Tax break for Porsche dealership gets green light

After a week of commentary and criticism over the City of Ottawa's plan to offer a $2.9 million tax break toa future Porsche dealership, council approved the community improvement grant Wednesday in a 15-to-9 vote.

The Mrak family, owners of Mark Motors, are the first toapply under the city's two-year-old program aimed at revitalizingthe Vanier neighbourhood's main street. The ownerswantto redevelop two existing luxury car dealerships into a "flagship" Porsche store, and staff said it would provide a "gateway" toMontreal Road.

Even though council members' email accounts were flooded with comments and some residents gathered at the site on the eve of the vote in protest, Mayor Jim Watson hasn't wavered in his support for the applicationor forcommunity improvement plans generally.

• Committee supports $2.9M tax break for Porsche dealership

Watson maintains the arrangement would bringin an extra $1 million over 10 years, once the redevelopment causes the site's property taxes to soar and the city returns75 per cent to the Mraks under the program.

"I'm optimistic that this is going to kickstart other people to invest on Montreal Road," he said.

Council debated a flurry of motions and raised several questions about the Porsche grant, including whether it could have located somewhere else in the city.

Some councillors voted against the grant, saying the dealership didn't prove it meets the program's criteria, which requirea project meet a need for "urban renewal" and clearly demonstrates it "would not otherwise proceed in the absence of the incentive."

Others, however, said the tax break would nothave attracted the attention it did ifnot for the Porsche brand. West Carleton-March Coun. Eli El-Chantiryoffered his apologies to the Mrak familyfor what he called the "shenanigans" of the past week.

"They've been through the mud on this file only because they're requesting something we've already given to other businesses," he said.

Money for affordable housing

Watson added a twist to the debate by moving to committhe extra taxes to affordable housing. He touted $6 million overall would go toward housing, with $5 million of that expectedafter thegrant period elapses,more than a decade from now.

Yet, a handful ofcouncillors, including housing liaison Catherine McKenney, didn'tbuy the commitment. Kitchissippi's Jeff Leiper called it "messy" and "political," while Gloucester-Southgate's Diane Deans called it "smoke and mirrors".

"I find tying the affordable housing crisis in the Cityof Ottawa to a grant to a luxury car dealership to be cynical, disingenuous, insincere, and a crass, politically-motivated move," said Deans.

The city clerk said the current council couldn't bind a future one to spending the money on housing, however,council approved Watson's motion 18to 5 anyway.

Watson called it "unfortunate" that councillors who typically support affordable housing would vote against his "innovative" way of finding a funding source for it.

Cost-benefit analysis in 2023

Some councillorssaid they felt the issue was bigger than a single application on Montreal Road.

Rideau-Rockcliffe Coun.Rawlson King, whose ward encompasses where the dealership will be located, askedstaff to do a cost-benefit analysis of the city's five community improvement plans, but the city manager said staff had their hands full in the remaining year before election campaigns begin.

Instead, council voted18-to-5 to push that analysisto 2023, after the next municipal election.

In the meantime, more applications are expected to come in for similar tax breaks, especially as the city is planning a relaunch of its community improvement plans in Orlans.

Watson sees the financial incentivesas successes and called the one thatled to a $2.3 million tax break for a new Hyatt hotel inBells Corners the"gold standard."

Yet, he also saidthe city should hold off targeting new parts of Ottawa for financial incentives becausethey will lose their effect if there are too many.