Bath Road Car Wash Inc. v. Municipal Property Assessment Corporation, Region 05, 2015 CanLII 74338

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: November 12, 2015

FILE NO.: WR 2015M1

Assessed Person(s): Bath Road Car Wash Inc.

Appellant(s): Bath Road Car Wash Inc.

Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 05

Respondent(s): City of Kingston

Property Location(s): 311 Bath Road

Municipality(ies): City of Kingston

Roll Number(s): 1011-060-090-00200-0000

Appeal Number(s): 2942688, 3018264 and 3073246

Taxation Year(s): 2013, 2014 and 2015

Hearing Event No. 591534

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

Heard: July 23, 2015 in Kingston, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Bath Road Car Wash Inc.	Terry Goddard
MPAC	Paul McIntyre
City of Kingston	Maureen Peterson

MEMORANDUM OF ORAL DECISION DELIVERED BY SCOTT McANSH ON JULY 23, 2015

INTRODUCTION

1Bath Car Wash is an eight bay self-serve car wash built in 1996 in central Kingston (the “Car Wash”). The Car Wash was assessed at $613,000 for the 2013 taxation year and at $582,000 for the 2014 and 2015 taxation years. MPAC argued that the Car Wash should be assessed at $582,000 for all three taxation years. Bath Car Wash Inc. (“Bath”) argues that the increase in the assessment over previous years is too high and that the assessment should be reduced to $391,809 in order to make the assessment equitable with the increases seen at other car washes in the city. Bath also argues that looking at other assessments on various metrics indicates that the assessment is inequitable.

Law

2Section 44.(3)(a) of the Assessment Act (“Act”) requires that I “determine the current value of the land.” Current value is defined in section 1 as “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.” That is, I must determine what the subject property would have sold for in an arms-length transaction on the relevant valuation day, set pursuant to s. 19.3 of the Act as January 1, 2012 for the 2014 and 2015 taxation years.

3Once I have determined the current value, s. 44.(3)(b) requires that I “have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land” if that adjustment would lower the assessment.

Current Value

4The only evidence before me on the question of what the Car Wash would have sold for on January 1, 2012 was provided by MPAC. They presented a cost analysis, which looks at the value of the land and how much it would have cost to build the structure, with some depreciation for the wear of time. MPAC provided a land value of $382,293 and a depreciated building value of $200,150, for a total value of $582,443. That evidence was never challenged by Bath.

5MPAC provided the sales of two other car washes in Kingston to support its costing of the Car Wash. 2329 Princess Street is a 12 bay car wash, with 11 self-serve bays and 1 automatic bay. It sold for $1,325,000 in July 2008. 473 Rideau Street is a six bay self-serve car wash in a less desirable area of the city. It sold for $700,000 in July 2013. I view 2329 Princess as far superior to the Car Wash and therefore of limited assistance in valuing the Car Wash. However, 473 Rideau Street supports MPACs recommended value. That site is smaller and on a less busy street, which is important for a car wash business. Despite those factors, it sold for more than MPAC’s recommended value and amply supports their costing of the Car Wash.

6Finally, MPAC presented the sale of a vacant parcel of land near the Car Wash to support its land valuation. 1318 Princess Street sold for $240,000 in September 2013. The value per square foot of $24.33 is significantly higher than the value per square foot of $17.13 recommended by MPAC. That evidence supports the land value recommended by MPAC and was not challenged by Bath.

Equity

7Bath did not challenge MPAC’s valuation, but rather focused on the increases in assessments on other car washes in Kingston. Bath presented four other car washes, which all saw an increase in their assessed value between the January 1, 2008 valuation day and the January 1, 2012 valuation day. 2339 Princess Street saw a 22.1% increase, 1019 Bayridge saw an 8.5% increase, 473 Rideau saw a 7.7% increase and 752 Highway 15 saw as 7.0% increase. Bath argued that it was inequitable that its assessment increased by 70.7% in the same time frame.

8I can put no weight on the increases of other properties over time. Assessments change as MPAC changes its methodologies and gathers more information. I do not know if any of those assessments are correct so can put no weight on how they changed. Secondly, there can be no reasonable expectation that property values will move in lockstep over time. The real estate market is complex, unpredictable and varied. Variations in the changes in value over time should be expected. Finally, I note that s. 44.(3)(b) requires that I look to “the value at which similar lands in the vicinity are assessed” not how those assessments have changed over time. I therefore put no weight on the argument that the assessment should be adjusted to make it equitable with changes in other assessments.

9Bath also argued that an assessment per bay was a fair method to compare car wash assessments. Bath provided a list of six car washes, including its own, which ranged in assessment per bay from $42,166 to $100,818. Bath’s assessment per bay, at the MPAC recommended assessment of $582,000, is $72,750. Bath went further and divided the assessment per bay by the average traffic count on the road adjacent to the car wash. It found a range of this value from 1.81 to 5.88. Bath’s ratio was 2.77. Bath argued that its position in the range was low and that the data supported a fair assessment per bay of $60,000, or a total assessed value of $480,000.

10I see no merit in this method of equity assessment. Bath’s numbers on this method are not outside of the range of values in the very small sample size provided. That data does not demonstrate any inequity that would require an adjustment to the assessment of $582,000.

CONCLUSION

11The most likely value of the Car Wash on January 1, 2012 is $582,000 and that value does not require an adjustment to make it equitable with similar properties in the vicinity. As such, I reduce the assessment of the Car Wash for the 2013 taxation year from $613,000 to $582,000 and confirm the assessed value of $582,000 for the 2014 and 2015 taxation years.