Posts Tagged ‘Cut-and-cover subway construction’

If Cambie Street grows as hoped, City of Vancouver will lose big bucks – From The Vancouver Sun

June 19, 2010

As stated before many times, rapid transit development in Vancouver, especially the Millennium and RAV/Canada Lines, has been about development and not moving people. The hype and hoopla of TransLink and the mainstream media that the Canada Line is carrying 94,000 riders a day ignores the fact that all except about 10% of the Canada Line customers are former bus riders that have been cascaded onto the metro. 10% new ridership on a new transit system is about on par with other new transit systems being opened, thus making the Canada Line just average. There has been no discernible modal shift from car to transit, despite the claims of some media types, as most of the new ridership is made up with $1 a day students with U-Passes; elderly gamblers going to the River rock Casino; and former taxi users going to YVR.

As predicted, the raison de être for the Canada Line was property development, for it is very easy to scream ‘densification’ and ‘rezoning’, when a very expensive metro is built and local government is desperate to find more  riders, so the the transit agency can ‘cook the books’, so to speak with high ridership figures. But, densification may backfire big time on Vancouver, with a vast loss of revenue, where taxes from businesses will decline and will not be made up from increased residential property taxes, which means an increase in property taxes for all in the city. In fact, Vancouver property owners will get a double whammy of higher property taxes and higher TransLink taxes to fund the hugely expensive metro system. Vancouver City and provincial politicians have brought this upon themselves by demanding gold-plated metro and subway lines on routes that do not have the ridership to sustain them instead of planning for affordable light rail. The big question now is, will the same people who blundered along, forcing the construction of the Canada Line metro, will do the same with the Broadway subway scam?

Will a Broadway SkyTrain subway be the final straw that breaks ‘Translink’s (read taxpayer’s) back?

From the Vancouver Sun.

If Cambie Street grows as hoped, City of Vancouver will lose big bucks

Canada Line corridor merchants can expect to get clobbered, again

By Don Cayo, Vancouver Sun June 18, 2010

The proposed rezoning of Cambie Street properties served by the new Canada Line may cause economic hardship that erodes or outweighs any potential benefits.

Because two likely results will be to undermine City Hall’s finances while once again clobbering the merchants who took such a hit while their street was torn up for construction.

The story is complicated, especially because allowing greater density in areas served by better transit will create an initial surge in revenue for the city.

But this will come at the expense of existing businesses in existing premises along the Cambie corridor. And when new developments inevitably start to rise in response to proposed rezoning, City Hall’s windfall will quickly turn into a loss.

To understand why, consider how differently business and residential properties affect the city’s financial health.

About 92 per cent of assessed properties in Vancouver are residential, leaving just eight per cent commercial — a number that is steadily declining as the city increasingly becomes a place to live but not to work.

This relative handful of business properties pays half of the city’s total property taxes. Yet the cost of services they use — streets, police, fire protection and such — adds up to only a quarter of City Hall spending.

Thus for every $2 businesses pay in property tax, the city spends just $1 in return, leaving a 50-per-cent “profit” the city can use to subsidize homeowners. And subsidize they do, spending about $1.50 on residential services for every $1 in residential property tax.

So what does this mean for Cambie Street redevelopment?

Peter Forward, an associate with the property tax consulting firm of Burgess Cawley and Sullivan, walked me through a detailed look at a representative sample — a cluster of seven buildings, mostly one-storey community retail blocks, just north of the Canada Line’s King Edward station.

The city’s annual “profit” from these buildings — the amount of money it can expect to have left over after all property taxes are collected and all services provided — will be:

– As things stand: $87,385

– With rezoning: $148,315

– With redevelopment: $41,974, or less than half as much as now.

Multiply these figures by the number of properties that will be similarly affected up and down the Cambie corridor, and the impact on civic finances is huge. Not to mention the impact on the tax bills of tenants in the Cambie buildings.

Here’s how Forward arrived at his numbers (I’ve rounded them for ease of reading).

As things stand

The land on which the seven buildings sit is assessed at $15 million and the structures are pegged at $4 million, for a total of $19 million.

The business tax rate — which in Vancouver is five times higher than the residential rate — will generate tax bills totalling about $175,000.

Based on city-wide averages, the cost of services for these businesses is $87,500. This will leave an additional $87,500 to be spent on other things.

With rezoning

The maximum allowable height of buildings on each lot will rise to at least six stories. This means the maximum square footage of new buildings will be twice what’s allowed now. Since assessments are based on “highest and best use” (what could be on each lot, rather than what’s actually there), the assessed value of the land will double to $30 million. Even if the old buildings are treated as teardowns and assessed at nearly no value, the total of $30-plus million will be more than 50 per cent higher than the assessed value today.

The new assessments mean businesses in these same old buildings will see their tax bills soar, as will city revenue. The new total will be $296,000, up from $175,000.

Even though there’s no logical reason for the cost of serving the same businesses in the same buildings to rise, Forward generously assumes the city will spend more to keep them happy. So he designates $148,000 of the new tax total as consumption cost. This leaves a surplus of $148,000, up from $87,000 now, that the city can spend on other things.

With redevelopment

If new buildings on each lot housed one floor of commercial tenants and five floors of residences, the total value of land and buildings would soar to $140 million — more than nine times what it is today.

