiating an external value-for-money review of the city’s spending.

And yes, Bob Laurie, we are going to move forward with the shift in business taxes. You can sleep better now.

We’re building a strong new management team to lead the city bureaucracy, with Penny Ballem as City Manager and now Patrice Impey as our new CFO.

But let me be clear - I believe in efficiency and rigourous fiscal management tempered with balance. My approach to business has always been to balance economic, social, and environmental priorities. That’s my approach in government.

The quest for deep savings cannot be at the expense of City Hall’s responsibility to the community. I will not use difficult economic times as an excuse to wipe out city services when they’re needed most. Nor will I sacrifice crucial commitments to reduce our environmental footprint. We need to be pragmatic and balanced, and do all we can to protect the quality of life that Vancouver is world renown for.

With all of the big problems we face, we’re very fortunate to be in the position that we’re in. Vancouver is blessed with incredible natural competitive advantages. We have a superb deep-water port, excellent transportation links to major transportation infrastructure, proximity to both the Asia-Pacific and American markets that is the envy of cities around the world, as well as our natural environment. Many consider us the most beautiful and livable city in the world.

We’re stocked with tremendous human intellectual and entrepreneurial capital – I’m sorry, I don’t have time to name everybody in this room personally. We have one of the highest ratios of entrepreneurs and small business in the western world.

We have top-ranked universities and colleges within minutes of each other, playing host to some of the brightest minds in medicine, physics, computer science, and chemistry in the world.

Our development, planning and design industries export their expertise around the world. To top it off, our cosmopolitan population strengthens our city’s connections to emerging markets and regions that are thousands of kilometres from here. We are blessed to be one of the world’s most multicultural cities.

So that’s not a bad place to start from.

Then you look at the opportunities we have coming up. The Junos. The Celebration of Lights is back – thanks to some of the folks here today. The 2010 Winter Olympic and Paralympic Games. The Grey Cup. Over the next couple of years, Vancouver is going to be the place to be.

The Olympics provide us with a platform to showcase Vancouver to the world. This opportunity to brand our city on the global stage is monumental. It is absolutely crucial that we capitalize on it with both a focused brand identity to the 3 billion viewers, and with a targeted hosting and business development strategy. We’ve gotta be on our game!

How do we do that? For starters, we need to deal with our most pressing local issues. The city’s homelessness crisis is a moral disgrace and a blight on our reputation. The way things are right now, we’ll have thousands of journalists from around the world in our city at the same time we have 1500 people sleeping on our streets, just blocks away from the hotels they’ll be staying in.

My first priority is to turn this around, and make huge progress to help people off of the streets. On the first day after being sworn in, I established a Homeless Emergency Action Team, whose sole focus was to get people off the street and into safe, warm shelter as soon as possible.

Through a creative partnership with the Province and the Streetohome Foundation, we were able to leverage $1 million to help open five emergency shelters. No barriers – if you had pets or a shopping cart, you wouldn’t get turned away.

Within days they were filled to capacity. Close to 500 people a night came in to them – and we still had to turn people away to due to capacity issues. The shelters have worked. VPD and DVBIA stats show that incidents of public disorder, aggressive panhandling, and mental health calls have dropped. So has open drug use. Thanks to the shelters, we’ve been able to get people off the street, get them in touch with health and social services, and have BC housing help them find a place to stay.

I was also pleased that this week we were able to announce that the province had committed to funding the shelters with us for another 3 months.

The long term solutions are on the way. The city has provided 14 sites for social housing, which will provide 1,400 new units of social housing to be funded by the province. These units will go to the people who desperately need them the most – those who are on the streets suffering from abuse, drug addiction, and mental illness.

It’s not easy, and it’s not going to change over night. But we’re making progress on homelessness and that needs to be the story that’s told, a city that’s taking care of it’s own.

We also need to deal with our shortage of affordable housing. The lack of affordability impacts people along the entire length of the housing continuum. We’re seeing our workforce – that same workforce that we need for the tourism, construction, and service industries that will get a boost from the Olympics – being forced to live out in the suburbs. That’s no way for a city to function.

Currently the city is in the midst of consultations with the development community. We’re listening. We’re hungry for new ideas. I’ve made it clear to our development staff that we need a culture that embraces bold ideas, because that’s what it’s going to take to come up with new ways to create affordable housing.

We’ve got to make progress fighting the gang war. Vancouver is again stepping up with more 96 police officers this year, we aren’t cutting that from our strained budget. But our suburban neighbours are many hundreds of police short of being able to effectively deal with gangs and the current crime rate.

We need them to step up with more resources. And we need to keep improving coordination and accountability at a metro level. The status quo is not good enough. The provincial and federal governments need to keep stepping up support as well, for policing and with changes to the justice system. If we’re all pulling in the same direction, we will prevail and Vancouver will again feel like the safe city I grew up in.

Let’s talk about the positives now. 
The brand that we want to create from the Olympics needs to focus on our strengths. It needs to be about the new economy, new ideas, where the world is going, not where it’s been. The brand that I envision Vancouver putting out to the world in 2010 is all about innovation, entrepreneurship, creativity and sustainability.

