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Germain Hotels Application for YOW CIP Grant to Rise to City Council for Consideration

On April 4th, 2023, Ottawa Board of Trade President & CEO appeared in front of the Finance & Corporate Services Committee to support Germain Hotels application for an Ottawa International Airport Community Improvement Plan (CIP) grant.

That application was denied by the Committee and will now rise to the City Council on April 12, 2023 for further consideration.  

While we recognize the need for the city to meet its due diligence obligations, the OBOT shares the disappointment of other key economic partners in today’s result but are hopeful that the application will be studied further and that a different outcome could result.

“This project is an opportunity for the city to show its commitment to a growth agenda and to tell investors that our city is committed to working with the private sector on projects that drive affordable, inclusive, and sustainable city building and community prosperity,” says Sueling Ching.  

“This is precisely the type of investment that is needed to ensure that our National Capital Region remains competitive in this new reality, where other cities all over the world are investing heavily in their post pandemic recovery plans," explains Ching.  “We should capitalize on this opportunity to create new, ongoing tax revenue, new jobs, a new amenity that is needed in our city and that will create significant economic spinoffs.”  

As we continue to work with our economic partners and the City to identify and pursue new economic development and city building opportunities, we hope that City Council will seriously consider approving this application to send a strong message of confidence for our city and its economic growth.

For more information on why the Ottawa Board of Trade is in support of this grant application, please see our Letter of Support.

Key highlights from the April 4, 2023 City of Ottawa Finance & Corporate Services Committee meeting

Presentation by Economic Development Services Planning, Real Estate and Economic Development staff: David Wise, Chris Cope, Cindy VanBuskirk. 

About the YOW Community Improvement Program  

  • enacted July 2, 2022 as a response to pandemic impacts on airport operations (including the suspension & cancellation of development projects) 

  • would provide tax increment equivalent grants (TIEGs) which are calculated based on a portion (75%) of increase in contribution to property taxes resulting from new assessments created through development. 

  • Grants are capped at the lessor of 100% of eligible costs or $25 million paid over 25 years. 

  • The availability of the airport CIP makes the area more attractive to private sector investment. Investments generate new lease revenue for airport operations, improvements to passenger experience and support air service development.  

  • Additional economic benefits would result in construction, employment, new LRT ridership and more. 

  • Mr Cope stated: “It is important to be very clear; the CIP program grants are not funded by taxpayers. CIP programs are self-funded. There is never a choice to be made between providing a CIP grant or funding another priority. If there is no CIP incentivized project, there is no new incremental tax revenue, and therefore, no CIP grant. 

  • Mr. Cope also stated: “Another point of clarification; CIP grants are provided annually over the duration of the grant period. And only after annual property taxes are paid in full. Payment of property taxes occurs only after a project has been completed and has been assessed by MPAC and no CIP grants funds are provided in advance of project completion nor is the total value of the CIP incentive provided all at once.  

About the Germain Hotel Application  

  • 8 story hotel, 180-room hotel, directly connected to airport.  

  • Project was abandoned in fall of 2021, after projected costs rose by 30% vs pre-pandemic 

  • In Summer 2022, the YOW Community Improvement Program was enacted as a response to pandemic impacts on airport operations and Germain Hotels determined the project would be viable with YOW CIP grant. 

  • Staff reviewed the application and deemed it to be complete and to have met all the requirements of the CIP program. 

By the Numbers:  

  • Property assessment at project completion is currently estimated at: $19.8M 

  • Municipal portion of property tax in YEAR 1 (currently estimated as 2025): $393,796 

  • Municipal property tax increase over 25 years: $17.5M 

  • Over 25 years: the City would retain $4.4M in property taxes and Germain Hotels would benefit from a $13.1M in the form of a grant which would be provided annually, and only after annual property taxes are paid in full 

  • Other direct economic benefits:  

    • $30M in locally supplied materials 

    • $3.7M in city permits in fees 

    • 50 new full-time jobs anticipated at hotel opening 

Economic Implications
Cindy VanBuskirk highlighted that "the proposed investment by Germain Hotels supports the airport's designation as a special economic district in the city's new official plan." She also explained that "the project would generate some much-needed momentum and signal confidence in the local economy and facilitate opportunities for the airport to grow as a commercial and employment hub for other aviation dependent and related companies."
Delegations of support
Before deliberations, committee members heard delegations of support from The Ottawa Board of Trade, Ottawa Tourism, International Airport Authority Ottawa and Germain Hotels.