Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: April 2, 2015
Assessed Person: ING Industrial Fund I Inc.
Appellant: ING Real Estate (GTA) Ltd.
Respondent: Municipal Property Assessment Corporation (“MPAC”), Region 09
Respondent: City of Toronto
Property Location: 55 Horner Avenue
Municipality: City of Toronto
Roll Number: 1919-054-280-01051-0000
Appeal Numbers: 2043776, 235640, 2697100, 2923823, 2908643
Taxation Years: 2009, 2010, 2011, 2012
Hearing Event No. 558694
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
ARB Case Name: WR 126826
Heard: July 16, 2014 in Toronto, Ontario
APPEARANCES:
| Parties | Representative |
|---|---|
| ING Industrial Fund I Inc. | M. Tomascik |
| MPAC | B. Mohammed |
| City of Toronto | No one appeared |
DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES
ISSUE
1The subject property is 6.18 acre lot improved with an industrial building with a gross floor area of 101,469 square feet (“sq. ft.”), the office component of the industrial building is two storeys with an area of 34,909 square feet, and was built in 1989.The warehouse has a height of 25.6 feet, and it was built in 1971.
2Both parties agree that the best approach to determine the current value of this property is the direct sales comparison approach, and that equity is not an issue. The dispute before the Board is centered on the comparables used to determine the correct current value assessment (“CVA”).
3Michelle Tomascik, appearing for the Appellant, takes the position that the assessment for the subject property is too high in comparison to similar properties. She is of the opinion that a more realistic current value is $5,599,000.
4For taxation years 2009, 2010, 2011, and 2012 the property assessment was returned pursuant to the Assessment Act (“Act”) at $6,411,000. Bashir Mohammed, appearing for MPAC, submits that the assessment as returned reflects correct current value and should be confirmed by the Board.
DECISION
5The Board is required by the Act to do two things in determining the amount for which the assessment should be made:
Section 44.(3)(a) requires the Board to determine the current value of the land. The Board finds that the current value of the property is $6,411,000.
Section 44.(3)(b) directs the Board to have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land. The Board finds that an assessment at current value, as determined above, is equitable and no adjustment is required.
6The assessment for 2009, 2010, 2011 and 2012 taxation years is confirmed at $6,411,000, in the commercial property class.
REASONS FOR DECISION
Legislation
7The Board must have regard to s. 1, 19.(1), 19.2(1), 40.(17), 40.(19), 44.(3)(a) and (b) of the Act when determining whether or not the assessment under appeal is correct.
8Section 1 of the Act defines current value as follows:
“current value” means, in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer.
9Section 19.(1) of the Act states:
19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.
10Section 19.2(1) of the Act provides:
19.2(1) Valuation days. – Subject to subsection (5)1, the day as of which land is valued for a taxation year is determined as follows:
- For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008
11Section 40.(17) of the Act states:
40.(17) Burden of proof. – For 2009 and subsequent taxation years, where value is a ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.
12Section 40.(19) of the Act states:
40.(19) Board to make determination. – After hearing the evidence and the submissions of the parties, the Board shall determine the matter.
13Section 44.(3)(a) and (b) of the Act state:
44.(3) Same, 2009 and subsequent years. – For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,
(a) determine the current value of the land; and
(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.
Current Value – Analysis and Evidence
Position of MPAC
14Mr. Mohammed testified that MPAC values properties like the subject property using the cost approach. In this methodology an estimate is made of the investment that would be required under current market conditions to construct improvements of equal utility to those of the subject property. From the reproduction cost new, an estimated loss in value due to depreciation is deducted and an estimated land value is then added.
15Mr. Mohammed testified that the subject property sold three times in the past seven years. Two of the sales were portfolio sales occurring in March 2008 for $8,250,000, and February 2012 for $7,495,599. The sale in August 2005 was an arm’s length transaction in the amount of $5,125,000. MPAC did not use these sales for its analysis, but the assessor testified that the sales of the subject property appear to be in line with the marketplace.
16Mr. Mohammed, in support of the assessment as returned, presented Exhibit 1 consisting of a document asserting the assessor’s position in relation to the valuation attributed to the subject property.
17The assessor identified six sales of properties in the Etobicoke area. The proposed comparables are considered by MPAC to be similar to the subject property on the basis of year built, quality of construction, location, total building area, and utility.
18Mr. Mohammed testified that the suggested comparables were adjusted for the following differences:
a) the site area at $464,000 per acre.
b) ceiling height, in the warehouse portion, calculation was ACS based.
19Details of each property proposed by MPAC are:
- 110 Carrier Drive
- Lot size 4.08 acres (total adjustment for lot difference – $946,560)
- Building size 94,844 sq. ft. – ceiling height 24.8 feet (“ft”)
- Built in 1977
- Sold in July 2008 for $6,850,000 / adj. sale price $7,796,560 = $82 per sq. ft.
- 215 Evans Avenue
- Lot size 3.36 acres (total adjustment for lot difference – $1,280,640)
- Building size 80,793 sq. ft. – ceiling height (“hght”) 40.8 ft. (hght adj. per ft. $95,000)
- Built in 1988
- Sold in July 2008 for $4,309,500 / adj. sale price $5,495,140 = $68 per sq. ft.
- 506 Kipling Avenue
- Lot size 7.55 acres (total adjustment for lot difference – $640,320)
- Building size 137,901 sq. ft. – ceiling height 18.5 ft. (hght adj. per ft. $363,000)
- Built in 1966
- Sold in May 2008 for $8,000,000 / adj. sale price $7,722,680 = $56 per sq. ft.
