Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 17, 2015

FILE NO.: DM 136736

Moving Party(ies): Four Seasons Hotels Limited

Respondent(s): Municipal Property Assessment Corporation(“MPAC”) Region 9

Respondent(s): City of Toronto

Property Location(s): 1165 Leslie Street

Municipality(ies): City of Toronto

Roll Number(s): 1908-101-480-01500-0000, 1908-101-480-01501-0000

Appeal Number(s): 2945959, 3073717 and 3040767 (reinstated to 3130427, 3130428 and 3130429)

Taxation Year(s): 2013, 2014 and 2015

Hearing Event No.: 606734

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

Heard: November 4, 2015 by Telephone Conference Call

APPEARANCES:

Parties	Counsel^+^/Representative
Four Seasons Hotels Limited	Ian Andres^+^
MPAC	Karey Lunau^+^
Amexon Property Management Corporation, Assessed Person Don Valley Business Park Corporation	Robert Baillie

MEMORANDUM OF ORAL DISPOSITION DELIVERED BY J. L. WALKER ON NOVEMBER 4, 2015

MOTION FOR PRODUCTION

1The Assessment Review Board (“Board”) had before it the motion of the Four Seasons Hotels Limited (“moving party”) to compel the production of documents from MPAC which it argues are relevant to appeals filed under s. 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended (“Act”) for the 2013, 2014 and 2015 taxation years. Section 53 of the Act bars MPAC from disclosing third-party income and expense information absent an Order of the Board.

2The subject property is improved with a six-storey commercial office building which has been assessed by MPAC using an income approach to value. The documents that the moving party is seeking include, but are not limited to, assessment and sales information, income and expense statements, rent rolls and lease information, and fair market rent, vacancy and capitalization studies for the properties (listed in Schedule B of the motion record) identified as comparables to be relied upon in the hearing of the s. 40 appeals.

3Ian Andres, counsel for the moving party, obtained an Order of the Board (Board Order No. 138359) permitting an alternative to personal service of the motion record to non-parties pursuant to Rule 34(f) of the Board’s Rules of Practice and Procedure (“Rules”). This Order provided for service by courier or registered mail. Mr. Andres obtained consent from the representatives of the owners of the parties listed in Schedule B to serve materials by e-mail. His requests, the representatives’ responses and their confirmation of receipt are attached to the affidavit of service provided to the Board. It makes sense to the Board that parties rely on electronic service where consent is given, but advised Mr. Andres that he should include electronic service when seeking a future Order for an alternative to personal service.

4Karey Lunau, counsel for MPAC, consents to the Order sought and to the draft Undertakings of Non-Disclosure (“Undertakings”) for counsel and experts provided in Schedule C of the motion record.

5Robert Baillie of Cushman & Wakefield, representative for Amexon Property Management Corporation and Don Valley Business Park Corporation, assessed owners of properties listed in Schedule B, did not oppose the Order sought or the form of draft Undertakings, but his consent is based upon receiving a list of documents being produced for each property prior to their release. These properties are 1200 Eglinton Avenue East, Toronto (Roll No. 19 08 101 240 00300 0000) and 250 Ferrand Drive, Toronto (Roll No. 19 08 101 210 00400 0000), and 50 Ferrand Drive, Toronto (Roll No. 19 08 101 210 00250 0000) respectively. Ms. Lunau agreed to provide the list to Cushman & Wakefield.

DISPOSITION OF MOTION AND ORDER OF THE BOARD

6The motion is granted. The Board finds that the moving party has complied with Rules 34(f) and 57 providing the assessed owners and their representatives with notice of its motion and an opportunity to object to the disclosure. All parties who attended consent to the disclosure pursuant to s. 53 of the Act and to the form of the Undertakings.

The Board Orders, on Consent of the Parties, that:

7MPAC produce to legal counsel and consultants for the Appellant, within 30 days of this Order being issued:

a) With respect to each of the properties set out in Schedule “B” hereto:

i. the income, expense, rent roll and lease information supplied to MPAC and MPAC’s subsequent valuations and assessor’s notes for the assessments as returned for the taxation years in question (2012 base year); and where the assessments for said properties have been appealed and settled, copies of the revised final valuations, and all memos, notes and documents indicating the basis of the resolution of such appeals, excluding any documents which are privileged;

ii. all memos, notes and documents relating to the age, condition, building classification, location, site plan and building layout of said properties;

