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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/