Monday , May 23 2022

Varcoe: $ 10,000 a month – a big tax bite face the restaurant & # 39; Calgary


Entrepreneur & # 39; Ontario Farhan Abbas decided to seek the west a few years ago and set up a series of & # 39; Popeye Louisiana Kitchen restaurant in & # 39; Calgary.

The recession has made for rough business environment and falls & # 39 ;. But the chief executive of & # 39; CLP Holding Inc. wanted to capitalize on costs & # 39; lower construction and create a swimming pool in the city.

Since then he has opened eight stores in the area, and created about 300 jobs.

Abbas has even greater expansion plans, but high taxes on property f'Calgary – including more than $ 113,000 per year to just one place over 17th Avenue S.W. – situated ask x & # 39; is the next storage.

"It's literally $ 10,000 a month. It is imaginable. One place, selling fried chicken, must pay $ 10,000 in taxes on the property? "He said in & # 39; interview.

"They will iġennuni out of town and will eventually hurt the city."

householders and businesses around Calgary now receive annual notices of property valuation, providing the market value used to calculate taxes on municipal property.

Mandated by provincial legislation, the process is designed to be revenue-neutral, that does not generate additional money for civic box. Helps determine who pays, and how much they pay, for their share of municipal property taxes.

B & # 39; more than one building on a blank office, the well-documented problems of Calgary & # 39; s downtown are creating turbulence for companies outside the core to pick up more weight.

biggest change taking place this year because almost a third – or $ 7.3 billion – of the total value of office buildings in Calgary disappeared last year.

The chance means a greater burden on other owners of residential property, particularly in retail sales and industrial businesses outside the core.

If the council does not make steps in the coming weeks to limit increases, 8000 owner of commercial property – or 64 percent of all residential accounts – will face tax increases double digits in 2019.

And owners of 1316 & # 39; non-residential property will experience increases & # 39; 30 percent or more due to revaluation.

"This is not a surprise. But it certainly is a point & # 39; Calgary difficult to change, "said couns. Druh Farrell, who represents part of the city center.

The city administration is sit & # 39; to & # 39; business groups to look for solutions. The Council discussed entering its reserve funds to limit the tax increases by 10 percent. (In the previous two years, the young councilors reached five percent increases.)

Farrell said Calgary has great city depends on a flourishing for several years to cover a large part of the overall tax bill, but those days are outdated.

Farrell said: "M & # 39; we have no choice but to do our fiscal reserves" to reduce small tax increases this year.

Entrepreneurs like Abbas say they can not afford to see the tax rates rise significantly without affecting their future.

"In the next five years, our plan was to build a restaurant at 21 & # 39; Calgary and outside (the city), but now, depending on how results in 2019," he added.

Michael Evans, president of Atlas Development Corp., which is the owner of the building on 17th Avenue which Popeye, said he is seeing similar issues in & # 39; other parts of the city.

In three years, the estimated value of the property of 17 Avenue jumped from $ 3.5 million to $ 6.9 million.

Darren Makowichuk / Postmedia

Evans believes that the city hall has to connect to the tax burden rather than simply changing imbuttatha all other businesses.

He notes that 17 Avenue property, which was restaurant & # 39; Wendy, had an estimated value of & # 39; $ 3.5 million in 2016, and the annual property tax of & # 39; $ 55,000.

By the time the Popeye opened in the same place last summer, the evaluation was & # 39; nearly $ 6 million.

The last year, the tax on the property was over $ 113,000.

For 2019, the estimated value rose & # 39; for $ 6.9 million. Other tax increase is on the way.

Evans said the city assessed value of the property based on the highest possible use – as if it & # 39 condo, high rise – and tenants are facing the huge tax bite.

"All this will do is empty 17 Avenue & # 39; southeast and empty the Fourth & # 39; Street. We kill, just kill businesses ", he said.

"Calgary is unfavorable business."

According to a study issued last autumn by the firm of real estate research Altus Group, the commercial real estate owners & # 39; Calgary civic taxes pay roughly three times that of & # 39; Residential property & # 39; similar value.

Evans said the city should be changing further the tax burden on homeowners, something which will council begins to make this year, and reduces b & # 39; significantly the cost way city.

Kay Gupta, co-owner of the Repair Centers & # 39; Cetus Automotive, expects that its business & # 39; Calgary in northeastern x & # 39; likely to see an increase in property tax b & # 39; two digits this year based on higher valuation.

Calgary needs to be careful that companies are driven by the business by increasing taxes, and make the load even heavier for those who remain.

"If you eliminate the rest of & # 39; entrepreneurs or make it more difficult, in the end from Calgary will not be able to recover", it warned.

Maureen Macdonald, the CMS Real Estate company owns seven properties in the city, saw the assessment on the building which is based outside off 54 percent in the past year.

However, the property has not seen any changes in tenants or had some improvement.

"I recommend to any building owner to know to appeal the taxes on their property, just to point sends a message to the city hall," she said Monday.

"This is not just a problem in the city, is spread across the city."

The Council is expected to take a final decision on the threshold after receiving a report from the administration to examine its options.

Couns. Shane Keating noted that the city gradually removed the tax on the business & # 39; Calgary and kkonsolidatha in the tax system on commercial property, one of the reasons that companies are paying taxes on higher property.

But like Farrell, he favors a limit on the maximum increase that companies will see in 2019 due to revaluation.

"We illimitawha for two years and maybe we can nappoġġawha for another year," he said. "We can not nagħlquha per year because eventually something has to give."

For business operators as Abbas and Evans, 2019 could be the year to give something – their patience in f'Calgary tax increase.

Chris Varcoe is a columnist of the Calgary Herald.

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