Court of Revision Applications by VCMA

M E M O R A N D U M 1999 03 03

TO: Mayor Owen and Councillors

COPY TO: City Clerk -- Court of Revision

Judy Rogers, City Manager
Peter Vaisbord, BIA Coordinator

FROM: Ann McAfee, Director of City Plans

SUBJECT: Court of Revision Application by the Vancouver Chinatown Merchants Association to Establish the Proposed Chinatown BIA.

ACTIONS

After reviewing letters of objection and hearing from delegations Council may choose to:

A. APPROVE THE APPLICATION TO ESTABLISH THE PROPOSED CHINATOWN BIA

Section 4 of this memo outlines past practice with respect to approval of a BIA application. Council practice has been to approve the application if less than one-third of property owners or business tenants are in opposition. If Council wishes to approve the application, the following motion is appropriate:

"THAT the application of the Vancouver Chinatown Merchants Association to establish the proposed Chinatown BIA, as described in Appendix A, be approved and that the Director of Legal Services, in consultation with the Director of City Plans, prepare a by-law to establish the new BIA boundaries and funding ceiling."

B. NOT APPROVE THE APPLICATION TO ESTABLISH THE CHINATOWN BIA

Several criteria identified in the past as possible reasons for rejecting a BIA application are outlined in section 4 of this memo. Should Council choose to reject the application the following motion is appropriate:

THAT the application of the Vancouver Chinatown Merchants Association to establish the proposed Chinatown BIA, as described in Appendix A, not be approved.

C. COUNCIL WISHES FURTHER INFORMATION

Since there are a large number of properties involved, representing considerable variation in assessed values, Council may require additional information to assess the level of opposition. If, after hearing delegations, Council wishes further information the following motion is appropriate:

THAT the hearing of the application by the Vancouver Chinatown Merchants Association to establish the proposed Chinatown BIA, as outlined in Appendix A, be concluded; and

THAT, before Council decides on the application, the Director of City Plans, in consultation with the Director of Finance and Director of Legal Services, assess information received from opponents of the proposed expansion and report to Council on the proportion of property owners and/or business tenants, by number of properties and assessed value, who do not support the proposal.

1. BACKGROUND

Sections 455 through 463 of the Vancouver Charter make provision for the creation, expansion, and funding of Business Improvement Areas (BIA). Taxation of properties in an area pays for a variety of programs to promote and enhance the area.

On October 30, 1997, Council amended the process for establishing or expanding a BIA. Under the new process a group of merchants/property owners interested in forming a BIA is required to:

· Initiate the BIA process by forming a Non Profit Society and advising Council of their desire to form a BIA;

· Make every effort to contact a variety of property owners and business tenants to discuss the proposal to start a BIA including identifying the potential BIA area and likely program and budget requirements;

· When the group is reasonably assured of widespread support, they document the outreach initiatives and request Council consider the proposal to form a BIA;

· Council considers the request, providing an opportunity for owners and tenants who wish to speak for or against the proposal to address Council;

· If supportive, Council forwards the proposal, as a Council Initiative, for consideration at a hearing of the Court of Revision;

· The City notifies all property owners and business tenants of the Court of Revision Hearing, the proposed levy, and details on filing objections; and

· At the Court of Revision Council is advised of letters of opposition. Council also hears delegations. Council policy is that if one third of property owners or business tenants object, the BIA proposal will be defeated.

· If approved, Council directs that a by-law establishing the BIA boundaries and funding ceiling be prepared.

On February 4, 1999, Council considered an application by the Vancouver Chinatown Merchants Association to establish the proposed Chinatown BIA (as noted in Appendix A). Council referred the application to the Court of Revision for consideration as a Council Initiative.

Council's amendments to the BIA formation and expansion process mean that all BIA applications now follow essentially the same process.

