‘Community gardens’ give big developers big tax breaks while small businesses suffer and close under tax burden

Community Garden Wesgroup 41st Oak Dec-2017 (2)

Wesgroup’s “Community Garden” at 41st and Oak. What is the definition of “your”? Photo: CityHallWatch.

On 9-Jan-2018, regular columnist Allen Garr had an interesting article in the Vancouver Courier, entitled “Small businesses suffer while Vancouver developers cash in on tax breaks.” We capture some excerpts of his findings here. We would like to see a map of all the developers’ community gardens in Vancouver, and tally of the taxes they are saving but the burden being passed on to other taxpayers. Also, how many of the raised bed boxes are actually being gardened by members of the local “community”?

We hear about local businesses suffering under heavy property tax loads and many closing down after many years of operation (see “Taxed to death: How Vancouver’s small business are falling victim to soaring property tax” Jan Zeschky, Westender, 14-Dec-2017). Meanwhile, major developers are getting an easy ride on taxes by clearing a development property and making a deals with “community garden” operators to place raised bed gardens on the site and save significantly on taxes while the land appreciates and the developer prepares a development application.

As we see it, systems are heavily biased in favour of developers, a symptom of “regulatory capture.” Regulators should never be funded by those they are supposed to regulate.  Many of the same developers benefitting from this system are the same ones who donate to politicians in elections at both the provincial and municipal level. Corporate and union donations are banned for the October 2018 civic election, but will the systemic biases change? Time will tell.

Community Garden Wesgroup 41st Oak Dec-2017 (1)

Another view of Wesgroup’s “Community Garden” at 41st and Oak. Photo: CityHallWatch

Other “Community Gardens”:

  • Broadway/Alma. Previously a gas station.
  • 10th/Alma. Previously a gas station.
  • More to be added…

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Small businesses suffer while Vancouver developers cash in on tax breaks (Allen Garr, Vancouver Courier, 9-Jan-2018)
http://www.vancourier.com/opinion/small-businesses-suffer-while-vancouver-developers-cash-in-on-tax-breaks-1.23140119

Excerpts:

Does it not strike you as odd that, when it comes to city-imposed property taxes in Vancouver, small businesses, struggling to stay alive, get pounded to the point of facing failure, while major developers get significant tax reductions for doing nothing except allowing folks to grow a few carrots or potatoes on their patch of land?

… The city has tried to deal with the issue of property tax burdens on small businesses. For years there was a program of shifting the overall tax collected from commercial properties to residential. That impact was significantly diminished by the fact that real estate assessed values in recent times have shot up dramatically on all property in this neck of the woods.

For those figures we rely on the BC Assessment Authority, which is required by law to determine value based the “highest and best use” for that property.

What has hurt small businesses is that many of them have what are called “triple net” leases. That means that every time their landlord’s property taxes go up — mostly because of the increasing value of their property — that tax increase gets passed on to the small business tenant. …

I draw your attention to what has been happening for the past several years and seems to have escalated last year in particular. Let me cite one example.

Wesgroup is a development company owned by a guy named Peeter Wesik. Last year Wesgroup purchased five gas stations, including one in my neighborhood at West Fourth and Macdonald. By October the buildings were demolished and removed, the ground surface was covered with gravel and the property was surrounded with a chain link fence.

Thanks to a deal Wesgroup made with a not-for-profit outfit called Shifting Growth Society, wooden planter boxes filled with soil were placed on the property. In my particular ’hood there were 100 boxes mostly three feet by four feet in size.

Then signs were erected announcing “Your Community Garden Brought to you by Wesgroup.”

All of this was deliberately done before the end of October. Here’s why. That is the point on the calendar when the BC Assessment Authority folks turn up to determine the classification of the property.

In the case of these five properties, they changed from the previous year when they were “business or other,” which put them in Class 6, to this year where they are “recreational,” which is Class 8.

Now here is the point. By shifting the property from Class 6 to Class 8 the property taxes Wesgroup has to pay are cut to about one third of what they would have been — a savings of at least $15,000 on one property.

But the city treasury doesn’t suffer at all.

Vision councillor Raymond Louie says the money they aren’t getting from Wesgroup gets applied to all the other properties in the same category. So that means much of that tax burden gets passed on to all these small business with triple net leases.

