A $914,000 Vancouver condo used by employees of the Audain Art Museum is not exempt from taxation.
A B.C. Property Assessment Appeal Board reached this conclusion in a case involving a Yaletown apartment.
The Audain Art Museum is located in Whistler, and houses the collection of arts patron and property developer Michael Audain.
The Vancouver condo provides accommodation for museum staff when they are in the city.
The museum argued before the board that the two-bedroom and two-bath condo should be exempt from taxation by virtue of the Vancouver Charter.
The charter exempts from tax real property that is in “actual occupation by the incorporated charitable institution and is wholly in use for charitable purposes”.
In a decision and order, Kimberly Jakeman ruled that the museum’s use of the 787-square-foot Yaletown condo is “beyond the scope” of the organization’s stated charitable purposes.
These purposes involve the establishment of an art museum in Whistler, and to support the Audain Art Museum Foundation.
Jakeman related that the museum argued that its “purpose of purchasing a condo in Vancouver was to extend and build the Appellant’s presence in the prominent cultural hub of Vancouver”.
The charity claimed that while the museum is in Whistler, it “serves not only the local Sea to Sky residents and international travelers, but also Vancouverites and the people of British Columbia”.
It asserted that a presence in Vancouver is necessary to “cultivate connections with artists, sponsors, collectors and cultural partners”.
Jakeman also related that based on the museum’s evidence, the uses of the condo include “overnight stays in transit to other destinations like Paris, for example, or to attend meetings in Vancouver”.
“I find, however, that there is nothing in the stated charitable purposes which would allow me to conclude that owning and maintaining the Property in City of Vancouver is necessarily ancillary to further the charitable purpose,” Jakeman said.
The provincial assessor for the Vancouver Sea to Sky region argued that if a property is used by a charitable organization because it makes operational or business sense, it does not qualify for a tax exemption.
The assessor cited a case in Winnipeg in which a hospital claimed exemption for two apartments it acquired to house employees.
The low-cost housing served as an incentive for staff to join or remain with the Winnipeg General Hospital.
Jakeman recalled that a court of appeal in Manitoba referred to legislation similar in wording to the Vancouver Charter, and “found that the residence did not meet the test for an exemption”.
“It was an inducement to bring staff in, which was seen to be in keeping with a business purpose, but not a charitable use considering the charitable purpose of the hospital,” Jakeman wrote.
The same reasoning applies with the Audain Art Museum’s appeal.
“Holding the Property may make good business sense and can further the operation of the Appellant but it does not fall within the stated purpose of establishing, maintaining and building a collection of art in a museum in Whistler,” Jakeman wrote.
Jakeman also noted that the museum’s evidence that having the condo allows it to support the Audain Art Museum Foundation by attending meetings in Vancouver is “not necessarily ancillary to the stated purpose” of the charity.
“The Appellant can no doubt attend the meetings and support the Foundation without the Property,” Jakeman noted.
The condo is on the 23rd floor of the Bentley, a condo development by Polygon Homes.
Audain founded and chairs Polygon Homes.
According to the real-estate digital platform BC Condos and Homes, the 24-storey Bentley condo development features 146 units. The property was built in 2005.