A small strip mall adjacent to the Capstan Village area is facing an extraordinary property tax hike that threatens the viability of several mom-and-pop shops and restaurants, according to its property manager.
“They’re ready to lynch me because I never saw this coming,” explained Dave Jackson of the sentiments reverberating throughout the small mall he manages at the southeast corner of Garden City Road and Capstan Way.
The mall’s owner was handed an $18,556 tax hike over last year — a 26-per-cent increase — from $69,719 to $88,275.
The extra bill will need to be divided amongst the six establishments, which includes four restaurants and an insurance agency.
Jackson explained that, in his 40 years in property management, he’s never seen “common expenses,” which include property taxes, increase more than the base rent in such a drastic manner.
“It used to be that common expenses in commercial properties were 25 to 30 per cent of base rent. Now the common expenses are in excess of 100 per cent of the base rent,” said Jackson.
Jackson questions where all the money is going at city hall.
“They’ve got all this revenue. I don’t know what they’re doing with it,” said Jackson.
In a reply to his queries, City of Richmond’s revenue manager Ivy Wong explained that the property’s taxes shot up so dramatically because taxes are based on BC Assessment’s valuation and for 2017, the property was valued 47 per cent more than in 2016 (from $5.1 million to $7.5 million).
Wrote Wong to Jackson, via email:
“When a property increase in assessment value [is] in line with the average increase for the City, the property should see a minimal increase in property taxes.
“When a property has an assessed value significantly greater than the average, there will be a corresponding larger than average tax increase. This is what happened in 2017, where the average increase in assessment value for class 06 (commercial) properties in the City was 19.65 per cent.”
Jackson said he foresees problems with tenant viability.
“Everyone’s stuck with this. I’ve got little tenants here and had to hand them a bill for $2,500 to $3,000, or whatever,” said Jackson.
In other properties he manages across the Lower Mainland, he’s seen the same thing.
“A Mac’s convenience store in Surrey we look after, they tell me they just have to pull out because they can only charge so much for a coffee. Their common expenses are so high,” said Jackson.
He said he wasn’t sure why BC Assessment valued the property so high. It is nearby to new developments, however it is also across the street from an empty field and is next to a residential zone.
