Those "community gardens" are fertile tax dodges

City to close 'community garden' loophole used by developers     By Christina Montgomery, The ProvinceFebruary 19, 2009 7:01 AM     Story Photos ( 1 )

VANCOUVER — The City of Vancouver is aiming to close a zoning loophole that allows developers to stick shrubs or vegetable plots on land they’re holding — and save hundreds of thousands on tax bills for the reclassified “park” or “garden." The reclassifications don’t cost the city tax revenue, because the lost taxes are redistributed to other property owners in the original tax bracket. The move, which is entirely legal and has happened on some half a dozen sites in Vancouver, is saving the developers using it $1.3 million this year. And that has the city worried that more requests will arise as the economy tanks and developers seek cheap ways to carry property as they ride out the storm. At the urging of COPE Coun. Ellen Woodsworth, council voted Tuesday to put together a detailed argument to the province asking that the loophole be closed. Classification of property for tax purposes is done by the B.C. Assessment Authority and would require the province’s involvement. COPE Coun. David Cadman had an alternate suggestion if the province balks: allow the conversions to parkland, but freeze the rezoning changes until the developers reapply — and pay. To reclassify, developers create parks or garden space and apply for rezoning from Class 6 (business or commercial) to Class 8 (recreational or non-profit). That one move cuts taxes by about 70 per cent. And it leaves other commercial owners and their tenants to pick up the slack. Among the properties that have been reclassified in Vancouver recently: • Omni Group’s popular gardens at Pacific and Seymour. The seven parcels are worth an assessed $24 million. All are now Class 8, saving Omni $357,000 this year alone. • Prima Properties’ community garden at Burrard and Davie. The $24-million site was headed for retail and condos. As Class 8, it saves Prima about $345,000 a year. • Sunco Enterprises’ gardens at Oak and 16th. On land worth just over $3 million, Sunco saves $47,000 for the scraggly site. • Cressy Developments’ two community parks, one at West First and Columbia and one at Drake and Howe alongside the Granville Street Bridge. The first, directly bordering Olympic Village construction, is worth $14.9 million and earns a tax break of $222,000. At the moment it features two benches, a line of young trees and a stretch of gravel. The other, the site of a former Travelodge hotel, is worth more than $20 million. Its two benches, handful of saplings and gravel earns it a $308,000 annual tax break. The Omni garden in Yaletown took an additional controversial turn when it was learned that people signing up for the plots had to sign contracts that barred gardeners from opposing any Omni proposal for a development on the site, or one adjacent to it or “in the vicinity.” The restriction grew from the developer’s fear that those using the plots would oppose any development later planned for the site. cmontgomery@theprovince.com