Ria

Challenge against Shell -

worth $3M for Burnaby

With massive handouts from the federal government and rip off prices at the pumps, the “‘big four”’ oil companies operating in Canada — Texaco, Gulf, Imperial and Shell — pushed their profits to new highs in 1979

Shell boosted its profit margin by $150 million to $243 million for the year. That was 62 percent up over 1978.

And 1978 wasn’t a bad year for Shell either. That year it paid not a single cent in federal income taxes.

But it is not only the federal government enriching Shell at public expense; the multinational has also escaped paying millions of dollars in property and school taxes for its Burnaby refinery on Burrard Inlet. :

Shell could be about to fall off the local gravy train, however, as its assessments on the Shellburn refinery are being challenged before the B.C. Assessment Authority’s Board of Appeal.

The appeal has been launched by Burnaby resident and trade union economist David Fairey who has gathered evidence proving that Shell’s Burnaby properties are vast- ly underassessed.

If Fairey is successful in proving his case, Shell could be forced to pay more than $3 million more taxes to local government in 1980.

About $2 million would go to the Burnaby School Board, about $1 million to the municipality of Bur- naby and several thousands of dollars more would go to hospitals and the regional district.

The prospect undoubtedly has Shell officials beside themselves and they aren’t in any hurry to answer the charges. Fairey got a first hand measure of the com- pany’s paranoia, and of the kid glove treatment it gets from the

Assessment authority, when the

Authority’s Court of Revision set for 12 noon Tuesday in a Burnaby church basement, shut down the court and denied the appeal at 12:05 when Fairey had not yet ap- peared. When he did walk in at 12:10, the court officials and Shell’s lawyers had already packed up and driven away.

The appeal would have been referred to the.Board of Appeal, a higher appeal body, in any event, Fairey predicted later, and he is taking the case directly there, most likely in March. But by ducking out of the Court of Revision, Shell escaped justifying its assessment and allowing Fairey to prepare countering arguments for the Board of Appeal.

The evidence which Fairey has gathered, however, leaves little doubt that there is a giant rip off

taking place over Shell’s

assessments. The Shellburn Refinery, sprawling over 220 acres of choice waterfront property on Burrard Inlet, has a current assess- ed value of $12.8 million for the land and $34.4 million for the refinery itself. The $47.2 million total assessment translated into $852,000 in school and property taxes last year.

The glaring inequity in assessments became clear to Fairey earlier this year when Shell an- . nounced it was expanding the 3

capacity of the refinery from = =

23,500 barrels per day to 34,500 & bpd. The cost of the expansion was

oe |

announced as $52 million — more 2 i

than the assessed value of the entire = k

refinery and property.

Assessments are supposed to be based on a number of key factors:” the present use, the location, the original cost, the cost of replace- ai the market price if put up for

e.

The cost of the refinery expan- sion is proof that the cost of replacement for even a small pro- tion of the refinery is far in excess of. the assessed value. In fact, Fairey calculated, to replace Shellburn with a refinery of equal capacity, based on the costs of ex- pansion, would cost $111 million. — more that 3 times the current

TRIBUN!

i.

At work in his Trade Union Research Bureau office, preparing

his

challénge to the tax assessments of Burnaby’s largest industrial property, Fairey says that if his appeal wins it could spark similar ac tions against industrial property throughout Greater Vancouver.

assessed value.

In Nov. of last year, Shell an- nounced it was building a new refinery in Edmonton. Based on the costs of that refinery, it would cost $187 million to replace the Shellburn refinery — five times the Shellburn assessment.

Who will pay the shot for rapid transit?

By ALD. HARRY RANKIN

Residents of the Trout Lake area won an impressive victory when they persuaded city council to go along with their demand that any light rapid transit line from downtown Vancouver to Burnaby should not infringe on Trout Lake or the residential area around the lake.

City council agreed to recom- mend to the Greater Vancouver Regional District (GVRD) that the rapid transit line should go underground in this ‘area, even

though the cost will be substantially higher sae .

However that does not settle the issue because there are groups within the GVRD who are strongly opposed to any change that will in- crease the cost of light rapid transit. This again raises the whole ques- tion of who’s going to pay the shot for rapid transit? The GVRD has been silent on this one. Why? Why hasn’t it come up with a plan for financing the project?

It’s clear that the provincial

government has no intention of making much of a contribution. In fact, to head off. any demand. Premier Bennett has already an- nounced that it will spend $130 million of this year’s surplus to build a new bridge across the Fraser

- at Annacis Island.

Furthermore it throws a monkey-wrench into GVRD plans to build a rapid transit bridge close to Pattullo Bridge.

There is no doubt in my mind that it is both fair and logical to de-

Annacis slap in the face to GVRD

Construction of the Annacis Is- land bridge and highway system will begin immediately, premier Bennett said Feb. 22, but it is doubtful that the fourth crossing of the Fraser River will be able to tra- verse the growing gap between the Socreds and the Greater Vancou- ver Regional District on trans- portation policy.

