Developers could soon have some big reasons to build in the city, thanks to a proposed development incentives policy currently before city council.

The proposal was unveiled at a news conference Monday afternoon and discussed at city council's standing committee last night.

"The policy essentially proposes that the city will grant back taxes for the improvements made to properties that provide housing and redevelopment in strategic locations,” said Mike Gau, the city's manager of planning and development.

The proposed policy offers three levels – minor, standard and major – depending on the development.

Minor developments such as living or garden suites will be eligible for up to $10,000 over five years. The grant will drop by 20 per cent annually.

The incentive is meant to encourage the creation of rental or family units.

"Ten thousand dollars to assist in the development of a living suite, for example, may make the difference for a home owner to add that unit,” Gau said. "And that's a key objective and goal, to have these units provided throughout the city.”

Garden or living suites fit into the city's sustainability and densification plans, Gau said, as they do not take up vacant land or green space.

Standard developments, including multi-family or supportive housing downtown, or mixed use developments in neighbourhood commercial zones, will be eligible for up to $50,000 over 10 years, decreasing by 10 per cent annually.

The goal is to encourage private developers to create rental units and condos, Gau said.

The major development incentive will provide up to $500,000 over 10 years. Both new developments and alterations will be eligible, but the project will have to have a minimum construction value of $1 million.

Several different types of projects will be eligible for the major incentive, including mixed use or multifamily developments on 22 sites the city has designated as being "high priority” for redevelopment.

The sites have been identified in other planning documents, such as the Downtown Plan, because of their location, size and potential. They include the former Canadian Tire building on Ogilvie Street, underutilized buildings and vacant lots throughout downtown.

The planning department has called the owners of all of the "high priority” sites, making contact with about three-quarters, Gau said.

"I would say there's been 100 per cent positive response,” he said, adding that the owners will be sent a copy of the proposed policy.

Other projects which could be eligible for the major incentive grants would be a parkade building that incorporated another use, a development with a minimum of 10 rental units that would be used as such for a minimum of 10 years, or a development with a minimum of 10 supportive housing units to be owned and operated by a registered non-profit organization.

Development incentives have been requested for a while now, Gau said. Suggestions included getting rid of tipping fees or the costs associated with building permits.

The proposed incentives would come as tax grants. The city would continue to collect taxes on the land, but any tax revenue resulting from the development will be granted back after taxes have been paid.

"We looked for something simple and significant,” Gau said of the decision to offer tax incentives.

By going the tax grant route, the city also avoids losing revenue.

"We've looked at the tax incentive route to provide the incentive desired without impacting the taxpayers,” Gau explained.

"We're not collecting these taxes now and, in fact, this should spur economic development to increase taxes once the incentive period expires.”

At last night's council meeting, response to the proposal was generally positive, though several individuals had suggestions for improvement.

Samson Hartland, an ex-councillor and the executive assistant with the Whitehorse Chamber of Commerce, said the chamber is "encouraged” by the city's proposal, but wants to see redevelopment and revitalization policies as well to encourage businesses to upgrade their properties. The result would be a better-looking and more vibrant downtown, he said.

Coun. Doug Graham said he doesn't agree with development incentives in general.

"I feel that if a developer can't develop in downtown Whitehorse in the current economic climate, then they shouldn't call themselves developers and they should get out of the business altogether,” he said.

However, he added that he supports "most” of the proposed policy because it wouldn't take tax money away from the city and would help accelerate redevelopment and improve the city's housing stock.

He does want to see a disincentive policy as well, however.

"I believe there are buildings in downtown Whitehorse where owners find it's cheaper to keep the building empty in order to lessen competition to their own current building,” he said.

"And I don't think we should be including them in this list of 22 areas this policy will apply to.”

Graham would like to have a policy that makes it more expensive for such owners to keep their currently underutilized buildings empty.

Mayor Bev Buckway said she would like to see a timeframe for re-evaluating the policy included.

"There might be a need at this time to see some areas redeveloped, but five years down the road, that might not be the case,” she said.

The proposed development incentive policy will come back to council's regular meeting next Monday.