Joscona Limited v. Municipal Property Assessment Corporation, 2015 CanLII 30365

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 29, 2015

FILE NO.: WR 132386

Assessed Person(s): Joscona Limited

Appellant(s): Joscona Limited and Dennis Tascona

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

Respondent(s): City of Barrie

Property Location(s): 220 Bradford Street

Municipality(ies): City of Barrie

Roll Number(s): 4342-040-001-08100-0000

Appeal Number(s): 3036911 and 3087594 (deemed 2015)

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

Hearing Event No. 582545

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

Heard: May 4, 2015 in Barrie, Ontario

APPEARANCES:

Parties	Counsel^+^/Representative
Joscona Limited	Dennis Tascona
MPAC	Britanny Kee and Marc Lauren
City of Barrie	No one appeared

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

INTRODUCTION

1The subject property is an “L” shaped piece of vacant land that has an area of 38,720 square feet.

2The municipal address of the property is number 220 Bradford Street in Barrie, Ontario and is located across the street from the City of Barrie Wastewater Treatment Plant.

3The property is located in Allandale Centre and is within the Allandale Centre Community Plan. It is also within the Downtown Barrie Urban Growth Centre, an intensification area to allow the City to meet the target that 40% of residential growth is to occur within the established boundary of the Provincial Growth Plan.

Background

4Prior to the 2014 taxation year, the subject property was zoned General Commercial (C4) and Residential Multiple Second Density (RM2).

5Up to early May 2012 the property was improved with a house, detached garage and a commercial building.

6The residential structures on the property were demolished by May 24, 2012 and the commercial structures on July 26, 2012.

7The Appellant filed a request to alter the zoning of the subject property with the City of Barrie. In 2013 the City of Barrie approved the requested zoning change from General Commercial (C2) and Residential Multiple Second Density (RM2) to Transition Centre Commercial (C2-2) (SP-492) (H-124) to allow for a proposed 13 storey 100 unit (plus or minus) residential condominium building with commercial units on the ground floor. It is anticipated that the units from the second floor and up would have an unobstructed view of the lake.

8The assessment on the property was returned at $1,084,000.

9The Appellant argues that MPAC has over assessed his property and believes that the assessment is excessive in relation to similar properties in the neighbourhood.

ISSUE

10The issue before the Assessment Review Board (“Board”) is whether the assessment as returned for the subject property for taxation years 2014 and deemed 2015 is at current value as at the January 1, 2012 valuation date, and whether it is equitable with the assessments of similar lands in the vicinity.

DECISION

11The Board finds that the current value of the subject property is $1,601,459.

12The Board applies a negative adjustment of 20% (based on MPAC’s consideration to account for the subject property being across from the City of Barrie Wastewater Treatment Plant and further from the downtown core) to the current value as determined above. This adjustment results in a reduction of from $1,601,459 to $1,281,167.

13The 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”), R.S.O. 1990. C. A31, as amended, in order to make it equitable with similar lands in the vicinity.

14The Board notes that the assessment as determined above is at a higher level than the assessment as returned on the roll for the subject property. No party has given notice of a request for an increase in the assessment of the subject property. Accordingly, for the 2014 and deemed 2015 taxation years the assessment of the subject property as at the valuation day January 1, 2012, is confirmed in the amount of $1,084,000.

15Accordingly, as at the valuation day, January 1, 2012, the assessment of the subject property for the 2014 and deemed 2015 taxation years is confirmed in the amount of $1,084,000.

REASONS FOR DECISION

The Legislation

16For the 2014 and deemed 2015 taxation years, in determining the value at which land shall be assessed, the Board must have regard to the following provisions of the R.S.O 1990, c.A.31, as amended Act:

17Section 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.

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 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.

20Section 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.

21Section 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.

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.

Analysis

23Under 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; and

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

Current Value

24The best measure of current value is an arm’s length and market tested sale of the subject property on or around the valuation date of January 1, 2012. 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

25MPAC in its Exhibit 1, stated that because of the Transition Centre Commercial (C2) zoning, the search for comparable properties was limited to within the Downtown Barrie Urban Growth Centre. MPAC submitted two suggested comparable properties shown in Table 1.

