Mine wants a tax break
Property taxes at Giant could be cut to make Miramar deal
NNSL (Sep 29/99) - In a year when property taxes have increased on every other property in the city, they may soon go down at Giant Mine.
Though Miramar Mining Inc.'s bid to buy Giant Mine has yet to be finalized, a reduction or elimination of property taxes for Giant Mine is one of the issues now on the bargaining table.
"In any deal like this all of the parties are going to have to make sacrifices," said Indian Affairs and Northern Development official Dave Nutter.
"It's an issue that's been raised, but it hasn't been settled," said Nutter.
Nutter said the federal government has no control over city property taxes and that no reduction in taxes would be offered without the involvement and consent of the city.
That involvement began Friday, when Mayor Dave Lovell met with two Miramar representatives.
Lovell said Miramar is looking for a break or elimination of taxes for Giant. The argument they advanced, he said, was that even without property taxes it would be better for the city if Miramar operated the mine than if no company took over.
"It's all real," the mayor said of the points Miramar representatives made.
"What city council has to do is look at the potential costs and weigh them against the potential benefits."
Lovell said he told the Miramar representatives to write a proposal for council to consider.
"What I told them, basically, is 'What are you going to do for us?'"
The sharp rise in the price of gold this week sparked a jump in the value of Miramar stock. On Sept. 23 it closed at 83 cents a share. Yesterday morning it was trading at $1.02.
One of the arrangements being considered is to have Miramar spend money they may have saved in taxes on exploration to extend the life of Giant or Con mine.
At the time it went into receivership, Royal Oak owed the city an estimated $893,000 in back taxes for Giant Mine.
When it was paying, only two companies -- Miramar ($1.1 million) and Bellanca Developments ($780,000) -- contributed more to city coffers. Property and school taxes for the Giant were $738,000 annually.
Councillors were reluctant to comment on the issue of Giant's taxes until the proposal was presented.
"My whole thing is cautious paranoia until I have the details," said Robert Slaven of the requested property tax reduction. "But at this point nothing would surprise me."
A controversial 3.7 per cent property tax hike council approved this year was prompted in part by the loss of tax revenue for the Giant property.
Nutter said he anticipates the deal for Giant will be finalized in the first half of October.
A call Wednesday to the office of Miramar vice-president Brian Labadie was not returned by press time.