Student union accepts city plan to pay tax bill

Daniel
Daniel MacEachern
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Memorial University’s student union has accepted a payment plan from St. John’s that gives the union a break on taxes owed on the Breezeway Bar.

The Breezeway bar at Memorial University’s St. John’s campus Tuesday night.

Last week, the city’s finance committee approved a repayment scheme that would give the union some breathing space on its tax bill — including taxes for 2014, more than $388,000, going back about a decade.

Bob Bishop, the city’s deputy manager of financial management, offered 10 years to pay, a 50 per cent abatement of the interest currently owed and interest-free status on the outstanding amount.

On Tuesday, representatives of the student union met with city staff to discuss the plan, and the union’s director of finance said they’ve accepted it.

“We’re really pleased with the 50 per cent interest abatement, and 10 years (interest-free),” Travis Perry said Tuesday afternoon.

“We were sitting down to discuss what the payment allotments would look like for the next number of years. We’re quite confident that what we’ve come to agreement on won’t impact the services and the initiatives that the students’ union does undertake.”

The plan offered by the city reduces the union’s taxes owed to $204,07.58, which Perry said will be paid with annual instalments of about $11,000 for the first three years, allowing time for increased bar revenues to enable the union to pay the tax bill faster after that.

The union had requested tax-exempt status from the business realty tax for the future, but the city rejected it. It was a battle the union took to the Supreme Court — arguing that the student union should enjoy the same tax-exempt status the university does — and lost earlier this year (along with a subsequent appeal), but Perry said the union has conceded the fight and will pay its taxes.

“At this point in time, there’s no decision within the student union to take that any further,” he said. “We just want to work with the city to figure out that plan to pay back those taxes.”

Perry told the city the Breezeway Bar had a deficit of about $123,000 in 2013, but he’s confident the union will return the bar to profitability.

“The students’ union has, in the past number of years, taken steps to reduce the costs and increase the revenue at the bar, and we do plan on continuing to do that,” he said. “It’s mainly through introducing new products that the students want, and hosting events there that students do desire.”

Several factors have affected the bar’s finances, said Perry, including changing its location, shifting demographics at the university and competition from George Street. It’s also hamstrung, he said, by restrictions on advertising sponsorship not faced by other bars in the city.

“We have had time to regroup and figure out ways to combat those things,” he said.

“We have taken steps. We’ve reduced the deficit over the subsidy that we’ve put into the bar over the past number of years by more than $100,000, and we do plan on continuing the work that we’ve been doing to improve the service and make it a service that students are proud of.”

dmaceachern@thetelegram.com

Twitter: @TelegramDaniel

Organizations: Student union, Supreme Court

Geographic location: George Street

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