A 50 per cent development charge discount being offered by the Town of Whitby is projected to represent some $1 million to $2 million per hotel development.
In return, the town is projected to collect between $540,000 and $870,000 annually from the three projects that are currently enrolled in the program, through property taxes and the Municipal Accommodation Tax, said Mayor Elizabeth Roy.
The three projects are also estimated to generate $8.4 million to $14 million in new off-site visitor spending each year, supporting Whitby restaurants, retailers, attractions, and other local businesses, she pointed out.
Their development would also create employment opportunities during construction and, once operational, support ongoing jobs in hotel and conference centre operations, hospitality, food and beverage services, event management, maintenance, and other related services, she said.
Targeted Incentives
Municipalities regularly use targeted incentives when a development can deliver broader and lasting benefits. Niagara Region, for example, operates a Hotel/Motel Grant Program that reduces regional development costs for qualifying projects, while York Region has a separate, more favourable development charge category for hotels, the mayor said.
“In a difficult construction market, standing still risks losing important projects — and their benefits — to other communities. These are carefully considered, targeted measures designed to turn plans into shovels in the ground,” she added.
The Background
Whitby Council, at a special meeting on August 26, approved a cut by 50 per cent in development charges to boost the town’s hotel and conference sector.
The discount is available to applicants of the town’s Hotel and Conference Centre Attraction Program, and is part of Whitby’s 2023-2026 Community Strategic Plan.
A hotel and conference centre is a long-sought-after community amenity that multiple councils have worked to deliver because of the broader public benefits it would provide.
However, high construction and financing costs, labour pressures, and economic uncertainty are making it increasingly difficult for major developments to proceed. Even projects supported by strong market demand can be scaled back or abandoned if the financial conditions don’t work,” said Roy. “The hotel and conference centre discount will be available on the condition that participating applicants secure building permits within 18 months.”
Limits Capitalizing on Tourism
The lack of hotel and conference capacity needed to meet current and future demand limits the town’s ability to fully capitalize on the significant sport-tourism opportunities created by the new Fieldgate Sports Complex, as well as the tourism demand generated by attractions like Thermea Spa Village, said Roy.
The competitive, time-limited incentive approved by council is available through a defined municipal program rather than being directed to a single proponent, she pointed out.
She said the town is seeking significant public benefits in return, including tourism growth, economic activity, taxes, employment opportunities, and community amenities.
To encourage purpose-built rental housing starts, council also approved a program that will discount the town’s residential development charges by up to 50 per cent and allow them to be paid over 10 years following occupancy.
Related Story
You May Also Like To Read
Steps for Care surpasses $20,000 in peer-to-peer fundraising