Councillors sour on $10K condo incentive plan

FourWinnipeg city councillors are having second thoughts about offering a $10,000 incentiveto peoplewho buy acondo in the Exchange or Waterfront districts.

The plan, passed last week by council, calls for a "forgivable loan"that would not need to be repaid if people stayed for at least five years in their new condo.

• City of Winnipeg to offer $10K to Exchange condo buyers
• BLOG | Condo incentives, if you pay them will they come?

Councillors Scott Fielding,Jeff Browaty,Jenny Gerbasi and Harvey Smithwere among the vast majority of councillors who voted in favour of the plan last week, butthey are nowreconsidering.

Fielding said his decision was based primarily due to backlash since the plan was passed.

"We heard from our constituents pretty clearly that they don't think that's fair, that they are hard working people and if you have a house in St. James or Fort Garry, anywhere throughout the city, there shouldn't be an incentive just to live downtown,"he said.

He hopes the city takes a "sober second look" at the plan, which isexpected to cost $2.5 million.

Browaty told CBC News that he also wants to revisit it, while Gerbasi and Smith said theymisunderstood exactly what the plan called for.

"It was a pretty hefty council agenda. This one, I think, really did get by us," said Browaty, who added he thinks there are other ways to get people downtown.

The loan was presented to councilas a way to attract residents and re-ignite interest in the Exchange/Waterfront area and by doing so, try to keep developers from abandoning plans for further projects.

The report, which went to council on July 17,outlined concerns that developers were starting toreconsider investing in those areas any further.

"The first units under the DRDGP (Downtown Residential Development Strategy) came onto the market in late 2011 and have been marketed through 2012. Unit sales since inception have been lower than expected with many completed units remaining vacant and the development community is skeptical about further investment," according to the report.

"A result is that six additional projects approved under the DRDGP may not proceed."

Smith said he reviewed the report but didnt fully understand it.

"The housing committee was for it. Jenny Gerbasi chairs that committee so she was for it, and I looked at that -- I couldnt figure it out. I just went along with it," said Smith.

Gerbasi now says she is withdrawing her support for the program because shes not sure where the incentive money will come from.

Qualicos Streetside Development Corporation isnt happy about the news. Marty Maykut, the manager of the company, said the $10,000 meant the company saw an uptick in business.

"Today were concerned. We had a lot of activity and interest over the weekend with the announcement of the program," said Maykut. "From having the good news last week and the potential bad news this week, it is disappointing."

Councillors Brian Mayes and John Orlikow originally voted against the plan at council, with Orlikow saying the city is further subsidizing buildings it has already subsidized through various incentive grants.

"I personally believe if the market isnt there then those developers have to lower their price," said Orlikow.

Smith said he wants to meet with city planners and Centre-Venture, a downtown development corporation, to discuss his concerns with the plan.

"Theres no mention about the cost of these condos. Theres no mention of affordable housing," he said.

City council will likely get a chance to revisit the issue in the fall, as the program cant be fully implemented until a new bylaw is passed.