Anthony Edwards, owner of Hotel Kimberley, is seeking the support of City Council after the most recent tax valuations were released from BC Assessment.
Edwards took over ownership of Hotel Kimberley in April of last year. Since then, he and his wife Catherine have completed extensive and neccessary renovations.
The 2017 BC Assessment for the property was $1.246 million, while the recently released assessment for 2018 is $705,000.
Edwards, along with Manager of the Kimberley Chamber of Commerce Mike Guarnery, presented their findings to Council at a regular meeting on Monday, Jan. 8, 2018.
“The Chamber would like to advocate for Hotel Kimberley,” explained Guarnery. “They [the owners] have spent a lot of time investing their capital and their time and sweat equity into their purchase since they took over the hotel in April.
We need to take a look at ways that municipalities can help; they shouldn’t charge penalties or interest when an unfair tax assessment has been made.”
Edwards applied for a reassessment of 2017’s taxations, however the window of opportunity for such a request ends in January of the assessment year. Since Edwards took over the hotel in April, he did not get that opportunity.
“We would like Council to look at supporting changes to legislation, allowing municipalities to not charge penalties or interest when assessments are clearly over valued,” said Guarnery. “Secondly, write a letter of support to BC Assessment on behalf of Hotel Kimberley to reopen an appeal of the 2017 tax assessment. Moving forward with that, perhaps get assistance from [Chief Financial Officer] Jim Hendricks, as he speaks the language of BC assessors, in helping to resolve this and somehow align 2017’s taxes. BC Assessment has clearly overshot the value which makes their taxation unfair in what they need to be paying for taxes.”
Guarnery explained that Edwards has already reached out to Columbia River-Revelstoke MLA, Doug Clovechok for support as well.
When asked how BC Assessment came up with the figures, Edwards responded saying he is not entirely sure but, it is a combination of comparison and occupancy rates.
“I am still not really clear on how they come up with the assessment for commercial properties here,” explained Edwards. “Generally speaking they seem to use a comparison method between properties that have sold in recent times. I can see that with houses, but commercial properties are a bit different, and hotels in Kimberley are extremely different because there are only two. From my understanding, when I spoke to BC Assessment earlier this year, some of the factors they took into consideration were things like occupancy rates (to somehow assist what the income of the property may be). So they use, for example, the occupancy of Cranbrook hotels. They’re talking 35 per cent occupancy on the average hotel. Our occupancy in that hotel is about 15 per cent.”
Mayor Don McCormick says that it was the responsibility of the previous owners to appeal the 2017 assessment, and that Edwards has been caught in the transition.
“When you took this over on April 1, you were subject to the taxes that were based on 2017,” McCormick said. “Subsequently, with a revisit, they have assessed that down from the $1.4 million down to $700,000. Clearly they made a mistake, but they are basically telling you now, gee too bad for 2017, you now have a $700,000 valuation for 2018. I think the issue here has to do with you being caught in the transition on the purchase of the building and the previous owners not paying attention to what that assessment was and completing an appeal, which they should have done.”
Councillor Kent Goodwin says that the difference between 2017 and 2018’s assessments is an admission of the mistake they made.
“Keep in mind,” said Edwards, “looking at the assessments from the previous two years (2015/16), the land value from my understanding did not change on the property. The only thing that changed was the actual improvement value. I’m pretty sure we’re all able to agree that the building did not improve in the last three years, probably in the last seven actually.”
McCormick says that MLA Clovechok is the one who really needs to drive this through BC Assessment and that the City’s hands are tied.
“There was recently a penalty that had been issued on a property owner and we sent a letter off to the provincial authorities, basically saying we appreciate that there are rules stating we can’t waive this, but we’d like you to consider it,” explained McCormick. “They came back to basically say no, if that were opened up there would be all kinds of inequitable treatment on tax payers and that’s not the way it works. We don’t have any authority whatsoever with respect to penalties. It’s unfortunate but we don’t. This whole things does in fact rest with BC Assessment. Somewhere, someone has the authority to look at that and make a call on some kind of remedy, but it’s clearly within BC Assessment that that has to happen.
We need to go down the MLA path, and I am happy to continue to advocate along with Mike on your behalf. We need to drive it until we get the right answer.”
