Tax hike puts Vancouver store out of business
Published Wednesday, February 20, 2019 6:09PM PST Last Updated Wednesday, February 20, 2019 6:51PM PST
One of the West End's most infamous gift shops is closing its doors.
The Chocolate Mousse, owned by two sisters, has been operating on Vancouver's Robson Street for 34 years. They say skyrocketing property taxes are squeezing them out.
In 2017, their building owner sold the property for $79.5 million and last year it was assessed for more than $82 million. The property has been rezoned, and the development application is for a 28-storey mixed-use building with condos and commercial offices.
"Our property tax was $120,000 in 2018," says Karen Tennant, "in the beginning it was probably $28,000 years ago and it's crept up. We understand that but 120 is too much."
The majority of businesses in Metro Vancouver sign "triple net" leases. According to tax agent and senior partner at Burgess Cawley Sullivan Paul Sullivan, it means you have to pay "the net rent, the property taxes, and the common area and maintenance charges."
Sullivan says the lease is standard but increasing taxes is a problem across the Lower Mainland, and commercial rates are five times higher than residential ones.
"When you pass municipal policy that creates that increase building potential, you create higher values in the land," he says. Sullivan thinks municipalities aren't doing anything to protect local businesses until redevelopment happens.
"Pass tax exemption policies or bylaws that provide a window of time to allow tenants to relocate and not lose their livelihood over property taxes," Sullivan suggests, or "put a residential tax rate on that air space. It will drop the taxes from properties like this to a level that interim use is viable."
No one from the City of Vancouver was available for an interview. In a statement a spokesperson says, "the City cannot use a by-law to override the assessment roll."
Officials say they are "exploring alternatives to support small businesses."
"They already know what they have to do and they just have to do it," Jane Tennant, co-owner of the Chocolate Mousse, says.
Long-time customer Pat Baird worries this means there will be more chain stores in the West End. And she says "to make the taxes go up on the potential of what it could bring in is so short-sighted."
Meanwhile customers have left Post-It notes on the store window expressing frustration, sadness and sympathy.
"It's a family business, it's a small business, the backbone of what this city is. I think and it's just devastating what's happened," customer Libby Harington told CTV News. She and her husband have shopped at the Chocolate Mousse since it opened, 34 years ago.
"I think the absolute saddest part is the customers," says Karen. "We thought the West End needed a store 35 years ago and it did need a store. And the community needed a store and it worked out very well."