Table 1

Addresses	Property Code	Zoning	Site Area (sq. ft.)	Sale Date	Sale Amount ($)	Current Value ($)
220 Bradford Street (subject property)	Condominium Development Land - Residential	C2-2	38,720	nil	nil	1,084,000
28 Toronto Street	Vacant Commercial Land	C2-1	29,882	2011/11	1,236,000	1,098,000
20 Checkley Street	Multi-residential vacant land	C2-2	377,230	2012/06	6,750,000	6,790,000

26MPAC stated that the suggested comparable properties are similar to the subject property because:

1. Their zoning is similar;
2. They have similar potential and/or proposed uses;
3. They are both vacant lands;
4. They are located within the same neighbourhood and are in proximity to each other and
5. They both have valid sales.

27MPAC informed the Board that the sales of both properties have been adjusted by - 20% to account for the subject property’s location being across from the City of Barrie Wastewater Treatment Plant and further from the downtown core.

28MPAC submitted three additional suggested comparable properties that they considered inferior to the subject property but nevertheless they believed provided a measure of similarity and places the current value of the subject property in relative perspective.

29MPAC informed the Board that the subject property was listed for sale in 2014 for a list price of $1,500,000 and submitted a copy of the listing to support the information.

Appellant’s Evidence

30The Appellant submitted into evidence the following Exhibits:

a) Exhibit 2 is an e-mail correspondence between Mr. Tascona and Real Estate Agent Mr. Pon Sivakumar in which Mr. Sivakumar stated that he was unable to meet Mr. Tascona’s sale price expectations of the subject property.

b) Exhibit 3 is a 2012 listing proposal from Royal Le Page for the subject property which included a valuation by Royal Le Page indicating a value in the range of $570,000 to $630,000.

c) Exhibit 4 is a letter of opinion dated April 22, 2015 from Hassey Realty Corp. Brokerage signed by Mr. Michael Hassey, indicating that in his opinion the “highest likely selling price of the subject property is $500,000.”

d) Exhibit 5 is a copy of the conclusions of the Phase I Environmental Site Assessment Report conducted by Skelton Brumwell and Associates Inc. and submitted to the City of Barrie. The main recommendation is that a Phase II Environmental Assessment be completed in order to determine whether or not any contamination exists on the subject lands.

e) Exhibit 6 is a copy of the Guideline titled “Compatibility between Sewage Treatment and Sensitive Land Use” (August 1996) for the establishment of appropriate distances and control measures for land use planning.

f) Exhibit 7 is a copy of an aerial view map (source unidentified) showing the distance between the subject land and the City of Barrie Wastewater Treatment Plant.

g) Exhibit 8 is an extract from an Air Quality and Noise Assessment report prepared by Church and Trought Inc. for the subject property which concludes that air quality and noise issues are not expected to impede the residential development from proceeding.

h) Exhibit 9 is a map of the area of the subject property showing entry and exit points.

i) Exhibit 10 is a collection of photographs showing the surrounding buildings in the vicinity of the suggested comparable property submitted by MPAC located at 122 Edgehill Drive.

j) Exhibit 11 is a collection of photographs showing the surrounding buildings in the vicinity of the suggested comparable property submitted by MPAC located at 76 Ardagh Road.

k) Exhibit 12 is a collection of photographs showing the surrounding properties in the neighbourhood of the subject property.

l) Exhibits 13 to 16 are copies of the 2013 Taxation Year Enhanced Property Profiles for properties at 240 Bradford Street, 93 Bradford Street, 176-178 Bradford Street and 100 Bradford Street respectively. The Appellant believes that these are similar to his property and they are all assessed at lower values than the subject property.

m) Exhibit 17 is a copy of the City of Barrie By-Law Number 2013-176 which is the approval for the change in zoning of the subject property from (C4) to (C2-2).

31The Appellant stated that in his opinion, Bradford Street is a “dead zone” and Business Activity has declined continually due to the decimation of Business Activity caused by the presence of the City of Barrie Wastewater Treatment Plant and which he believes negatively affects the value of his property.

