Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 24, 2016

FILE NO.: ID 139792

Assessed Person(s): Milton Lawn Bowling

Appellant(s): Milton Lawn Bowling

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s): Town of Milton

Property Location(s): 39 Commercial Street

Municipality(ies): Town of Milton

Roll Number(s): 2409-010-002-49800

Appeal Number(s): 2998170, 3032041, 3083206 and 3154373 (deemed 2016 appeal)

Taxation Year(s): 2013, 2014, 2015 and 2016 (deemed appeal)

Hearing Event No.: 620734

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

Heard: June 16, 2015, January 8, 2016 and April 11, 2016 in Milton, Ontario

APPEARANCES:

Parties

Counsel⁺/Representative

Milton Lawn Bowling

Ken Armstrong

MPAC

Chester Gryski⁺

Town of Milton

Steven Radenic

INTERIM DECISION OF THE BOARD DELIVERED BY VINCENT STABILE

INTRODUCTION

1The subject property is owned by Milton Lawn Bowling and used by its members for that purpose. It has property code 736 – Clubs – private, fraternal. It is classified as residential, in accordance with the provisions of the Assessment Act (“Act”). There are three structures on the property: a club house and two sheds. For the 2012 taxation year, the subject property was assessed at $299,688 apportioned as follows: building value - $23,160; land value - $276,528.

2Ken Armstrong, the representative for the appellant accepts the value placed on the structures but rejects the land value assessment stating that the classification, based on the use of the land and lot area are both wrong.

ISSUES

3The issues to be determined are:

(i) The correct classification.

(ii) The correct lot area.

(iii) The current value of the subject property as of January 1, 2012, being the “valuation day.”

(iv) Whether an assessment at current value is equitable with that of similar lands in the vicinity.

DECISION

4For reasons set out below, I find that:

(i) The subject property is properly in the residential property class.

(ii) The lot area is at least 18,999.20 square feet.

(iii) The correct current value of the land is $11,589.51 (0.61 x 18,999.20), subject to better evidence being presented for consideration within 90 days of the date of the release of this interim decision.

5The value of the structures has been agreed to at $23,160.

6There would be no further adjustments for equity.

Preliminary Motion

7At the opening of the hearing, Chester Gryski, counsel for MPAC, brought a preliminary motion to qualify the assessor, Antonella Fong as an expert witness. Her Curriculum Vitae (Exhibit 1) was reviewed in detail. It indicates that Ms. Fong has been employed with MPAC since 2005 and has held various positions. Presently, she is a Property Valuation Analyst. She had prepared and served her Valuation Report, a thirty- five (35) page narrative setting out her reasons and approach at arriving at the recommended assessment (Exhibit 1). Mr. Armstrong consented to Ms. Fong being qualified as an expert witness and consented to the Assessment Review Board (“Board”) receiving the Valuation Report for consideration.

8After hearing submissions from counsel and considering the consent on behalf of the appellant, the motion was granted.

MPAC’s Position

9Ms. Fong confirmed that the subject lands back onto the Sixteen Mile Creek and that the property is situated entirely within the floodplain of Sixteen Mile Creek. Thus it is subject to Ontario Regulation 162/06 (“O. Reg. 162/06”), under the Conservation Authorities Act, R.S.O. 1990, c. C.27. The Regulation restricts development on the property.

10The assessor relies upon a letter dated January 27, 2015, from Conservation Halton which she paraphrases in pages 15 – 16 of her report (Exhibit 1). The letter states that although new development on the subject site is prohibited, an application would be considered if Conservation Halton received for review, as part of the application, a topographic survey of the subject together with opinions from professional engineers that the proposed new structure(s) would be sound, capable to withstand the hydrostatic pressures, as predicted, during Regulatory Storm conditions. A further requirement is written confirmation from a Professional Engineer that the proposed structure(s) was/were flood proofed as required by the Ministry of Natural Resources and Forestry (MNRF).

11The assessor further noted that O. Reg. 162/06 does not restrict the subject from being bought or sold.

12As already noted, the appellant accepts the value of the existing structures as determined by the assessor. Thus the focus is strictly on the value of the land, subject to the issues of classification and lot area as raised by the appellant. The assessor used two approaches to value the land: the Cost Approach and the Direct Sales Comparison Approach.

13Based on the Cost Approach, Ms. Fong determined a value for the land of $276,528 (Exhibit 1, Tab B). This value was determined by applying the value of residential land to an effective site area of 18,899.20 square feet using a valuation day of January 1, 2012.

14Based on the Direct Sales Comparison Approach Ms. Fong determined a land sale rate per square foot of a range of $12.61 to $18.41 using the sales of six (6) proposed comparable properties (Exhibit 1, p. 31). All of the proposed comparable properties have structures built between 1870 and 1979, ranging in size from 984 square feet to 2,248 square feet. All are in the residential property class, classified as residential properties and used for residential purposes.