So, in effect there are two beneficiaries. One is Wesgroup. The other is the commercial landlord who not only benefits from his property going up in value but who can automatically pass the increased property tax burden on to his tenants.

The city doesn’t lose a dime in the transfer. The community, however, loses when those small businesses shut down….

See full article:

http://www.vancourier.com/opinion/small-businesses-suffer-while-vancouver-developers-cash-in-on-tax-breaks-1.23140119

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RELATED…

Vancouver community gardens a gift from developers who get tax break
Denise Ryan, Vancouver Sun, April 14, 2017

Excerpt: Chris Reid is the executive director at Shifting Growth, which sets up community gardens in undeveloped properties throughout the Lower Mainland.

Driving rain couldn’t keep a steady stream of urban gardeners from showing up to claim their plots at a new, temporary community garden at the corner of 10th and Alma in Vancouver last Saturday.

The transformation of a gravel lot on the site of a long-shuttered gas station was spearheaded by Shifting Growth, a Vancouver non-profit that bridges the gap between commercial property owners and urbanites eager to grow their own food.

For a modest buy-in fee of $15, gardeners at one of Shifting Growth’s urban gardens get a 4′ x 3.3′ raised box, already assembled, filled with good soil and access to water. Unlike collective community gardens governed by boards, Shifting Growth gardeners don’t have to deal with the politics of a group or commit hours to site maintenance.

“We take care of all the management. There are no work party requirements, where a lot of the complications come in,” said Chris Reid, executive director of Shifting Growth. “Most people don’t want to be responsible for a non-profit, they just want to grow food, and we let them do that.”

The 100 raised beds at Alma and 10th are on land owned by Landa Global Properties.

“The site has been empty for many years and we thought this would be a great way to give back to the community and do something useful while we go through the development process,” said Kevin Cheung, Landa’s CEO in a statement.

Shifting Growth doesn’t solicit developers because there are enough developers willing to assume the risk and responsibility for the garden projects in exchange for a tax break from the B.C. Assessment Authority. If a vacant lot houses a temporary community garden it will be taxed at a lower rate than on a business site.

Reid said the situation is a win for both the community and developer. “We try to keep it really local, so we put up a notice right by the property, in the hopes that we will get people from the neighbourhood who might live in condos or basement suites, who don’t have another option to grow their own food.”

 

Reid said their land use agreements with corporations range from one to five years. “If we can get one season out of it, it’s a great engagement piece for the community. It’s a great engagement piece for the community.”

Shifting Growth has over 600 garden beds on seven properties from Dunbar to East Vancouver, False Creek to North Vancouver. Vacant residential lots don’t qualify for the same benefit through the B.C. Assessment Authority.

Shifting Growth began with a start-up grant from Vancity Credit Union.

“We had to work against some preconceived notions about community gardens, and the associated risks. We had to prove there was a model that would work,” Reid said.

An unexpected offshoot of the initiative is the success of their pre-fab raised garden boxes, which are set on pallets for drainage, which they now sell through their website shiftinggrowth.com

Reid said Shifting Growth researched and found a German community gardener making use of a hinged shipping industry box that lies flat when not in use. “We import the hinges, buy local untreated cedar and assemble them by hand in Vancouver. It unfolds in about a minute, you fill it with soil and you’re ready to go.”

http://vancouversun.com/news/local-news/vancouver-community-gardens-a-gift-from-developers-who-get-tax-break

 

Explosive growth of Vancouver’s urban gardens prompts confrontations
Mike Hager and Jeff Lee, Vancouver Sun, 08.07.2013.
Excerpts:

 

… According to Coun. Andrea Reimer, the number of community garden plots on city, school and park board land has more than doubled to over 4,000 in 104 locations in the past four years. There are now at least 19 urban farms, including Yummy Yards. The city even allows its traffic circles to be used for food-growing, as long the plants don’t pose a traffic hazard.

There’s also a growing trend of commercial property developers temporarily turning over future development sites to non-profit organizations for short-term community gardens while they wait for market conditions to improve. In return, the developer’s land is reclassified by the B.C. Assessment Authority, which leads to significant reductions in taxes to the city.

Some land owners, such as Concord Pacific and London Drugs, have committed to give the difference in those taxes to the non-profits that run the temporary gardens on their properties.

