Well, only according to the City of Vancouver. The lot at 88 Pacific Boulevard is a huge piece of land that had a recent assessment value of only $1. Sounds too good to be true, right? It might be if you look at how the land around is typically assessed and taxed.
Prime, Waterfront Real Estate
The 9.46 acre lot is located in one of Vancouver’s nicest neighbourhoods, and surrounded by some pretty pricey real estate. According to BC Assessment, the lot immediately east at 811 Carrall St. is a quarter of the size, and has a land assessment of $29 million with $3,300 worth of buildings on it. East of that, is a lot less than a fifth the size with land assessed at $16,601,400. That’s around $284 per sq ft.. I’m not an appraiser, but that’s an 11,708,539,713.1% difference in valuation per square foot.
Who Owns It?
The 412,271 sq ft. lot is owned by Concord Pacific Developments (CPD). For those that don’t know, they are the people responsible for transforming Vancouver’s False Creek from sleepy industrial waste land to the bustling, urban centre it is today. In fact, the lot is the location of their presentation center in Vancouver.
The lot is also occasionally rented out for events, and is listed by WestPark Parking Services as one of their parking lots. Convenient since it’s just a few blocks away from BC Place Stadium and Rogers Arena. One estimate claimed the lot generated an average of $600,000 per year. Not exactly a worthless piece of land.
Seriously, 88 Pacific Boulevard Is Worth A $1?
Apparently. The property was purchased by Concord when they purchased the former ‘86 Expo lands in the 1990s. In exchange for densifying the area with over 7,500 units, Concord Pacific had to commit to building a few parks to balance things out. This is where one of those parks is suppose to be, so it’s zoned as such. They didn’t get around to building the park ever, but they did get around to building 50% more homes. To date, the developer has delivered over 11,500 units.
The parkland was originally assessed at $192,000, an already heavily discounted rate. It was raised briefly in 2013 to $400k, then dropped to a $1 after an appeal. BC Assessment found the value of the land to be worth $12,046,200, but assigned a nominal value. The reason being Concord estimated it would cost $17 million to build the park, and seawall they had previously committed too. This seems logical, until you look at the numbers and how property like this is normally treated.
BC Assessment doesn’t have to give a criteria (nor did they), as to how they came up with that number. At today’s value, it’s about $100 million dollars short of their neighbours. Even at a quarter of that – it’s still worth more than the land value cited in the assessment. So really, is BC overcharging the neighbours, or undercharging at 88 Pacific Blvd? Either way, sweet for Concord Pacific since they don’t have to commit to a hard deadline to actually build a park. If I were them, I would continue generating income on the near tax-free property until the park paid for itself.
Can I Do That?
Yeah, I know. You’re a developer and you want your land assessed at a $1! Well, it’s not so easy. It turns out even other massive developers like Bosa Properties don’t get to do it.
Bosa had a 7.5 acre plot of land for a park down the street that had an assessed value of $18.569 million. Some back of the napkin math shows that would be $260,000 in taxes per year at that assessment level. Slight motivation to hurry up and build a park if you ask me. It wasn’t until they delivered the park to the City of Vancouver in 2013 that it was reassessed. Once the park was built the land was assigned a nominal value.
If anyone knows what that one strange trick is for having their property assessed at a $1, I’d love to know it. Leave your suggestions below.
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