Wide Flange Inc. v. Municipal Property Assessment Corporation, 2015 CanLII 20378

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 15, 2015

FILE NO.: WR 130538

Assessed Person(s): Wide Flange Inc. Trustee

Appellant(s): Wide Flange Inc.

Respondent(s): Municipal Property Assessment Corporation (“MPAC)” Region 16

Respondent(s): City of Orillia

Property Location(s): 123 Norweld Drive

Municipality(ies): City of Orillia

Roll Number(s): 4352-020-212-01672-0000

Appeal Number(s): 2970885, 3022635 and 3087923 (deemed 2015)

Taxation Year(s): 2013, 2014 (and deemed 2015)

Hearing Event No. 574148

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

ARB Case Name: WR 130538

Heard: February 3, 2015 in Orillia, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Wide Flange Inc.	Alan Holmes
MPAC	Julian Pikulik, David Zhao and C. Gentle
City of Orillia	No one appeared

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

INTRODUCTION

1The subject property is vacant land zoned M2 consisting of 0.22 acres.

2It is located in the south-east end of the Town of Orillia and is within close proximity to Highways 400 and 12. Access to the property is from Norweld Drive.

3The subject property is classified as “Vacant Land” (VL/IX).

4The subject property has a classification which is designated for unoccupied vacant land.

5There are no issues regarding the classification of the land.

6The assessment of the subject property as of the valuation date January 1, 2012 is $54,000.

7Alan Holmes, the representative for the Appellant (the “Representative”) argues that the subject property is affected by landfill contamination problems that negatively affect the marketability and value of the land. He further contends that MPAC has not adequately taken into account the impact of contamination on the value of his property which results in his property being over assessed.

PRELIMINARY MATTER

8MPAC requested that the Assessment Review Board (“Board”) accept Julian Pikulik as an “expert witness.” The Board, on examination of Mr. Pikulik’s C.V. in addition to questioning pertaining to his formal training and experience, accepted Mr. Pikulik as an expert witness. The Appellant represented by Mr. Holmes had no objections.

ISSUE

9The issue before the Board is to determine whether the subject property is over-assessed in relation to similar properties in the area.

DECISION

10The Board finds that the current value of the subject property is $61,140.

11The Board has made reference to similar lands in the vicinity and finds that no reduction is required for equity under s. 44.(3)(b) of the Assessment Act (“Act”).

12The Board notes that the current value established by the Board is higher than the assessment as established by MPAC. Since no party requested an increase in the assessment of the subject property, the Board therefore confirms the assessment of the subject property in the amount of $54,000 for the 2013 and 2014 taxation years.

13Accordingly, as at the valuation day, January 1, 2012, the assessment of the subject property for the 2013 taxation year and deemed 2014 taxation year is confirmed in the amount of $54,000.

REASONS FOR DECISION

The Legislation

14For the 2013 taxation year, in determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Act:

15Section 1 of the Act defines “current value” as:

“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.

16Section 19.(1) of the Act states:

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

17Section 19.2(1)2 of the Act states:

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.

18Section 44.(3) 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.

19Section 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.

20Section 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.

Analysis

21Under the Act the Board is required to do three things:

(1) Find the current value of the property.

(2) Make reference to the value at which similar lands in the vicinity are assessed.

(3) Adjust the assessment of the subject property if the adjustment would result in a reduction in the assessment.

Current Value

22The best measure of current value is an arm’s length and market tested sale of the subject property on the valuation date of January 1, 2012, or close to it. If no such transaction took place, a further measure of current value is arm’s length and market tested sales of comparable properties in the same vicinity and market. This measure acts as a benchmark and gauge of the correctness of the assessed value of the subject property. The onus for establishing the correctness of the current value lies with MPAC.

MPAC’s Evidence

23The Valuation Report submitted into evidence by the Assessor provided three suggested comparable properties shown in Table 1:

Table 1 MPAC’s Suggested Comparable Properties

Roll Number	Address	Sale Amount	Sale Date	Site Area (Acres)	Sale Price Per Acre
4352-020-212-01672	123 Norweld Drive (Subject Property)			0.220
4352-020-212-01618	118 Norweld Drive	70,000	2012-04-27	0.230	304,347
4352-020-212-01610	110 Norweld Drive	57,600	2012-06-27	0.229	251,528
4352-010-109-11100	434 West Street	330,000	2013-01-03	1.370	240,876

24The Assessor informed the Board that although the subject property is classified as “Vacant Land Unoccupied” the property is being used by another party under lease.

25The Assessor also pointed out that MPAC inspected the property on January 7, 2015 and observed one of the uses as Snow Dumping. MPAC also observed several Dump Trucks parked on the property.

26The Assessor stated that the Appellant is not complying with the designation and classification of the property especially in regard to usage. The current assessment is based on the property being unoccupied vacant land and any other usage of the land would have an impact on current value.

27The Assessor also pointed out that two of the suggested comparable properties submitted by MPAC and located at 118 Norweld Drive and 110 Norweld Drive have valid sales.

28The Assessor stated that in his opinion, the property located at 110 Norweld Drive is most comparable to the subject property because it is located on the same street as the subject property, it is in the same Industrial Complex and it was sold within seven months of the valuation date of January 1, 2012.

29The Assessor informed the Board that based on his analysis including taking into account the difference between lot sizes and zoning; he estimates that market value of the subject property to be $54,000. He is satisfied that the current value assessment of the subject property at $54,000 is reasonable.

