Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
August 10, 2016
FILE NO.:
WR 140942
Assessed Person(s):
Dom Investment Corporation and 1067005 Ontario Ltd.
Appellant(s):
Dom Investment Corporation
Respondent(s):
Municipal Property Assessment Corporation (“MPAC”) Region 03
Respondent(s):
City of Ottawa
Property Location(s):
400 West Hunt Club Road
Municipality(ies):
City of Ottawa
Roll Number(s):
0614-120-505-06604-0000
Appeal Number(s):
2981031, 3004336, 3070647 and 3144662 (deemed 2016 appeal)
Taxation Year(s):
2013, 2014, 2015 and 2016 (deemed appeal)
Hearing Event No:
624645
Legislative Authority:
Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard:
June 13, 2016 in Ottawa, Ontario
APPEARANCES:
Parties
Representative
1067005 Ontario Ltd.
No one appeared
Dom Investment Corporation
Glenn Lucas
MPAC
Laura Kelleher
City of Ottawa
No one appeared
MEMORANDUM OF ORAL DECISION DELIVERED BY JACQUES LAFLAMME ON JUNE 13, 2016
INTRODUCTION
1The subject property is a one storey car dealership located on West Hunt Club Road. The building which was built in 2003 sits on a 2.47 acre parcel of land zoned “GM-General Mix Use”. The Municipal Property Assessment Corporation (“MPAC”) used the cost approach to valuation for this property.
2The January 1, 2012 current value assessment (“CVA”) for the subject property is $4,272,000 in the commercial tax class (CT). This value is used for the 2013, 2014, 2015 and 2016 taxation years.
3Dom Investment Corporation (the “Appellant”) argued that the assessment should be reduced but did not produce a study to demonstrate a current value estimate.
ISSUE
4The Assessment Review Board (“Board”) must determine the subject property’s current value for the 2013, 2014 and 2015 taxation years and, once that is done, adjust the subject property’s CVA to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment.
5The Appellant indicated to the Board at the beginning of the hearing that they were in agreement with the building value and only disputed the land value of $1,627,398.
DECISION
6The Board confirms the CVA of the subject property at $4,272,000 in the Commercial tax class for the 2013, 2014, 2015 and 2016 taxation years.
REASONS FOR DECISION
Position of MPAC
7Laura Kelleher, an advocate for MPAC, introduced Katherine Kennedy-Boisvert, a property valuation analyst with MPAC, to the Board. Ms. Kennedy-Boisvert indicated that she had inspected the subject property on June 2, 2016.
8Ms. Kennedy-Boisvert submitted one exhibit only. Exhibit 1 is MPAC’s valuation report. This report contains a property description, a complete breakdown of the “Cost” approach to valuation, maps and a picture of the subject property, a listing of one built on sold property which she deemed to be comparable, a listing of three unsold properties for assessment comparison and an equity analysis using 30 commercial properties.
Position of Appellant
9Glenn Lucas, an advocate from Property Tax Review Services stated that he agreed with the building value but wanted to dispute the land value.
10Mr. Lucas did not submit a “current value” or “equity” report.
11In his summation Mr. Lucas stated that “we rely on MPAC evidence to make our case” and as such presented no current value estimate or equity analysis to support a lower value for the subject property.
12Mr. Lucas stated that he had negotiated a lower land value assessment for a property located at 299 West Hunt Club Road and that the same principles used to lower the land value should apply to the subject property. He maintained that the land value was lowered because the original land value was too high.
The Legislation
13The following provisions of the Assessment Act (“Act”) instruct the Board in appeals of this nature.
14Section 1 of the Act defines current value as follows:
“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.
15Section 19.(1) of the Act states:
19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.
16Section 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.
17Section 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.
18Section 44.(3)(a) and (b) 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.
The Board’s Analysis - Current Value
19Under the Act the Board is required to do three things:
Find the current value of the property.
Make reference to the value of which similar lands in the vicinity are assessed.
Adjust the assessment of the subject property if the adjustment will result in a reduction in the assessment.
20Both parties agree that the “highest and best use” of the property is its current use.
21The subject property is accessible going eastbound on the “main” West Hunt Club Road which is a four lane divided arterial road and also accessible at the rear of the property from Jamie Street. The car dealership building fronts on West Hunt Club Road and therefore benefits from the high exposure and visibility that a main arterial Ottawa Road provides. There are many other car dealerships in the area.
