The Stephenville Dymond International Airport, purchased last summer by an entrepreneur promising to build giant futuristic drones and create hundreds of jobs, is in talks with the town council to slash a hefty tax bill.
The Ottawa-based Dymond Group, owner of the western Newfoundland airport since last August, hopes to pay the Town of Stephenville a grant in lieu of taxes — a payment that would be a fraction of the yearly tax revenues that have been touted by Stephenville Mayor Tom Rose.
In 2022 and early 2023 — while the deal remained up in the air — Rose indicated on several occasions that the town would receive about a quarter of a million dollars a year in tax once the airport was sold.
However, in an interview last week with Radio-Canada, Rose said, "Normally, with big infrastructure like ports and airports, instead of getting a full tax regime, you tend to get a grant in lieu of taxes."
Rose said the payment in lieu of taxes will likely be between $50,000 and $100,000 a year. He added that similar agreements are in place with other airports in the province. Negotiations are scheduled for later this month, he said.
Stephenville Dymond International Airport CEO Lew Short said the airport has made a proposal to the town but wouldn't provide further details.
Tax break would help upgrade airport, says CEO
"I think a lot of people have a misunderstanding of that whole process," Short said. "We're basically requesting a tax break. So that tax break enables us to put more into the infrastructure because we are improving the infrastructure of the airport."
How long would the tax break last? Short said that's up to the town.
Rose said the grant would be renegotiated over time.
"When a company's coming in to say, 'We're going to outlay this capital, we got to grow the airport, we got to attract the airlines,' we got to get things moving."
Stephenville Mayor Tom Rose says talks are underway to allow the new owners of the airport to pay a grant in lieu of taxes to the town. (Patrick Butler/Radio-Canada)
The mayor cited Deer Lake as a precedent for such an arrangement, saying council there receives a grant of only $50,000 per year.
Rose said the council will vote publicly on any deal.
Stephenville has struggled to retain scheduled commercial flights for years, with no airlines currently providing regular service. The town council has funnelled significant tax dollars to the airport in the past — before the new owners took over — to keep the operation on life support.
Short said about 15 people currently work at the airport, clearing the runways and maintaining the building for the few medical and private flights that land at the sleepy facility. Inside the terminal, former car rental counters have been transformed into a showcase for local taxidermy.
Short said lighting upgrades are underway at the airport and that once Dymond took possession, all employees received a $10-per-hour pay raise.
Scheduled passenger flights by the end of the year?
Last month, the new owners said scheduled passenger flights will return to the airport by the end of 2024. Short said discussions are happening with airlines but wouldn't provide further details.
Dymond has promised to build a state-of-the-art production facility where his company will fabricate 25-metre-long drones. He has also promised hundreds of jobs and hundreds of millions in investments, using private-sector cash.
Short said he didn't want to comment on the plan for drone production.
Lew Short, CEO of the Stephenville Dymond International Airport, says the airport has made a proposal to the town but wouldn't provide further details. (Patrick Butler/Radio-Canada)
"My focus today is trying to get this airport running and I haven't really had those discussions with Mr. Dymond," he said. "My focus here is let's get this place ready to receive traffic and scheduled flights and let's move forward."
Rose told Radio-Canada last week that Stephenville's former paper mill, closed by Abitibi Consolidated in 2005, also paid a grant in lieu of taxes and that World Energy GH2's wind-to-hydrogen-to-ammonia project would be granted similar tax relief.
"When World Energy gets the hydrogen plant up and running and they start shipping ammonia, start making money, we will negotiate a grant in lieu of taxes with World Energy on the port and hydrogen plant, just like we would do at the airport," Rose said.