ATHABASCA – A recent request for two years of property tax exemption from a local contracting company left the Town of Athabasca in a bind after councillors realized they didn’t have a policy in place for the request.
Lewis Semashkewich, president of local construction company Melewka Structures and Design, appeared as a delegation with his son John during the town’s May 21 council meeting. The duo are trying to build housing in the town and are seeking for help from council by asking them to forgive the property tax while the company renovates an existing business.
“Our goal is to totally revitalize the entire thing,” said Semashkewich, referring to the New Western Athabasca Inn. “We’re thinking 60-plus rooms that will offer one-to-three or even six-month rentals.”
Semashkewich said the plan is to turn the hotel into a short-term rental business while still maintaining the restaurant and lounge aspect.
Councillors immediately expressed their interest in the project, which would help address a transitional housing crisis that has been a consistent issue in the community, but not everyone was sure a tax exemption was the way to go about things.
“I think about the restrictions in the [Municipal Government Act], and the notions of tax equity and fairness,” said Coun. Sara Graling. "Ultimately, we do shift tax to another taxpayer when we make an exemption. This was a big thing to see on the agenda, but I do hope you have some understanding that it is going to take some work on our end and on our administrations end.”
Currently, the Town of Athabasca has a tax incentive policy in place for commercial business renovations, but nothing to address re-development. There’s no policy in place for tax exemption requests either, so councillors had to do their own research.
During the June 4 council meeting, Graling presented the City of Edmonton’s policy on tax exemption, noting that it was an “apples to oranges” comparison.
“I do think we have underutilized commercial spaces in our community, and I would love to see us look at strategy,” said Graling. “I’m not sure we have a great program in place to support that and to make sure we’re consistent.”
While her fellow councillors agreed that a broader strategy was needed, some felt it more important to get Lewis and his son John an answer before fleshing out all the other details.
“Whatever we decide to do moving forward, we need to make sure that it's nimble and can be acted on fairly quickly,” said Mayor Rob Balay. “We are going to be asked for a decision on that. I don’t want us to take six months to get an answer back.”
Business frustrations
While the town continues to work on a solution on its end, the Semashewichs have plowed ahead with the project on their own. In a June 6 interview, John Semashkewich, Melewka’s Chief Commercial Officer, said the firm hadn’t heard anything from the town since presenting, adding that Athabasca has never given them a “warm and fuzzy feeling.”
“We’ve done work in Melfort, Sask. and other places as well, and in these small rural communities, the town comes and gives a gift basket and says, ‘Wow, thanks for coming to our community and doing something,” said the younger Semashkewich. “In Athabasca, we always get pushback.”
Despite the lack of a warm and fuzzy reception, the father and son duo decided to go ahead with the purchase, which is expected to close June 10. John said the support from the town had initially been a condition of the purchase agreement but was dropped during the process.
“I’m a third generation Athabascan,” said John. “I don’t want the town to die. We have no housing, there are a lot of issues. (The Inn) is a beautiful building, but if someone takes it and makes it into another hotel, that doesn’t really help anything.”
He added the property currently comes with a tax bill of between $60,000 and $80,000 a year, although the company expects it to increase significantly after the project is finished.
“We’re just asking for the two years, but we’re going to raise the value of it exponentially,” said John. “And so, you’re going to be getting double that for 30 years to come … it’s a huge gain for generations to come.”
