Six people on a committee disagreed about whether or not Germain Hotels needs the city incentive
Tuesday at city hall, after a long debate about whether a hotel project at the Ottawa International Airport should get a $13 million break on property taxes, the vote was a strange tie.
City staff have decided that Germain Hotels can pay $4.4 million in taxes to the City of Ottawa over the next 25 years if it builds a new 180-room Alt Hotel next to the terminal. This is just 25% of the $17.4 million in tax revenue that is expected to come in from the hotel.
The old city council approved a new community improvement plan for the airport area last July. Germain Hotels was the first business to apply for it. It is also used in Bells Corners, on Montreal Road, and in most of Orleans to spur development in places where it might not happen otherwise. However, when a Porsche dealership successfully applied in 2021, it got a lot of negative attention from the public.
Some council members, including the new mayor Mark Sutcliffe, have grown less fond of the program this term. The finance and corporate services committee voted 6 to 6 against the hotel’s application, which means it failed at the committee level.
Sutcliffe supports the airport, economic development, and city staff, but he doesn’t think it’s a good idea to give property tax breaks to certain private businesses, he said. He said it was a “flawed” way to get money.
Catherine Kitts, Laura Dudas, Glen Gower, Matthew Luloff, Rawlson King, and Cathy Curry voted yes, while Sutcliffe and councillors Tim Tierney, Jeff Leiper, Riley Brockington, Shawn Menard, and George Darouze voted no. Darouze said that he usually voted for grants like this, but he didn’t vote for this one because he wants the Airport Parkway to be made wider first.
The split vote creates some suspense and will almost certainly lead to conversations between councillors before the full city council votes on April 12 on whether to approve or reject the grant.
Airport wants to be a hu
The Ottawa International Airport pushed hard for the grant, saying that the on-site hotel was needed to get airlines to use the airport as a hub where many flights pass and passengers make connections.
Mark Laroche, the president and CEO of Ottawa’s airport, said that the process needs to move quickly because Porter Airlines is spending millions to build two new hangars and he wants Ottawa’s airport to be as appealing as possible.
“There is a terminal hotel in Toronto, Montreal, Vancouver, and Calgary,” Laroche told councillors. “If we want to be in the same league as a hub airport, we need those amenities.”
Laroche said that the airport has been trying for seven years to get a hotel connected to its terminal, but the site has some building restrictions and the airport is being “picky” to make sure a good hotel is built. In 2018, Germain Hotels signed a lease to become the airport’s fourth hotel tenant. It is the only one connected to the terminal by a pedestrian walkway.
Before the pandemic, the construction costs were estimated to be $44 million, but as they went up, Germain left. Construction is now expected to cost $55 million, and Laroche said that Germain Hotels needed the incentive in order to agree to move forward.
Hugo Germain, vice-president of operations for Germain Hotels, told the committee that higher construction costs have created risks, and that his lenders were taking the municipal grant into account when figuring out how much money they would give him.
Councillors in favou
Coun. Cathy Curry, who is in charge of the high-tech park in Kanata North, was sure that the airport needed more direct flights and connections to make it easier for business and leisure travelers to get to and from Ottawa.
“Here’s how you do it. If you make it, people will come “She added that economic growth is what makes it possible to have more money for social needs like housing.
We do have to pay for it. It’s a grant from taxpayers, and I don’t think taxpayers want their money going to this kind of project, said Mayor Mark Sutcliffe.
Other people on the committee agreed with the hotel owner and airport that it would be better to get jobs and a boost to the economy from a new hotel than to let the site sit empty.
Orléans West-Innes Coun. Laura Dudas could see why the airport and hotel would be upset that they had followed the city’s steps under the new program, only to face a challenge from politicians at the committee level.
Dudas told the airport’s CEO, “This isn’t the money of our residents. This is found money that would come into our city and help you do what you’re trying to do.”
Those oppose
Some people strongly disagreed with the idea that the hotel’s planned property taxes were “found money.” They saw the grant as lost tax money or a subsidy from the city.
“We do have to pay for it. It’s a grant from taxpayers, and I don’t think taxpayers want their money going to this kind of project “he said.
Sutcliffe wasn’t sure that the site would sit empty for 25 years and not bring in any tax money.
Others questioned whether there was a market for the hotel and brought up worries from nearby hotels that the Alt Hotel’s grant would hurt their room occupancy.
Riley Brockington, a council member for the River ward, thought that there were many other things that would have a bigger impact on the airport’s growth than a municipal incentive for a hotel. For example, he thought that getting the federal government to lower fees on fares would be a better idea.
Most of the disagreement on Tuesday was about whether or not the community improvement plans themselves are good for the city.
Sutcliffe ran for mayor in 2022 on a promise to get rid of these kinds of tax breaks in the future. He is now waiting to see what the review says.
- The City of Ottawa stops giving money to developers who clean up polluted sites.
In December, the council asked staff to look at the community improvement plans and brownfield grants. Brownfield grants have been put on hold while this is going on, but the city is still taking applications for community improvement plans that are already in place.