But with only the commercial occupants paying the business rate, and with the residents paying just a fifth of that, the total tax revenue would rise to only about $550,000 — just over six times more than today. Of this, $317,000 would be paid by the ground-floor businesses and $233,000 by residents.

With businesses paying twice as much in tax as they consume in services, their portion of the tax bill would generate surplus revenue of $158,000 — a nice increase for the city. But with residents’ tax bills adding up to only two-thirds of the cost of services they consume, they’d create a “loss” of $116,000.

This would leave a net surplus of $42,000 for the seven properties, or less than half of what’s left over today.

In other words, a snazzy redevelopment project for this little bit of Cambie — just what the city is aiming for with its Canada Line-related plans — will cost the city tens of thousands a year in forgone revenue.

And as other parts of the street are similarly redeveloped, the annual losses will soar to hundreds of thousands, and then millions.

Not to mention the plight of those poor Cambie merchants — the very ones who went through hell and back during the Canada Line construction. They can look forward to sharply higher tax bills in the short-term, and the longer-term prospect that their premises will fall to the wrecker’s ball.

Read more:


More Financial Woes For TransLink

February 7, 2010

Instead of doing what most other ‘rail‘ transit projects have done, offer compensation packages to affected merchants and residents along the construction route, TransLink did nothing and now has to pay the ‘piper’s price’.

Not only will future awards drive up the RAV/Canada Line’s price tag, the legal costs alone will take money away from much needed transit services, which ultimately will translate into even higher TransLink taxes. TransLink, RAVCo., and the provincial government tried to hide the true cost of the metro line and as costs spiraled out of control, the scope of the project was downsized, including adding cut-and-cover subway construction without paying affected people compensation.

Cambie St. merchant ,Susan Heyes’s $600,000.00 award for “Nuisance” for years of business disruption for subway construction, took the smirk of the faces of TransLink’s officials (who thought they pulled a fast one) and now seeing that TransLink is liable, hundreds of merchants are now going to sue!

Would not have it been easier just to offer compensation packages to affected merchants in the first place?

It is Zweisystem’s belief that ‘Judicial Inquiry’ must be held on the RAV/Canada Line and all its sordid financing, much of it hidden from the public who have to subsidize this massivly expensive, politcally prestigious edifice.

From Radio News CKWX 1130

Cambie Street merchants given go ahead to file class action suit against Canada Line

CVBA would like to settle out of court

Jim Goddard  Feb 05, 2010

VANCOUVER (NEWS1130) – Cambie merchants and property owners who claim they suffered huge losses during Canada Line construction have received permission from the courts to pursue their class action suit.  Leonard Shein with the Cambie Village Business Association says 216 merchants and 67 property owners are part of the class-action.

However he says they would prefer to settle out of court.  “We would like to negotiate a fair settlement rather than TransLink and us spending all this money on lawyers and court.”

Shein says the $600,000 Hazel and Co. owner Susan Hayes was awarded from the courts for the Canada Line disruption to her business shows his members have a good case.  He says a negotiated settlement makes sense since it cost the Canada Line a million and a half dollars to fight just the one lawsuit from Hayes.

He also points out originally Cambie merchants had offered to settle for five million dollars but that was rejected by the TransLink Board.  Shein now believes any settlement will be much larger than that whether it’s negotiated or comes from the courts.

From Radio 1130 – Cambie merchants still waiting for Canada Line business boom. Not coming? Yes, Zweisystem told you so!

September 13, 2009


Well the RAV/Canada line has been open for some time now and now one wonders where is all those subway passengers that were dying to shop on Cambie St., as promised by RAVCo. and InTransit BC?

Didn’t come? Well don’t hold your breathe, they’re not. It has been found in other jurisdictions where cut-and-cover subway construction has been done that it takes ten years for businesses to recouver financially. Unlike new light-rail lines, where adjacent business see about a 10% increase in revenue, businesses on top of a subway do not. The reason is simple; on-street/at-grade LRT transit customers see local businesses and with convenient stops can access them with little interruption of their journey. All subway passengers see is dank concrete and with widely spaced stations, seldom venture forth and patronize local businesses.

Zweisystem knew this, then why didn’t Gordon Campbell, Kevin Falcon, Susan Anton, Larry Campbell, TransLink’s planners, radio talk show hosts, reporters, and the rest who vaguely promised and/or spoke of a great upsurge in local business whence the RAV/Canada Line opened?

Dave White VANCOUVER (NEWS1130) | Saturday, September 12th, 2009 1:00 pm 

 It’s been nearly a month since the Canada Line opened, connecting downtown with Richmond and YVR. But Cambie Street business owners are still evaluating just what the line will mean for their businesses after enduring years of construction.

Leonard Schein with the Cambie Street Business Association says so far there hasn’t been a major spike in business. “We were looking forward to it, but the city is still doing some work and school is just back, and we’ll see over time how that does happen.”

Yip says her business is more likely to be successful with a solid customer base and community advertising.

Karyee Yip, who owns Honey Gifts on Cambie, isn’t expecting a boost because a station was never built in the Cambie Village. ‘It’s kind of disappointing that we lost a lot of business to build this line but we’re not really reaping a lot of benefits once the line is built.”