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Marina owners shaken by hikes

'I'm a tenant ... and they want to raise my rent 300 per cent'

Marina owners in New Westminster are crying foul after their water lot leases have doubled, or tripled in cost.

Port Metro Vancouver began contacting various marina owners last year, informing them that their lease rates would be increasing in 2013. The port calculates the value of a water lot based on the value of one acre of commercial land in the corresponding city.

In the past, the then Vancouver Port Authority, would review the value of water lots along the Fraser River every five years. Port Metro Vancouver is continuing this system and in 2012 issued new "zone values" to marina owners across the Lower Mainland, including New Westminster.

The only difference between this system and the previous one, according to the port, is that now the water lot lease is four per cent of the land value, not eight, as it was during the last review in 2007.

This means New Westminster marina owners are being asked to pay four per cent of about $1 million, which comes to about $40,000, depending on how the leased water lot is being used.

Royal City Marina owner Kent Carbis was contacted in November 2012, by a representative of Port Metro Vancouver, informing him that his lease had expired and he could expect a new rate for the following year.

"But then the increases came through, and (they were) over 300 per cent," Carbis said.

"If you own an apartment and you're the landlord, the provincial government says the most you can raise your rent is like three per cent, and yet I'm a tenant . and they want to raise my rent 300 per cent."

While Carbis didn't want to comment on the exact amount of the lease increase, he said it's too much to pass down to his tenants.

Marina tenants are typically charged moorage at a per-foot rate. Marina owners in New Westminster and East Richmond said $8 per foot is usually the going rate for boat owners. Float homes that rent space at marinas pay rent similar to tenants in apartments. Their monthly rates range from $600 to $800, according to marina owners in Richmond.

Ron Francis owns a marina in Queensborough where he is currently renting out space to 20 boats. Francis received a notice informing him that his lease would increase from $7,000 annually to $33,000 by 2014.

Francis worries that if the port continues to renew leases as they come up (most are on a five-year cycle) by the time he has to pay his new rate of $33,000 (after taxes) all his tenants will have moved out in search of a cheaper marina that hasn't faced an increase yet.

"When it's all settled down, it'll take five years, . I'll go broke and my people will have already left me," he said. "If (the port is) going to do it, . (they) should do it at once."

But that isn't how Port Metro Vancouver conducts its zone value reviews.

"Because we go out every three years and we update these zonal values, it depends on what point in the cycle that their rent is up for review," said Heather Courville, director of real estate for the port.

This means some leases could be due the year right before a review. Marina owners who had their rent re-evaluated in 2007 could have been assigned a value from 2005, Courville said.

Francis has already spoken with his tenants, and a few of them have admitted they've started comparing prices around the Lower Mainland.

But it's not only Francis's tenants who are shopping around. His marina has received a few calls from people in Vancouver inquiring about prices and availability.

"It's going to be one big mess," Francis said.

But the port is adamant marina owners are getting a good deal. According to Courville, not only are the new rent rates only four per cent of the market value of upland industrial lots, the port has also decided to phase in the increases.

"To soften the blow even further, we've phased in the increase so that the tenants are not paying the full rent until the third year of the review period," she said.

But marina owners argue that they are paying for a value of land that they do not even own. Many small marinas have a narrow strip of land providing access to the marina - but not enough land to build on or develop.

Right now all local marina owners, like Carbis, can do is continue to ignore requests by the port to sign the new agreement and hope that marina owners across the Lower Mainland come together to fight the increases.

And that's where the Waterlot Leaseholder Association of B.C. comes in.

Dorothy Leighton, president of the association, manages a marina in East Richmond. She, too, was contacted by Port Metro Vancouver about the new water lot lease rates.

"The port makes the rent based on the industrial upland value," Leighton said.

High Water Marina, which she and a small group of shareholders own, also had its lease rates based on a $1 million per acre land value.

According to Leighton, when she was first approached by the port, the increase she received was close to 134 per cent. However, after much back and forth between Leighton and the port, she has been offered a reduced increase. Instead of paying close to $40,000 a year, the port made a deal with Leighton in which she will pay $21,500 a year, starting in June 2014.

Port Metro Vancouver couldn't be reached for comment concerning Leighton's deal, but in a previous interview with The Record, Courville denied the port was making any special arrangements with lease holders.

Despite the "deal," Leighton says, she can't charge her tenants nearly enough to make up the new lease rate. While she does intend to sign the agreement soon, nothing is official yet. Leighton feels the representatives from Port Metro Vancouver have been "very heavy handed" in their dealings with marina owners, and she doesn't think their system of appraisal is a fair one.

While she didn't provide a complete alternative, she did say the provincial sys-tem would better serve small marina owners like herself. That system uses income, not land values. According to B.C.'s Ministry of Forests, Lands and Natural Resources Operations, marinas that lease water lots from the province are "required to submit information outlining how much they could charge for moorage and how much income they would make in a year. The province charges rental payments of 3.5 per cent of gross potential income."

Leighton hopes that by joining together, marina and float home owners can convince Port Metro Vancouver to reconsider the lease increases.

"The odd thing is if (the marina doesn't) survive and you empty the waterlot, the port gets no rent at all," she said.

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