In theory, turning urban spaces into farms and gardens would seem like a win for everyone. Dead spaces are greened, neighbours without gardens get to exercise their green thumbs, and urban farms create entry-level jobs and a ready source of local food for restaurants.

In practice, urban gardening can sometimes lead to conflict and angst. With perpetual complaints about theft of food, disputes over conditions of gardens and conflicts over commercial food plots, gardening can be a fractious affair.

“Yes, conflicts sometimes occur,” says Michael Levenston, executive director of CityFarmer, a Vancouver urban farming resource. “Conflict in community gardens isn’t unique because people will fight over all kinds of things.”

Years ago, a fight between property owners along East Boulevard in Kerrisdale and gardeners using the adjacent CPR right-of-way led to the development of policies for how community gardens should operate.

Now, the development of new urban farms — a reversal of the history of cities which once squeezed out small market farms as neighbourhoods expanded — has also created the need for new rules. No policies exist for how urban farms can operate. In Vancouver, there’s not even such a thing as a business licence for urban farms.

Reimer said a report to council this fall may help resolve conflicts between urban farmers and neighbours. “There are all kinds of issues, from tenure of land to how long you can stay to how you operate it without negatively affecting your neighbours,” Reimer said. “If you are going to run an urban farm, you need some security.”

There is no plan to slow down the development of food-growing within the city. In January, council adopted a food strategy that would also see the number of urban farms grow to 35, the addition of 13 new farmers markets, and more “edible landscaping and food-bearing trees.” There’s a demand for community gardens, with as many as 16,000 people on waiting lists for plots.

But Vancouver’s urban green strategy has also created conflicts for the city itself as developers take advantage of tax breaks that reclassify temporary community gardens to a lower bracket that sees taxes to the city cut by nearly two-thirds. In 2009, Vancouver complained to the provincial assessment authority, but nothing was resolved, Reimer said.

Dharmesh Sisodraker, the deputy assessor for Vancouver region, said reclassification takes place when a property owner can show that the actual use of the land has changed, even if it is for a temporary use such as a community garden. The valuation of the land doesn’t change, but the classification does.

We’re not talking hundreds of applications, but we’re talking about tens,” he said. “For a commercial property to be reclassified it has to be a park or garden open to the public.”

Sisodraker said when a commercial property is used for commercial urban farming, it falls under different rules that require it to produce a minimum income in order to qualify for farm status with its much lower tax rate.

Sisodraker didn’t have figures for how many properties have been converted to community gardens, but in a 2010 Vancouver Sun story the city said it gave more than $212,000 tax abatements in 2009 to the Prima Properties community garden at Burrard and Davie Streets. Another garden on a parking lot next to the Astoria Hotel earned the owners, the Sahota family, $132,000 in tax breaks that same year.

Chris Reid sees the positive power of temporarily converting commercial properties to community gardens. His Shifting Growth non-profit recently took possession of land at 2500 East Hastings that London Drugs plans to some day develop. The company is returning its tax break to Shifting Growth to help finance the construction of the 167 plots, all of which go to local residents for food production. The garden officially opens on Friday, but all of the plots were subscribed to in just five days.

“London Drugs approached us and said they wanted to help the community while they wait for development conditions to improve,” Reid said. “There is not enough garden land in the city and there is such a huge demand that even having a temporary garden is worthwhile.”

Reid doesn’t regard the cut in taxes as a break to developers. Instead, he said, it allows for more community gardens and helps deal with an unfillable demand.

“I don’t view it as a tax break. They are investing in the community,” he said.

Do said the Jerusalem artichokes incident is a “really great lesson in terms of the common benefit that the farm site offers, it’s been a really great hub for education and discussion around food production.”

“There’s a lot of confusion around the subject and … (this discussion allows) us to explore and challenge our current paradigm of what it means to be in a city,” Do said.

http://www.vancouversun.com/life/explosive+growth+vancouver+urban+gardens+prompts+confrontations/8755855/story.html

 

 

One thought on “‘Community gardens’ give big developers big tax breaks while small businesses suffer and close under tax burden

  1. The properties should be taxed at the rate as to what their ultimate FSR is going to be. The COV should enforce the tidy property by-law and tell the owners to pay the tax.

    People can grow a few carrots somewhere else and I am sure that most are ignorant of the facts surrounding the “deal” between the developers and the City. Its a gift to the developers and should be stopped !! We need the tax dollars that these properties should be paying.

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