YOW Alt Hotel [1085 Airport Pkwy] | ?m | 7f | U/C

[ars]

Originally Posted by phil235

We made a decision that we wanted to drive investment to the airport area and set up a program to do that. This is an investment in the airport area that fits the criteria of the program. It's disappointing that politics are creeping into the decision-making. Whatever the merits of the program (I think it has some obvious merit in the case of an airport that is trying to grow its destinations), this debate by politicians over whether a hotel is a good investment is exactly how not to make good policy.

I agree, really disappointed about Sutcliffe's position on this. And, from reading the Reddit thread on this, it seems like a lot of people support him on this, so it's a politically advantageous position to take.

I just hope that other councillors miraculously vote for this, it's definitely money better spent than the tax break that the Porsche dealership was given.

[waterloowarrior]

tied vote, going to Council April 12 with no recommendation

[kwoldtimer]

Originally Posted by roger1818

You are assuming that the airport hotel will only be used by people who live out of town and are driving to the airport, and that the only advantage YOW would offer them is a shorter drive. Your 500m comment also assumes that no-one lives west of Ottawa, where you have to drive past Ottawa to get to YUL.

There are many other uses for an airport hotel by people flying either in or out of Ottawa. An airport hotel makes early morning departures and late night arrivals more palatable, especially for visitors who need to stay in a hotel anyway. This makes it easier for the airport authority to market YOW to the airlines, and more flights, means more visitors, which means more money fed into the local economy.

But silly servant Karen from Orleans doesn't care about the local economy, as her job is secure, and more visitors means longer lines at her favourite restaurant. Besides, she drives to YUL when going on her annual sun destination vacation, so doesn't care about YOW.

What does that have to do with an airport hotel?

[kwoldtimer]

Originally Posted by ars

I agree, really disappointed about Sutcliffe's position on this. And, from reading the Reddit thread on this, it seems like a lot of people support him on this, so it's a politically advantageous position to take.

I just hope that other councillors miraculously vote for this, it's definitely money better spent than the tax break that the Porsche dealership was given.

That's setting the bar awfully low.

[rocketphish]

Airport hotel tax break hits turbulence at Ottawa's finance committee
The estimated increase to municipal property tax would be $17.4 million over 25 years. If the grant is approved, the city would keep $4.4 million and forgive up to $13.1 million.

Taylor Blewett, Ottawa Citizen
Published Apr 04, 2023 • Last updated 1 hour ago • 5 minute read

Without a $13-million municipal tax break, would a new Alt Hotel get developed at the Ottawa International Airport?

It’s a hypothetical question that city council members grappled with Tuesday and one that may soon have a real answer.

Six of 12 members of the finance and corporate services committee (FCSC), including the mayor, ultimately recommended against giving Germain Hotels the tax relief it technically qualifies for under a program set up by the previous council.

It’s now up to the current city council to make a final decision on the application, at its April 12 meeting, in what’s sure to be a closely watched vote. If they deny the 25-year discount on property taxes the hotel company and their airport hosts are seeking, Germain and the chief executive officer of the Ottawa International Airport have both warned that the future of the project is up in the air and with that an important ingredient in the quest to build a “hub” airport in the national capital region.

For members who voted in favour of the proposal at FCSC — a high-powered committee bringing together the mayor and most returning councillors from last term — it wasn’t a risk they were willing to take, especially considering the benefits they saw in green-lighting the first application under the newly established airport community improvement plan.

“I don’t know that we can do that crystal-balling. The time is now,” Kanata North Coun. Cathy Curry said in response to skepticism about how critical the grant was to the development and the potential for this project or another one to move forward without it.

“A bird in the hand is better than two in the bush.”

The committee heard how the airport authority had been looking for seven years to secure a terminal-connected hotel, and, after three requests-for-proposal, it signed an agreement with Germain Hotels. Then the COVID-19 pandemic hit and construction costs pushed the project budget to $55 million from $42 million. As the hotel company tried to figure out a way forward, the airport authority offered up the prospect of the CIP incentive it had worked with the city to develop.