The Annacis project is a slap in the face to the GVRD which had stated its clear priority for rapid transit before any further major highway developments. But the Annacis crossing, expected to cost $200 million by the time it is finish- ed, all but rules out provincial sup- port for rapid transit.

Another slap at the GVRD was the smug announcement that the funds would come from surplus revenues, while the regional district has been told that if it wants to build rapid transit it must borrow the money. It is unlikely, however, that rapid transit could be financed without a capital grant from the province.

GVRD officials were sold the province’s Urban Transit Author- ity funding formula on the promise of a quick start on rapid transit. But the Annacis project indicates the opposite, and a willingness of

the Socreds to back major freeway developments instead.

An additional factor motivating the Socreds to push ahead with the Annacis project, and which prom- ises to push the costs up consider- ably, is the land development around Annacis Island itself and in Delta.

Almost all of Annacis Island, in- cluding the entire right of way for the new highway, is owned by the British multinational Grosvenor International. Grosvenor is owned outright by the family of the Duke of Westminster.

PACIFIC TRIBUNE—FEBRUARY 29, 1980—Page 2

Annacis Island is a giant indus-

trial park of sawmills, plywood plants, light manufacturing and warehouses. Grosvertor’s B.C. president John Little said Tuesday that the company wants ‘‘fair mar- ket value’ for the 50 to 60 acres néeded for the highway, but he ad- mitted that the big benefit will be the location of a highway through the industrial park. ' Nearby Annacis the province owns 600 acres in Tilbury Indust- rial Park which it is presently leas- ing.

The provincial government has seen the benefits in the Annacis

‘project for some years and, accord-

ing to Little, entered into an agree- ment with Grosvenor in 1973 to set aside the right of way for the sys- tem.

GVRD officials reacted to Ben- nett’s announcement that Annacis was proceeding immediately with hurried calls for meetings with the province. If the GVRD can muster the united stand it showed in earlier negotiations with the province on transit policy, and if the voices of community groups demanding rapid transit as a first priority are heard in the exchange, the con- struction timetable could yet run-

‘into political delays.

mand that the provincial govern- ment pay a major portion of the cost of rapid transit in the Lower Mainland. But there is also no doubt in my mind that the action of the provincial cabinet in pressuring the GVRD to take over the bus system from B.C. Hydro was aim- ed at taking all financial respon- sibility for public transit, off the shoulder of the provincial govern- ment and placing it directly on the residents of the GVRD.

The heads of the GVRD know this but so far they haven’t had the political courage to talk frankly about the costs. Where is the money to pay for rapid transit — somewhere between $500 million and $1 billion — to come from? By adding an additional 25c a gallon tax on gasoline? That won’t go over so well — Joe Clark tried that and got fired by Canadian voters. Will an additional surcharge of $1.00 or $2.00 a month be placed on our hydro bills? Will property taxes be increased? The GVRD won’t say; it’s keeping quiet.

There is another way to finance rapid transit which I and the Com- mittee of Progressive Electors (COPE) have been advocating for the past decade. That is through land assembly.

The transit authority should

now acquire substantial sections of .

land along the rapid transit route, and especially around all the transit stations where the people get on and off trains. This land is bound to increase greatly in value, in fact it will increase enormously. In most cases it will have to be rezoned up- wards. When the rapid transit line is completed, this land could then be sold to private business interests for development. By this method, the GVRD (and through it the citizens) would get the financial benefit from the big boost in land values along the route. And this

would go a long way towards.

financing rapid transit.

The assessments on the land are even more out of whack with market values. Comparable water” front property just across Burrard Inlet, adjacent to the Second Nal- rows Bridge, has, according to the Greater Vancouver Real Estate Board, been selling at between $479,000 and $566,000 per acre 1 1979. But Shell’s land is assessed at about $55,500 per acre, around one tenth its real value. : :

Those are hard facts, Fairey claims, which should raise the real value of Shellburn to about $220 million, which at the 1979 Burnaby mill rates would generate $3.4 million in additional taxes.

If other interpretative factors like present use and location are considered, namely the profitabili- _ ty of the oil industry and the strategic site of Shellburn in a ma-

, jor harbor, the real value would be — even higher.

Shell’s assessments did increas¢ this year, by 7.9 percent. But assessments on single family homes. in Burnaby are up by an average of © 15 percent. Coupled with a 9.5 per- cent increase in the mill rate, Bur- naby ratepayers could be paying 25 percent more property taxes this | year.

What it all means is that every taxpayer, and Burnaby council and school board, have millions of dollars riding with Fairey’s challenge against Shell.

.« DERA asks

for support

The Downtown Eastside Resi- dents association is calling on its supporters in Vancouver to back its annual application .for funding from Vancouver city council.

The city’s community services committee is recommending that DERA be given $12,000 for 1980, one-third of the $36,000 DERA re- quested. But it is widely expected that council will refuse even the $12,000 when it comes up March 4.

DERA already has its eyes on the appeal process, president Bruce Eriksen told the Tribune Monday. DERA supporters are asked to write Vancouver city council and ask for the right to speak in favor of the grant. Send a copy of the letter

- to DERA, 193 E. Hastings, Van.