Is Concord getting a sweet deal on Creekside taxes?
Recent stories by Courier reporter Mike Howell have questioned why the city has not appealed an apparently low assessment on land Concord Pacific is required to deliver as a park to complete development of the north shore of False Creek.
In response to his queries, forwarded to staff by Mayor Gregor Robertson and several councillors, the city’s chief financial officer Patrice Impey today circulated a memo to council. The key points:
• Assessment and classification of real properties in BC is within the Assessment Authority’s legislative mandate. The City does not undertake assessments; it relies on the values established by BCA in accordance with the Assessment Act and appropriate principles of valuation. There are over 185,000 folios on the City’s assessment roll. It is not the City’s standard practice nor within its expertise to review and challenge the valuations provided by BCA and assessment methodologies for each folio.
• Generally speaking, BCA would not establish a property value if it does not have reasonable certainty that the value, as well as the methodology based on which the value is established, would stand in the court of law. In fact, the percentage of successful appeals on property assessment has been low relative to the size of the assessment base.
• With respect to the subject property (assessed value: 2009 – $192,000, 2010 – $400,000), BCA’s assessment was primarily based on its current zoning and the complex legal arrangements between the City and Concord related to the entire Concord site. These agreements obligate Concord to deliver a park on the subject site at an estimated cost of $17M to $20M and then turn it over to the City. From an assessment perspective, the property is highly encumbered with very limited use and development potential. In other words, any “fair market value” for this site would have to take into consideration the $17M to $20M outstanding obligations.
• Factoring in legal encumbrances in the valuation of a property is standard assessment practice in BC. The same principles are applied to all property in the province. Similar circumstances were applied to Woodward’s prior to its redevelopment. Some examples of legal encumbrances include: no development covenant, option to purchase by the City, developer required to donate density, restricted use as non-market housing, etc.
• In establishing the property value, the Assessment Act and standard assessment practice do not take into consideration any temporary uses (like Cirque or the Olympics) and revenues generated from these uses on site during the year as long as the use is not predominant and does not form the highest and best use for the property. Pursuant to the Assessment Act, the Concord property has had no commercial uses as of October 31, 2009 when “actual use” for assessment purposes is determined.
• Despite the public perception on the value of this property, staff is not certain what legal basis the City would argue in any appeal. In any case, the deadlines for appealing this value for 2010 have passed.