Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 8, 2015 FILE NO.: WR 130689 Assessed Person(s): 1196158 Ontario Inc. Appellant(s): 1196158 Ontario Inc. Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 9 Respondent(s): City of Toronto Property Location(s): 125 Bethridge Road Municipality(ies): City of Toronto Roll Number(s): 1919-044-010-01000-0000 Appeal Number(s): 2951806, 3017145 and 3075715 (deemed) Taxation Year(s): 2013, 2014 (and deemed 2015) Hearing Event No. 570138 Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended ARB Case Name: WR 130689 Heard: February 5, 2015 in Toronto, Ontario

APPEARANCES:

Parties	Counsel+/Representative
1196158 Ontario Inc.	Daniel Attard
MPAC	Bashir Mohamed
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY BARBARA KOWARSKY

ISSUE

1The issue is to determine whether the assessment of 125 Bethridge Road, located in the City of Toronto (“subject property”) as returned at $3,064,000 for the 2013 and 2014 taxation years is correct, and whether it is equitable with that of similar lands in the vicinity.

DECISION

2In order to determine the value assessment of a property, the Assessment Review Board (“Board”) is legislated to follow two steps.

3Section 44.(3)(a) of the Assessment Act (“Act”) which requires the Board to:

(a) “determine the current value of the land.”

4The Board determines the current value to be $2,748,000 as at the January 1, 2012 valuation date.

5Section 44.(3)(b) of the Act directs the Board to:

(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.”

6The Board finds that an adjustment for equity pursuant to s. 44.(3)(b) is not required.

7Therefore, the assessment of the subject property is reduced from $3,064,000 to $2,748,000 for the 2013 and 2014 taxation years.

REASONS FOR DECISION

The Subject Property

8The subject property is described as an industrial building erected in 1967 in the section of Toronto, Ontario, known as Etobicoke. The building has a total area of 40,768 square feet comprising an attached office measuring 3,782 square feet, and 133 square feet of interior finish. The average ceiling height is 18.4 feet. It is situated on a lot measuring 2.32 acres. The property is classified as Industrial (IT). The appellant’s representatives agree with the description and the classification.

The Position of MPAC

9MPAC was represented by Bashir Mohamed. He submitted an MPAC summary report into evidence. (Exhibit 1)

10He testified that:

i. He used the direct sales approach in his assessment analysis that includes seven suggested comparable properties that sold between January 2011 and September 2012.

ii. Where he felt it was necessary and applicable, he made site area adjustments based on vacant land sales in the vicinity ($600,000 per acre), and ceiling height adjustments (to one property only).

iii. He used the Automatic Cost System (ACS) which analyzed the data and produced the results that he applied.

iv. All seven of these properties are situated in the same locale as the subject property and are subject to the same market area and economic influences.

v. The lot sizes of his suggested comparables range from 1.56 to 4 acres; the total building areas range from 29,952 square feet to 48,486 square feet; the ceiling heights range from 17 to 31 feet, and the year built ranges from 1954 to 1986. The sale prices range from $2,200,000 to $3,750,000.

vi. The subject property falls in the middle of all of these and therefore supports the assessment.

11Mr. Mohamed testified that he calculated that the suggested comparables have values of $50 to $90 per square foot based on the adjusted sale prices. The mean is $73 and the median is $77. He determined that the subject property’s value is $75 per square foot.

12Finally, he referred to the equity report which he compiled. It lists 19 properties. He acknowledged that his results are based on “revised/corrected values”, and not the original assessments as at January 1, 2012. The assessment to sales ratios (“ASR”) range from 0.64 to 1.58, the mean is 1.03 and the median is 1.0. Consequently, Mr. Mohamed submits that no equity adjustment is necessary because these are within the acceptable range of ASR’s.

The Position of the Appellant

13The appellant is represented by Mr. Daniel Attard, who was the advocate and Mr. Andrew Attard who gave evidence at the hearing.

14Mr. Daniel Attard submitted the following into evidence:

i. An analysis report (Exhibit 2) and

ii. A copy of ARB decision Highland Equipment Ltd. v. Municipal Property Assessment Corp., Region No. 9, [2013] O.A.R.B.D. No. 157 during the summation of his position at the conclusion of the hearing.

15Mr. Andrew Attard testified that:

i. The GRAD report issued by MPAC for the 2012 base year value for the subject property, listed minimal property information (roll number, address and property code), site information, structure information and value calculation, which the parties agreed, should be $3,064,000), while a second Property Valuation issued by MPAC, also for the 2012 base year value, has more detailed information and has a heading “Selected Valuation Method: ACS” and lists the “Property Current Valuation Rounded” as $2,546,000.

ii. This second value of $2,496,000 is much closer to the value of $2,546,000 which he is seeking for his client.

iii. His analysis indicates a 51 percent increase in value since 2008.

iv. He is relying on six properties as suggested comparables and is applying MPAC’s rate of $600,000 per acre to all six properties. He noted that Mr. Mohamed only applied this land adjustment to four of his seven suggested comparables.

v. He used the time adjustment factor of 0.05 percent per month, as MPAC has used previously.

vi. He made age adjustments of 0.05 percent per year which he acknowledges are subjective and that it is “generally accepted” that depreciation occurs faster for newer buildings. He also adjusted for height at the rate of 1 percent per foot.

vii. His adjusted sales analysis resulted in an average of $64 per square foot and a median rate of $62 per square foot.

viii. His equity analysis indicates that the subject property would sell for less than the assessed value, as his results are an average ASR of 1.21 and a median of 1.14.

