Downtown economic summit urged as calls for property tax assessment changes grow louder
Increasing downtown vacancies mean Calgary has to shift tax burden to other areas
Two Calgary city councillors believe a downtown economic summit could be a step in the right direction as calls for changes to property tax assessments grow louder, in part due to skyrocketing vacancy rates in the downtown core.
"It is tough, and I am sympathetic. I had my own small business for almost 20 years before I got elected. Increases in taxes and other fees can put a business under," Coun. Druh Farrell told The Homestretch Thursday.
"That's why we have got to look at long-term strategies to make the business community more resilient, but specifically the downtown. Almost a third of the buildings in the downtown are sitting vacant, and that impacts all the other businesses in the city, so you are seeing a shift in the taxes from one part of the city to the other."
Farrell is joining Coun. Evan Woolley in calling for an economic summit to look for long term solutions for businesses affected by that tax shift, which is hitting some Beltline business owners especially hard.
Bernard Drouin, owner of 17th Avenue Framing, says he's one of those business owners.
"My property tax [assessment] increased from $1.34 million to $2.35 million, that is a 75 per cent increase in property value. My taxes are going from $21,000 a year to $41,000, a 93 per cent increase in the tax burden," Drouin told CBC News.
"The impact is huge. I am a small business here on 17th Avenue S.W. Many of the businesses here are restaurants, bars, pubs, nightclubs and here I am, a small retailer. Four per cent of my sales go to property taxes, now it will be eight per cent."
He says he disputes the city's land value approach to his recent assessment.
"The reality is, my property is not worth that amount. My property is worth $1 million," Drouin said.
"They will take parcels of land sold in the Beltline, developers will buy the land and build a 30-storey condo. They will use the value of the sale of that land and apply it to my land — which is night and day, but because we are both in the Beltline, they are able to do that. I look at that as totally unfair."
Drouin may have a friend in Farrell.
"I have never been a fan of market-value assessment," the councillor said.
"You can't predict it. It's not based on ability to pay or services rendered, but that is the requirement for the city through the provincial act. That's why we are looking at a city charter."
'We will continue to have these fiscal issues'
Farrell says historically downtown property owners have contributed significantly to city coffers, roughly 40 per cent, but with the jump in vacancies, that burden has shifted somewhat to other communities.
A one-time $15-million fund to help businesses can help in the short term, but just the short term, Farrell explained.
"If we don't figure out a way to get our downtown back on its feet again, we will continue to have these fiscal issues for years to come."
She said demolishing older, vacant office buildings could be an option on the table, as they are inefficient and expensive to retrofit.
Farrell and Woolley will address the summit at Monday's council meeting.
With files from The Homestretch
- An earlier version of this story said a one-time, $50-million fund can be used to help businesses. City council has approved a $15 million fund to reduce tax increases for small businesses.Jan 13, 2017 6:20 AM MT