The Fortune Motel was purchased by B.C. Housing and will welcome tenants later this year.
Image Credit: Google Maps
June 18, 2021 - 6:00 PM
B.C. Housing paid roughly $2 million above the tax assessed value for the Fortune Motel in Kamloops.
B.C. Assessment values the 654 Fortune Drive property at just under $1.6 million, but B.C. Housing signed the deal at $3.6 million after an independent appraisal on the property, according to a news release last week.
In an emailed response to iNFOnews.ca, B.C. Housing spokesperson Laura Matthews said B.C. Assessment's tax value is typically lower than actual market value, and that's exactly why the Crown agency had an independent appraisal.
"For the purchase of the Fortune Motel, an independent appraisal was completed, which supports the purchase price. The independent appraisal took into account the existing market-value of the site, as well as the potential redevelopment value," she said in the emailed statement. "The latter is not typically included in the BC Assessment valuation."
It's not uncommon for the tax assessment to differ from the purchase price, as previous iNFOnews.ca reporting has shown in the Okanagan luxury real estate market.
"There is a very distinct difference between market-value for the public and B.C. Assessment for taxation. (B.C. Assessment) should never be inferring market value for the public," Kamloops-based commercial realtor, Larry Good, said.
However, he doesn't believe $2 million over the assessed value is a fair price for a Crown agency to have paid. But when B.C. Housing comes to the table to buy an old motel, "sellers love it," he said.
"At face value, for an old motel on Fortune Drive, it would appear (B.C. Housing) paid substantially. They're not a comparative market-value purchaser," he said.
While the residential market in Kamloops has reached all-time records in 2021, Good acknowledged that land prices have risen, but said the same spike in selling prices hasn't happened in the commercial market. So while the residential market activity may not reflect the selling price of the Fortune Motel, it does reflect the growing need for B.C. Housing to supply more housing when possible.
"It’s also important to note that there is a limited supply of real estate in Kamloops that is appropriate to quickly renovate and open," Matthews said.
According to B.C. Assessment, the Fortune Motel was built in 1950 and sits on a 0.96 acre lot. It's going to require renovations before it's turned from a motel to livable supportive housing facility, also paid for by B.C. Housing.
With two buildings, there will be 40 available units at the Fortune Motel once it is renovated and an operator is chosen. B.C. Housing is aiming to have tenants move in early this fall.
B.C. Housing opened an online forum for residents in Kamloops to ask questions about the Fortune Motel development, which can be found at this link.
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