16In summary, Mr. Daniel Attard submitted that the median rate per square foot should be applied to the subject property, which would result in a valuation of $2,546,000.

The Legislation

17In arriving at a decision, the Board must consider the following provisions of the Act.

18Section 19.(1) of the Act states:

19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

19Section 1 of the Act states:

“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.

20Section 19.2(1)(2) 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:

2. For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.

3. For each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

21Section 40.(17) of the Act provides:

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.

22Section 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.

23Section 44.(3)(a) and (b) of the Act states:

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.

Analysis and Findings

24The assessment legislation, as amended for taxation year 2009 and subsequent years, directs the Board to determine the current value of the subject property, having reference to the value at which similar lands in the vicinity have been assessed. Once current value is determined, the Board may reduce an assessment where it finds that it is inequitable with that of similar lands in the vicinity.

The Current Value of the Land

25The best evidence of current value is an arm’s length and market tested sale of the subject property on the valuation date, January 1, 2012, or close to it.

26The parties agree that the RealNet and Marsh Reports do not include the business in the total sale price of 156 Disco Drive, but that Real Track Service Report indicates that the sale price includes the existing business. There is no clear evidence to authenticate this detail of the sale and therefore it is excluded from the Board’s analysis.

27The Board rejects the 45 Disco Road comparable because the total building area is 10,816 square feet smaller than the subject property, and the economies of scale would skew results with the use of this comparable.

28The Board finds that the best evidence is that of the five comparables listed below. The properties are sufficiently similar in terms of the total building area, ceiling height aand lot size.

Address	2012 CVA	Lot (A)	Total Building Area (sq.ft.)	Ceiling Height (Ft.)	Year Built	Sale Date	Sale price	Adjusted Sale Price	Value per sq.ft. based on Adjusted Sale Price($)
125 Brethridge	3,064,000	2.32	40,768	18.4	1967
30 Brethridge	*4,329,000	4	40,969	18.5	1965	6/12	3,100,000	2,108,800	51
307 Humberline	3,935,000	3.01	48,486	21	1978	9/12	3,750,000	3,356,400	69
25 Clairport	3,031,000	2.02	34,113	20	1987	01/12	3,075,000	3,075,000	90
165 Rexdale	3,704,000	2.74	46,682	17	1954	08/11	2,350,000	2,350,000	50
30 Clairville	2,634,000	1.56	34,461	20	1982	08/12	2,200,000	2,656,000	77

*original CVA

29The average of the value per square foot based on the time adjusted sale price is $67.40. When applied to the subject property, the result is $2,747,763.20 or $2,748,000 rounded.

30Consequently, the Board determines that the current value of the subject property as at January 1, 2012 is $2,748,000.

Equity with Similar Lands in the Vicinity

31The Board is required under s. 44.(3)(b) of the Act 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 similar lands in the vicinity if such an adjustment would result in a reduction of the assessment.

32Mr. Attard’s concern lies in the fact that Mr. Mohamed altered figures in the equity analysis that is included in his report of the subject property.

33In Highland Equipment Ltd. v Municipal Property Assessment Corp., Region No. 9 (supra), Member Cowan said the following:

at paragraph 40: “One cannot begin to speculate as to how many “corrections” were made or missed in this study, as presented.” And at paragraph 41: “…the use of corrected assessments would only provide a moving target as to an ASR study’s implications. MPAC’s evidence provides no level of comfort that this process merits consideration respecting the appeal at issue.”

34The Board finds the reasoning of Member Cowan to be appropriate and compelling when applied to this decision with respect to the subject property.

35The Board does not rely on the ASR study reflected on page 9 of Mr. Mohamed’s report because Mr. Mohamed altered values of certain properties within this study and therefore renders the results inaccurate.

36Mr. Attard used the actual sale values in his ASR study. These sales occurred in a time span of 12 months prior to nine months after the valuation date of January 1, 2012. No time adjustments were entered into evidence.

37The Board finds that no equity adjustment is necessary.

CONCLUSION

38Based on the totality of the evidence presented, coupled with the findings of the Board, the assessment of the subject property is reduced from $3,064,000 to $2,748,000 for the 2013 and 2014 taxation years.

2015 DEEMED APPEAL

39An appeal for the 2014 taxation year is presently before the Board. Section 40.(26) provides that the Appellant is deemed to have made the same appeal for the subsequent taxation year if the appeal is not finally disposed of before March 31 of the subsequent taxation year. The Board has not disposed of the 2014 appeal before March 31, 2015. For that reason, this decision also applies to the 2015 taxation year.

40Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,

(a) in relation to the assessments under sections 32, 33 and 34 for the year; and

(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed.

Footnotes

1. 1Subsection 5 permits the Minister to prescribe a different valuation day. A different day has not been prescribed.