CALGARY- A second Calgary business owner is speaking out about colossal jumps in property taxes after reading Global News’ coverage of a 97 per cent increase for 8 Avenue’s Escoba Bistro.
Trevor Katelnikoff is the chief operating officer of PEO Canada, an employment management company located at the corner of 5 Ave. and 7 St. S.W. He said the Escoba story caught his attention because his company’s taxes have increased a whopping 265 per cent this year.
“Since 2012, our property taxes have gone up 340 per cent,” he told Global News.
“Last year, our property was valued at about $13 million, and this year it’s just under $35 million…if someone wants to offer me $35 million, let’s chat.”
The city confirmed the building’s assessed value has almost tripled, from $13, 290,000 to $33, 570,000 in 2015. Assessment director Nelson Karpa says it’s slightly different than the Escoba case because this property has “always been valued on the land approach.”
“In the last number of years, we’ve seen a terrific increase in the value of land in downtown Calgary,” said Karpa.
About three blocks away from PEO Canada, a 63,000 square foot parcel of bare land sold for $90 million in 2013, said Karpa. PEO Canada is 41,000 square feet, so the city assessed it for less—at the $33-million figure.
“What we use to derive the assessed values is bona fide market evidence of sales that did transact. We use that as a basis for estimating what it would have sold for … we feel those values are accurate.”
Katelnikoff says his small business has been at the location for over a decade. He says he would be fine with a “reasonable” increase, but can’t believe the size of the sudden jump.
“If our property taxes got to where they are now over the next 15 years, through just natural inflation, it would make sense to me. But we went from paying $185,000 last year to $476,000 this year.”
Katelnikoff says he’ll be challenging the assessment—like Escoba Bistro’s owner—but will have to pay until a September hearing. He’s not sure where the money will come from in his one-and-a-half story building.
“I don’t have 45 stories of tenants to divide $300,000 up and reconcile it at the end of the year.”
Katelnikoff says he has letters from realtors who work downtown that “basically say the city’s assessment is out to lunch.”
“There’s no way anyone’s going to give me $35 million for the property.”
Karpa says the building is on an extremely desirable piece of land, and the city’s assessment reflects market value.
“Whether you’re the owner of a 20-story office building, or whether you’re the owner of a small building in a big lot downtown, the question we have to ask—that the legislation requires—is: if that property sold in July 2014, what would it have sold for?”
“We’re entirely doing the same process whether it’s a 20-story office buildings, vacant land, or in this case, a 32,000 square foot building on 41,000 square foot piece of land,” said Karpa.
© 2015 Shaw Media