In the 12 October edition of The Calgary Herald, it is reported that a member of City Council is seeking to block development of private land. The subject site is the Shaw-Nee Golf Course. The private golf course was uneconomic and its owners decided to sell. The new owners seek to develop the land into residential use accommodating 1,500 units. This fits with the City’s efforts towards “densification”. The adjacent residents are up in arms protesting and they rather enjoyed living next to the open space. The ward alderman is going to bat for them.
So what? The objectors don’t own the land. Yet they and their alderman seek to limit what an owner may or may not do with their land, and apparently seek to impose limitations in a reactionary move to effectively usurp or confiscate the legitimate right of a property owner to do what they see fit with their real property. This is worrisome.
If the adjacent owners and others in the community object to the development, as seems to be the case, then they are free to purchase the land and to preserve it as open space. The City of Calgary should not purchase this land as there is no defined municipal purpose in doing so. The argument that it should be preserved as open space/park land is difficult to accept given the community’s proximity to Fish Creek Provincial Park, the largest urban park of its type.
In this particular case, Council will seek to protect people who buy into “lifestyle” communities to assure them that residents will have some certainty that such a lifestyle remains. If that community has title or contractual rights to the “lifestyle amenities”, then the argument has merit. Without such rights, the argument has no merit and is a significant intrusion in the property rights afforded under common law. Another alderman suggests that it is not necessarily in the best interests to make private facilities like golf courses “perpetual fixtures” and the City should evaluate what’s best done with the land. This is also cause for concern. While the City has the right to plan and determine land use, it must tread cautiously so as to not effectively strip a land owner of his rights that a government at the same time has some obligation to protect.
As regulations, development controls, and “guidelines” become progressively more intrusive, property owners should be diligent to ensure their rights are not trampled upon. In this particular case, the City should back off. And as stated above, if the residents truly want to control the destiny of old golf course, they should step up and buy it. That is the only way they can truly control the outcome.
The real risk comes from posing the larger question: Is the pendulum swinging back to a time when the state (monarch) owns and controls all the land to who we all become indentured servants and will be required to feudal systems of loyalty and fealty? Freedom has been hard-earned. We should vigorously resist all efforts to limit it.
That’s the way I see it.

5 October 2011
Business Tax Consolidation
BOMA is the representative association of commercial real estate which includes the owners of office, industrial and retail properties in Calgary. These owners are predominantly pension funds.
By way of NM2011-20, and subsequent discussions with Aldermen and the administration, we took it on good faith that the underlying intent of the Notice of Motion was to “have the discussion”. In fact, the notice of motion stipulates that, “administration prepare a report … which provides information…to consider whether business tax” could be consolidated with property tax.
The materials accompanying this Agenda fall far short of completing that discussion and the actual implementation process has not been articulated. In short, the case for harmonization has not been made.
BOMA’s position of record for this and the previous two attempts to harmonize business and property tax is well known. BOMA would support harmonization subject to satisfactory resolution of a number of matters. The proposal before you to day fails to offer that resolution. In fact, the material before in effect asks us to agree to an open-ended approval. We cannot do that given the arguments put forward.
The outstanding issues have been accurately represented in the report. These are:
• Addressing vacancy rates
• Addressing tenant defaults
• Addressing vacant land
• Addressing properties under construction]
• Addressing linear property
• Addressing gross leases
• Addressing exempt entities
• Addressing machinery and equipment
• Addressing the zero rate increase of the business tax component
In short, the mechanisms have not been addressed and the interests of owners/investors have not been satisfactorily addressed. The devil is in the details and we need to receive this information and have a reasonable opportunity to completely analyze their implications to owners. As the proposal is written there is just too much uncertainty. Details must be provided.
Accordingly BOMA recommends the Committee direct the administration to:
a) Prepare a detailed implementation plan and transition time frame
b) Addresses the customer and implementation issues identified in the report and how these will be resolved, and
c) Articulates a communications plan
BOMA makes these recommendations in good faith recognizing that both industry and Council require complete information to render a good and proper decision. BOMA seeks to be part of a genuine solution to this issue.

There are many supporters of the new system of residential waste removal in Calgary. But a good discussion question relates to what has really been accomplished?

Waste reduction and recycling are easy concepts to embrace. If you accept the premise that the recycling decision, if not the actual process, commences at the time and the point of purchase, then you should accept the role of the individual in that process. Why do I need this in the first place?

The late George Carlin, one of my favourite comedic philosophers, had a good routine on “Stuff”. Do a search on YouTube and you can view it.

