Nanaimo’s Recent Tax Sale
Ron Bolin: Oct. 1, 2011
It may be appropriate for the City to assist homeowners who live in their homes and have been unable to pay their property taxes for three years to give those owners an extra year to come up with those taxes by purchasing them in a tax sale. But what about those who use the system as a means of relatively cheap financing for their business ventures? I do not know which other of those properties the City saved from private sale are rental properties or speculative land developments. I do know that two large pieces of the Cable Bay/Oceanview development are among them. While it may be in our community interest to assist live-in homeowner citizens with an extra year at minimal cost, do we owe the same compassion to out-of-town landlords and developers?
The properties in immediate question are 1170 and 1270 Phoenix Way and lie immediately below Joan Point Park. In 2011 the 60.51 acres of 1170 Phoenix Way was assessed at $2,398,000 and the 90.6 acres of 1270 Phoenix Way was assessed at $3,452,000. The City purchased these two properties for the upset price of $100,848.74. Within a year, the owner(s) can repatriate these lands which are assessed at $5,850,000 for that $101,000 upset cost. I don’t know the current cost of risk capital, but I expect it is significantly greater, else why go to tax sale. If the City is to bid on such commercial property, its bid should be related to its commercial value. Making a significant bid seems to provide an opportunity to either make a significant return for City on the amount taxpayers have invested in the delinquent taxes or, alternatively, to acquire land for a city land bank at modest cost to the taxpayers. Either is preferable to taxpayer support for what amounts to a low interest loan program for commercial land owners.