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Lower Lonsdale “BIA” Tax On Business – Financial Mismanagement

Lower Lonsdale BIA Tax on Business – Mismanagement:     The BIA tax or levy as it was proposed in December of 2013 is a burden that the Lower Lonsdale (“LoLo”) businesses community simply cannot afford at this time. This opinion is held by the vast majority of business owners in the area, as well as the City’s chosen real estate experts. Council debated the BIA Negative Petition bylaw on December 2nd 2013, and it past in a contentious vote split 5 in favour, with Councillors Clark and Bookham standing in opposition. See Agenda Item 10, Council Video Feed:

I decided to take up the challange of securing oposition to this initiative due to the anti-democratic principles under which the BIA bylaw was to proceed. While legal under the Community Charter Act, the negative petition process to create a BIA is simply not right. The businesses that would eventually be stuck paying the BIA tax or levy on an annual basis through the typical “triple-net” lease format would in fact get no vote in the process. The vote would go to the building owner or landlord, many of whom are located offshore, whose property is often managed by an indifferent property manager. The issues are further compounded by the fact the owner may have an ESL (English as a Second Language) issue. However, that same property manager is also responsible for leasing empty space. What is not commonly known or understood by the City is that 40 per cent of the commercial spaces in lower Lonsdale are currently vacant. The reasons for these high vacancy rates are varied and pose significant challanges. However the difficulty of securing new renters for those vacant spaces would not be made easier by the application of a BIA tax of levy.

The City, when seeking expert real estate advise, often turns to the people at Colliers to provide that expertise, as do many of the City’s commercial property owners. In this regard I have received an email from Ms. Bunny Wortman wherein she offers the following opine:

Hi Kerry,
Thanks so much for your response.  One hopes that with some revitalization of the waterfront area, there will be increased opportunities for business.  Certainly, we have hopes there will be more retail leasing at 120 Lonsdale/100 E. 1st St., and tenants for the office building at 267 West Esplanade.  If the Lonsdale property gets leased, it may be that the Landlord would be more favorably disposed to seeing the BIA as a positive thing, but that’s unlikely ever to be the case for Esplanade, given the tenant composition.

The key point you’ve brought forward in your challenge is that it’s the tenants, the actual business owners, who are affected by this levy.  Landlords are responsible for the costs associated with all vacant areas, so depending on the occupancy of the building, it can represent a significant cost burden for them, as is presently the case with these two buildings.  However, even in the case of fully occupied buildings, when competing for leasing with buildings outside the BIA area, it puts these Landlords at a disadvantage when prospective tenants are comparing their total rental costs.

To impose this BIA on all properties when supported by a small minority would be a serious injustice.  It’s a reality that many owners of businesses or properties in the area will not be familiar with the concept or costs associated with mandatory “membership” in a BIA, and ignore any material mailed or left for them.  This is further exacerbated by ESL issues, and/or the fact many property owners may not even be local, so the percentage response is likely to be small.  The property tax is already of great concern to many businesses, and I’m sure the last thing we want to do is chase business out of the City of North Vancouver.

I appreciate your assistance in keeping me informed on this issue.

Bunny Wortman, RPA, Property Manager bunny.wortman@colliers.com

It is evident from Ms. Wortman’s email that pushing through a local BIA initiative on a whim, without proper consultation could have a devastating impact on effected businesses. This kind of poorly thought out decision making is wrong.

I took up this cause over the 2013 Christmas period and on January 20th 2014 I appeared as a delegation before City Council, and the earlier BIA decision was reversed by council that night.

Councillors Buchanan and Keating both accused me of tearing down the BIA, and providing no solution to the issues of Lower Lonsdale. I disagree with this evaluation, and had I the opportunity to respond to these assertions, I would have drawn both their attention to my report as presented to council wherein I setout numerous recommendations to resolve the various issues of LoLo business owners, or in the alternative, I proposed processes to arrive at solutions. I note that neither councillors Buchanan or Keating chose to engage me in questions on any of the topics presented, but both took liberty tossing about various opinions of my work product after my delegation was concluded. I also note that neither councillor’s Keating or Buchanan proposed a solution of their own, other than more taxation.

IT  IS  MY  POSITION  THAT there is no proper place for application of a “Negative Petition” bylaw, despite the legality of that process in the provincial legislation known as the Community Charter Act. Therefore;

  1. I will never support a process which relies on a negative petition to rationalize creation of a BIA, or causes a new stand-alone form of business taxation.
  2. I will support the creation of a group of precinct based BIA’s around the City, in which each BIA is publicly funded via assignment of a portion of the municipal tax dollars already collected from those businesses by the City. These funds would then be used to fund locally determined and administered initiatives (Example: “Way-Finding Signage), under a fee-for-service management contract which I propose would fall under program administration by the North Shore Chamber of Commerce.

When I find myself in a position to apply these policies and principals as setout above, they will guide my decision-making.

What do you think?

What do you think about my position on Lower Lonsdale “BIA” Tax On Business – Financial Mismanagement?

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