iii. all memos, notes and documents relating to MPAC’s position on typical vacancy and the determination of fair market rent for said properties for the relevant years, including the actual lease documents, extracts from leases, offers to lease, lease summaries, information related to inducements or rent free periods, rent rolls, vacancy information, any income and expense information as well as adjustments thereto, and any fair market rent or vacancy studies, reports or analyses, together with all supporting memos, notes and documentation; and

iv. all memos, notes and documents relating to MPAC’s determination of the capitalization rates applied to said properties, and all sale documents in MPAC’s possession on any of said properties that have sold during the relevant time period, including but not limited to deeds, statements of adjustment (including back-up documentation and calculations used to quantify the adjustments), MPAC sales questionnaires and any responses thereto, TIP returns, sales investigations reports, and any analysis by MPAC of the sales;

provided that legal counsel and consultants for the Appellant have first executed and delivered undertakings of confidentiality and non-disclosure to MPAC in the form attached hereto as Schedule “C”; and

b) All memos, notes, documents, internal policy statements and internal or external market publications or summaries in MPAC’s possession, of either a general nature relating to Toronto office buildings or relating specifically to the subject property, with respect to:

i. the classification of office buildings in Toronto (ie. Class AAA, AA, A, B, etc.);

ii. how the neighbourhood boundaries and vicinity of the subject property were determined for the purposes of identifying comparable properties, in order to make the assessment in the first instance and to respond to these assessment appeals;

iii. the relative viability or attractiveness of business parks or commercial nodes from a market perspective, including the relative impact on market value associated with a property’s access to and visibility from major arterial roads and highways;

iv. the determination of fair market rents for each class of office building and each different neighbourhood, and how the net effective rents are calculated; and

v. the treatment of tenant inducements or rent-free periods, and the methodology used by MPAC to calculate the impact of any such inducements or rent-free periods on property value.

8MPAC to provide to Cushman & Wakefield a list of any documents to be disclosed regarding 1200 Eglinton Avenue East, Toronto (Roll No. 19 08 101 240 00300 0000) and 250 Ferrand Drive, Toronto (Roll No. 19 08 101 210 00400 0000), and 50 Ferrand Drive, Toronto (Roll No. 19 08 101 210 00250 0000) respectively prior to releasing them to counsel for the moving party.

9The appeals are adjourned to a prehearing conference to be convened by Telephone Conference Call on January 7, 2016 at 10:00 a.m. Hearing No. 608941.

10No earlier than five minutes prior to the indicated start time participants to the call must dial one of the following numbers:

From within Toronto: 416-212-8012

From outside of Toronto: 1-866-633-0848

After the conference greeting enter the code: 3612806 #

You will be connected to the call with all other participants. Please remain on the line until the Presiding Member calls the hearing to order.

If experiencing technical difficulties, press ‘*0’ to access the I-Serve operator for assistance.

Note: Rule 15 of the Board’s Rules of Practice and Procedure whereby the Board will not proceed with an in-person hearing event for at least 30 minutes after the time given for commencement of the event, will not proceed with a telephone conference call or a video conference call for at least 10 minutes after the time given for commencement of the event, if one or more parties have not yet appeared.

In cases of non-attendance by a party, without reasonable excuse, the Board may proceed to determine the matter or, where it deems appropriate, take steps to dismiss.

“J. L. Walker”

J. L. WALKER 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

SCHEDULE “A”

SCHEDULE “B”

LIST OF THIRD PARTY PROPERTIES TO WHICH PARAGRAPH 1(A) OF THIS PRODUCTION ORDER APPLIES

1. 100 Wynford Drive, Toronto (Roll No. 19 08 101 250 00100 0000)
2. 90 Wynford Drive, Toronto (Roll No. 19 08 101 250 00200 0000)
3. 1200 Eglinton Avenue East, Toronto (Roll No. 19 08 101 240 00300 0000)
4. 150 Ferrand Drive, Toronto (Roll No. 19 08 101 210 00250 0000)
5. 250 Ferrand Drive, Toronto (Roll No. 19 08 101 210 00400 0000)
6. 895 Don Mills Road, Toronto (Roll No. 19 08 101 260 00100 0000)
7. 1 McDonald’s Place, Toronto (Roll No. 19 08 101 055 00100 0000)
8. 1-3 Concorde Gate, Toronto (Roll No. 19 08 101 055 00300 0000)
9. 10-12 Concorde Place, Toronto (Roll No. 19 08 101 050 01051 0000)
10. 225 Duncan Mill Road, Toronto (Roll No. 19 08 103 145 00100 0000)
11. 2001 Sheppard Avenue East, Toronto (Roll No. 19 08 111 210 00250 0000)
12. 2005 Sheppard Avenue East, Toronto (Roll No. 19 08 111 210 00270 0000)
13. 90 Sheppard Avenue East, Toronto (Roll No. 19 08 092 130 03310 0000)
14. 1450 Don Mills Road, Toronto (Roll No. 19 08 102 180 01800 0000)

