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Mt. Begbie Brewing wants tax break to build new $2 million brewery
Although it’s not budget time yet, Revelstoke City Council faced a tough taxation question at their Oct. 22 meeting, when Mt. Begbie Brewing Co. president Bart Larson’s tax appeal letter was on the agenda.
Larson wanted a tax concession of some kind in order to build a new brewery, and noted that Salmon Arm was an option, where taxes are significantly lower.
It’s no big secret the successful, locally-owned brewery is hunting for a new home. They’re bursting at the seams, and rent significant storage off-site. The Times Review has spoken with the brewery ownership in the past months about rumoured locations, but nothing was final enough to report on. A lot near the Revelstoke Railway Museum is one proposed location.
In his letter to council, Larson said the existing taxation levels will make building a new, 15,000-square-foot facility cost-prohibitive, estimating monthly taxes on a $1.5–$2 million light-industrial facility to be about $7,500.
(Note: Read the letter embedded at the bottom of this story.)
“I believe, in our case, these taxes will prevent us from going forward with this project,” Larson writes.
Larson said the brewery employs just over 10 full-time employees, saying that number could “easily” double if their current 20 per cent annual growth rate continues. “More permanent, full-time residents are desperately needed here. [We] provide benefit to our community in numerous ways besides paying taxes. Examples include the significant portion of our revenue that is directed toward local clubs and non-profit organizations, healthy yeast for our sewage plant and free grain for local cattle farmers.”
Larson, who served on the city’s most recent citizens’ budget focus group, requested a review of class 5 and class 6 property taxes, saying they are, “significantly higher than surrounding communities and could potentially deter any other potential interested parties in doing business in Revelstoke.” Larson also suggests possible tax concessions if Mt. Begbie is to build a new brewery.
“I have determined that we would pay 31 per cent less in taxes to do the same building project in Salmon Arm,” he writes.
At their Oct. 22 council meeting, everyone agreed they wanted a new brewery built in Revelstoke, but the question was how to get there.
Coun. Chris Johnston wanted to be mindful of fairness and legality in the city's response, and was concerned about "biased or favoured treatment." He advocated for a solution that "is consistent for people coming to the community."
Coun. Tony Scarcella advocated for action, saying taxes had proliferated under this council. "We don't need a professor of mathematics to figure that out. We've got to take action right now. We can't afford to lose this kind of business in town."
Coun. Steve Bender wondered if council had already set an example when council reduced taxes for Downie Timber during past budget sessions. "Did we set a precedent and how does it figure into this now?" In recent budget cycles, Downie advocated for reduced taxes; however, the mill is the only industrial property in Revelstoke in the heavy industrial tax category, so the tax reductions could be achieved without the same fairness issues.
Bart Larson addressed questions from council at the meeting, saying he hoped to begin construction next summer, so moving forward quickly is important.
"We're pretty much at the ceiling of production in our existing facility. A new brewery is something I would really like to do," Larson said. "It's going to be something that's going to become an issue for us pretty soon – not being able to grow."
He hoped for a decision within a month, saying he just needed a "yes or a no." He added he didn't have real estate secured, and potential lots could be sold at any time.
Mayor David Raven said he wanted the new brewery to be built in Revelstoke. "I would really, really love to see this go ahead," the mayor said. He added later that any solution would need a proper "legal framework."
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PHOTO: Mt. Begbie Brewing Co. president Bart Larson. Aaron Orlando/Revelstoke Times Review
In the end, council agreed to refer the issue to its economic development committee and city staff for consideration of ways to move forward. They requested a speedy turnaround and report back.
In an interview outside the meeting, Larson said a move to Salmon Arm isn't his preference: "That would be a very tough decision. It is not something [we] would come to lightly. I moved to Revelstoke for a reason. I am a Revelstoke boy. That's where I want to be," Larson said. "It would have to be a last resort."
Larson, who is from Revelstoke, holds a PhD in physics and worked as a researcher in nuclear physics before deciding to make his brewing hobby a full-time job. He relocated back to his home town to open Mt. Begbie Brewing Co.
Larson agreed that council's path forward on his request isn't clear-cut. "I don't know it would be fair to give us a tax break," Larson said. "Taxes are high, is basically what I am saying in my letter."
He didn't have suggestions onto the kind of concession he is seeking, saying it's up to the city to make proposals.
Larson said designing a new building that can properly accommodate tours and tourist amenities is part of their reason for the expansion.
The Times Review will update this story when staff present options to council in the coming weeks. There was some discussion about the possibility of linking into provincial development programs.
Related story: B.C. Chamber of Commerce advocates for business owner vote, slams Revelstoke's 'worst offender' tax ratio
The B.C. Chamber of Commerce is advocating for the return of a business vote in municipal elections.
Prior to 1993, business owners enjoyed extra voting rights in local elections, and the B.C. Chamber of Commerce is advocating for its return, hoping the idea will gain traction during the provincial government’s ongoing local government reform initiative.
In a form-letter circulated through local chamber of commerce organizations in B.C., Revelstoke was again knocked as an expensive place to do business as far as municipal taxes. It was mentioned as the third “worst offending” municipality in B.C., with a residential to business tax ratio of 4.59, trailing only Coquitlam and North Saanich.
The letter, intended to be signed by business owners, then sent to the Minister Coralee Oakes, of the Community, Sport and Cultural Development ministry, said a lack of a business vote amounted to taxation without representation for business owners.
“Without a vote, they are the easiest group on which to increase taxes,” it states. “Many business owners live outside their jurisdiction and cannot be part of the election process or vote in a referendum which may impact their business directly. This means that, while they are the most highly taxed taxpayers in a jurisdiction, they have no voice.”
Revelstoke’s high disparity between business and residential property taxes has been in the news for years, with business advocates gaining some ground recently.
Revelstoke Chamber of Commerce executive director Judy Goodman supported the call for change that would allow business owners an added vote. “I think in our situation here, it would definitely help for the business owners to have a bigger voice.”
She wasn’t thrilled that the provincial chamber used Revelstoke as an example, but conceded the reality is something holding back existing businesses and hindering new ones from establishing in town.
“The business tax in Salmon Arm is quite significantly lower,” she said, adding Revelstoke could be losing out to our neighbours.
Here is Bart Larson's letter discussed at the Oct. 22 Revelstoke City Council meeting.