Towers come with taxation warning

By John MoorhouseWednesday, November 22, 2006 http://www.pentictonherald.ca/article_2467.php
A controversial proposed highrise hotel-resort project for the south end of Penticton is expected to generate intense community debate at a special public hearing before city council Thursday night.But council members this week also heard from the taxman about another type of impact from such strata title hotels."There is a new breed of development on the horizon," said city administrator Leo den Boer. "That could have a real negative impact on our local accommodation industry, depending on how these properties are assessed (for property taxes)."Penticton's commercial property tax rate is 1.9 times the residential rate.Jim Inverarity, Okanagan regional assessor for the B.C. Assessment Authority, told council provincial legislation dating back to 1994 sets out a number of criteria which must be met before a strata hotel can be taxed by municipalities as a commercial outlet.A development must include 20 or more units and be available for overnight accommodation for at least 50 per cent of the year. It also must be managed by a person or firm representing 85 per cent or more of the strata units.The problem was most pronounced at the resort community of Whistler, where many of the traditional hotels complained the tax regulations give strata hotels an unfair advantage."The people who develop strata hotels are well aware of this issue and have been after the government for many years to deal with this issue," he said.Since the legislation was enacted, a number of cases wound up before the courts. Inverarity said many strata unit owners made their purchase thinking their property would be taxed at the lower rate."These people were put in a position where they were paying more taxes than they thought they were going to pay," he said.Jack Kler, the city's director of corporate services, said some businesses could see an impact in their annual taxes as a result of strata hotels. However, it would not affect the city's overall tax revenue."One entity coming on probably isn't going to affect anybody significantly," he said. "But if we have a huge number of these kind of developments happening in our community, then we could see some fluctuations from year to year."Penticton Waterside Resort and Spa, headed by Vancouver developer Barry Kaplan, wants to develop a three-tower hotel complex on a 1.8-hectare property on South Main Street currently occupied by the Skaha Tent and Trailer Park.A public hearing into the rezoning application will be held Thursday at 7 p.m. at the Penticton Trade and Convention Centre.Revised plans for the complex call for towers of 10, 14, and 15 storeys atop a three-storey parkade, which would make the complex the tallest in the city. Plans call for 368 rentable rooms with parking for 415 vehicles.The idea of living next to the towers -- and their impact on local traffic loads -- doesn't sit well with many nearby residents and a large crowd is expected for Thursday's hearing.

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