A recent decision by the Property Assessment Appeal Board bears a name esteemed in development circles.
“Yes that was me,” Michael Geller told the Straight when reached by phone for confirmation.
Geller is the guy who has done it all.
He’s an architect, developer, real-estate consultant, educator, policy analyst, media commentator, opinion writer, and more.
Geller and his client, development company Aria Pacific GP Inc., were appellants in a quasi-judicial matter involving the assessment of a Vancouver development site along the Cambie Corridor.
A new six-storey luxury condo development called the Savoy is currently under construction at the site at 4240-4262 Cambie Street.
The property previously consisted of two single-family home lots, which Vancouver city council rezoned for condo development in 2017.
For 2020, the property was assessed at $27,055,000.
The assessment was slightly reduced in 2021 to $23,118,000.
Geller and Aria Pacific claimed that the assessments were too high.
The appellants argued that the valuation should be $16 million in 2020, or 40 percent less.
For 2021, they suggested $19,858,000, or 14 percent less.
The assessor indicated to the appeal board that the 2020 valuation can be reduced to $24,974,000.
However, the assessor stood firm on the 2021 valuation of $23,118,000.
Howard Mak, a panel chair with the Property Assessment Appeal Board, summarized the bottom line for Geller and Aria Pacific.
“The Appellant says he would accept the Assessor’s 2020 reduced value if his 2021 valuation for the subject was accepted,” Mak noted in his decision and order dated December 14, 2021.
Rezoning and sale
City of Vancouver records show that a rezoning application was filed in 2016 for the same property under a 4238-4262 Cambie Street address.
Arno Matis Architecture filed the application on behalf of Create Properties Ltd.
So how did the same site end with up Geller’s client Aria Pacific?
“A number of years ago,” Geller started the story, “quite a few developers paid, in my opinion, a ridiculous amount of money for those single-family lots along Cambie Corridor, with the hope that they could be redeveloped into luxury housing.”
“And as you probably know,” he continued, “those lots were worth around $3 million, and then when the city put its official…new [Cambie community] plan in place, the value of those lots jumped significantly anywhere between $8 million and $12 million.”
“And one of my clients purchased one of those sites in 2017, with the hope that they could create a development that would sell for $1,400 or $1,500 a square foot.
“But what happened was a couple of years later, the market dropped from $1,400 to $1,500 down to about $1,100 or $1,200 a foot.
“But B.C. Assessment did not fully recognize the drop in market value in the land assessments. And so as a matter of principle, I recommended to my clients that they should appeal the assessments,” Geller related.
Geller recalled that Aria Pacific purchased the 4240-4262 Cambie Street development site from Create Properties Ltd. “prior to the rezoning approval”.
As a side note, Geller said that it is interesting that Create’s architect at the time, Arno Matis Architecture, has been working with other developers with rezoning approvals along the Cambie Corridor.
“And then, the sites are being sold,” he said.
Geller noted that rezonings result in “significantly increasing the value” of properties, and that these rezoned lots are sold to “other developers”.
“And that’s been happening all along that corridor,” he said.
Geller said that Aria Pacific paid “around $27 million” for the Cambie development site between West 26th and 27th Avenue.
The development company also purchased plans drawn by Arno Matis Architecture, and then later changed designers to Rafii Architects.
Geller also finds interesting that there is another development site immediately next door that was also rezoned by the City of Vancouver and designed by Arno Matis Architecture.
He noted that this particular property at 4338-4362 Cambie Street is currently for sale.
“I can send it to you if you’re interested, just to show you how everything goes round and round,” Geller said.
Development sites listed
It can be recalled that the Straight reported the same property listing for 4338-4362 Cambie Street, which has an asking price of $28.8 million.
This development site between West 27th and 28th Avenues was rezoned by Vancouver city council in 2020.
“That’s part of the story,” Geller suggested.
On December 5, the Straight reported about another Cambie Street development site between King Edward Avenue and West 26th Avenue that was listed for sale.
This one at 4118-4138 Cambie Street, which includes a reputed haunted house, has an asking price of $26 million. This was rezoned by city council in 2021.
For orientation, the three development sites, starting from 4118-4138 Cambie Street to Aria’s site at 4240-4262 Cambie Street and 4338-4362 Cambie Street, are all located on a three-block stretch.
Going back to the Property Assessment Appeal Board, panel chair Mak ordered a reduction of the 2020 valuation of Aria Pacific’s development site at 4240-4262 Cambie Street from $27,055,000 to $24,900,000.
This means that Geller and Aria Pacific won a nearly eight percent reduction.
As for the 2021 assessment of $23,118,000, Mak upheld this valuation.
“They had dropped the assessed value nominally,” Geller noted when reached by the Straight.
It wasn’t the result he and his clients wanted, but this “still results in a saving”.
One of the reasons why the assessed value is important, Geller explained, is that property owners also pay an additional school tax.
It's the cost of doing business.
And as for Aria and other condo property developers, Geller said that things are looking up.
“Now the interesting thing to be fair is that the market has picked up again, and the values are approaching what they were expected to be, you know, four years ago,” Geller said.