Developer who created big Saint John hole wants N.B. to cut tax to spur construction

Developer Percy Wilbur says a lack of help from the provincial government has been a roadblock to moving forward with his project on King Street in uptown Saint John.

The site of the former Woolworth's building across from King's Square has been a vacant hole for more than three years, since Wilbur tore down the existing building in 2021.

He has been facing increasing pressure from the public to fill the empty site with a building or even just a park. He says he is planning to move forward with a project but that he has struggled with finding a commercial tenant as an anchor for the property.

"One of the key things at this point is trying to get the province to help out with some incentives, Wilbur said.

"Most of the other provinces have dropped the PST to incentivize developers and homeowners to build. For some reason, unbeknownst to me, the premier is just not doing anything to help this."

Last September, the federal government removed the GST from the construction of new rental apartments to spur development. Federal Housing Minister Sean Fraser wrote to provincial housing ministers across the country asking them to follow suit.

Since then, some provinces, such as Ontario, have made commitments to eliminating provincial sales tax from new rental construction. Nova Scotia, Newfoundland and Labrador and Prince Edward Island all announced the elimination of their portion of the tax last fall, following the federal announcement.

Willy Scholten, president of the New Brunswick Apartment Owners Association, said that according to the group's information, New Brunswick is not following suit. And he said that has an affect on development.

"We completely understand why developers are delaying much-needed projects. They are hoping the province fixes taxation," Scholten said in an emailed statement.

He said his group is already hearing from some members that they are moving their development activities out of the province.

CBC News reached out to the provincial Department of Finance and Treasury to ask if there are plans to eliminate provincial sales tax on housing development.

Department spokesperson Mir Hyder responded in an email, saying that rental construction in the province is consistently running near record levels and that there is limited capacity for further increases in construction in the short term.

The statement said that, following analysis by government, it isn't clear that rebating the provincial portion of the HST for developers of purpose-built rental properties would result in benefits to tenants, such as lower, more affordable rents.

Fencing to be updated

Meanwhile, at a recent city growth committee meeting, the developer said there will be upgraded fencing around the empty lot.

"We agreed to straighten out the fencing and put some filter fabric up so that it's not so visible inside the hole," said Wilbur.

And plans are still moving forward to develop the site.

"Our design has changed because one of the tenants has since pulled out. So we've had to redesign the building," Wilbur said.

"We now have a new design that we're working on, and we are bringing it forward. So I would expect that in the next couple of months, you will see some activity on-site."

Wilbur said that he hopes to have "boots on the ground" soon and expects the project to have started by the fall. 

"From the time we start construction it's a pretty solid two years to 30 months [until completion]," he said.

'It's not much,' says local business owner

Billy Grant, who owns a Billy's Seafood Company, which sits right next door to the hole, said the empty lot and the lack of sidewalk has impacted his business. He says that while the fencing "isn't much," it is something.

"It's still not going to help anything. I mean, it will stop people throwing garbage in and so on, and maybe it'll look better," he said.

Wilbur did not comment on how the empty lot affected surrounding businesses when asked. But he said he understood the public's concerns.

"I understand the concerns that the public has with it being a bit of an eyesore," he said.

"I bought it with the intention of fixing up an eyesore and doing something good and meaningful there but then COVID-19 struck and, and it kind of changed the game quite drastically by raising interest rates and the labour shortages meant increased in labour costs and interest rates, material costs — everything just went through the roof."