I made the observation the other day when seeing a City of Calgary waste services vehicle picking up the bins in the lane behind my house. I couldn’t help but notice that these highly mechanized and automated vehicles could pick up a bin on the curb-side of the truck. That means the truck has to make two trips down the same lane to collect the waste from that very same lane. By comparison when people not machines picked up the garbage, only one trip was necessary.

Extrapolate this to the blue bins and the black bins and you realize that 4 trips along the same lane are now required where under the previous regime just one trip was required. Gets you to thinking what we have actually accomplished under the banner of “sustainability”?
There are advocates for green bins to handle organic waste. Hold it just a minute! People actually want me to have three bins? That will mean 6 trips! Six times the trips, six times the amount of time, six times the amount of fuel consumption and we are not really sure if the environment will be better off. So what has really been accomplished?

Carlin was right: We have too much stuff.

Are the people we rely on in our communities to keep us safe, really putting us at risk? There are several situations that cause me to believe that in some way, rigid design standards or regulations can actually be harmful.

Most would agree that impaired drivers are a threat to everyone else on the road. Most would agree that we should get them off the roads. There are even organizations such as MADD which are devoted and campaign heavily to get the drunks off the road. So, why does the City of Calgary Land Use Bylaw require bars and other drinking emporiums to provide parking? Aren’t we in some way sending out conflicting messages? You shouldn’t drink and drive, but if you open a bar you need a bunch of parking stalls.

The latest popular kick is water conservation, and quite rightly so. We live in a semi-arid climatic zone – that means we live in almost-a-desert. Why does the Land Use Bylaw provide that in association with development, we place non-native plant species that requires a good deal of irrigation? Again we send mixed messages. Phoenix, Calgary’s sister city, where summer temperatures now would nearly melt metal, provided incentives to its citizens to take out their lawns in favour of natural landscaping or xerascapes. The objective was to conserve the scare water resource. I won’t touch watering lawns or City parks in the rain. There will be a predictable sermon from the urban forester – why do we need one of those?- articulating the positive benefits of the “urban forest”, But for goodness sake, we live on the prairie where the natural vegetation is grass! Trees, no matter how much we may like them, are alien to this ecosystem. We have used the bylaw to mess with Mother Nature.

The other thing that irks me a little is the location of certain bus stops. A simple observation suggests that someone is just not thinking it through. For example, on 90 Avenue SW there is a bus stop just west of 24th Street where buses discharge their riders who immediately proceed to jaywalk across a 4-lane divided road way. Well, we have bylaws against jaywalking, but then why do we locate those bus stops in such away that leaves person with the less safe choice of avoiding the controlled intersection 100 meters to the east in favour of the more risky jaywalking.

While we are on the subject of questionable bus stops, another one that left me scratching my head is one located on south bound Crowchild Trail underneath the 17 Avenue overpass. Buses typically leave the downtown core via Bow Trail and exit on to the left lane of Crowchild. When fully loaded with passengers, the buses which appear to be seriously underpowered, struggle to get to a safe merge speed in order to cross three lanes of high-speed traffic to get to the designated bus stop a couple of hundred meters away on the right-hand curb. How the bus drivers do it is beyond me but that they do is a testament to their skill and their patience. It appears to be a location for accidents waiting to happen.

Next: I remember the day when I was in the residential development business and I recall another head-scratcher of a regulation. As I recall – it was several years ago – there was a standard that specified a street light be located every 110 or 120 feet or thereabouts. So they were spaced at that interval regardless. And that is why a lamp standard ended up in the middle of someone’s drive way. Apparently no one on the city side or the builder’s side was paying attention to the details.

And details it is. In the urban realm it is the details that do count. The concept of comprehensive urban design has apparently been lost amongst the text books and not found its way into how we build our cities. There are just too many things that have been left undone, just as there are too many things that have been over done.

Next: Perhaps readers have noticed the plethora of litter lying about and silently rebuked those who threw it to the ground. But then, where are the littler bins? Never one around when you need one, so just toss it. That’s not good enough. Now we have to pay someone to pick it up for want of a $200 litter bin. Here’s a thought: rather than handing out fines to litterbugs, why not sentence them to 20 hours of community service to pick up other people’s litter? Punishment fitting the crime? And while I am on this rant, have you seen the adhesive signs at transit shelters? They have litter bins declaring “For the Transit User use Only”. Who owns transit? It is kind of discriminatory. How do they know it is garbage deposited by a non-transit citizen? Watch out for the transit litter cops!