32The Appellant stated that both the potential contamination issues identified in the Phase I Environmental Study and the cost of conducting a Phase II Environmental Study negatively impact his property.

33The Appellant raised issues regarding the condition of the soil and the potential cost of any decontamination remedies that may be required.

34The Appellant informed the Board that there have been no willing buyers of the subject property in the past or at the current time or in the foreseeable future.

35The Appellant advised the Board that he was unable to provide any suggested comparable properties in the vicinity of Bradford Street because Bradford Street properties are in his opinion unique and there have been no sales because no one is interested in locating there.

36The Appellant further stated that in his opinion the best evidence of current value is the property located at 240 Bradford Street which is valued at $999,000. He agrees with the estimates of value provided by the agents from Hassey Realty Corp. and Royal Le Page who indicated that in their opinion the current value established by MPAC is unrealistic and misleading.

Analysis of Evidence

Analysis of MPAC’s Evidence

37The Board considered the evidence presented by MPAC regarding its two suggested comparable properties. The Board accepts that only the suggested comparable property located at 28 Toronto Street is similar to the subject property because it has a similar zoning, is located within the same neighbourhood and has similar potential and or proposed uses.

38The Board rejects the suggested comparable property located at 20 Checkley Street because it is approximately 10 times larger than the subject property.

39The Board accepts that the sale of the suggested comparable property at 28 Toronto Street occurred within the valuation period and therefore considers the sale as being valid for use in determining the current value of the subject property.

40The Board reviewed the sale listing of the subject property when it was placed on the open market in 2014. It notes that while the list price of $1,500,000 asked by the Appellant is not conclusive evidence of value, it nevertheless provides an indication of the expected value as perceived by the Appellant.

Analysis of the Appellant’s Evidence

41The Board reviewed the several pieces of evidence submitted by the Appellant and has made the following observations/findings:

a) In Exhibit 2 the Appellant sought to convince the Board that the list price displayed in the 2014 sale listing of $1,500,000 was a misrepresentation by the listing agent. The Board, on the basis of the e-mail correspondence between the Appellant and the listing agent is satisfied with the Appellant’s explanation and therefore gives no consideration to the information in this exhibit.

b) In Exhibit 3 the Appellant makes the case that a July 2012 valuation of the subject property by Royal Le Page places the expected value of the subject property at between $570,000 and $630,000. The Board notes two significant issues with the suggested valuation submitted; firstly, at the time of the valuation in July 2012 the subject property had a zoning designation of C4 (General Commercial (C2) and Residential Multiple Second Density (RM2), while the zoning for the year under appeal is C2-2 (Transition Centre Commercial (C2-2) (SP-492) (H-124) to allow for a proposed 13 storey 100 unit (plus or minus) residential condominium building with commercial units on the ground floor). The Board was advised by the Assessor that the current zoning attracts a much higher value based on the permitted uses than that which obtains under a C4 zoning designation. Secondly, the signatories to the valuation report were not present to be cross examined on any aspect of the valuation. The Board therefore places no weight on this evidence.

c) Exhibit 4 is “Letter of Opinion” prepared by Mr. Michael Hassey of Hassey Realty Corporation for the purpose of estimating the value of the subject property in April 2015. This letter of opinion is the result of a request made by the Appellant. Mr. Hassey reaches the conclusion that the highest likely selling price for each of the years 2012, 2013, 2014 and 2015 is $500,000. The Board places no weight on this information since it was unable to assess the accuracy of the information contained in Mr. Hassey’s letter of opinion because Mr. Hassey was not available to be cross-examined. In addition, the Board notes that much of the information in this exhibit is subjective as well as short on analytical details and sources of information.

d) The Appellant believes that Exhibit 5, which is a copy of the conclusions of the Phase I Environmental Site Assessment Report for the subject property suggests that the subject property is possibly contaminated and having a highly negative impact on the value of the property. The Board has reviewed Exhibit 5 and finds that while the study identified certain prior uses of the subject property that have the potential for contamination, no evidence was provided to support the Appellant’s claim. The Board further notes that the author of the report states that “……..Skelton, Brumwell & Associates assumes no responsibility for damages, if any, suffered by any third party as a result of decisions made or actions based on this report.” The Board notes that the author of the Phase I assessment was not present to be cross-examined. The Board takes the evidence in this exhibit at face value.

