FCA Canada Inc. v. Municipal Property Assessment Corporation, 2016 CanLII 11170

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 3, 2016

FILE NO.: WR 138687

Assessed Person(s): Transmetro Properties Limited

Appellant(s): FCA Canada Inc.

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

Respondent(s): City of Toronto

Property Location(s): 20 Cowdray Court

Municipality(ies): City of Toronto

Roll Number(s): 1901-111-180-00610-0000

Appeal Number(s): 3094662

Taxation Year(s): 2015

Hearing Event No. 609341

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

Heard: February 5, 2016 in Toronto, Ontario

APPEARANCES:

Parties

Representative

FCA Canada Inc.

Chris Ratnasingham

Transmetro Properties Limited

No one appeared

MPAC

Wellannie Ching

City of Toronto

No one appeared

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI AND JOSEPH WYGER

INTRODUCTION

1The subject property is a 28,030 square foot automotive dealership, situated on a 3.95 acre parcel at 20 Cowdray Court in the area of Kennedy Road and Highway 401 in the former City of Scarborough. It is zoned for commercial and other uses within the Agincourt Secondary Plan. It is classified as commercial and has a returned assessment of $5,939,000 for the 2015 taxation year.

2Land value was derived from commercial vacant land tables, showing a value of $769,000 per acre for its 3.95 acres. On reviewing the assessment, the assessor reduced the costing of the structures by almost $900,000 but noted vacant land sales that suggested a land value of $1,091,477 per acre. In addition, a land rate of $1,008,059 per acre was used for all other car dealerships in Scarborough. The combination of the reduced costing and the increased land value resulted in a current value that was higher than the returned value of $5,939,000, leading the assessor to request that the returned assessment be confirmed.

3The Appellant’s representative generally agreed with the new structure costing, give or take some minor differences related to curtain walls and ceiling tiles, but wanted to retain the land table valuation of $769,000 per acre. He provided graphical evidence that this value was defensible and using these figures he determined an overall value of $5,121,902. He asserted that the vacant land sales that the assessor used to support his land valuation of $1,091,477 had a highest and best use that was superior in value to the subject land, and so they were not comparable and should not be used.

DECISION

4The assessment as returned is confirmed. The current and equitable value is determined to be $5,939,000:

Commercial (full) (“CT”) $5,446,853

Commercial (excess land) (“CU”) $ 492,147

REASONS FOR DECISION

Legislation

5Section 1.(1) of the Assessment Act (“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.

6Section 19.(1) of the Act states:

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

7Section 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.

MPAC’s Position and Evidence

8Ms. Wellannie Ching, the advocate for MPAC, called evidence from the assessor Mr. Paul Nedinis. He provided a revised costing of the structures that reduced the replacement cost new less depreciation (“RCNLD”) from $2,903,221 to $2,093,787. Upon review of the land value, Mr. Nedinis found that the land table which allotted a value of $769,308 per acre to the subject land, was not reflected by actual sales of vacant commercial land in Scarborough.

9Mr. Nedinis provided four sales within 23 months of the valuation day of January 1, 2012, that ranged from $950,115 to $1,282,051 per acre. He contended that these were sales of commercial vacant properties intended for the construction of commercial buildings, similar in highest and best use as the subject commercial auto dealership. The average and median values were $1,103,780 and $1,091,477 respectively. His analysis of these figures led to his conclusion that the land table rate of $769,000 per acre was too low to apply to the subject property.

10To further bolster his land value, Mr. Nedinis presented a chart showing 16 of 17 other auto dealerships in Scarborough assessed at a land rate of $1,008,059 per acre. This is the figure he employed to arrive at his land value of $3,981,833, which he submitted was both the correct and equitable value.

Appellant’s Position and Evidence

11Mr. Chris Ratnasingham represented the Appellant as advocate and valuation witness. He presented e-mails between himself and the assessor, addressing the costing differences that remained with respect to a curtain wall/window issue and the quality of ceiling tiles. His final RCNLD of $2,007,294 was marginally lower than MPAC’s figure.

12On land value, Mr. Ratnasingham challenged the four comparable properties as being more valuable by reason of a superior highest and best use, opining that for this reason they were not comparable to the auto dealership property. He submitted that the land table value of $769,000 per acre was appropriate and presented charts that appeared to show that value was located on the median trend line of assessed value plotted against acreage.

Analysis

Automated Cost System

13The Assessment Review Board (“Board”) found Mr. Ratnasingham to be knowledgeable with respect to Automated Cost System, and reasonable in his analysis of the remaining costing issues. We accept his professional opinion over that of Mr. Nedinis on the curtain wall/window and ceiling tile issues, and agree with his RCNLD of $2,007,294, because the photographs and descriptions that he provided support his position. Mr. Nedinis amended his report to some extent and it lacked the clarity of Mr. Ratnasingham’s analysis.

Land Value

14The Board found Mr. Nedinis to be a knowledgeable assessor, and we are more persuaded by his analysis of the land value issue. He is correct that his comparable properties, whether developed with a Walmart or commercial condos, have a highest and best use as commercial, similar to the subject auto dealership which continues to operate with a commercial highest and best use. Mr. Nedinis intimated that if anything, the subject property may have a superior highest and best use, since the Agincourt Secondary Plan permits high-rise residential condominiums on the subject parcel, as well as the neighbouring parcels all of which are also owned by Transmetro Properties.

15For the purposes of this appeal, the Board finds the current highest and best use of the subject property and the four comparable properties to be all similarly commercial. The fact that the $1,091,477 per acre median sale value is practically the same as the $1,008,059 per acre assessed value of all of the other Scarborough car dealerships, simply strengthens the conclusion that the value employed by the assessor is both correct and equitable.

16The chart provided by Mr. Ratnasingham of the assessed values per acre of a large number of vacant commercial properties in Scarborough displays a significant number at $1 million per acre for parcels 1.5 acre to 4.5 acres in size, with a substantial number of much higher values per acre for parcels under 2 acres. There are a few larger parcels that are closer to the level of assessment of the subject at just under $800,000 per acre, but not enough to suggest that the land table is a correct indicator of current value in the face of actual market evidence to the contrary. Ms. Ching provided a recent Board decision, Transforce Inc. v. Municipal Property Assessment Corp. Region 9, [2015] O.A.R.B.D. No. 249, wherein the Board indicated that it always has a preference for solid market evidence over arbitrary land tables where they conflict. This panel of the Board expresses the same preference in the case before us.

CONCLUSION

17We accept Mr. Nedinis’s land value conclusion of $3,981,833. Added to Mr. Ratnasingham’s cost value of $2,007,294, this results in an indicated final current value of $5,989,127. As this value is slightly higher than the returned value, and no party has requested an increase, the Board confirms the returned value of $5,939,000 apportioned $5,446,853 to the Commercial (full) CT class and $492,147 to the Commercial (excess land) CU class.