Comstock: Tax Big Box ‘acres of free parking’

Big Boxes do most of the retail trade, pay little in taxes

By Mike Comstock –

I would like to thank the many folks who have told me they enjoyed and now miss, the Food and History Shows that Bruce Bell and I—helped along by one or more of the St. Lawrence Market merchants—performed each Saturday at noon. The Market is looking into a revival program for the Kitchen West Mezzanine and it holds great promise.
Since the Kitchen closed, I have been working on the tourism and heritage website, The Internet has introduced me to, a coalition of residents’ groups that is working to educate communities about the planning process and advocate for reform.” Among their issues is a move to abolish the Ontario Municipal Board’s (OMB) power over Toronto.
One of the massive changes in how we build our cities is in the retail sector. Most notable is the Wal- Martization factor where 60% of the city’s commercial tax base is being undermined by the tax treatment of this new-format retail: the Big Box with acres of parking. This change is not really surprising, because store formats have been growing larger over time. The grocery shop where Fred Pringle Loblaw began his working career is on King St. E. in the heart of Corktown in Old Town Toronto; here the shops are 14 feet wide! The supermarket of the 1940s and ‘50s were only 5,000 to 8,000 sq. ft.: Shoppers Drug Mart size.
But today, continued growth has us looking at a retail complex at Lakeshore and Leslie that dwarfs the St. Lawrence Market, making it small in comparison. Because the 1,900 parking spots here aren’t taxed as integral to the new format, the city receives 60% less than if these buildings were traditional storefront commercial properties with street parking. The planning department is too small and underfunded to properly address the current Downtown condo boom; we can’t expect secondary plans for the layout of commercial areas. Vague zoning for employment areas is as close as I have seen.
Planning still allows small, first-floor retail under most every condo even though many of these units stand empty for years or attract marginal businesses. It drives me crazy to hear people ask why there aren’t many little shops that aren’t chain stores or franchises. Making a living in an independent, small shop is very difficult. It is only possible for smart, highly specialized retailers, with a high traffic location. We are also seeing some typical second-floor users, professional offices, coming downstairs to street level with success. A neighbour wrote the other day to see what I knew about live-work zoning or rules. He has launched a new career and wanted people drop by to see his photography, making his living room into a small studio.
My opinion, being free and therefore possibly of no value, was that he could jump into that grey area the live-work building. A condominium can have many rules like excluding restaurants, setting hours of operation and noise controls, etc. On a freehold street, only local bylaws could act like our restrictive condo rules. There are bylaws that control the placement or size of signs in commercial and residential areas and in the near future (2015) you will have to make it handicapped accessible. So, I assume you have the right to open even a regular-hours gallery with modest signage at your home. Hang out at least a shingle. Our neighbours have a fancy lettered glass door signage which seems okay with Municipal Property Assessment Corp. You should get a rider on your home and personal liability insurance in which they have been told you have some commercial use. You can then deduct the cost of maintaining this percentage of the house as a business expense.
I think problems might come up with hiring employees, or renting some of the space to someone else. You have always been allowed to do business at your home quietly and privately: bookkeepers, authors and other quiet practices. Under current live-work rules your home office or small businesses are treated like a residential activity. Much of this activity in days of old would have needed to be located in an office or commercial unit and pay commercial taxes. This live-work arrangement may actually save some storefront strips where individuals can live upstairs, above their shops or offices. I would love to see this become a trend and have the Victorian storefronts of Queens East or Parliament continue into the next century. But it is highly unlikely without civic leadership. Live-work arrangements are usually not in storefronts, but just right in the home. The federal government allows millions of people deductions for home-run businesses, but zero commercial property tax dollars go to the city.

A salesman who keeps his “office” at home deducts that office portion of the home, and on and on. Let’s add another brick in the wall to the old storefront architecture, the e-commerce business. You can run three laptops, a printer, a server and your condo becomes “the office.” This trend has become a significant factor in the Liberty Village BIA where conversions of warehouses to large lofts and live-work units are causing a decline in commercial assessment. It has been shown in the BIA budgets and it affects their voting rights on what and where the street improvements are placed. With both these new-style commercial venues and the Big Box commercial retail formats, the city is really changing. Good city planning needs to involve the storefront neighbourhoods to strengthen these challenged but green and urban alternatives for shopping. The shopkeepers want the same safe and friendly lifestyle areas as do the residents. The city must face the shifting pattern of commercial property values and place more of the tax burden on the “Acres of Free Parking” folks where 80% of the retail dollar is spent.