Appellant’s Evidence

30The Representative for the Appellant stated that:

• His client owned all the lots on Norweld Drive and 29 Lots were fully developed and ready for sale in 1995.
• He further informed the Board that during the Planning and Development Stages, the City asked for a Phase One Environmental Site Assessment. The study came back requesting a Phase Two Environmental Assessment.
• His client was approached by the City to build a Ball Hockey Rink on lots 127 and 129 Norweld Drive on a lease basis. The Developer built the Ball Hockey Rink and after facing many challenges from the City, he was forced to demolish the rink.
• In his view the City’s main concern was that Norweld Drive was built on an old land-fill site and toxic fumes might still linger.
• He believes that the fear that the property may still emit toxic fumes discourages financial entities from lending for development.
• He is of the opinion that because the demand for industrial land in Orillia has been stagnant for many years and with manufacturing moving to South Barrie and North Toronto/Vaughan, lot prices in Orillia will continue to fall.

31The Representative submitted the following suggested comparable properties:

Table 2 Appellant’s Suggested Comparable Properties

Roll Number	Address	Sale Amount	Sale Date	Site Area (Acres)	Sale Price Per Acre
4352-020-212-01672	123 Norweld Drive (Subject Property)			0.220
4352-020-212-01618	118 Norweld Drive	45,000	2012-04-27	0.230	304,347
	114 Norweld Drive	40,000	2012-12-18	N/A	N/A

32The Representative stated that based on the above-mentioned two sales, it is his opinion that the 2012 Current Value Assessment for the subject property should be $42,500.

Analysis of Evidence

Analysis of MPAC’s Evidence

33The Assessor presented three suggested comparable properties as shown in Table 1. The Board has reviewed the information pertaining to the three properties and finds that there is sufficient similarity between two of the comparable properties and the subject property to allow for comparison because they are located on the same street, have similar lot sizes and are both industrial lands. The Board therefore accepts the properties located at 110 and 118 Norweld Drive as being sufficiently similar to the subject property and suitable for comparative purposes.

34The Board accepts that the sale of the two suggested comparable properties submitted by MPAC and located at 110 and 118 Norweld Drive as valid sales.

35The Board rejects the sale of the suggested comparable property located at 434 West Street because the lot size is considerably larger than the subject property and the sale occurred in January 2013 which is considered too far removed from the valuation date of January 1, 2012.

Analysis of Appellant’s Evidence

36The Board considered the various arguments advanced by the Representative for the Appellant and summarized in Exhibit 5. The Board places no weight on these arguments since they are not supported by credible evidence or by documents or studies.

37The Board reviewed the details of the two suggested comparable properties submitted by the Representative for the Appellant. The properties are on the same street as the subject being located at 114 and 118 Norweld Drive, are of similar size and are industrial lands.

38The Board however notes that the property located at 118 Norweld Drive was also submitted by MPAC. The Board notes that the purchase price submitted by MPAC pertaining to 118 Norweld Drive is $70,000 and the purchase price submitted by the Appellant is $45,000. The representative for the Appellant claims that he was present when the sale transaction occurred and that the sale price of $70,000 includes an assignment of a contract with the Ontario Power Authority. The Representative argues that the value of the land is $45,000 and the value of the Ontario Power Authority contract is $25,000 and should not be included in the sale price of the property. The Board dismisses the Representative’s argument herein because he was unable to provide any credible evidence to buttress his argument that the land at 118 Norweld Drive was indeed sold for $45,000.

39The Board accepts that the sale price of $70,000 submitted by MPAC as being the valid sale price for the property located at 118 Norweld Drive.

40The Board also considered the sale data for the property located at 114 Norweld Drive. The Appellant submitted its sale price as being $40,000. However, the Board reviewed Exhibits 2(a) and 2(b) submitted by MPAC which provide the sale transaction and details pertaining to the seller and the buyer. The Board, on the basis of this examination accepts the Assessor’s explanation that the sale does not represent an “arm’s length or open market sale.” The Board therefore rejects the sale of this property as a suitable sale.

Determination of Current Value

41The Board agrees that the best method to determine the current value of the subject property is based on the sales of similar properties in the neighborhood. The Board finds that the average sales value per square foot of the two comparable properties provided by MPAC and located at 118 Norweld Drive and 110 Norweld Drive is $6.38 per square foot, which when applied to the subject property results in a current value of $61,140.81. The Board finds that the current value of the subject property is $61,140 (rounded).

Equity with Similar Lands in the Vicinity

42The Board is required under s. 44.(3) sub-paragraph (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 that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.

43No argument was presented for equity. The Board finds that the evidence does not support the conclusion that the current value as determined above requires an equity reduction.

CONCLUSION

44The Board finds that the current value of the subject property is $61,140.

45The Board has made reference to similar lands in the vicinity and finds that no reduction is required for equity under s. 44.(3)(b) of the Act.

46The Board notes that the current value established by the Board is higher than the assessment as established by MPAC. Since no party requested an increase in the assessment of the subject property, the Board therefore confirms the assessment of the subject property in the amount of $54,000 for the 2013 and 2014 taxation years.

47Accordingly, as at the valuation day, January 1, 2012, the assessment of the subject property for the 2013 taxation year and 2014 taxation year is confirmed in the amount of $54,000.

2015 DEEMED APPEAL

48An 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.

49Section 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.