KITCHENER — Incentives for development in Kitchener's downtown core will be extended a few blocks in an effort to aid the ailing east end.

But there is a catch — councillors voted Monday night not to extend the boundary to Betzner Avenue until 2016.

Development charge exemptions throughout the core will come to an end in 2019.

The exemptions from the development charges that are typically assessed when building permits are issued have helped to fuel a building boom in downtown Kitchener in recent years, particularly at the western end.

Some councillors and developers wanted to see the boundary extended past Cedar Street in an effort to spur projects near the Kitchener Market.

"It hasn't been treated equally," Coun. Dan Glenn-Graham said of the area. "It needs that boost in the arm."

Representatives for Fusion Homes, which wants to build a series of residential and commercial buildings on a block bounded by King Street East, Madison Avenue, and Charles and Cameron streets, told council their project could be stalled for five to ten years if the incentives weren't extended to include their property.

Fusion would have "no other option but to postpone development," Paul Puopolo told council.

But Mayor Carl Zehr warned that such an extension could be viewed as unfair by other developers.

"We would be moving the goalposts," he said. "This property was purchased with the knowledge that these incentives were not available."

Coun. Scott Davey said his suggestion to hold off until 2016 before expanding the boundary would address those concerns about fairness.

That suggestion was ultimately adopted by council. It wasn't clear Monday night whether the decision to postpone the boundary expansion until 2016 would have an impact on Fusion's plans.

Last week, council also heard from representatives from Ray of Hope, which owns a property currently on the market in the King Street, Charles Street and Stirling Avenue area.

Concerns were again raised Monday by those representatives that a lack of development incentives could affect the potential sale of the property.

But councillors didn't have an appetite to extend the boundary any further than Betzner Avenue.

By the time the incentives come to an end in 2019, the region's light rail transit system will be up and running. City staff said these development incentives shouldn't be required beyond that point.

bdavis@therecord.com