Securing this tax discount this was one of the conditions for sign-off by Germain’s investment committee. Without it, “there’s no certainty, certainly,” vice-president of operations Hugo Germain told the committee.

Airport CEO Mark Laroche positioned the terminal hotel as part of a larger plan to turn the airport into a hub, where an airline — like Porter, which has recently invested in maintenance facilities at YOW — chooses to use it as a connecting airport for flights. If YOW doesn’t get there, “We are going to continue feeding Toronto 40 times a day … We’re going to be a regional airport,” he told committee.

On the other side of the debate was Mayor Mark Sutcliffe, who announced publicly ahead of Tuesday’s meeting that he would be among the nay votes, sticking to a position he struck during the 2022 campaign that challenged the use of community improvement plans over their use of tax relief for eligible business development.

Speaking to reporters after the meeting, Sutcliffe repeated his belief there would eventually be some development on the airport-adjacent site in the absence of a CIP grant, which would bring with it property tax revenue that hadn’t been reduced for the developer.

“I don’t support the idea that this is all found revenue for the city, free money that we can just give back to the developer because it doesn’t cost us anything. It does cost us something. It’s a grant from taxpayers, and I don’t think taxpayers want their money going towards this,” Sutcliffe said.

Former Mayor Jim Watson and a majority of members of the previous council ushered in the CIP program, responding to a request for help by the pandemic-battered airport. The pitch then was that the city could encourage economic development on underused federal lands in the area and potentially bolster service at the airport. Sweetening its appeal was the program’s description as self-financing as it’s a portion of the property tax increase resulting from the development that would be forgiven.

For the 180-room, airport-attached build by Germain, described Tuesday as shovel-ready, the total estimated increase to municipal property tax would be $17.4 million over the 25-year life of the CIP grant. The city would keep $4.4 million of that increase and forgive up to $13.1 million.

The application has been controversial from the time its impending arrival at city hall was made public. Several councillors quickly spoke against it and the activist group Horizon Ottawa rallied opposition to the proposal; board member Sam Hersh said Tuesday that nearly 700 emails had been sent to FCSC members ahead of the vote.

Many of the critics pointed to priorities, like affordable housing, that forgone property tax revenue could go towards if development did, in fact, occur on the site.

Orléans West-Innes Coun. Laura Dudas proposed dedicating a portion of the tax revenue the city would still bring in from the Alt Hotel build and use it for efforts to move families out emergency shelters. It resembled a compromise solution put forward by former mayor Watson when council had to vote on a similarly controversial application under a CIP for Vanier’s Montreal Road that offered $3 million for a Porsche dealership.

Unlike that proposal, the motion by Dudas ended in a split vote and, therefore, didn’t pass.

The future of the CIP model in general is an open question. City staff were already reviewing the program and were tasked by the council in December to pause new CIPs to allow for a full evaluation. The four existing CIPs continue to take applications, though the city has yet to receive another for the airport area.

Joining Sutcliffe in voting against the grant were councillors Riley Brockington, George Darouze, Jeff Leiper, Shawn Menard and Tim Tierney. Yes votes came from Dudas, Curry, Glen Gower, Rawlson King and Matthew Luloff.

https://ottawacitizen.com/news/local...ance-committee

[Tesladom]

Originally Posted by Harley613

SFO has a Grand Hyatt attached to the terminals and probably a hundred other hotels encircling the airport

Its not in the terminal (like the Marriott at YUL), although connected by train. Ottawa already has 2 hotels right next door, likely closer than the Hyatt is to the main terminal at SFU. All other hotels are quite far, 2-3km drive or shuttle

The idea that we need to give a tax break for a hotel to be built at YOW terminal is ridiculous when major global hubs don't have this.

