The following was published yesterday on CityHallWatch
CityHallWatch has just learned that an unusual third-party appeal to the BC Property Assessment Review Panel has resulted in a threefold increase in the assessed value for the Dunsmuir Hotel at 500 Dunsmuir Street. Readers will recall this historic building was ordered to be demolished by the City of Vancouver in late 2024 after years of neglect by its owner.
The property is owned by controversial Trump Tower property developer Holborn Group who in 2008 purchased the Little Mountain property from the BC Government. The company was subsequently severely criticized for delaying redevelopment of the social and market housing approved for the property. Development is now underway.
Third party assessment appeals are rare
While most people are familiar with property assessment appeals, what is not widely known is that anyone can initiate a third-party appeal of the assessed value of any property in British Columbia.
This appeal was initiated by retired architect and real estate consultant Michael Geller. He became interested in this property after reading a December 16, 2024 Vancouver Sun article by Dan Fumano regarding a City of Vancouver report to Council from the City’s Chief Building Official. It ordered the demolition of this 167-unit former SRO because it had become unsafe and dangerous to the public due to years of neglect by the owner. Although on the heritage list, it was not a protected heritage building.
Upon reading this Vancouver Sun story and Council Report, Geller was curious to see the assessed value of a building deemed so dangerous to the public that it had to be demolished immediately.
He was surprised to discover this dangerous building was assessed at an astonishingly high $1,757,000 and even more surprised to see the land value of this prominent 12,000 square foot Central Business District (CBD) property assessed at only $6,345,000 for a total of $8,102,000, or $675 per square foot. Based on its ‘outright’ 7 FSR commercial zoning, this equated to only $96 per square foot buildable. This value was considerably less than nearby properties.
SRO Replacement/Conversion fee
When a Vancouver SRO unit is demolished or converted, a $300,000/unit fee may be required. However, there was no reference to this in the Council Report. Geller wrote to the City and was subsequently advised by the former Vancouver Senior Planner who worked on this property that (a) since the property was vacant for many years, and (b) rezoned from mixed-use to commercial, and (c) the Salvation Army (the previous owner) had relocated the SRO units into another building prior to its sale, the fee was not applicable. However, BC Assessment was not likely aware of this when they valued the land and building.
Assessment history
In 2019 this property was assessed at $26,643,000. An agent for the owner appealed this assessment, and successfully had it reduced to $15,521,000. It was further reduced three more times to $8,102,000 in 2024. For 2025, the assessed value was further reduced from $8,102,000 to $6,476,000.
During this time, the SRO removal/conversion fee increased from $125,000 to $300,000.
As a result of this very low valuation, Holborn was saving property taxes while allowing the building to become so run down that it became unsafe to the public.
.
Original 2025 Assessment
(values as of 1-Jul-2024)
Land $6,375,000
Buildings $101,000
Total $6,476,000
Amended Assessment
(March 2025)
Land $18,864,000
Buildings $101,000
Total $18,965,000
BASIS FOR THE APPEAL – A REQUEST FOR EQUITY ON LAND VALUE
In his appeal, Geller noted that since the SRO replacement fee did not apply for the reasons previously mentioned, and the building was not a protected heritage structure, the land value should be comparable to the assessed value of adjacent properties, including a vacant lot immediately next door. This lot was half the size but assessed at considerably more than the subject property.
After taking considerable time to review Geller’s written and verbal submissions, the Property Assessment Review Panel agreed with his arguments.
It should be noted that if the owner disagrees with the Panel decision, it may appeal to the Property Assessment Appeal Board. It has until April 30th, 2025 to file this appeal. While Geller doesn’t know if the owner will appeal, he is confident that the Appeal Board will uphold the Panel’s decision now that all the facts related to the SRO replacement fee are known.
WHY IS THIS ISSUE IMPORTANT?
Under-assessments of industrial/commercial/institutional (ICI) properties appear to be a long-standing systemic problem. Key players here include developers and their legal teams, BC Assessment, and municipal and provincial governments.
Our municipal and provincial governments have checks and balances in place, and it is up to our elected officials to ensure that they are functioning. The failure to do so can have serious negative consequences for society as a whole.
Let’s look first at the actual story of demolition in January 2025, since it is so recent in memory. The issue was covered extensively by media. Here we take excerpts from coverage by CBC.
Vancouver council reluctantly votes to demolish 115-year-old building. Councillors criticized owner of Dunsmuir House for letting historic building fall into disrepair (Akshay Kulkarni, CBC News, 18-Dec-2024).
“Vancouver councillors passed a motion Wednesday that would see a 115-year-old building on the city’s Dunsmuir Street demolished — even as they chastised the property owner for letting the heritage-listed building fall into disrepair.
Built in 1909 at the corner of Dunsmuir and Richards streets, Vancouver’s Dunsmuir House has served as a grand hotel, a barracks for soldiers and a single-room occupancy (SRO) housing complex. But since 2013, it’s stood vacant. 500 Dunsmuir Street is listed in the city’s heritage registry but is not subject to heritage protection, according to a city report, which also noted a detailed cornice atop the building and its historic brick façade.
