Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 05, 2016 FILE NO.: WR 142344

Assessed Person(s): Anita Helen Petersen Appellant(s): Anita Petersen Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 32 Respondent(s): City of Thunder Bay

Property Location(s): Plan 215 BLK 22 Lot 20 Municipality(ies): City of Thunder Bay Roll Number(s): 5804-030-109-20116-0000 Appeal Number(s): 3140027 Taxation Year(s): 2016 Hearing Event No. 635239

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

Heard: August 11, 2016 in Thunder Bay, Ontario

APPEARANCES:

Parties	Representative
Anita Petersen	Andrew Petersen
MPAC	Geoff Higginson
City of Thunder Bay	Vince Desando

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property is a vacant single lot in the residential property class, measuring 50 feet by 110 feet. The property is located in a residential subdivision that was registered in the 1970s and for several reasons, has not been developed since that time. The subject property is located west of the developed part of Thunder Bay and is north of the Thunder Bay International Airport.

2For the 2016 taxation year, MPAC returned a current value assessment (“CVA”) of $8,200. The Appellant filed a Request for Reconsideration (“RfR”) which resulted in a reduced recommendation from MPAC of $4,100. This reduced value was rejected by the Appellant and the appeal was filed under s. 40 of the Assessment Act (“Act”).

3The Appellant believes the subject property has no value in its current state and submits that the value should be reduced to a strictly nominal amount owing to the restrictions on development that apply.

4The Assessment Review Board (“Board”) must determine two things in this appeal. Firstly, the Board must decide the correct current value of the subject property from the evidence at the hearing. Secondly, the Board must determine, with reference to the assessments of similar properties in the vicinity, if the current value determined should be reduced for the purposes of equity.

DECISION

5The Board finds that the current value of the subject property is $500. Further, the Board finds that it has no evidence before it to suggest a reduction in this value is required for its assessment to be considered equitable when reference is made of the assessments of similar properties in the vicinity.

6The assessment of the property known as Plan 215 Block 22 Lot 20 is reduced from $8,200 to $500 for the 2016 taxation year, in the residential property class.

LEGISLATION

7In making its determination of these appeals, the Board must consider the relevant sections of the Act.

8Section 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.

9Section 19.(1) of the Act states:

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

10Section 40 of the Act states:

40.(1) Appeal to Assessment Review Board. Any person, including a municipality, a school board or, in the case of land in non-municipal territory, the Minister, may appeal in writing to the Assessment Review Board,

(a) on the basis that,

(i) the current value of the person’s land or another person’s land is incorrect,

(ii) the person or another person was wrongly placed on or omitted from the assessment roll,

(iii) the person or another person was wrongly placed on or omitted from the roll in respect of school support,

(iv) the classification of the person’s land or another person’s land is incorrect, or

(v) for land, portions of which are in different classes of real property, the determination of the share of the value of the land that is attributable to each class is incorrect; or

(b) on such other basis as the Minister may prescribe.

11Section 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 EVIDENCE

12Mr. Higginson prepared a valuation report to support MPAC’s current value recommendation of $4,100. He describes the subject property as a vacant residential lot that is land-locked and unbuildable. It is located in an area north of the ‘Parkdale Subdivision’ which is currently being developed. To support his recommendation, Mr. Higginson conducted a market analysis of four vacant residential properties in Thunder Bay that sold between March 2008 and June 2012. Each sale price was adjusted so that they could be compared as though those sales occurred on January 1, 2012 the valuation date for the 2016 taxation year. He selected vacant lots that are considered land-locked and unbuildable by MPAC.

13Sale A, at 517 Toledo Street is a 48 foot by 1,000 foot vacant property in the northwest area of Thunder Bay. It sold in June 2012 for $5,500 and has a Time Adjusted Sale (“TAS”) value of $5,413.

14Sale B lies west of the urban part of Thunder Bay and west of the subject property. It measures 202,554 square feet (“sq. ft.”) with a frontage of 430 feet and a depth of 471 feet. Sale B sold in May 2011 for $7,500 with a TAS value of $7,697.

15Sale C lies outside of the northwest limit of the developed part of Thunder Bay and comprises 35,046 sq. ft. It sold in May 2008 for $4,500. No time adjustment was applied to Sale C owing to the large amount of time between the sale date and the valuation date.

16Sale D lies several kilometers west of the built up area of the City and has a site area of five acres. It sold in March 2008 for $7,770. Sale D did not have a TAS value applied.

17Mr. Higginson acknowledged that he found it difficult to identify properties comparable to the subject property, given its combined constraints. He considers all of the properties in his analysis to be relatively comparable to the subject property, citing specifically that all are landlocked and undevelopable. He concluded that the recommended value of the subject property of $4,100 is supported by his comparative analysis, given that the median values of these comparables is $6,555, which is higher that the recommended current value assessment.

APPELLANT’S EVIDENCE

18Andrew Petersen represented his spouse in this appeal. He submitted that none of the comparable properties in MPAC’s analysis are comparable to the subject property in its most important characteristic; that being its location within the “Williams Bog.” He described the site as being completely inaccessible owing to the bog-like, watery conditions surrounding the lot on all sides. He explained that, while the subdivision that the subject lot lies within is adjacent to a developing subdivision, the land and soil conditions in “Plan 215”, where the subject property is located, are not at all conducive to any type of development.

