Resort zoning bylaw preventing sales, hurting owners, Nakusp council told

There is enough property zoned R-5 resort/hotel to put up 7,358 hotel rooms – roughly five times the current population of Nakusp. That may be overkill, according to Andy Moffat.

  • Jun. 21, 2011 6:00 a.m.

On a pretty little strip of undeveloped land known as the Nakusp point lands, there is enough property zoned R-5 resort/hotel to put up 7,358 hotel rooms – roughly five times the current population of Nakusp.

Visionary overkill?

Andy Moffat seems to think so.

“By including a reference to ‘hotels with complimentary retail only and resorts with complimentary retail only’ the wording in the zoning bylaw paints the entire 125 acres of the R-5 point lands as one huge hotel site as far as the assessor is concerned,” the Arrow Lakes Appraisals Ltd. exec told the Nakusp village council in their June 14 meeting.

“For the purposes of illustration of the absurdity of the current situation, even if we only used a total land area of 100 acres as the property included in the present R-5 zoning … that development would be over 18 times the size of the 390-room Grand Okanagan Resort in Kelowna.”

Moffat requested a review of the bylaw affecting as-yet undeveloped R-5 zoned properties.

“There are a number of larger-acreage properties located in the R-5 Resort area that are experiencing very high – and, we suggest, unfair – levels of taxation,” Mof fat said in his report. For those properties, “the situation becomes considerably more complex and results in a most unfair and unfortunate situation.

“It may be possible to envision one hotel-resort property emerging from the huge land base within this zoning in the future and operating as a commercial resort property. However, the entire land area that any such hotel or resort would need would be reasonably estimated at two to three acres of land,” he said. “A three-acre site could supply the land required for a 220 room hotel. That would be a very large development for the Village of Nakusp.

It’s a weird and relatively new legal loop between land use plans and zoning that has a handful of Nakusp taxpayers forking over big taxes on land that doesn’t even have a shed constructed on it.

For a handful of  owners of 15 or so larger lots included in the R-5 Resort Residential zoned lands on the Nakusp point lands, this is causing undue hardship, Moffat said.

“With that much higher rate of taxation being applied to the unused lands in this zoning, the owners of these properties have become trapped.

“They are unable to sell or develop these properties in a local real estate marketplace that has been in decline for two years.

“Investors who may be looking at possible future development in this village see the extremely high taxes on these lands and lose all interest.

“The current owners are not able to afford to hold the properties under this unfair tax burden, and they are unable to sell the properties due to the unfair tax burden,” Moffat said.

“The Nakusp Village Council should amend the wording of the R-5 Resort Residential section of the bylaw and remove the two references to resort and hotel uses,” he said.

It used to be that property wasn’t taxed at the higher rate until it was used for commercial purposes. The intertwining of three separate but interrelated policies leading to the current classification is wreaking havoc for some taxpayers, he said.

“It’s in the application the policies and legislation governing the ‘classification’ and ‘actual use’ derivation of properties for assessment purposes that the unnecessary property tax hardship for the owners of these properties is created. For properties and portions of properties that are actually being used by the owner, the assessment is straightforward. The assessor doesn’t rely upon the zoning of those properties to determine the classification, but instead looks at the actual use made of the property,” he said.

“It is the determination of the classification of unused or vacant properties that are causing a problem,” he said.

The wording of the bylaw is extremely critical, with every word becoming very important, Moffat said.

A test case out of Vancouver Island that has made it all the way to the provincial Supreme Court is forcing municipalities to rethink zoning bylaws, because now it’s “totally opposite,” Moffat told the council.

“The courts have clearly decided that if the wording in the zoning bylaw includes any reference to the possible use of the land for a commercial activity, the proper classification of any unused lands must be totally as Business and Other classification,” he said, noting that ‘business and other’ has 2.6 times the mill rate of residential.

“Right now you’re taxing it, with a flair for the dramatic, as if you could put 18 Grand Okanagan resorts on it… I’m very optimistic about the future of Nakusp, but (I don’t see) 7,000 hotel rooms,” he said.

If a zoning bylaw is passed that would allow landowners relief until they actually use the land for something, by leaving the development permitting process in place the council retains control for future purposes, Moffat said.

“At least that would give these guys a fighting chance to get something going,” Moffat said, adding that he’s eager to see developers come in.

“Let’s hope they come tomorrow – I’ll go pick ‘em up,” he said.

Mayor Karen Hamling said the Village will work on the issue right away.

“This is something we’ll make a priority,” she told Moffat.

“We appreciate you bringing this forward – something needs to be done to address this,” said Councillor Joseph Hughes.

For the assessor to reflect the new wording for the 2012 Assessment Roll, the changes to the zoning bylaw would need to be completed by the permitted use date of Oct. 31, 2011.