A decision by the provincial Property Assessment Appeal Board to significantly reduce the assessed value of B.C. Ferries' Horseshoe Bay terminal and property has Nanaimo city officials concerned.
In late October, the board ruled to decrease the assessed value of the upland property of the terminal from $47 million to just $20. Since the appeal was launched in 2010, the new assessment means the City of West Vancouver may have to pay back B.C. Ferries more than $750,000 in taxes – $250,000 for the 2010, 2011 and 2012 taxation years.
The portion of the property in question includes everything but the maritime berths.
The board ruled that because the land lease requires the property to be a ferry terminal, and that B.C. Ferries is losing money, a market-based approach suggests the land is virtually worthless.
The Horseshoe Bay to Departure Bay route on its own, however, is profitable.
Brian Clemens, Nanaimo's director of finance, said the city has, along with the North Saanich District Council, requested to participate in an appeal of the assessment because the decision could affect Nanaimo.
"We have similar fact patterns here in Nanaimo so it is reasonable to assume that B.C. Ferries would extend that logic to Nanaimo if it can," said Clemens.
In 2012, B.C. Ferries paid approximately $1.1 million in property taxes to the City of Nanaimo for three terminals — Departure Bay, Gabriola and Duke Point.
There are currently no appeals by B.C. Ferries regarding its Nanaimo properties.
The appeal is of immediate concern to North Saanich, however, given it is already under appeal from B.C. Ferries.
Nanaimo Mayor John Ruttan said participating in the appeal is the best way for Nanaimo to protect its interests.
"Council believes that it is important that every property bear its fair share of the cost of services that are provided by local government," he said. "We think that this is the best way to ensure the outcome in this instance."
Nanaimo's request to participate could still be rejected.
Deborah Marshall, spokeswoman for B.C. Ferries, said because case is under appeal the corporation is not in a position to comment.
Clemens said it is an unusual step for the city to become involved in assessment appeals.
"It rarely happens in our own community never mind another community," he said. "But this has such a potential impact on the City of Nanaimo we wanted to become as involved as we could to protect our taxpayers' interests."