Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 31, 2015

FILE NO.: WR 133387

Assessed Person(s): 1451715 Ontario Inc.

Appellant(s): 1451715 Ontario Inc.

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 27

Respondent(s): City of Windsor

Property Location(s): 694 Cameron Avenue

Municipality(ies): City of Windsor

Roll Number(s): 3739-040-220-13700-0000

Appeal Number(s): 3061427 and 3092973

Taxation Year(s): 2014 and 2015

Hearing Event No.: 586229

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

Heard: July 14, 2015 in Windsor, Ontario

APPEARANCES:

Parties	Counsel/Representative
1451715 Ontario Inc.	Scott Moser
MPAC	William Somerville and Jennifer Jubenville
City of Windsor	Rick Murdoch

MEMORANDUM OF ORAL DECISION DELIVERED BY RICK LIMOGES ON JULY 14, 2015

INTRODUCTION

1The subject property is a 5.18 acre site improved with 14 purpose built mini storage buildings operating as ‘Price Self Storage’. Eight of the buildings were erected prior to 1990 and are built of concrete block while the six buildings constructed in 2002 through 2007 are metal pre-engineered structures. The Appellant purchased the subject property in April 2001 for $1,175,000 prior to the newer steel buildings being erected. The total building area is estimated at 72,723 square feet with the 590 square foot office area being the only portion with interior finish. MPAC has returned and recommended values of $2,669,000 in the Commercial tax class, $23,000 in the Residential tax class and $76,000 in the Commercial Excess Land tax class for a total returned value of $2,768,000 which the Appellant believes to be too high. A small portion of the finished office area was known to be previously used as a residence; however the current use is uncertain without a site inspection.

Background

2The parties described a very acrimonious relationship where all correspondence was to be routed through MPAC’s lawyer following their objection to the Appellant’s conduct and threat of lawsuits and where the Appellant refused to share information through the lawyer and even now repeatedly accused the other parties of lying during the hearing. Included in the Appellant’s presentation were numerous pages of dialogue said to be the verbatim of a telephone conversation that was recorded without the knowledge or consent of the other parties. Following William Somerville’s objection to the evidence as only one of a long series of conversations between the parties, notwithstanding that it was described as proof that MPAC had gone the extra mile to help him and included his thanks for their help; he proffered the transcript as evidence of deceit and proof that MPAC’s representatives were continually lying. The objectionable pages (Section 12) were returned to the Appellant and not accepted as evidence of the Current Value of the subject property, since evidence used to impugn the testimony of a witness should have been introduced during his cross-examination which was completed long before this evidence was introduced.

3The acrimonious relationship resulted in the lack of any site inspection which was reportedly requested and then denied by the Appellant and then requested again once the parties had ceased to cooperate. At the conclusion of the hearing and prior to the decision being delivered orally, the Appellant admitted that he had been surreptitiously recording the proceedings and upon being apprised of the Assessment Review Board’s (“Board’s”) rules on the topic, he agreed to delete the recording without further argument.

DECISION

4The current value of the subject property as of January 1, 2012 for the 2014 and 2015 taxation years is confirmed at $2,669,000 in the Commercial Tax Class (CT), $23,000 in the Residential Tax Class (RT) and $76,000 in the Commercial (Excess Land) Tax Class (CU) for a total returned value of $2,768,000 with no further adjustment required to make it equitable with similar properties in the vicinity.

Case For MPAC

5Jennifer Jubenville submitted Exhibit 1, her valuation report broken down into nine sections and three attachments. She described her valuation methodology as a ‘Market Modified Cost Approach’ using MPAC’s proprietary Automated Cost System (“ACS”). An estimated replacement cost of the building and land improvements as of the valuation date is developed and an estimate of the losses in value that have taken place due to wear and tear, design and plan deficiencies, or external influences is subtracted using a breakdown method of depreciation analysis. An estimate of land value is then added with the result being the estimate of value by the Cost Approach.

6The property details are included in 19 pages of information appended to the report although none of the ACS components were site verified as to accuracy in view of the lack of a site visit. The total square foot area of the buildings were calculated as 72,723 square feet along with a site area of 5.18 acres providing a rate per acre of $63,462 and a total property net rate of $38.06 per square foot of building.

7As part of the review of the subject property’s assessment in preparation for the hearing, five sales of comparable properties were selected with photographs and descriptions provided. Due to the lack of valid sales in the City of Windsor, comparable sales were selected from various municipalities in South Western Ontario. The sales were all of smaller properties in markets that were felt to be generally more depressed than the subject market. The five sales had a median sale price per square foot of $42.98 as compared to the $38.06 returned value per square foot of the subject property. Using the above median sale price would obviously return a higher value for the subject property.