15MPAC initially determined the site area to be 22,999.20 square feet in 2008 however it was changed to 18,999.20 following a Request for Reconsideration. It was then changed to 27,586.74 square feet following an inspection and further inquiries with MPAC’s Land Parcel Unit (“LPU”), as a result of this appeal. For purposes of this appeal, the site area is being calculated at 18,899.20 square feet, as recommended in 2008. Ms. Fong recommends that the site area be changed to 27,586.74 square feet as she does not believe that a reduction in site area is warranted. An Amended Property Assessment Notice for the 2016 property tax year effective March 22, 2016 shows a lot area of 30,076.17 square feet, based on the most recent review by the LPU at MPAC. Based on the Request for Reconsideration in 2008, I am accepting 18,999.20 as the lot area, for purposes of this appeal only.

Appellant’s Position

16Ken Armstrong, President of the Milton Lawn Bowling Club, submitted there is confusion in respect to the lot size. He provided documentary evidence (Exhibit 6) that in 1952 a portion of the original parcel was sold. The sale was for a lot measuring 74 feet in width and 168 feet in depth. Mr. Armstrong alleges there was an error in the deed or other instrument registered on title that describes the parcel sold as 60.76 feet wide and 169 feet in depth. Mr. Armstrong argues therefore that the lot size of the subject property should be reduced by at least 13.24 feet in width by 169 feet in depth. He did not present other specific calculations, but acknowledged that the land actually owned is irregular and encompasses a strip along the creek to the south of the property toward Pinr Street.

17Mr. Armstrong stated that the property has been used as a lawn bowling club since 1952 and that the use will continue. He produced a large bound volume of documents (Exhibit 6) among which is a letter dated April 6, 2016 from Conservation Halton authored by Barbara J. Veale, Manager, Planning and Regulation Services. The letter is addressed to Ken Armstrong and commences:

Further to your inquiry regarding the above property and Conservation’s Halton correspondence dated January 27, 2015, I am providing further clarification regarding the restrictions at the above address.

18The letter continues:

…the subject property is regulated under Ontario Regulation 162/06 because it is located within the Regional Storm floodplain associated with Sixteen Mile Creek. The Regional Storm is the standard in this part of Ontario used to delimit the extent of the floodplain (prescribed by the Regulation). Based on current information, the flood elevation on the site at 39 Commercial Street is 194.8m with velocity of 0.65 metres/second. The depth of flooding on the site during a regional storm would very likely exceed 1 metre during a Regional Storm event.

Areas subject to this level of flooding are considered high risk flood areas. For development already located in these high risk areas, limited development is permitted in order for property owners to maintain their residences and structures only. On this site, only very minor development would be permitted under Conservation Halton’s policies. Minor is considered an addition of less than ten square metres (108 square feet or about 10’ x 10’), on a one time basis, provided that: 1) there is no opportunity to develop outside of the floodplain, 2) there will be no interference with flood conveyance upstream or downstream, and 3) any works are floodproofed to with stand regulatory flows (Policy 3.22.2.2).

Should the depth of flooding be less than one metre and the velocity of flow less than I metre/second as determined by an updated flood modelling exercise, minor additions of less than 50 per cent may be allowed, with the same conditions as outlined for Policy 3.22.2.2 above. Please note that the information regarding which policy would apply as outlined in our correspondence of January 27, 2015 is incorrect.

Any proposed additions that comply with either of the above policies (whichever is applied, based on the most recent floodplain modelling) would require permission from Conservation Halton. As a condition of permission, you would be required to enter an on-title agreement with Conservation Halton which states that: 1) you acknowledge that the structure is flood susceptible, 2) you will notify future landowners/tenants of this fact, and 3) you save harmless Conservation Halton from any damages or liability experienced in the event of a flood.

Regardless of depth of flooding on the site, new development would not be permitted on the site.

I trust that this letter serves to clarify and correct the information that was provided by Conservation Halton on January 27, 2015…..

19Mr. Armstrong relies on this letter in support of his argument that the subject property should be valued as a sports facility and not residential since it is clear that residential development would not be permitted.

20Also produced is a copy of Order MO-2440 dated July 22, 2009, a decision from the Information and Privacy Commissioner. Although the decision relates to a complaint that MPAC had failed to fully produce documents and records, it is nevertheless instructive as to MPAC’s value adjustments when dealing with flood plain lands. At page two of the decision the adjudicator set out a response from MPAC, as follows:

……..Conservation Authority lands, which are often designated as flood plain lands are initially valued similar to surrounding land. However, due to the restrictions placed on the development of the land, a value adjustment is made to all Conservation Authority properties across the Province (generally 50%).This adjustment would apply to the City of Toronto and the Regional Municipality of Peel. Further adjustments may be required on an individual property by property basis depending on the type of land and its use e.g., swamps wetlands and creek banks. If the flood plain land is located within the Conservation Authority lands, it would receive the adjustment for restricted use and if a further adjustment is warranted due to the nature of the specific land and available market date (sic), then a further reduction might occur.

