Our Society recently learned of a new BC Assessment private agreement to reduce the assessed value of the 508 Helmcken development site by $40 million dollars. We challenged the assessment on March 3. A decision is to be finalized March 15, 2017 (today).
This is the same condo development site that BC Housing loaned $39 million dollars to recently. The agreed reduction would reduce the $130 million government assessment down to about $90 million dollars. BC assessment said they made an “error” and that $130 million was too high. This is the 2nd time in three years that BC Assessment has made such a large “error” while assessing this particular property. The first BC Assessment “error” in 2015 was for $50 million dollars and is another saga altogether. What is with these massive “errors” and corrections? Can Vancouver residents get some too? We learned about this current private reduction while appealing the latest government assessment a few weeks ago. Our intention was to have BC Assessment increase the assessed value substantially, and ensure the actual current market value was represented on the tax roll. We presented our argument on March 3 and now await the Assessment Review Panel decision on the matter.
March 3, 2017- British Columbia Property Assessment Review Panel
- BC Assessment, revealed their privately negotiated agreement to lower the government assessed value of this property by $40 million to approximately $90 million dollars.
- We requested the assessment increase from $84.5m to $288 million dollars for this fully approved, permitted property that included paid CAC’s, and presented our evidence. We argued that this property required a higher Per buildable area rate (PBA) assessment for a host of reasons. Some of our evidence included sales comparables of single family homes in Vancouver with little known development potential, that were assessed at far higher per buildable area rates (PBA) than this property.
- PAID CAC VALUE: We identified the multi million dollar asset that was collected to cover the negotiated CAC. The actual value of the developers CAC contribution must be considered since NO CAC will be due for this development project in the future. It is now paid.
July 1, 2016
The current BC Assessment value for this property sits at $130 million for the July 1, 2016 assessment date. On July 1, 2016, this property had an FSR of 17.19, sat on a park, was located in downtown Vancouver, offered great views, was fully permitted for 360,000 square feet of gross buildable space, CAC’s were paid, and is reputed to have been significantly pre sold. This development project is approved for market priced condos and market priced rentals. There is zero affordable housing approved or planned for this site.
Legal title of this approved and permitted development site was transferred from the City of Vancouver to the developer (Brenhill), in August 2016. They only declared $84.5 million dollars as the sworn actual market value. (Note: The City didn’t receive anywhere near this amount for the property.)
Property Transfer Tax Consequence
There is a massive $45,500,000.00 difference between the $130M government assessment value and the $84.5M declared value. So if BC Assessments number is low which we believe it is, then the property transfer tax would appear to be low as well. The PTT had to be calculated and paid at the time of transfer. PTT is 3% on every dollar above two million. It is the Society opinion that the market value of this property was well in excess of $200 million dollars on July1, 2016, rather than the declared $84.5 million or even the assessed $130 million dollars.
January 1, 2017
The July 1, 2016 $130 million assessed value only became public on January 1, 2017.
Late January 2017
- Our Society appealed the $130 million taxable assessment as being too low and a BC Assessment Review Panel hearing was scheduled for March 3, 2017.
$219.5 Million Loan & Appraisal
- British Columbia Investment Management Corporation “BCIMC” granted a 2nd mortgage on 508 Helmcken.
- $219.5 million loan amount granted by BCIMC (a BC Crown Corp)
- Signed January 25, 2017. Registered Jan 27,2017.
- Was this new money used as 30 day interim financing to pay off the $39 million BC Housing loan about four weeks later (in late February), before another $40 million dollar loan was obtained from travellers Insurance at what appears to be18%?
- Lender, BCIMC required a 75% loan to value ratio which suggests a very high value.
- An appraisal was required by this Crown Corporation to issue their mortgage.
- The $219.5M mortgage was in addition to the $39 million 1st mortgage.
- $258.5 million was the combined amount of the total approved mortgages.
- 508 Helmcken is a bare land site. The value includes all of the fee simple interests which would also cover the rights to all income sources.
BCIMC is a Crown Corporation.
Full 219.5 million dollar loan document
NEW $40 Million Dollar Loan – Just Issued