[phil235]

Originally Posted by Tesladom

Its not in the terminal (like the Marriott at YUL), although connected by train. Ottawa already has 2 hotels right next door, likely closer than the Hyatt is to the main terminal at SFU. All other hotels are quite far, 2-3km drive or shuttle

The idea that we need to give a tax break for a hotel to be built at YOW terminal is ridiculous when major global hubs don't have this.

I don’t think the question is whether we need a hotel attached to the terminal. The question is whether this is the type of economic development that the program is intended to spur.

[acottawa]

Originally Posted by phil235

I don’t think the question is whether we need a hotel attached to the terminal. The question is whether this is the type of economic development that the program is intended to spur.

Since the program was set up so that individual proposals require individual council approvals, the question is whether Council sees the cost of this as justifying the economic development.

[phil235]

Originally Posted by acottawa

Since the program was set up so that individual proposals require individual council approvals, the question is whether Council sees the cost of this as justifying the economic development.

I guess it depends on the purpose of the approval. If it is wide open and council is picking the business propositions that it likes, that is not a good program.

[J.OT13]

Originally Posted by Tesladom

Its not in the terminal (like the Marriott at YUL), although connected by train. Ottawa already has 2 hotels right next door, likely closer than the Hyatt is to the main terminal at SFU. All other hotels are quite far, 2-3km drive or shuttle

The idea that we need to give a tax break for a hotel to be built at YOW terminal is ridiculous when major global hubs don't have this.

If the YOW hotels were connected by train, it wouldn't be so bad. The current set-up where you need to take the shuttle (not obvious where it stops) or a Uber/Taxi (as someone said, probably won't take anyone for a short ride like that) is not great.

Originally Posted by acottawa

Since the program was set up so that individual proposals require individual council approvals, the question is whether Council sees the cost of this as justifying the economic development.

If that's how they judged the individual projects, it wouldn't be so bad, but at the moment, they are voting against because they don't think we should subsidize any private project. If that's the case, we shouldn't have a program in the first place. We can't start a program and then reject every application.

[roger1818]

Glen Gower posted why he is supportive of the CIP for the Airport Hotel on his website. Well worth a read IMHO.

NOTEBOOK: ON THE AIRPORT HOTEL, ECONOMIC DEVELOPMENT, AND FAIRNESS
by Glen Gower | Apr 5, 2023 | Notebook

On April 12, City Council will vote on an application to provide a tax grant to a new hotel at the airport. Here’s why I’ll be supporting it.

SUMMARY

• The hotel will pay a lease to the airport each year that allows the airport to incentivize new routes in and out of Ottawa.
• The airport has said it urgently needs a hotel connected to the terminal as an essential component of a “hub” airport, so that it can compete with other Canadian municipalities to attract new airlines and service.
• More routes and services directly benefits the City due to higher passenger taxes; and indirectly benefits the local economy.

SOME BACKGROUND
It’s no surprise that COVID-19 travel restrictions have had a major negative effect on the airport, and they’re continuing to struggle to regain passengers. Other municipalities in Canada like Edmonton, Winnipeg and Halifax are making direct multi-million dollar contributions to help their airports.

In Ottawa, we decided to support the airport via a CIP (Community Improvement Program) instead. In July 2022, City Council voted 20-4 to establish the YOW CIP to encourage development on land around the Ottawa Airport. The CIP has strong support from groups like Invest Ottawa, Ottawa Tourism, the Board of Trade, local Business Improvement Associations, and many other businesses and organizations in the community.

The program allows eligible projects to receive a City grant in the form of a partial refund on their taxes. Eligible businesses include hotels, warehouses, hangars, restaurants, retail and so on, and the grant helps kickstart these projects despite the ongoing impacts the pandemic continues to have on travel and tourism.

The airport benefits directly because they earn lease revenue from any new development on their land. The goal is to help the airport generate up to $10-million in additional lease revenue per year that can be used to improve airport services and incentivize more flights in and out of Ottawa. (You can read more about the CIP and the benefits here…)


THE CURRENT PROJECT
The application in front of us now meets every criteria established for the CIP grant. It’s a 180-room hotel that includes a restaurant, meeting rooms, and a covered pedestrian connection between the hotel and airport. It fits in with the airport’s vision of becoming an international hub with more North American and international connections.

