Uptown Saint John Inc. has formally asked the city to set aside $400,000 to reinstate a successful development grant from the 1990s.
The infill grant program for residential development helped fund construction of dozens of residential buildings in the central peninsula and lower west side, by offering grants to developers to build on vacant inner city lots.
Builders were given up to $7,500 for each new unit, based on the increase in assessed value of the property. The more tax money a property earns for the city, the bigger the cheque for developers.
Peter Asimakos, general manager of the business group, said there is no shortage of available space in the uptown area.
"It is a shocking figure," he said. "Since 1981 to 2006, 940 dwellings in the uptown were eliminated. And that was largely due to fires and neglect of buildings."
Asimakos said that could be turned around with the right encouragement. He said with the added property tax revenue, the city would get its investment back in three to four years.
Grant program eliminates risk, says developer
Peter Pappas, a Saint John real estate broker and developer, used the program to build 10 units in two city neighbourhoods.
He said reviving the program could jump-start new development in core areas of Saint John, where residential construction has slowed, and could lead to the construction of dozens of new buildings.
"That's a healthy incentive to go ahead and do a property … If there was ever a time for it to be reinstated it would be now for sure," he said.
"I think it eliminates a lot of the risk in this current market — I mean you could literally sell your building for cost and still make a profit. And so would the city."
Pappas said the incentive would also bring new customers to the water and sewage departments, and Saint John Energy at very little cost because the infrastructure is already in place.
"When the market's tough, as it is now, that could really be the incentive that anybody would require to go ahead and develop a vacant lot in any one of our peninsulas," he said.
“It eliminated the risk for any development in these older areas. If you’re getting 15 per cent of your project back, or up to a maximum of it, really, it eliminated the risk.
"You were willing to take those chances in those areas.”
The request to revive the grant program will be considered by city council on Tuesday.