Municipal tax revenues will likely be short $597,000 this year as a result of the Westin Resort and Spa and Whistler Holiday Inn being reclassified from commercial to residential, and taxed accordingly.
However, the change in tax classification, and resulting savings for property owners, should only be for 2001. A change to the regulation, which will put both hotels back in the Class 6 commercial category, has already been approved by the province and will come into effect for 2002.
Permanent changes to the legislation to achieve the same end are on the order paper for the current session of the legislature, but may not be approved before this session is dissolved and an election called.
The reclassification of the Westin and Holiday Inn are just the latest in a series of assessment changes and appeals regarding condo-hotels.
Last year four condo-hotels the Alpenglow, Timberline, Blackcomb Springs and Cascade Lodge were for the first time assessed as residential rather than commercial after owners re-organized their management and rental programs. Among the definitions of a commercial property, for assessment purposes, is one where 85 per cent of the units are managed by one management company. Some condo-hotels attempted to get around this by hiring a second property management company to manage more than 15 per cent of the units in the building.
The re-classification of the four condo-hotels could have represented a "loss" of $450,000 in tax revenue to the municipality. However, the municipality appealed the assessment classifications and one property, the Blackcomb Springs, was returned to commercial. The net result was approximately $280,000 less in tax revenues than the municipality had anticipated.
Both the Westin, which opened last year, and the Holiday Inn were assessed as commercial properties in 2000. This year, however, the parking stalls in both hotels were included as "units" when calculating the number of units in each property. As the parking "units" make up more than 15 per cent of the units in each property and are managed by a different company than manages the condo-hotel rooms, the properties fall below the 85 per cent threshold and qualify as residential for assessment purposes.
The $597,000 "loss" as a result of this change in classification represents 2.3 per cent of the municipalitys annual revenues.
However, if the proposed bill on the order sheet is passed in this session of the legislature it will be retroactive, meaning property owners in the Westin and Holiday Inn would have to make up the $597,000 "saving" they are getting this year.
Last year, when the four condo-hotels changed classification, the municipality budgeted for the $450,000 shortfall but warned it would be in a financial pinch if other hotels changed from commercial to residential classification.