As the statue of Red Deer’s first mayor, Francis Galbraith, enjoys a coffee in City Hall Park, some city business owners can’t account for their increased property assessments. (Advocate file photo).

Some Red Deer business property owners are questioning increased assessments during a recession

‘The decision does not appear realistic,’ says Allan Hough

Allan Hough was surprised to open a City of Red Deer notice and see some of his commercial properties had gone up in assessed value.

Since Red Deer is in the midst of a prolonged recession, and most residential property assessments are on a downward trend, this hike does not appear reasonable, says Hough, whose company, Triple A Developments Ltd., owns several commercial and industrial properties.

Hough maintains he’s made no recent improvements to his land or buildings. In fact, he’s decreased the rent on one property, and had some copper cladding stripped off another exterior by metal thieves — yet the combined total value of his commercial properties was assessed by the municipality as higher than last year.

“This decision does not appear to be realistic or accurate,” he adds.

Hough believes the city is in a conflict of interest by setting property assessments and then collecting revenues from taxes based on those assessments.

Commercial realtor Brett Salomons — who’s heard similar complaints about increased property assessments from a handful of other baffled business property owners — also considers this a conflict.

Salomons notes municipalities in British Columbia don’t set property assessments. This is done by an arm’s-length independent board — and he believes the same rules should apply in Alberta.

A Calgary city councillor is, meanwhile, calling on the provincial government to reform how property assessments are determined. As oilfield offices relocate from downtown Calgary, some businesses outside the downtown have complained their property assessments are being increased, perhaps to help make up for a revenue shortfall.

Salomons acknowledged there are differences in Red Deer’s situation. Calgary has a downtown office vacancy rate of about 25 per cent, while the City of Red Deer reports our downtown has a 10 to 15 per cent office vacancy rate (and a 10 per cent retail vacancy rate).

But Salomons noted as some taxpaying businesses have left the downtown, more social service non-profits have entered it — and these charitable agencies do not pay property taxes.

Joanne Parkin, the city’s revenue and assessment services manager, said the City of Red Deer can’t assess properties arbitrarily, just to boost revenues.

“We have a very prescriptive system” of parameters set out by the province, she said.

Parkin said assessors consider things such as property improvements, square footage, resale value, and the type of business that’s operating on the property. While vacancy rate is also a consideration, it’s only one factor in a complex formula, she added.

While B.C. handles its assessments differently, she believes there are positives and negatives with both systems.

Parkin invited Hough and other property owners who don’t agree with their latest assessments to call the city for an explanation. If their concerns remain unresolved, they can launch an appeal, which is heard by an independent board.

Hough said he intends to have a discussion with the city’s assessment department.

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