An example of this is the Neighbourhood Energy Utility in False Creek, next to the Olympic Village. It’s innovative. By supplying energy from sewage heat, we’re acting in the best interest of the environment while reducing emissions. It saves energy, generates green jobs and enables similar innovations.

And we’ve got more of these projects on the way. The Olympic Village will be a model of environmentally sustainable design, the first LEED Gold neighbourhood in North America. There will be a demonstration Streetcar up and running for the Olympics. We are building, pursuing, and using the projects that other cities want to have.

Smart. Green. Innovative. These are the kind of infrastructure projects we want to accelerate. And the kind of Vancouver branding we want out there.

Another example of the Vancouver brand is the film and television industry. With all of the news out there about the economic downturn, it’s inspiring that in the midst of this, Vancouver’s film and TV industry is thriving. Hollywood North is seeing expanding operations and increased investment. It’s creating well-paid jobs that are bringing an influx of creativity and talent north of the border, providing great opportunities for local artists and companies.

The success of Vancouver’s film industry in these difficult times reflects just how crucial the creative economy is to our city. The creative economy is currently over 1/3 of the jobs in Vancouver, and growing steadily. More importantly, making Vancouver a creative capital on the international stage will position us to capitalize on the global growth of the creative industries.

Vancouver has an immense amount of talent when it comes to the creative economy. We’ve got an amazing array of performers, writers, musicians, film professionals, artists, bloggers, designers, and publishers in our city.

We need to continue building a city that people want to live and invest in. This connects to addressing homelessness, affordable housing and safety. It means striving to become the greenest city in the world. And it means focusing our energy on economic initiatives that build on our strengths and bolster our brand to create new opportunities.

There’s a lot the City can do. Over the coming months, here are some of the steps I will be taking as Mayor to ensure that Vancouver remains economically healthy and competitive, and that we continue to foster creativity and innovation within our city:

To spur development and business in Vancouver, I will

1. Initiate enhanced development zoning that will provide incentives for new development. I will bring to Council an innovative program which will be based on expedited processes, tax incentives, density, parking, zoning and easements that will encourage and incent multi-use developments which create jobs in the building phase, create new commercial space linked to long term jobs and are tied into transit corridors to enable sustainable transportation options.

2. We will strategically target the city’s capital investments to facilitate greater development activity and leverage new private and public investment. The City will spend $520 million into local infrastructure for the next 3 years, the City’s largest ever investment in our infrastructure and facilities. These expenditures will support a wide range of business in Vancouver from architectural and design firms, larger and small general contractors and subcontractors.

3. We are also pursuing further investment into infrastructure, including housing, in partnership with the Federal and Provincial government. Our hope is that infrastructure dollars flow this year from Ottawa and Victoria, so that we can accelerate the pace of job creation here in Vancouver.

4. We will provide tax incentives and expedited approvals at City Hall for projects that prepared to be shovel ready in 2009;

To attract investment, enhance our business climate and our global reputation leading into the 2010 games, I will strike a Mayors 2010 Economic and Investment Strategy Group, in consultation with the Board of Trade and industry leaders, to take advantage of the world being here in Vancouver.

We will start by convening the major sponsors and contributors of the 2010 Games and actively sell to markets both close to home in San Francisco, LA, Portland, Seattle and New York as well as emerging markets in Asia. Come Games time, we will be ready to host with local leaders to showcase the investment opportunities in our City.

I will be calling on the Board of Trade membership to actively participate in these trade missions and to build the Vancouver brand in international markets. 2010 will be about signing deals while the world is here in Vancouver;

To make sure Vancouver becomes a leader in green-tech research and innovation, we will

1. Build our knowledge-based and creative economy - it is crucial for the city to be a strong enabling partner to our academic community, our universities and colleges. We are reaching out to create a partnership which goes beyond being good neighbours, but which involves us finding ways to further enhance economic activity while benefiting from the knowledge translation from the innovative science and research that we have right here in Vancouver.

2. We will build partnerships with our exceptional health sector - VGH, St. Pauls, Childrens Hospital, BC Womens Hospital and BC Cancer and their respective research institutes - to become a leader, and exporter of, leading clinical and research innovations.

3. We will pursue incubators and incentives for green enterprise and technology. These are among the fastest growing sectors in the global economy now. We are fortunate to have potent cluster here, and urgently need to build on that success.

These steps will help Vancouver emerge as a creative economic capital. We will invest in our own people. We will invite and attract the smartest thinkers and companies of the new economy to move here and make the products and services the world needs now and tomorrow. We will show that Vancouver is the city to be if you want to innovate, invest in the future, and make a difference in the world.

While the world is rebuilding its economy, let’s seize the opportunity by positioning Vancouver as the best place to be for the next wave of industry and culture. Now is not the time to sit idly by and wait for others to act.

A city like Vancouver that aspires to be a global player needs to prove that we are serious when we say “we are a world-class city.” We have the talent, the ideas, and the determination to lead other cities in building the new global economy – now let’s roll up our sleeves and do it.

Thank you.

2 Comments

Same old stuff. Developers rule this City. And here I thought THIS mayor would be different. Nope.

Unfortunately, developers are overly influential in most N. American cities. If you want to see an interesting paper on the impact of developers' contributions on municipal candidates running for office, see MacDermid's paper posted to the Centre for Social Justice: http://www.socialjustice.org/

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