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Property tax relief for business tenants get mixed reaction in North Van

A provincial solution that could mean relief to mom-and-pop businesses facing skyrocketing property taxes is getting a cool reception from North Vancouver mayors and business leaders.

A provincial solution that could mean relief to mom-and-pop businesses facing skyrocketing property taxes is getting a cool reception from North Vancouver mayors and business leaders.

This week, the province introduced legislation aimed at providing help for commercial tenants who are caught paying taxes on rising values of their landlords’ property under triple-net leases.

Soaring property tax has been one factor in the changing face of commercial business on the North Shore, as independent shops have been forced out in the grip of mounting cost pressures.

“Longstanding businesses, they’re getting hammered,” said District of North Vancouver Mayor Mike Little, pointing to local shops that have closed their doors in areas like Edgemont Village.

Local politicians who’ve watched their once-vibrant business cores be hollowed out have been lobbying Victoria, asking for a solutions.

But a temporary fix offered up this week by the province hasn’t made anyone happy.

“For me the problem is very real and incredibly urgent,” said Patrick Stafford-Smith, CEO of the North Vancouver Chamber. “But I don’t think what they’ve proposed is the solution. It’s going to create a colossal rat’s nest.”

Municipalities had hoped the province would move to allow a split-assessment system, where a portion of assessed value resulting strictly from future development potential could be taxed at lower rate than the rest of the commercial property.

Instead, the province brought forward a temporary fix that essentially tossed the issue – and any solution – back to municipalities.

Big Pete's
Owner Pete Turcotte of Big Pete’s Collectibles had to move his shop in lower Lonsdale because of skyrocketing lease rates. Many local businesses are struggling to hold on in the face of rising assessments and increased property taxes. photo Paul McGrath, North Shore News

Now it will be up to each municipality to come up with rules about who might qualify for some portion of tax forgiveness and a list of properties that could apply to, within general provincial guidelines.

Owners of property classed either business or light industrial who have at least one tenant paying a triple-net lease would have to apply to the municipality and be decided on a case-by-case basis.

Any tax revenue forgiven by the municipality would have to be made up by other commercial property taxpayers.

That could easily lead to friction as businesses lobby town hall for exemptions, said Stafford-Smith, particularly when some businesses have more ability to argue their cases than others.

“There will be many losers in this,” he said.

Linda Buchanan, mayor of the City of North Vancouver, agreed the system could end up pitting business against business.

But Buchanan added it’s unlikely the city will be able to put the complex set of rules into place by the deadline of the third week of April – meaning no tax breaks are likely to be coming this year.

“We don’t have the capacity to deliver it in such a short turnaround time,” she said, adding any change would have to involve consultation with the business community.

Little said the situation is similar in the District of North Vancouver.

North Vancouver-Lonsdale MLA Bowinn Ma said the temporary fix “may or may not be the best long-term solution, but it was the quickest solution we could offer to municipalities.”

Ma said she believes the government also needs to take a serious look at “triple net” leases, “because what’s happening is that small business tenants are being hit with the carrying costs of a huge appreciating real estate asset without ever being able to benefit from the ownership of that asset.”