City and Business Community Address Vacancy Allowance Issue

The City of St. John’s has identified measures to tighten up the vacancy allowance procedure through collaboration with representatives of the local business community.

“We have been meeting with representatives of our business community since January on the vacancy allowance and other concerns related to the economy and our budget,” explained Deputy Mayor Ron Ellsworth. “These meetings have been very cooperative, and I’m pleased to say that we have identified measures to improve the vacancy allowance application process and reduce ‘red tape’ and delays which have been ongoing concerns for property owners.”

The vacancy allowance system will remain in place with added limitations on claim eligibility, including:

• Increased documentation from the property to support the validity of the claim
• Eligibility will only be approved when the space has been vacant for a full quarter (January – March; April – June; July – September; October – December)
• Claims will no longer be retroactive; only the most recent and prior quarter can be claimed
• Property owners can only claim for one quarter if the tenant does not pay rent or is subject to bankruptcy proceedings
• Claims will no longer be permitted for rent-free periods, offered as an incentive for long-term leases

"The initial proposal to end the vacancy allowance came from the City's efforts to find cost savings in our 2016-18 budget," said Councillor Galgay, Chair of the Standing Committee on Finance and Administration. "The agreement to modify but still retain the allowance means we will not achieve the forecast $5.5 million in revenue. We will get a better sense of how to recoup this shortfall as we implement the new allowance, conduct our program review, and partner with the business community to find new revenues."

"The continuation of the vacancy allowance helps create a good climate for business to invest," said Des Whelan, Chair of the St. John's Board of Trade. "When the City and the business community work together we can accomplish great things for the residents of St. John’s.”

“We've been quite pleased with the City’s willingness to engage and co-operate with the small business community. We feel effective consultation has resulted in the progress made on the vacancy allowance issue,” said Vaughn Hammond, the Director of Provincial Affairs for the Canadian Federation of Independent Business (CFIB) in Newfoundland and Labrador. “We're looking forward to this ongoing collaboration with the City to address the many important issues affecting small business owners.”

Media Contact:
Kelly Maguire
Media Relations
City of St. John's
709-576-8491
kmaguire@stjohns.ca