- 10 Shorncliffe Road
- Lot size 5.36 acres (total adjustment for lot difference – $352,640)
- Building size 108,106 sq. ft. – ceiling height 20 ft. (hght adj. per ft. $159,000)
- Built in 1969
- Sold in October 2007 for $7,000,000 / adj. sale price $7,511,640 = $69 per sq. ft.
- 36-40 Horner Avenue
- Lot size 2.89 acres (total adjustment for lot difference – $1,447,680)
- Building size 97,733 sq. ft. – ceiling height 19 ft. (hght adj. per ft. $107,000)
- Built in 1969
- Sold in July, 2007 for $4,100,000 / adj. sale price $5,654,680 = $58 per sq. ft.
- 80 Jutland Road
- Lot size 5 acres (total adjustment for lot difference – $519,680)
- Building size 123,537sq. ft. – ceiling height 25 ft.
- Built in 1968
- Sold in May 2007 for $5,000,000 / adj. sale price $5,519,680 = $45 per sq. ft.
20Mr. Mohammed stated the adjusted sale prices for the suggested comparables establish a range between $45 and $82 per square foot. He testified that the best comparables and best market indicators are 110 Carrier Drive, 10 Shorncliff Road and 36 – 40 Horner Avenue. The three sales establish a range of values between $58 and $82, a mean of $70 and a median of $69 per square foot. The subject property is within that range of values assessed at $63 per square foot, supporting the assessment as returned at $6,411,000.
21During cross-examination, Ms. Tomascik questioned the validity of the sale at 215 Evans Avenue. She presented a Marsh report, Exhibit 2, showing that the property sale was negotiated in 2004 with a closing date of July 2008. She stressed that this is not a valid sale because it is too far removed from the valuation day of January 1, 2008. She also questioned the validity of the sale at 10 Shorncliff Road, and presented a Marsh report, Exhibit 3, showing that the property is a cold storage facility, and that refrigeration equipment was part of the overall sale price. She argued that this is not a valid sale because it includes chattels.
Position of the Appellant
22Ms. Tomascik testified that the GRAD information supplied by MPAC shows the subject having a lot area of 6.18 acres. All her calculations are based on this value. The assessor did not dispute this information, and the Board will use 6.18 acres rather than 6.12 acres in its calculations.
23Ms. Tomasick submitted Exhibit 4 consisting of a property profile with photographs and five comparable sales. The five properties all in Etobicoke, range between 90,000 and 150,000 square feet, with lots greater than 2.55 acres. Four out of the five properties are also proposed by MPAC as good comparables, that being 110 Carrier Drive, 506 Kipling Avenue, 36 – 40 Horner Avenue, and 80 Jutland Road. Details of fifth property proposed are:
- 15 Bethridge Road
- Lot size 5.01 acres ( total adjustment for lot defence – $538,200)
- Building size 102,295 sq. ft. – ceiling height 16 – 28 ft. (hght adj. per ft. $159,000)
- Built in 1953 to 1971
- Sold in November 2007 for $3,625,000 / adj. sale price $4,208,995 = $41 per sq. ft.
24Ms. Tomascik argued her comparables reveal a median sale price per square foot of building of $55.18 demonstrating that MPAC is overvaluing the subject property. She submitted that the subject property’s current value should be $5,599,000.
25During cross-examination, Mr. Mohammed testified that 15 Bethridge Road had a fire in 2009. He stated that after the fire the use of the property changed, and that it is currently functioning as outside storage, and the building use also changed, it is currently used as a gravel storage facility. Ms. Tomascik rebutted that at the time of the sale in November 2007, the property had the same utility as the other comparables, and the subject property.
26The Board agrees with Ms. Tomascik that the property at the time of sale in 2007 was similar to the subject property. The fact that the property currently has a different utility is irrelevant for this analysis.
The Board’s Analysis – Section 44.(3)(a) – Current Value
27The best evidence of current value is an arm’s length and market-tested sale of the subject property on the valuation date, January 1, 2008, or close to it. If no such transaction has taken place, the Board looks to sales of comparable properties in the vicinity to determine if the sales evidence suggests that current value requires correction.
28The Board rejects the following as good comparables:
- 215 Evans Avenue, because evidence shows that although the sale closed in July 2008, the actual negotiations took place in 2004, a date too far removed from the valuation day of January 1, 2008 to be supportive to this analysis.
- 10 Shorncliffe Road, evidence shows that this sale included the cooling equipment that generally is part of a cold storage warehouse.
29The Board finds that the sales of the remaining sales comparables presented by both parties (five in total) provide evidence of the current value of the subject property. The sales value per square foot, as established by these sales ranges between $41 and $82. The subject property has a larger lot than four of the five comparables, and is one of the newer buildings, except for 110 Carrier Drive. The subject also sold in 2005 for $51 per square foot, and it is conceivable that the property would be worth considerably more three years later in the rising market of the Greater Toronto Area. MPAC values the subject property at $63 per square foot, or at $6,411,000, well within the range as established by the market place.
The Board’s Analysis – Section 44.(3)(b) – Equity Analysis
30Section 44.(3)(b) mandates and directs that after determining current value, the Board shall have reference to the value at which similar lands in the vicinity are assessed.
31The parties agreed that equity was not an issue. There is no evidence before the Board that requires it to lower the assessment of the subject property below its current value to make it equitable with the assessment of similar land in the vicinity.
CONCLUSION
32The Board finds that the correct and equitable current value is $6,411,000 for the 2009, 2010, 2011 and 2012 taxation years.
“Cristina Marques”
CRISTINA MARQUES MEMBER Assessment Review Board A constituent tribunal of Environment and Land Tribunals Ontario Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248