The grant would be funded through the increase in municipal property taxes attributable to new assessment created by the development. For example, in Year 1, the City would collect $393,796 in new municipal property taxes from the hotel, and refund up to 75% of that amount. Spread out over 25 years, that means the City would collect $17.4-million in new taxes, and return $13.0-million to the hotel as a grant for a net tax revenue of $4.4-million. After 25 years, the City would continue to collect the full amount of taxes every year and the grant would end.


WHY I SUPPORT THIS PROJECT
I’m supportive of this project because of the many direct and indirect public benefits, including:

• Increased revenue to the City, including one-time building permit and development charge revenue of $3.7-million; $4.4-million in net new property tax per year over 25 years.
• Increase in lease revenue to the airport, to the tune of hundreds of thousands of dollars per year that can be used to improve services and incentivize new routes.
• Creation of additional passenger revenue to the City through the PILT (Payment In Lieu of Taxes) program. The City earns $1.08 per incoming and outgoing passenger so any increase in air traffic directly benefits the City. The City earns several million dollars in revenue each year from the PILT program.
• 50 new long-term jobs created at the hotel.
• $55-million in construction investment.
• Benefits to local business and the economy via additional visits and spending from tourists and other visitors.
• Guests at the hotel contribute to the Municipal Accommodation Tax which funds Ottawa Tourism marketing initiatives to attract more travellers.

…and all of this is accomplished through a 100% self-funded program with zero risk to the City.

At Committee on Tuesday, I shared a story: When I was a kid, my favourite board game was called “Hotels”. A bit like Monopoly, the object was to build hotels – but with a catch. Even if you had enough money to build your hotel, you had to roll a dice for permission. Roll green, and you can build. Roll red, and you can’t. Those were the rules of the game.

These rules make for a fun board game – but rolling the dice is not a fair way to manage economic development in the City of Ottawa.

We set up the CIP last year to encourage economic development around the airport. This hotel is exactly the kind of investment we envisioned and hoped for. The hotel owners applied in good faith for the funding and spent considerable time and resources making their application. It would be completely unfair to reject this application, and to deprive the airport and our City of the associated revenue and benefits.

https://www.glengower.ca/notebook/no...-and-fairness/

[acottawa]

I am extremely sceptical that any airline is basing their decision on whether to fly to Ottawa on a terminal-attached hotel. Many major airports do not have terminal-attached hotels and those that do, those hotels are a minuscule fraction of the total passengers..

[roger1818]

Originally Posted by roger1818

Glen Gower posted why he is supportive of the CIP for the Airport Hotel on his website. Well worth a read IMHO.

He also talks about it for about 3 minutes in his weekly video. He mentions a few things in it that aren't on his website, such as (paraphrased by me):

• YOW is competing with other airports for new routes, and having an hotel attached to the terminal is one of the factors that airlines are looking for when they decide to add new routes to a community.
• The airport is subsidizing the new Air France route as it won't break even for them, yet.
• Under Ontario law, the city is limited in what they can directly grant to the airport, which is why they are using a CIP.

Link to where he starts talking about the Hotel.


People on hear complain about YOW not having enough flights, but when the airport asks for help from the city, many of those same people are saying, "Hell no! We don't want to pay anything for those flights. They should be given to us for free."

[roger1818]

Originally Posted by acottawa

I am extremely sceptical that any airline is basing their decision on whether to fly to Ottawa on a terminal-attached hotel. Many major airports do not have terminal-attached hotels and those that do, those hotels are a minuscule fraction of the total passengers..

It isn't the only factor, but it is a factor. Market size, proximity to other major airports (they know people will travel to other, nearby airports), and subsidies from the airport are other factors.

The hotel will also give the airport more rental income and the CIP will allow the airport to use more of that income to subsidize new airlines/flights to allow them to grow their marketshare.