22Ms. Kennedy-Boisvert, was involved in the settlement of the current value of the property at 299 West Hunt Club Road that Mr. Lucas referred to many times in his presentation. She indicated to the Board that the lowering of the current value for 299 West Hunt Club Road was due to the fact that 299 West Hunt Club is not located on the four lane main Hunt Club Road but on a two lane “side street” of Hunt Club Road. In her opinion, 299 Hunt Club Road does not benefit to the same degree as far as exposure is concerned as compared to the main four lane West Hunt Club Road. She indicated that MPAC applied a 0.71% standard adjustment to the land value for 299 West Hunt Club Road because the exposure is considered inferior to 400 West Hunt Club Road.
23The Board agrees that the location and access of 299 Hunt Club Road is inferior and not comparable to the subject property.
24Both parties stated that sales of car dealerships were very hard to find. MPAC presented one sale of a car dealership to demonstrate the land value. The sale is a car dealership located at 2160 Robertson Road in Bell’s Corner. Mr. Lucas indicated to the Board that “using one sale is not a good thing”. The Board would normally agree with that statement however if that is all that the Board is given then it should be given some weight. The Board will not use this sale because it deems the sale to be too far away from the subject property and not within the “Hunt Club” car dealership neighborhood.
25The Board is left with the three unsold properties submitted by Ms. Kennedy-Boisvert on page 10 of Exhibit 1. These three properties were submitted so that the Board could compare the land assessments applied as compared to the subject property. The Board examined all three and notes the following:
1855 Merivale Road: The lot is substantially larger and based on the economies of scale, results in a lower rate per square foot. The Board will not use it in it’s calculation.
295 West Hunt Club Road: The lot is larger by approximately 15%. The land has been valued at $14.53 per square foot. No one disputed the comparability of the property at the hearing. The Board accepts this property as being comparable.
299 West Hunt Club Road: The Board has already heard that this property’s land value was reduced because MPAC decided that it was inferior to those properties fronting on the main four lane West Hunt Club Road. The Board will not use it in it’s analysis.
26The only property that can be used for land assessment comparison is 295 West Hunt Club Road. It is valued at $14.53 per square foot versus $15.13 per square foot for the subject property. Although the subject is valued 4% higher, it is reasonable based on the “economies of scale”. In other words the bigger the lot the lower the rate per square foot.
27The Board therefore accepts the land valued as applied to 400 West Hunt Club Road.
Equity
28The Board had reference to the assessments of similar properties in evidence to try to discern if the current value determined is fair and equitable relative to those assessed values. The Board requires evidence that similar properties are assessed at a lower level than the subject property in order to warrant an equity adjustment under s. 44.(3)(b). MPAC presented to the Board an “equity” analysis in Exhibit 1, using 30 sold properties in the neighborhood. When the assessor compared the CVAs to the time adjusted sales of the 30 sold properties, the median assessment to sales ratio was 0.97. This means that MPAC is slightly under assessing the neighboring properties.
29The Board looked at the size of the vicinity of the 30 properties submitted for the “equity” analysis and reworked it using only sales that transpired in the old “Municipality of Nepean” area (roll numbers beginning with 06 14 120) which is a smaller vicinity and encompasses the subject property. There were eight sales. These sales indicated a median assessment to sales ratio of 0.985. There is nothing to indicate that the subject property does not benefit equally from this systemic slight undervaluation.
30Mr. Lucas presented no equity analysis but argued that the properties used for the equity analysis by MPAC must be similar to the same degree as when comparing properties to establish current value. The Board made it clear that properties used for the equity analysis must be in the same tax class but need not be similar to the extent needed for establishing current value. The Board therefore finds that no adjustment is needed for equity.
CONCLUSION
31The assessment is confirmed at $4,272,000 for the taxation years 2013, 2014 and 2015.
2016 DEEMED APPEAL
32An appeal for the 2015 taxation year is presently before the Board. Section 40.(26) of the Assessment Act 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 2015 appeal before March 31, 2016. For that reason, this decision also applies to the 2016 taxation year.
33Section 40.(26) of the Act directs:
Deemed appeals, 2009 and subsequent years
(26) 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.
“Jacques Laflamme”
JACQUES LAFLAMME
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```