21In prior appeals, Mr. Armstrong argued that the subject property should be valued at zero. In this appeal, he withdrew that submission and accepts that regardless of the restrictions associated with the floodplain policies, the property has value.

22Mr. Armstrong states however, that the subject property should be classified and assessed as a “sports facility” and not residential. Further, he submits that MPAC should be responsible to determine the correct lot size for purposes of assessment.

23As to land value, he relies upon comparable properties (Exhibits 2 – 5). Exhibit 2 is a summary of the 23 properties relied upon. They are a mixture of recreational sport club facilities, Municipal parks, conservation authority lands, vacant industrial lands, vacant commercial lands, vacant residential lands as well as lands on the Niagara Escarpment and greenbelt. There are no sales of the proposed comparable properties.

24Of all the proposed comparable properties relied upon by the appellant, the only ‘club-private, fraternal’ in Milton, also in the flood plain abutting Sixteen Mile Creek, is the ‘Italian Canadian Club’ (Exhibit 2, part 9). It has a site area of 15.93 acres or 693,911 square feet with various structures. The land portion is assessed at $423,061.00 or 0.61 cents per square foot. The subject property is assessed at $14.63 per square foot for the taxation years 2013, 2014 and 2015.

The Legislation

25The Board’s jurisdiction to make corrections to an assessment is found in the Act. 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.

26Section 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.

27Section 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.

Exception

(5) Subsection (1) does not apply in respect of the valuation of land for a taxation year after 2004 if the Minister prescribes a different day as of which land is valued for that year.

28Section 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.

29Section 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.

Analysis

30The best evidence of value is the sale of the subject property. There is no recent sale of the subject property to inform the Board. The duty of the Board under the Act is to determine current value with reference to similar lands in the vicinity.

31The Board accepts the Cost Approach and the Direct Comparison Approach to value as valid approaches. The Board also accepts a determination of current value based upon the sale values per square foot of valid sales of comparable properties.

32The evidence relied upon by the assessor is in respect to ‘residential properties used for residential purposes’. It is clear that the subject property although classified as residential, consistent with the provisions of the Act, has never been and likely will never be used for residential purposes. The restrictions imposed under O. Reg. 162/06 clearly prevent any development.

33I regard the use of the subject and the restrictions imposed by O. Reg. 162/06 critical considerations. Although Ms. Fong correctly relied upon the letter dated January 27, 2015 from Conservation Halton to assume that new development on the subject property might be available (subject to satisfying certain conditions on application) it is clear from the further ‘clarifying’ letter dated April 6, 2016 that new development would not be permitted. The assessor has valued the subject land (excluding the existing structures) by using comparable values of lands with existing residential structures. I do not accept those proposed comparable sales. Further, I received no evidence of any reduction or adjustment made by MPAC as set out in paragraph 33 above.

34The appellant did not provide any evidence of sales.

35With respect to the “effective lot size”, the evidence is less than clear. MPAC appears to have made best efforts based on information available to it. The relevant registered instruments (see Exhibit 6) seem to support Mr. Armstrong’s submission. The onus is upon the appellant to provide better evidence as to what it owns or does not own. At the very least it ought to have provided an up to date survey. It failed to do so.

36On balance, I accept the evidence of the assessor that the subject property has an effective lot size of at least 18,899 square feet.

37As to the issue of classification, I am satisfied that the subject property is correctly classified as being within the Residential Property Class pursuant to s. 3. (1). 2. iv of Ontario Regulation 282/98, which states:

3. (1) The residential property class consists of the following:

4. Land not used for residential purposes that is,

iv. land owned and occupied by a non-profit service organization, a non-profit private club, a non-profit cultural organization or a non-profit recreational sports club, other than land used as a golf course or ski resort,

38As already stated, I have no probative and reliable evidence of sales of similar lands in the vicinity, considering the use of the subject lands as a private, fraternal club, with minor structures. More importantly, I accept and rely upon the letter dated April 6, 2016, from Conservation Halton that “new development would not be permitted on the

site”.

CONCLUSION

39The Board has certain obligations to the parties including arriving at a decision bringing finality to an appeal. Section 45 of the Act, noted in paragraph [29] above, gives the Board broad powers relating to assessment decisions. I have already found that the subject property has an effective lot size of 18,899.20 square feet, based on a 2008 assessment. The evidence available to me in respect to value of similar lands in the vicinity, with similar use and similar restrictions, is the Italian Canadian Club. I rely on the 2012 current value assessment of the Italian Canadian Club at 0.61 cents a square foot and find that the current value assessment of the Milton Lawn Bowling Club is $11,589.51 (0.61 x 18,899.20). I would not make any adjustments for equity. I am mindful of the economies of scale principle, however I have no better evidence. If the parties submit better evidence of similar properties within 90 days of the date of the release of this interim decision, I will consider it. The parties are also encouraged to consider mediation as an option to resolve these appeals.

2016 DEEMED APPEAL

40An 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.

41Section 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.