2. NOTIFICATION PROCESS

BIA applications are a form of local improvement. As such, the City is required to mail to the owners of parcels liable to be assessed notification of the project, the designated area, and estimated annual rate. The notification letter must be sent at least one month prior to the hearing. While the Charter does not require notification of tenants, it is City policy to notifybusiness owners of a BIA proposal. Staff have notified property owners and business tenants in the area of the proposed Chinatown BIA:

· Individually addressed letters (Appendix B) were sent, postmarked on or before February 5, 1999, to 130 property owners, owning 200 legal parcels located in the proposed BIA area (Appendix A). Two letters were returned either because the property had sold to new owners, the owners had moved, or the address was incorrect. Every effort was made to forward the letters.

· The City does not have a current record of all business owners in the proposed BIA area. Letters to business owners (Appendix C) were hand delivered to all businesses in the area (Appendix A). Over 300 letters were distributed.

For information, the proposed BIA levy ranges from $24.15 to $21,712.32 annually depending upon the assessed value of the property. About 17 properties will have a levy of less than $100, 87 properties will be charged between $100 and $1,000, and 96 properties will be charged over $1,000 annually.

3. LETTERS OF OPPOSITION

Property owners/ business tenants who oppose the proposed BIA were invited to either write to the City Clerk, with the letter being received before noon on March 9, 1999, or address Council directly at the Court of Revision.

The City Clerk will distribute copies of all objections received prior to the Court of Revision. For information, as of mid-day March 3, 1999, letters of objection had been received from 4 property owners (3.1% of total) representing 5 assessed parcels (2.5% of total) and an assessed value of $17,754,193 (7.6% of total). Two tenants have responded (0.7% of total).

Several questions emerged during the public process:

· Who will be charged: The BIA levy only applies to commercial and light industrial (Class 5 and 6) properties. Some letters were incorrectly hand delivered to residential properties. Several residential tenants called and were advised the levy will not apply to them.
· Can an owner choose to opt out: If the levy is approved it applies to all eligible owners.
· Is there a charge to property owners and to business tenants: There is one levy and it is included as part of the annual taxation bill sent to property owners. It is up to each owner as to whether they pass the charge along to tenants and how the amount charged to tenants is allocated.

4. BASIS FOR COUNCIL ACTION

Under section 506 of the Vancouver Charter a "sufficient number" of notices of objection to defeat a Local Improvement Council Initiative is deemed to be more than one-half of the assessed owners, representing more than one-half of the value according to the last revised real-property assessment roll, of the parcels liable to be assessed. However, Council guidelines apply a more stringent standard for BIAs.

Council policy with respect to BIA applications has been to identify the "sufficient number" of objections to be either one-third of the assessed owners, representing at least one-third of the assessed value or one-third of the business owners. The one-third guideline has been used by Council to reflect the fact that Council initiatives require those who oppose an application to make the case that the levy is not desired. Typically, local improvements involve only a few owners, and in many cases each have petitioned to have the work done. This is not the case for a BIA application. For a large area, with many owners, the task of assembling sufficient opposition is difficult. For this reason, Council policy is to consider rejection if one-third, rather than one-half, of the owners or tenants oppose the application. There is no actual experience of Council rejecting a BIA application.

For information, should Council wish to apply the one-third guideline then:

· one-third of the number of assessed properties is 67 properties;
· since there are many multiple owners, one-third of the actual owners is 43 owners; and
· one-third of the assessed property value is $77,805,259.

One-third of the business tenants is a difficult number to assess with any certainty. The number is likely in the order of 100 business owners.

As of March 3, 1999, the number of owners/tenants opposing the proposal is considerably less than one-third. However, staff understand that some property-owners have received correspondence inviting them to sign a form-letter indicating opposition to the proposed BIA. Should Council receive, on March 9, petitions, letters or delegations indicating more wide spread opposition, then it will likely take some time to calculate whether the objections reflect one-third of the assessed property value. If this is the case, Council may wish to conclude the Court of Revision and have staff calculate the level of opposition. Recommendation C offers a way for staff to provide additional advice prior to Council deciding on the BIA application.

Representatives of the VCMA will be in attendance to respond to questions about the BIA proposal.

____________________________________
Ann McAfee

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RTS No. 581

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