[acottawa]

Originally Posted by roger1818

It isn't the only factor, but it is a factor. Market size, proximity to other major airports (they know people will travel to other, nearby airports), and subsidies from the airport are other factors.

I don’t think it is a factor at all. If it were airports would be scrambling to build terminal-connected hotels and they aren’t. Most terminal connected hotels were built decades ago.

Anyway, if the airport authority sees value in this they should be doing the subsidizing, not the city.

[roger1818]

Originally Posted by acottawa

I don’t think it is a factor at all. If it were airports would be scrambling to build terminal-connected hotels and they aren’t. Most terminal connected hotels were built decades ago.

Anyway, if the airport authority sees value in this they should be doing the subsidizing, not the city.

You are certainly entitled to your opinion, but I would rather have my taxes go up a few bucks a year to allow the city to subsidize YOW to allow them to encourage airlines to offer more flights (and maybe even make YOW a hub in the case of PD), reducing the chance that I will need to connect. Would I be correct in assuming, based on your name, that your priorates lie with only one airline though?

[phil235]

Originally Posted by acottawa

I don’t think it is a factor at all. If it were airports would be scrambling to build terminal-connected hotels and they aren’t. Most terminal connected hotels were built decades ago.

Anyway, if the airport authority sees value in this they should be doing the subsidizing, not the city.

I think you are overstating your case here. As for major airports in Canada, Montreal, Toronto, Calgary, Edmonton and Vancouver all have in-terminal hotels, and they are the airports we are trying to draw connecting business from. The idea that all of those hotels are old is not true either.

You are obviously entitled to your opinion on whether the investment is worth it, but unless we have some expertise in the field, I’m not sure what value our opinions have. The last thing I want is politicians making decisions based on their assessment of a particular project (or worse, the opinions of their loudest constituents).

Also hard disagree that the airport authority should be the only entity to assist with investment. Even if the airport hadn’t just gone through COViD, which devastated its finances and was the rationale for the creation of the improvement program, the airport is a public facility and a generator of regional economic growth and we all have an interest in its success.

[acottawa]

Originally Posted by phil235

You are obviously entitled to your opinion on whether the investment is worth it, but unless we have some expertise in the field, I’m not sure what value our opinions have. The last thing I want is politicians making decisions based on their assessment of a particular project (or worse, the opinions of their loudest constituents).

I have travelled fairly extensively both for work and pleasure and been in probably close to a hundred airports on 6 continents. I am not an expert in the sense that I know about negotiations between the airport authority and airlines, but I am fairly familiar with how people travel.

An in terminal hotel is of significant value if it is airside and it saves hours going through customs/security, etc for a short, but overnight layover. Other than that, its value depends on how hard it is to get in and out of the airport to other hotels nearby (for example checkpoints, toll plazas, complicated access roads can make getting to nearby hotels difficult).. Ottawa airport is extremely easy with a 5 minute shuttle to two existing hotels on the airport property. I also expect the uplands and south keys stations to eventually get nearby hotels over time that would take advantage of rail access.

For these reasons there is no business case for this hotel without panhandling at city hall.

[acottawa]

Originally Posted by roger1818

You are certainly entitled to your opinion, but I would rather have my taxes go up a few bucks a year to allow the city to subsidize YOW to allow them to encourage airlines to offer more flights (and maybe even make YOW a hub in the case of PD), reducing the chance that I will need to connect. Would I be correct in assuming, based on your name, that your priorates lie with only one airline though?

If that is what you want then why the needlessly complicated complicated step of a hotel of questionable use to anyone. Why not directly subsidize the airlines to add more flights?

[roger1818]

Originally Posted by acottawa

If that is what you want then why the needlessly complicated complicated step of a hotel of questionable use to anyone. Why not directly subsidize the airlines to add more flights?

I don't know, but if Ontario Law limits the city's ability to directly funding the airport, I suspect they wouldn't be allowed to directly fund airlines either.