[8] Ms. Jubenville concluded that: i) Based on comparable sales data, the January 1, 2012 current value as returned and as calculated by using the cost approach at $2,768,000 is not excessive. ii) The tax class apportionment of CT/CU/RT is considered to be correct until such time that an on-site inspection concludes otherwise. iii) These conclusions have been made without an inspection of the property.

Case For The Appellants

9Scott Moser submitted Exhibit 2, the Appellant's presentation consisting of 25 sections. Section 1 includes a copy of the 2014 Request for Reconsideration along with an extensive attachment that described the physical, locational, economic and functional obsolescence of the subject property. He contrasted his quote for recreating a facility in 2014 (Section 4) against MPAC’s ACS costing system in Section 1 subsection 3.0 and determined that the total cost would not exceed $2,000,000 which would then need to be reduced for all of the obsolescence factors previously noted. Mr. Moser described his repeated frustration at not receiving access to MPAC’s information or records and being denied a full explanation of their ACS. He maintains that values reflected in MPAC’s ACS are too high and not representative of the subject property’s value.

10Section 7 includes photographs and descriptions of some of the older units which are said to be leaking and in poor condition, with all of the eight older units reportedly not being rentable. Mr. Somerville objected to this evidence as they were not able to ascertain the legitimacy of such complaints without being permitted a site visit. These photographs without corroborating and valuation evidence are not sufficient to determine the effect on the value of the affected units. The remainder of the presentation binder contains copies of correspondence and complaints that further underscore the acrimonious relationship as it developed between the parties but adds little to our quest to determine the correct current value of the subject property.

11When asked what he felt his property would be worth on the valuation date Mr. Moser responded that it was worth $1,900,000 which he determined by studying the information available to him. When prompted for any evidence that would be useful for the Board to determine the correct current value, Mr. Moser revealed that he had hired an appraisal firm, F.R. Jordan to compare the subject property with other similar properties; however he did not include the report in his evidence. His only evidence of value is the quote for replacement cost and estimates of land value, all of which he admitted was not reflective of the total value as some costs were not included and nor was depreciation reflected. It remains his belief that the subject property should be valued at $1,900,000 as of January 1, 2012.

The Legislation

12The Board’s jurisdiction to make corrections to an assessment is found in the Assessment Act (“Act”).

[13] Section 19.(1) of the Act provides that the assessment of a property must be based upon its current value: 19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

[14] Section 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.

[15] Section 19.2(1) of the Act provides: 19.2(1) Valuation days – Subject to subsection (5), the day as of which land is valued for a taxation year is determined as follows:

1. For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.
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.

[16] Section 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.

[17] Section 45 of the Act states: 45. Powers and functions of the Assessment Review Board. – Upon an appeal with respect to an assessment, the Assessment Review Board may review the assessment and, for the purposes of the review, has all the powers and functions of the assessment corporation in making an assessment, determination or decision under this Act, and any assessment, determination or decision made on review by the Assessment Review Board shall be deemed to be an assessment, determination or decision of the assessment corporation and has the same force and effect.

[18] Ontario Regulation 282/98 s. 4.(1) states: The multi-residential property class consists of the following:

1. Land used for residential purposes that has seven or more self-contained units other than land included in the residential property class under paragraph 1 of subsection 3 (1).
2. Vacant land principally zoned for multi-residential development.

Board Deliberations

19The Board must have regard to the legislation, in particular, s. 19.(1) of the Act, which provides that the assessment of a property must be based on its current value. Current value is also defined for us in the Act as noted above.

20The first task is to find the correct current value as of January 1, 2012. While the evidence submitted is less than ideal due to the lack of a recent site visit or the support of sales of comparable properties in the immediate vicinity, the Board has determined that the best evidence of value presented during the hearing is contained in the valuation report submitted by MPAC. The Board places limited weight upon the Appellant’s opinion of value since he is not a professional appraiser and nor has he presented compelling or complete evidence to support his estimate of value. While we understand the potential frustration of an unrepresented party, MPAC has a responsibility to demonstrate that the subject property’s assessment is correct; however they are not obliged to ensure that every Appellant understands their methodology or agrees with their findings.

21The Board has received no evidence to suggest that the subject property’s assessment is not equitable when compared to the assessments of similar properties in the vicinity for the January 1, 2012 valuation date.

CONCLUSION

22The current value of the subject property as of January 1, 2012 for the 2014 and 2015 taxation years is confirmed at $2,669,000 in the Commercial Tax Class (CT), $23,000 in the Residential Tax Class (RT) and $76,000 in the Commercial (Excess Land) Tax Class (CU) for a total returned value of $2,768,000 with no further adjustment required to make it equitable with similar properties in the vicinity.