A company partially owned by Hamilton’s manager of urban renewal is getting a $23,739 city grant for a downtown development project, sparking councillors to take a harder look at conflict of interest rules.

A city report identifies Glen Norton as a partner in a numbered company that revitalized part of James North. He and Robert Scott Smith at 2206066 Ontario Inc. renovated 193-197 James St. N., which is now home to the Mulberry Café.

In August 2009, about one month after council approved the company for a tax increment grant, the city hired Norton to his current position.

With confirmation that the project did lead to an assessment increase, the grant came to council committee Wednesday for approval. The report notes the project meets the criteria for the grant.

But when the general issues committee voted to give Norton’s company the grant, Coun. Brad Clark didn’t like how it felt.

“We have a little bit of an issue,” the Stoney Creek councillor said. While Norton had nothing to do with the report that recommended approval, two staff members who answer to him prepared it, and “there’s an inherent conflict of interest over that.”

Several councillors spoke of Norton’s hard work. In renovating part of James North, he is “putting his money where his mouth is” when it comes to downtown renewal, said Coun. Jason Farr, who represents the downtown.

The issue has “nothing to with your integrity,” Coun. Brenda Johnson told Norton, who sat in the audience. “You know I have the highest respect for you.

“But to approve this now and say we’ll fix it later doesn’t jive with me.”

In the end, 10 of 14 councillors voted to approve the grant. The city’s governance committee will look at how the city should handle similar situations in the future.

With the renovation, the café building went from a lodging house to having retail on the ground level and some offices on the other floors, resulting in an assessment increase of more than $200,000. The city grant helps ease that increase over five years.

The redevelopment means the city will collect $15,826.66 more in taxes over five years.