19To further describe the conditions of the subject property, Mr. Petersen described the history of its creation in a plan of subdivision:

• In 1967 a plan of subdivision (Plan 215) was created by the former Neebing Township as a means to raise money for the municipality to support capital projects.
• In 1975, the Highway 11/17 by-pass was constructed to the east which changed the drainage pattern in the Plan 215 area.
• Ms. Petersen purchased the lot in 1982 at about the time that the development to the south, along Arthur Street West began.
• The development to the south of Plan 215 lead to further drainage changes and increased the level of ground water at the subject property so that it was essentially wet throughout the year, creating a bog-like condition.

20The subject area is known as the Williams Bog and according to Mr. Petersen, the subject property is prohibited from development. He submitted Exhibit 2, including a form letter from the City of Thunder Bay Planning Services Division, explaining the land use planning constraints that exist for properties in the Williams Bog area. According to the City, Williams Bog is a Provincially Significant Wetland which carries with it a significant restriction on development. The Official Plan designates the Williams Bog, including the subject property as an ‘Environmental Protection Area’. The Zoning By-Law for the City of Thunder Bay applies the ‘Environmental Protection (“EP”) Zone’ to the subject property. The By-Law states: “No person shall use any land or erect or use any building or structure within any EP zone.”

21Mr. Petersen submitted that these restrictions go well beyond normal market related conditions that involve the extension of services or incremental development that might delay development. The land use restrictions present at the subject property essentially prohibit development of any kind. This differs, according to Mr. Petersen from the comparable properties in MPAC’s analysis. None of the properties in Mr. Higginson’s analysis are within a Provincially Significant Wetland (“PSW”), the Environmental Protection Act (“EPA”) official plan designation or the EP zone. His view is that this difference makes their comparison with the subject property meaningless with respect to current value.

22Exhibit 2 also included a letter from a local real estate broker who places a nominal value of $500 on the subject property, and his opinion that there is little prospect of selling it at any price given its condition and statutory development restrictions. The author, Ralph St. Jarre stated “…any value assigned to (the subject property) is subjective as there are no comparable sales.”

23Finally, Mr. Petersen explained his efforts to date in donating the subject property to the Thunder Bay Field Naturalists (“TBFN”), recognizing that group’s interest in acquiring lands of environmental significance in the interest of furthering their work. Exhibit 2 also included an email communication between Mr. Petersen and the TBFN which indicated the subject property was too small for the group to accept it. The TBFN only accepts properties of 0.5 acres and larger; the subject property measures 0.126 acres in size.

24Mr. Petersen concluded that the subject property has no development potential, and likely never will, his efforts to give the property away have failed and that, even if he was able to transfer the title, the transfer costs in legal and administrative fees would cost him something like $1,000.

ANALYSIS

25To assist the Board in its deliberations, MPAC cited Board decision WR 124121; Lukinuk v. Municipal Property Assessment Corp., Region No. 32 [2014] O. A. R. B. D. No. 257 (“Lukinuk”), which Mr. Higginson submitted gives guidance on the valuation of properties within the Plan 215 area. In this decision, released in 2014, Member Plumstead found the value of a property similar to the subject property to be $3,600. The Lukinuk property had the identical lot size and, like the subject property, was considered to be land-locked.

26In Lukinuk, the Board’s findings were based on the application of assessment to sales ratios (“ASA”) of the comparable properties in MPAC’s evidence. In Lukinuk, there was no evidence that referenced the land use restrictions placed on the property. While Member Plumstead referred to the property as being within a Provincially Significant Wetland, this fact had no bearing on the decision reached.

27This differs greatly from the present case. Mr. Petersen has differentiated the subject property from that in Lukinuk with his compelling evidence from the City of Thunder Bay which explains the impact of the PSW designation, the Official Plan Designation and the EP zone in the municipal zoning by-law.

28None of MPAC’s comparable properties are located in a PSW with the same restrictions as that of the subject property. For this reason, the Board agrees with Mr. Petersen, that the property has very little value. The lowest opinion of value in evidence is that of Mr. St. Jarre and even though he was not present to defend his position, the Board finds his valuation of $500 to be the most compelling of evidence at the hearing. Mr. St. Jarre points out two things in his letter. The first is his reference to the Williams Bog PSW which he describes as not buildable. Secondly, he points out that there are no comparable sales available that have the same level of development constraint as the subject property. This is the only evidence before the Board that takes into account the subject property’s location within a PSW.

29The Board finds the value of the subject property to be $500. The Board heard no evidence to suggest a lower value is necessary for equity of assessment.

DECISION

30The Board finds that the current value of the subject property is $500. Further, the Board finds that it has no evidence before it to suggest a reduction in this value is required for its assessment to be considered equitable when reference is made of the assessments of similar properties in the vicinity.

31The assessment of the property known as Plan 215 Block 22 Lot 20 is reduced from $8,200 to $500 for the 2016 taxation year, in the residential property class.