… City staff recommended that the building be demolished over the risk of a “catastrophic, cascading collapse,” saying that water leakage and disrepair mean walls are no longer supported properly… While councillors passed a staff motion approving the demolition, they did so after criticizing the building’s owner, Holborn Properties, and asking staff to look at legal avenues the city could take against property owners who do not maintain historic buildings…
… In a statement to CBC News, Lee Medd, director of asset management for Holborn, said they are committed to “acting responsibly in the best interests of public safety, the community and the future of this site.” Medd did not say what would replace Dunsmuir House or when that may happen, but that Holborn has had “long-held intentions to redevelop this location.”” Link – https://www.cbc.ca/news/canada/british-columbia/dunsmuir-house-demolition-city-of-vancouver- 1.7414532
And here below is a link to CityHallWatch coverage of “The demolition of 500 Dunsmuir Street” (more photos at the link) – https://cityhallwatch.wordpress.com/2025/01/18/demolition-of-500-dunsmuir-in-photos/
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THE ROLE OF MUNICIPAL GOVERNMENT
We must note that the City of Vancouver is not an innocent bystander when it comes to low-balled assessments, which benefit some property owners at the expense of the rest of the taxpayers.
In his article on another case of low assessments by BC Assessment, Robert Renger quoted Derek Holloway, AACI (Ret.), a 28-year veteran of BC Assessment: “I’ve made Vancouver City & Council aware of many under-assessed properties over the years. I hear crickets when I send the [info] – even the press is afraid.”
ADDITIONAL INFO ABOUT THE PROBLEM OF UNDER-ASSESSMENTS
A 2019 article by Kerry Gold in The Globe and Mail is entirely relevant now in 2025. She even refers to another project by same developer (Holborn) though the developer is not named in the article. Below are some excerpts relevant to today’s story of the amended assessment at 500 Dunsmuir.
“B.C. has lost millions to undervalued commercial properties, former assessor says” (Kerry Gold, Globe and Mail, 22-Jan-2019, for subscribers).
“Recently retired BC Assessment assessor Derek Holloway says that for too long, large commercial properties, often slated for residential density, were being undervalued and money was left on the table. That’s money that could have been going toward funding social housing and affordable housing models, such as co-op housing.
When big properties aren’t taxed correctly, he says, residential property owners take on the extra tax burden.
… He blames policies that saw government stepping away from housing programs, selling off public lands to private developers and failing to ensure trophy properties were valued and taxed according to the market. Mr. Holloway says that anyone concerned with the creation of affordable housing should consider this overlooked source of lost funding… “I don’t know of any housing advocates who have taken issue with low assessments, since the process is so insulated,” says Mr. Holloway…
…. The former provincially owned Little Mountain property, for example, may have been under-assessed due to a lack of transparency, he says. The province sold it to a developer [NOTE – Holborn – same as the subject of the 500 Dunsmuir demolition and low-ball property assessment] in 2007 as part of a secret deal, receiving payments in future installments. “I’ll bet that BC Assessment has never seen the sale agreement,”
… He’s especially critical of the BC Liberals’ handling of Little Mountain, which was one of Canada’s largest low- income housing projects. “BC Housing could have just held onto the site and then subdivided off individual lots over 10 years, reaping the windfall for B.C. taxpayers that is reflected in the higher assessments.
… “Past provincial governments have not only screwed taxing jurisdictions by perennially under- assessing trophy properties – they’ve handed over massive amounts of prime real estate to developers, all whilst ignoring B.C.’s needs for affordable housing.”
Link – https://www.theglobeandmail.com/real- estate/vancouver/article-bc-has-lost-millions-to-under-assessed-commercial-properties-former/
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More recently, in an article entitled “Retired appraiser says BC Assessment intentionally undervaluing commercial properties” (Chilliwack Progress, 24-Feb-2023) Paul Henderson reinforced a number of critical themes.
“A retired property assessor says residential taxpayers in B.C. are getting fleeced by chronically under-valued industrial/commercial/institutional (ICI) properties. Derek Holloway was a senior appraiser at BC Assessment for 28 years, and he’s been banging this drum for years, reaching out to media outlets across the province with examples of properties sold at rates way higher than assessments.
… Holloway points to the New York District Attorney who accused former president Donald Trump of inflating values of some of his assets in financial statements to obtain favourable terms for loans, while deflating the value of other assets to reduce property taxes. ‘In B.C., this is a regular occurrence for many large ICIs,’ Holloway says. ‘ICI property owners often hire an army of assessment appeal agents and lawyers to frustrate BC Assessment and the appeal system.’ ”
… Holloway responds that at the very least there is an imbalance if some ICI properties use the appeal system to keep valuations low since the others (usually smaller ones) will have to make up the taxes… It’s all a messy and opaque business, and there does not seem to be enough political will to make it cleaner and more transparent.
CONCLUSION
This amended BC Assessment for 500 Dunsmuir will no doubt please those members of Council and others who were so very critical of Holborn’s behaviour in neglecting the building . Geller should be complimented for taking on the appeal, noting it was not for any personal gain, other than the satisfaction of seeing Holborn paying its fair share of taxes, based on the true value of the property.
MORE MATERIAL
The demolition of 500 Dunsmuir Street (in photos) – https://cityhallwatch.wordpress.com/2025/01/18/demolition-of-500-dunsmuir-in-photos/
Demolition of 500 Dunsmuir St at Special Council Meeting December 18th. Former SRO, building derelict since 2013. Owner is Holborn (Little Mountain developer) – https://cityhallwatch.wordpress.com/2024/12/17/500dunsmuir-demolition-council-dec18/
BC Assessment’s low valuation of 601 Beach Crescent saved purchaser Pinnacle millions in property tax (at the expense of other Vancouver taxpayers). Note: This article points out how there seems to be a systemic bias of low valuations for some major properties, at the expense of other taxpayers https://cityhallwatch.wordpress.com/2024/12/02/bc-assessment-valuations-601beach-cr-saved- pinnacle-millions-renger/
