The blast radius from the October 2018 sale of the Saputo Foods Ltd. property in north Burnaby for an unprecedented $11 million an acre has quadrupled local land values, driven property taxes sky high, forced some businesses to close and staked the future costs for high-density development along Burnaby’s central SkyTrain corridor.
Saputo’s 19-acre dairy plant, next to the Millennium Line’s Sperling-Burnaby Lake Station, sold for a staggering $209 million, according to BC Assessment. The transaction ranks No. 8 on Business in Vancouver’s Biggest Real Estate Deals of 2018 list and, for value, was the largest single land transaction in Burnaby last year.
The buyers, Vancouver developers Peterson Group and Create Properties, have a contemporary plan for generating profits from the 6000 Lougheed Highway site, which began producing dairy products in 1963.
The BC Assessment Authority valued the property at $26.3 million in 2015, and it increased to $197.2 million based on the 2019 assessment roll – a 323% increase from 2018’s assessed value of $46.6 million.
Peterson and Create paid above the assessment to secure land that has the potential to be redeveloped into a mixed-use, high-density, residential-oriented community close to SkyTrain.
The deal was executed by Cushman & Wakefield, which first listed the property in 2017.
The land is zoned industrial, but zoning to accommodate housing and light commercial space appears to be a slam dunk. In its original lobby for the SkyTrain extension on the Lougheed corridor, the City of Burnaby agreed to promote both residential development and job growth along the route.
Saputo, which will rent back the Burnaby site for two years, is building a new dairy facility on a 20-acre site in Port Coquitlam that it expects to open in 2021.
The transfer of a major employer is only the start of the ripple effect of the landmark Saputo transaction.
The owner of a neighbouring business, tile maker Kim Hauner of Interstyle Ceramics and Glass on Brighton Avenue, cited the value of the Saputo sale for driving up the recent assessment of his four-acre site to $41.6 million from $11.8 million a year earlier.
It pushed his annual property taxes to $496,000. BC Assessment values property based on its highest and best possible use, not on its current configuration.
“It is all speculation,” Hauner said.
The new annual tax bill, he added, puts him out of business. “We don’t have the extra money budgeted for this year.”
Hauner expects the higher taxes to shove other local businesses out as well.
The Saputo deal domino effect continues, disrupting and potentially usurping businesses along the corridor. Just next to Interstyle, the eight-acre Costco discount warehouse and store on Brighton Avenue has seen its most recent assessment skyrocket to $84.3 million, up from $28.8 million a year previous.
This year Colliers International is marketing a potential development site at 7000 Lougheed Highway close to the Saputo site. The 14 acres were assessed at $41 million in 2007, but BC Assessment now says the site is worth $143.6 million, a per-acre cost nearly equal to that of the Saputo transaction.