Vote on $13M grant for proposed Ottawa airport hotel ends in tie; here's what happens next

Council to consider tax break for hotel A tie vote at committee means Ottawa city council will decide if a new hotel could receive a 25-year tax break. CTV's Tyler Fleming reports.

A vote at the Finance and Corporate Services Committee on a $13 million tax grant for a proposed hotel at the Ottawa airport ended in a tie.

Six councillors voted in favour of giving Germain Hotels a multi-year tax break on a proposed 180-room terminal hotel, while five councillors and the mayor voted against it. By way of protocol, a tie vote means the proposal will rise to council for consideration.

Mayor Mark Sutcliffe publicly stated on Monday that he would oppose the grant, which would be given under the Ottawa International Airport Community Improvement Plan (YOW CIP) that was approved by the previous term of council. Sutcliffe said he has heard repeatedly from residents that "they don't want their tax dollars going to these kinds of projects."

Speaking to councillors at committee Tuesday, Sutcliffe made the case that if a development is not approved today, it does not mean nothing will ever be built there.

"There are actually lots of scenarios in the next 25 years where some kind of development will happen on that site and we'll collect 100 per cent of the tax revenues," Sutcliffe said. "If, in the next 10 years, we saw development on the site, we would collect tax revenue and it would add up to more than $4.4 million."

That $4.4 million is the difference between the amount of tax revenue the develop would bring the city over 25 years minus the $13 million grant.

"I want to be clear, it is not because I don't support the airport. It's not because I don't believe in economic development. It is not because I don't support staff. It is because I don't believe in this type of funding model," Sutcliffe said.

Several business leaders who spoke at committee said they were in favour of giving the grant to build the hotel.

"The Ottawa Board of Trade supports the grant application for Germain Hotels under the YOW CIP," said board of trade president Sueling Ching. "Our business leaders have been long concerned with the support for our airport as a key economic driver for our region."

Ching said business owners have said a lack of direct flights to Ottawa hinder their ability to attract tourists, conferences and other customers.

Mark Laroche, president and CEO Ottawa International Airport Authority, told committee that investments in the airport are critical to making it competitive.

"St. Hubert airport (in Longueuil, Que.) just announced building a terminal of nine gates with a hotel, directly trying to capture traffic from eastern Canada. I do not want them to eat our lunch and take away the opportunity to be a hub," he said.

He says the Ottawa airport is at a significant geographical disadvantage, being close to the busier hubs of Toronto and Montreal. Adding a hotel, like other airports, would help bring more service to the capital.

"Hotel use is not a bad use. It's the choice of the airport. We're the one who went to the market to attract a hotel," he said. "If we want to play in the league of a hub airport, we have to have those amenities."

Hugo Germain, vice-president of operations for Germain Hotels, said if the grant were not approved, the company would need to re-evaluate its partnerships.

"An investment of this magnitude, $55 million, you can appreciate we're not doing this all in cash, we have a lender. That lender is entertaining this (the grant) as additional source of help to justify an investment," he said. "Getting them at the table required additional arguments and this was one of them."

Coun. Matthew Luloff said denying the grant would send the wrong message.

"Why would anyone apply for this if we shut down the first application that comes in front of us?" he asked. "What message does that send when we have an applicant who meets every criteria and we deny them?"

Coun. Laura Dudas, who is in favour of the grant, moved a motion asking that the expected $4.4 million in tax revenue that would be raised over 25 years by the construction of the hotel be directed to affordable housing for people in the shelter system.

"At this point in time, there's money on the table that we can designate to helping families in emergency shelters find housing," she said, noting that if the hotel is not built, the city naturally gets no tax revenue.

Her motion, however, was defeated on a tie vote.

The motion will be considered by council April 12.

HOW COUNCILLORS VOTED

Here is how councillors voted for the motion to provide the YOW CIP grant to the hotel project.

Matthew Luloff: Yes

Laura Dudas: Yes

Cathy Curry: Yes

Glen Gower: Yes

Tim Tierney: No

Rawlson King: Yes

Jeff Leiper: No

Riley Brockington: No

Shawn Menard: No

George Darouze: No

Catherine Kitts: Yes

Mark Sutcliffe: No