e) Exhibit 6 is a copy of the guideline from 1996 (Guideline D-2) for “Compatibility between Sewage Treatment and Sensitive Land Use which the Appellant provided to show the measures required to satisfy land use planning for the subject property. The Appellant did not provide the Board with any evidence as to what impact (if any), such requirements may have on value. The Board accepts the evidence in this exhibit at face value.

f) Exhibit 7 is an aerial view of the subject property in relation to the City of Barrie Wastewater Treatment Plant. The Board finds no evidentiary value of this exhibit because it does not provide any information to assist in establishing value.

g) Exhibit 8 is an extract from an Air Quality and Noise Assessment report for the subject property conducted by Church & Trought Inc. to show that the Separation Distance was not met as per Guideline D-2. The Appellant contends that the consultants relied strictly on information obtained from the City of Barrie and therefore the conclusion in the report is skewed. The Board is unable to utilize this information since it is a one-page extract from a more extensive report. In addition, without the benefit of the entire report and without the presence of its author or authors to be cross-examined the Board is unable to consider the exhibit in its deliberations.

h) Exhibit 9 is a map of the general area of the subject property showing entry and exit points. The Board finds that the exhibit by itself has no utility in the determination of value.

i) Exhibits 10, 11 and 12 are photographic evidence of suggested comparable properties and surrounding areas as well as various photographs of the neighbourhood of the subject property. The Board regards the photographic evidence as referential and places no other value to them.

j) Exhibits 13, 14, 15 and 16 are the 2013 Taxation Year enhanced property profiles of properties on Bradford Street which the Appellant submitted to demonstrate that they are all similar to the subject property but they all have lower assessed values than the subject property. The Board is of the view that the properties in these exhibits are singularly different from the subject property in a very important aspect i.e. the zoning. The subject property has a zoning of C2-2 with allowable uses that are of a much higher value than C4 which is the current zoning designation of all the properties in the exhibits. The Board finds that the properties in these exhibits are not similar to the subject property and their assessed values cannot be compared to it.

k) Exhibit 17 is a copy of the By-Law (2013-176 dated December 2, 2013 which approved the rezoning the subject property from C4 to C2-2. The Board accepts that the current zoning designation of the subject property is as approved in By-Law Number 2013-176.

Determination of Current Value

42The Board finds that the best method to determine the current value of the subject property is based on sales of similar properties in the neighbourhood.

43The Board has accepted that the property located at 28 Toronto Street is similar to the subject property with a valid sale and is therefore acceptable for use in determining the current value of the subject property.

44The Board finds that the sales value per square foot of the comparable property based on a valid sale of $1,236,000 is $41.36 per square foot. When this unit price per square foot is applied to the subject property it results in a current value of $1,601,459.

Equity with Similar Lands in the Vicinity

45The 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.

46While the Appellant presented properties on Bradford Street to establish equity, the Board does not consider these properties to be similar to the subject property since they are of a zoning that carries a lower valuation. No other evidence was presented on equity. The Board therefore finds that no reduction of the assessment of the subject property for equity is warranted.

CONCLUSION

47The Board finds that the current value of the subject property is $1,601,459.

48The Board applies a negative adjustment of 20% (based on MPAC’s consideration to account for the subject property being across from the City of Barrie Wastewater Treatment Plant and further from the downtown core) to the current value as determined above. This adjustment results in a reduction of the value from $1,601,459 to $1,281,167.

49The 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 in order to make it equitable with similar lands in the vicinity.

50The Board notes that the assessment as determined above is at a higher level than the assessment as returned on the roll for the subject property. No party has given notice of a request for an increase in the assessment of the subject property. Accordingly, for the 2014 and deemed 2015 taxation years the assessment of the subject property as at the valuation day January 1, 2012, is confirmed in the amount of $1,084,000.

51Accordingly, as at the valuation day, January 1, 2012, the assessment of the subject property for the 2014 and deemed 2015 taxation years is confirmed in the amount of $1,084,000.

2015 DEEMED APPEAL

52An 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.

53Section 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.