Property Taxes Bite Vancouver Store Owners

CBCNews is reporting Vancouver residential property tax up 3 per cent in 2008.

Vancouver city council approved a one per cent property tax increase for 2008 on Tuesday evening, but homeowners will pay a three percent increase following a tax redistribution from businesses to homeowners.

Opposition councillors were quick to point out the tax increase for 2009 could be much higher.

Vision Vancouver Coun. Raymond Louie said last year's municipal strike saved the city millions of dollars, and the full cost of expanding Vancouver's police force won't be felt until next year.

"We're talking about potentially an 11 per cent tax increase right out of the gates [in 2009]," said Louie.

This year's modest one per cent overall tax increase is part of the governing Non-Partisan Association's campaign to get re-elected in November, while keeping the bigger increase for 2009, said Louie.

Some of the comments are pretty funny. Here is one from Sandy who writes:

Let's not forget the additional windfall they get from the inflated property values in Vancouver, where a dump of a house which should be worth $300,000 has an assessed value of $1,500,000 (but where the homeowner's income hasn't gone up by a factor of five to match). Throw in the savings from the strike last year, and it's another City of Vancouver rip-off.

If this "moderate" tax increase is supposed to encourage us to vote for the NPA, I don't think it will work. However, people in Vancouver will believe anything and vote for anyone - like the gullible idiots who obediently "backed the bid" when our corporate masters bought that fake Olympic referendum a few years back. Truly, anything is possible in the Most Liveable City on Earth.

Olympic Casualty

Matt pinged me with this email about a casualty of the 2010 Olympics.

Hi Mish,

Thought I'd pass on this new little juicy tidbit of info from Vancouver, BC.

I was just in Rona, which the big competition for Home Depot here in Canada. This is a brand new store in a brand new commercial development that opened in late 2005, and is now closing at the end of June. Why? Because property taxes have skyrocketed over four hundred percent. Yes that's right over 400%! Why so much of an increase? To pay for the brand new Olympic Speed Skating Oval less than a mile down the road!

After talking to a few of the employees, who were concerned about where they were going to be working, some told me that there are more stores closing in the area due to the increase in tax as well.

Oh well, I guess the City of Richmond can just increase taxes on the remaining businesses again to make up for the shortfall.

Anyways here's a link to their Grand Opening Flyer:

Oh yeah, and perhaps the most ironic thing is, they are a "Proud Sponsor of the 2010 Olympic Games!" See page 4 in the above link. I wonder if they are still proud 2 1/2 years later?

Matt
Vancouver, BC

Forced Out By Property Taxes

With that tip from Matt it did not take long to find this article: Rona store owner Forced out by the Olympics.

Two years ago Mack Foster faced a huge decision. His 20-year lease on the building of his Rona store at 7111 Elmbridge Way was about to expire.

He could shut down his longtime business, move to a new Rona store in Bridgeport or renew his lease. He encouraged his two sons to take greater control of the business and to give it stability, he signed a new 10-year lease for what he believed to be a superior location.

�Let me tell you, if I had forward sight, if I had realized this, I would have never re-signed my lease,� said Foster, 64. Like dozens of other businesses in a light industrial zone near the oval, Foster is facing massive property tax hikes resulting from skyrocketing real estate values.

As a leaseholder and not a landowner, Foster is on the hook for rising property taxes each year and will never see a benefit in the rising price of real estate. And with a lease that�s locked until 2015, he�s stuck between �a rock and a hard place.�

Last year, his tax increase was $29,951, but this year, the increase is $207,029. Foster is trying to stay positive and cut expenses wherever he can to stay in business.

�It�s almost so bad there has to be a solution. No business can sustain this kind of situation,� he said. �Some of the businesses will disappear this year, some will disappear next year. But all of them will disappear in three years.�

Michael Bailey, owner of Lang�s Glass at 5871 Minoru Blvd., said he�s expecting his tax bill to inflate from approximately $8,000 to $24,000 this year.

Roy Van Hest owns the Art Knapp Plantland on Minoru Boulevard at Alderbridge Way with his family. When his store opened in 2005, his tax bill was $59,625. He estimates his 2008 bill will be $269,070.

�There�s no way that we can stomach it. Basically my taxes will be 400 per cent greater than they were three years ago.�

Robert McCullough, senior property manager for properties in the area owned by Richmond Holdings Ltd., said it�s not unusual to see 100 to 200 per cent increases in taxes this year. McCullough predicts the neighbourhood will become �an empty industrial ghetto� before 2010 on the doorstep to the Olympic oval, made worse by criminals arriving by Canada Line.

Fallout from the Olympic crash is going to be enormous and it's starting already. What an incredible waste of money for a onetime event. Legitimate businesses and taxpayers are getting the shaft, while concessionaires selling corn dogs, trinkets and other Olympic junk will likely make out like bandits.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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