ESTEVAN — Estevan city council has approved a tax abatement worth more than $58,000 for the Ramada Hotel in Estevan, after an error by the Saskatchewan Assessment Management Agency resulted in Ramada's property values soaring.
The business pitched the relief request during the July 14 meeting of Estevan city council. In a letter to council, Gurpal Bajwa, the director/owner of the Ramada by Wyndham Estevan, wrote that last year's property taxes were $54,104.04 and the new amount was $112,847.19.
"As a business working in Estevan still working to build stability, this increase presents a serious and unexpected financial challenge," Bajwa wrote in a letter to council.
In speaking to council by Zoom, Sarb Cheema, the external accountant for the property, told council the property was purchased for a little less than $1 million in January 2024. At the time, the property assessment was based on a value of $1.4 million. But after the provincial reassessment conducted by the Saskatchewan Assessment Management Agency, the value tripled to $4.2 million, causing the property taxes to soar.
Cheema went on to say that when the property was purchased, the lawyer used their address for correspondences with city and SAMA. He said the initial assessment, which could have been used for a challenge, was never received by the new hotel owners.
A property tax notice, dated June 12, was received June 18 by the hotel owners. They emailed city tax assessor Trina Sieben that same day, which Cheema said reflected how seriously they took the situation. Sieben suggested Ramada connect with a woman at the SAMA office; efforts were unsuccessful.
"Gurpal was out of the country. He was in India, and right away he flew back to Estevan. On June 27th, Gurpal visited the city hall and met with Miss Trina," said Cheema.
Cheema said Sieben indicated an error had occurred and Bajwa needed to connect with someone at SAMA; the next day, he met with someone from the agency, who looked at the other properties in the area and confirmed an error.
The SAMA representative was retiring, and the retiree's successor indicated the valuation should be $1.36 million, which was lower than the previous valuation. She told Bajwa not to worry about it, so Bajwa booked a flight for a return trip to India. When Bajwa was at the airport, he was called by the city and told he was outside of the window to file an appeal, which led to the presentation to council.
Coun. Shelly Veroba wanted to know if the city would be responsible for the education portion of property tax if it granted an abatement. Treasurer Trudy Firth said the city would notify the schools, and they would adjust their rates accordingly.
"There was definitely some conversation going back and forth here, especially with SAMA, admittedly talking to you and saying there was an error in the assessment," said Veroba.
A commitment has been made to change the hotel's assessment for future years, but the issue remained for 2025.
Veroba also pointed out that once the business owner noticed the mistake, an effort was made to fix the error. If he didn't, Veroba said she would have had a problem with the abatement.
Coun. Brian Johnson said so many errors took place. When SAMA came up with an assessment that was nearly $3 million higher, Johnson believes it should have been a red flag, and he suggested SAMA should have come down to look at the property.
"There seems to be some gray areas of discussion of what's in the property, like a meeting room and a laundry room and things like that," said Johnson.
He believes it's too bad a property owner has to go through rate shock to that degree.
Cheema noted that when Bajwa visited Estevan, he fell in love with the community, its people and its proximity to the Canada-U.S. border, and Bajwa is looking to do more business in the town and rebuild the hotel's business.
"Eventually he wants to move his family from India all the way to Estevan. He really enjoys the town, and he spent quite a bit of time here over the past year and a half," said Cheema.