I think, and perhaps it is a function of our times, in the context of urban planning and urban development we have become lazy, paying less attention to detail, displacing creativity and innovation with rigid regulation, and managing by “formulas”. We have very complicated and lengthy approval processes in someway forcing the proponents of development to look to the expedient just to get it done. This strikes me as less than sufficient to achieve the greater community good.

Do you have any similar pet peeves, or things that you question saying, “Why do we do that?”  If so, pass them along.  I will look into them.

What follows is a summary of BOMA Calgary’s position on the issue of business tax and various proposals to “harmonize” or “eliminate” business taxes in the City of Calgary. This is a very significant issue and more information will be posted to the BOMA Blog as the matter evolves.

At this particular juncture, there are no proposals from the City on how it may mitigate any of the inequities which have been cited consistently each time this matter has come forward.

___________________________________________________

Business Tax Elimination
Outlining BOMA’s Position – February 2000

BOMA Calgary has long supported the elimination of Business Tax in the City of Calgary. In the early 1990′s BOMA initiated the lobby effort to establish a Fair Tax Committee. That committee gave City Council a series of recommendations aimed at streamlining the tax system and removing its inequities. One of the recommendations was the elimination of Business Tax. BOMA continues to support elimination of this tax altogether. Should it be removed, the City would still need to obtain the $128 million in revenue. The Fair Tax Committee went on to recommend that the $128 million be collected from the non-residential property tax base.

In a no business tax environment, commercial and industrial property owners would pass on the amalgamated tax to the tenants who occupy their buildings. This will have the effect of business paying the same amount in taxes, but in a more efficient manner.

What about vacancy? The vacancy issue is addressed through market value assessment. Before, MVA BOMA objected to being the city’s business tax collector because there were no acceptable mechanisms in place to adequately adjust for the annual fluctuations in occupancy. With MVA now in place, theoretically, assessment for a specific building can be factored annually to reflect the current vacancy rate. Higher occupancies would translate into relatively higher assessment values. Conversely, lower occupancy levels tend to diminish the value of the asset and would be accompanied by lower assessed values. The City has undertaken to make these annual adjustments.

Why should Business Tax Be Eliminated?

 Business tax has many inequities. 40,000 (Est.) businesses don’t pay business tax.
 Dynamic nature of industry – mergers, re-locations, closures, make tracking of businesses difficult to monitor, and to collect tax.
 City would save an estimated $2 million in administrative costs. Also would avoid costly upgrading of the City’s computer systems. (BOMA’s position calls for applying the savings to reduce the overall tax bill.)
 Would eliminate a duplicate appeal process.
 Tend to make the tax system easier to understand.
 Would make comparison of Calgary’s competitive advantage easier to understand, as most major North American cities do not have a business tax. (Examples?)

How would the new system be implemented?

 The non-residential mill rate is adjusted in the initial year to collect the same revenue as the previous year. (E.g. $128 million in business tax would be added to $179 million in property tax. $307 million in total.)
 New result would be revenue-neutral to the city.
 Adjustments to property mill-rates in subsequent year would be applied equally to all classes of property, residential and non-residential.
 No need to “phase out” business tax.

The change for landlords will be to treat the amalgamated tax as a variable cost. The gross amount of taxes will be applied across the building such that the full amount is recovered from the tenants.

________________________________________________________

BOMA Calgary
Position Paper
Business Tax Harmonization

May 2003

• BOMA will not support the harmonization of business tax just so the
City of Calgary can pass all liability of the tax on to non-residential
property ratepayers (an estimated 37% increase).

• The City has a policy of not raising business tax rates.
• There is no such policy for non-residential property tax rates.
• Therefore, the city could collect more tax by harmonizing business tax. For example:

o The City currently collects $146.6 million in business tax and $256.8 million in non-residential property tax.
o Assuming that the number of businesses paying business tax is the same, therefore, the business tax rate stays the same. If the City were to raise non-residential taxes by 5%, the total non-residential and business taxes collected would be: $146.6 + ($256.8 x 1.05) = $416.2 million or a 3.17% overall increase.
o If business tax were harmonized and the City were to raise non-residential taxes by 5%, the total non-residential taxes collected would be: ($146.6 + $256.8) x 1.05 = $423.6 million or a 5% overall increase.

• BOMA would consider supporting the harmonization of business tax
with the property tax only if provisions are legislated to:

• Protect landlords from increased taxes on unoccupied space.
o Unoccupied space does not pay any business tax.
o The landlord absorbs the property taxes on this space.
o The landlord will also absorb the 37% increase in property taxes.

