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This article was published 5/6/2014 (2299 days ago), so information in it may no longer be current.

City hall says it's finally tackling the problem of the glut of surface parking lots in the downtown area.

A civic committee this morning endorsed a comprehensive plan that would give developers a property tax freeze for up to 20 years for the construction of new rental housing units in selected areas of the downtown.

"To have mixed-use housing in our downtown with this program is awesome," said Coun. Mike Pagtakhan, chairman of the downtown development committee. "We're going to solve, finally, our problem with surface parking lots in our downtown."

Curiously, however, surface parking lots do not appear to be the primary target of the proposed program, which is designed to boost existing downtown development.

Under the proposal, which still must be approved by city council, developers would get a property tax freeze for a minimum of 12 years for constructing rental units in select areas of the downtown.

The tax freeze would be extended for another four years if the project is built in a strategic area with high visibility that supports adjacent development; an additional two years, if the project is constructed on an existing surface parking lot; and a further two years, if the project includes a parkade.

The tax freeze would only apply to the increased property and education taxes that would result from the higher value of the new development. The owner will still be required to continue paying the same amount of property taxes as if no development had occurred on the property.

As part of the program, developers would have to set aside a minimum of 10 per cent of the rental units for what city planners called "affordable housing" – rents geared to median market rental rates, as determined by the Canada Mortgage and Housing Corp – for five years.

Committee support was not unanimous. Coun. Jeff Browaty voted against the plan after he questioned the length of the tax freeze.

Browaty (North Kildonan) said a builder would see little benefit in the getting a partial tax refund 15 to 20 years down the road, adding that other municipalities have similar programs geared to 10-year terms or shorter.

"We're throwing away good money," Browaty said during the meeting.

"There's no real good business case for them to be doing an incentive this long out," Browaty said. "We're giving up too much, as a city, that far out," adding he hoped the program could be revised before it hits the floor of council later this month.

It's believed that up to 50 per cent of downtown Winnipeg is taken up with surface parking lots, considered by planners as a blight and an obstacle for high-density growth.

Mayor Sam Katz said there were 140 surface parking lots across downtown Winnipeg and made their elimination one of his key campaign platforms in the 2010 election.

However, the program proposed by the administration today isn’t the same as the one proposed by Katz four years ago, where he promised a blanket five-year freeze on taxes, and Katz’s plan would only include parkades if the structures included retail or commercial development on the main floor.

Winston Yee, the city’s manager of housing, said the program is based on a financial analysis of the downtown housing situation, adding that surface parking lots generate a great deal of cash and their owners need healthy incentives over a long period of time to make up that loss of income.

The tax freeze would apply only to new projects and to the first 750-900 rental units.

Yee admitted the program would likely attract an additional 750-1,000 new residents downtown, but added it’s meant to compliment other residential programs in the area.

Yee said the program could be extended to accommodate more rental units if it was determined as appropriate.

aldo.santin@freepress.mb.ca