Schedule “C”

ARB Appeal Nos. 2945959, 3040767, 3073717 ARB Hearing No. 606734

ASSESSMENT REVIEW BOARD

IN THE MATTER OF Section 40 of the Assessment Act (R.S.O. 1990 c. A31) as amended.

AND IN THE MATTER OF appeals against the assessment of the property known municipally as 1165 Leslie Street, in the City of Toronto, on assessment roll no. 19 08 101 480 01500/01501 0000, for the 2013, 2014 and 2015 taxation years.

B E T W E E N:

FOUR SEASONS HOTELS LIMITED Appellant

• and -

MUNICIPAL PROPERTY ASSESSMENT CORPORATION and THE CORPORATION OF THE CITY OF TORONTO Respondents

UNDERTAKING OF NON-DISCLOSURE

To the Municipal Property Assessment Corporation:

I, , of the City of , of ______________________, expert consultant in this matter for Four Seasons Hotels Limited, undertake that no one (including our client and other members of my firm), other than Goodmans LLP, lawyers for Four Seasons Hotels Limited, will have access to any confidential information produced by the Municipal Property Assessment Corporation (“MPAC”) (such information will hereinafter be referred to as "Confidential Information").

I agree that Confidential Information will be presented at discovery in a manner which will preclude disclosure to any person besides lawyers and expert witnesses.

Confidential Information shall not be reproduced or copied in whole or in part in any manner (including electronically) except as is strictly necessary to comply with the Rules of Civil Procedure, the ARB's Rules of Practice and Procedure, or an order of the Court or of the ARB. In no circumstances shall Confidential Information be transmitted by way of the Internet. All Confidential Information, including reproductions or copies, shall be returned to MPAC at the conclusion of the proceedings. Any Confidential Information that is stored electronically shall be erased and written confirmation of the erasure shall be provided to MPAC at the conclusion of these proceedings.

Dated at Toronto this day of , 2015.

[Name, Firm and Business Address]

ARB Appeal Nos. 2945959, 3040767, 3073717 ARB Hearing No. 606734

ASSESSMENT REVIEW BOARD

IN THE MATTER OF Section 40 of the Assessment Act (R.S.O. 1990 c. A31) as amended.

AND IN THE MATTER OF appeals against the assessment of the property known municipally as 1165 Leslie Street, in the City of Toronto, on assessment roll no. 19 08 101 480 01500/01501 0000, for the 2013, 2014 and 2015 taxation years.

B E T W E E N:

FOUR SEASONS HOTELS LIMITED Appellant

• and -

MUNICIPAL PROPERTY ASSESSMENT CORPORATION and THE CORPORATION OF THE CITY OF TORONTO Respondents

UNDERTAKING OF NON-DISCLOSURE

To the Municipal Property Assessment Corporation:

I, , of Goodmans LLP, lawyers in this matter for Four Seasons Hotels Limited, undertake that no one (including our client), other than expert consultant(s) retained by us for the purposes of assisting us in this complaint(s) and who have executed the same form as this undertaking and delivered an original executed copy of same to counsel for the Municipal Property Assessment Corporation (“MPAC”), will have access to any confidential information produced or disclosed by MPAC (such information will hereinafter be referred to as "Confidential Information"). We may, however, provide our client with conclusions and opinions derived from Confidential Information for purposes of seeking instructions.

We agree that Confidential Information will be presented at discovery in a manner which will preclude disclosure to any person besides lawyers and expert witnesses.

Confidential Information shall not be reproduced or copied in whole or in part in any manner (including electronically) except as is strictly necessary to comply with the Rules of Civil Procedure, the ARB's Rules of Practice and Procedure, or an order of the Court or of the ARB. In no circumstances shall Confidential Information be transmitted by way of the Internet. All Confidential Information, including reproductions or copies, shall be returned to MPAC at the conclusion of the proceedings. Any Confidential Information that is stored electronically shall be erased and written confirmation of the erasure shall be provided to MPAC at the conclusion of these proceedings.