• Protect landlords from increased taxes on Gross Leases where the tenant does not pay a contribution towards property taxes.

o Tenants who pay business tax but not property tax.
o Tenants who pay business tax and property tax but have a ceiling on their property tax. For example:
• Tenants whose property tax increases are tied to the CPI index or their operating costs are capped at a certain amount – would not have to absorb the 37% increase.

• Protect vacant landowners from increased property taxes.

• Non-residential vacant landowners do not pay a business tax, therefore, face a 37% increase.
o Owners of improved land also face a net increase if they are assessed for excess land due to unused density.

• Protect commercial property owners with partially completed
buildings from increased taxes.

o Developers developing a parcel and have a partially completed building will be assessed for the land and could be assessed for the partially completed building. Both were not assessed for business tax before.

• Significant cost savings to the City of $3 million per year or more is realized due to the harmonization and this saving is passed directly to the non-residential ratepayer.

• Current business assessment staff would be redeployed elsewhere in the assessment department.
• Mail outs for tenant information will still be required for the market value assessment.

o The Calgary Tax Review Committee (1996) recommendations are adopted, specifically:

• Recommendation #3: The Committee recommends that revenue from the non-residential sector be capped and revenue from growth in the assessment base be applied to reduce the present ratio of non-residential mill rates to residential mill rates.

• Currently the non-residential mill rate is 2.28 times higher.
• If the business tax is harmonized, the ratio will be 3.13 times higher.

• Recommendation #4: The Committee recommends that the City adopt a system of licenses for home based business, with fees fixed by categories of size based upon full or part time activity and the number of persons involved.

• The City does not seek out home based businesses. They only assess licenses to those who advertise, for example: if you announce your business in the paper.

The July edition of the Calgary Police District One Business News is now available. As well, as a special feature, CPS has provided a Summer B&E Prevention Guide!

Check these publications out, brought to you by BOMA Calgary’s Public Safety Committee!

(Note: What follows is the script for the President’s Award for Sustainability in Commercial Real Estate w

For many years, BOMA Calgary has been a leader in the area of the indoor environment and building sustainability.  Our history in this regard goes back to the 1980’s when BOMA Calgary was part of the Federal Government’s Energy Management Task Force which was mandated to advise the government regarding energy conservation policy.

Most recently, BOMA secured its position as the industry leader by virtue of the BOMA BESt program.  Now with over 2,000 certified buildings, and the largest database of building performance statistics in North America in the form of the annual BOMA BESt Energy & Environmental Report, there is no doubt about BOMA’s leading role.

But it really is the industry members who deserve the credit for this accomplishment.  Many national and regional organizations readily embraced the BOMA BESt program as they recognized it provided them with a credible means by which to benchmark their building’s environmental management system against the national industry standard.  What’s more, they recognized BOMA BESt gave them a practical tool for continuous improvement.

We are impressed by such organizations as Bentall Kennedy which has the most BOMA BESt nationally verified buildings in Canada, we are also impressed by the achievements of Manulife Financial which has realized a 38% reduction in energy use in their properties, including many that were constructed in the 1960s.  Further, Oxford was the first to achieve a BOMA BESt level 3 certification for an industrial building in Alberta.  And there are many other firsts in this regard in terms of the achievements of other BOMA Calgary members. We truly admire all what the industry is doing in the name of sustainability.

There is, however, one member that is worthy of distinction.  And that is Alberta Infrastructure.  Alberta Infrastructure wrote its “Green Book”, which is essentially its operations manual for sustainability, with BOMA BESt as one of its key benchmarks.  Alberta Infrastructure committed itself to the BOMA BESt program early in the game, much through the efforts of John Enns, and the agency now has over 80 buildings verified in the program.  Further, Alberta Infrastructure through its Provincial Building in Pincher Creek, Alberta has received the highest score for a BOMA BESt Level 4 verified building, and incredible 91%.

For both their commitment to BOMA BESt and its principles of sustainability, and for their achievement within the program, I am please to present this Award to Alberta Infrastructure.

Accepting this award is Alberta Infrastructure Minister, the Honourable Ray Danyluk.

(Note: At the BOMA Awards event on Wednesday evening, May 18, several members commented on the narrative leading up to the special recognition of one of BOMA’s younger members. What follows is the text of that speech.)

Being in this business as long as I have I am still always inspired by BOMA volunteers, just as I am inspired by the entire BOMA organization and what it stands for. It is a strong and vibrant organization working on behalf of a key industry. Like any such organization BOMA Calgary is largely dependant upon volunteers, and the future of BOMA is dependant upon a progression of volunteers, and in particular young people, sometimes labeled “Gen Y”.

We have a duty to our industry to identify, to nurture and prepare our future leaders. We must support them, and encourage them, and most of all we must recognize them. They believe the same things as we do, and the while their values may be expressed in different ways; they have embraced the fundamental principles of our industry and of our community. We should always recognize exemplary individual performance not only to recognize that person, but to send a message of encouragement to those who one day will ultimately succeed us and who will lead our industry such that they willingly step forward and know that their contributions are meaningful.

BOMA is fortunate to have many young, enthusiastic people involved in many ways in our association. And one in particular stands out for his industry expertise, and his enthusiasm through his participation. He holds a highly principled position in the realm of sustainability as demonstrated through his participation on BOMA’s Environmental, Health & Safety Committee, he is a member of the Mentorship Sub-Committee aimed at helping others, and is a member of the national BOMA BESt Technical Committee. As well he has been a key participant on national industry panels presented at BOMEX events over the past two years. As well, this individual has distinguished himself as the youngest BOMA member to have been elected to the BOMA Board of Directors. He sets a positive role model for others to emulate. Despite his quiet and humble manner, he continues to make positive and constructive contributions to BOMA and to our industry.

I would like all of you to join me in recognizing Alvin Law, Alberta Infrastructure.

The recent issue of development fees charged by the City of Calgary has raised a number of issues that should concern owners, developers and operators of non-residential properties.

There is a development agreement periodically negotiated by The City of Calgary and The Urban Development Institute (UDI) which, among other things sets down the fees which a developer must pay for things like sewers, roads, community infrastructure and other things. The current round of negotiations over a period of several months resulted in significantly escalated fees that would translate to additional costs estimated to be between $8,000 and $12,000 per home.

That’s the point. The focus is on low density, suburban residential development and yet the development fees will apply to all forms of development: office, industrial and retail buildings included. Our issue is simply that BOMA, along with other representative groups, were excluded from these negotiations. I will repeat that: It wasn’t that we weren’t there, but rather that we were specifically excluded. This is despite specifically asking the City and UDI to be involved in negotiating fees that would significantly impact our industry sector.

Not only is this not fair, it is just not right. And in the interests of transparency and inclusiveness, key features of the City’s stakeholder engagement policy, the system is flawed and needs to be fixed.

It seems contradictory on the one hand that Calgary City Council would be staunch defenders of “affordable” housing then turn around and widen the affordability gap by pushing up its fees to new highs. But what is the impact of these fees on the non-residential properties? As one BOMA member stated at the public hearing, an escalation of as little as $0.50 per square foot and trigger a decision by a major industrial space user to locate somewhere other than Calgary. Losing business to surrounding municipalities would be a significant matter to Calgary’s tax base.

Keeping Calgary competitive and attractive to the labour pool is in our community interest. No only must Calgary attract new businesses to locate here, it must be affordable for people to live here. If labour can’t afford the housing, then that presents a barrier to their being here in the first instance.

BOMA is advocating for a set of development fees that are kept separate from the residential fees. The City argues that low density suburban sprawl is subsidized, and that by way of property taxes they don’t contribute their due, and are “subsidized” by the community. We are inclined to agree.

This raises the question of where those subsidize are derived, and the obvious answer is: From other taxpayers. The report of the Tax Review Committee in its February 1994 Report to Albertans, noted the disparity between the residential and non-residential sectors and recommended measures to “prevent municipalities from loading up taxes on the business sector”.
The City has yet to take steps to eliminate this disparity. And there is a structure resistance to adjusting this relationship since, unlike residential rate payers who do, non-residential rate payers do not vote!

One possible way to address the disparity is to segment the residential development from the non-residential development when considering the fees. Commercial development represents economies of scale that may not always be present in residential development. The infrastructure intensity applicable to residential development is significantly more that for a commercial development, and the taxes that are derived from commercial properties outweigh by a significant proportion the tax revenue derived from residential properties, which the City indicates don’t pay their way. But the main point is there is a fundamental difference in the requirements for residential and non-residential development. Their respective needs and the implications from those needs to the overall community are fundamentally different. This alone warrants the segregation of the negotiation of the respective servicing and development fees. There should be a separate non-residential development agreement.

BOMA is a strong community partner and seeks always to be part of the solution to community issues. Be we can’t be a partner if the City excludes BOMA from the table.

The April stats are out! Along with trend of the month (hint, it’s white and not illegal), and safety tips.

Read on…