1799120 Ontario Limited v. Municipal Property Assessment Corporation, 2016 CanLII 89336

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

November 29, 2016

FILE NO.:

WR 142042A

AMENDED DECISION ISSUED: December 13, 2016

Assessed Person(s):

1799120 Ontario Limited

Appellant(s):

1799120 Ontario Limited

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 19

Respondent(s):

City of Hamilton

Property Location(s):

1015 Golf Links Road

Municipality(ies):

City of Hamilton

Roll Number(s):

2518-140-280-53000-0000

Appeal Number(s):

2954921, 3024924, 3042841, 3042842, 3042843, 3042844, 3089262 and 3156102

Taxation Year(s):

2013, 2014, 2015 and 2016

Hearing Event No.:

634987

Legislative Authority:

Sections 33 and 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard:

August 5, 2015 in Toronto, Ontario

APPEARANCES:

Parties

Counsel

1799120 Ontario Limited

Daniel Attard

MPAC

Francis X. Shea

City of Hamilton

No one appeared

DECISION OF THE BOARD DELIVERED BY SUBUOLA AWOLERI AND ANTHONY LaREGINA

Amended pursuant to Rule 130 of the Assessment Review Board’s Rules of Practice and Procedure, effective January 4, 2016

BACKGROUND

1The subject property is a single parcel Small Box Shopping Centre with six retail buildings built in 1995 and 2013, situated on a 5.90 acre parcel, with a total Gross Leasable Area (“GLA”) of 88,836 square feet (“sq. ft.”). The sizes of these six buildings range from 5,132 to 29,320 sq. ft. The subject property has paved parking, including one parking lot on the roof of one of its buildings. The subject property is part of the Meadowlands Power Centre, which is a large regional retail node with more than 45 stores and over 600,000 sq. ft. of retail space occupied by national brand retailers situated at the intersection of Highway 403 and the Lincoln Alexander Parkway.

2The appeals before the Assessment Review Board (the “Board”) concern the assessment values returned for the subject property as of the valuation day January 1, 2012 set out in Table 1 below.

Table 1

Appeal No.

Taxation Year

Section No.

Property Classification

Assessment Value $

2954921

2013

40

Commercial (Full)

4,840,000

Shopping Centre (Full)

11,237,000

TOTAL:

$16,077,000

3042841

2013

33

Commercial (Full

85,570

3042842

2013

33

Shopping Centre (Full)

1,375,430

TOTAL:

$1,461,000

3024924

2014

40

Commercial (Full)

4,840,000

Shopping Centre (Full)

11,237,000

TOTAL:

$16,077,000

3042844

2014

33

Commercial (Full)

85,570

3042843

2014

33

Shopping Centre (Full)

1,375,430

TOTAL:

$1,461,000

3089262

2015

40

Commercial (Full)

4,925,570

Shopping Centre (Full)

12,612,430

TOTAL:

$17,538,000

3156102

2016

40

Commercial (Full)

4,925,570

Shopping Centre (Full)

12,612,430

TOTAL:

$17,538,000

3These current value assessments (“CVA”) were determined by MPAC using the income approach to value.

ISSUE

4Mr. Derek McCullough, the assessor from MPAC, provided a revised 2012 CVA for the subject property of $17,279,000 based on corrections to its GLA, a recalculation of its Net Operating Income (“NOI”) and the application of a lower capitalization rate of 7.5%. He submits that this revised assessment should be confirmed by the Board.

5Mr. Andrew Attard, appearing as a witness for the Appellant, presented two approaches he employed to arrive at the CVA for the subject property. The first, using the same income approach to value as MPAC but with a higher capitalization rate of 8.5% based on properties comparable to the subject. In the alternative, he used the time adjusted sale value for the subject property and applied an equity adjustment. These two approaches, he submits, provide a CVA of $13,239,000 and $12,577,000 respectively excluding the additional value of $1,364,000 for the Buffalo Wild Wings restaurant. Based on this, he concludes that the subject property has been incorrectly assessed by MPAC.

6In addition to determining what the current value of the subject property is, the Board must determine if the assessment of the subject property is equitable with that of similar properties in the vicinity.

DECISION

7The Board finds the current value of the subject property to be $18,496,000 for the 2013 and 2014 taxation years, $19,860,000 for the 2015 and 2016 taxation years and the current value of the omitted assessments should be $1,364,000.

8The Board will make a further adjustment to current value from $18,496,000 to $15,536,640 for the 2013 and 2014 taxation years, from $19,860,000 to $16,682,400 for the 2015 and 2016 taxation years, and from $1,364,000 to $1,145,760 for the omitted assessments for the 2013 and 2014 taxation years to ensure that the assessments of the subject property are equitable with the assessments of similar lands in the vicinity.

9The decision of the Board, therefore, is to reduce the assessment of the subject property for the 2013 and 2014 taxation years from $16,077,000 to $15,536,640 with the following breakdown in classification: $4,350,259 Commercial (Full) and $11,186,381 Shopping Centre (Full).

10The decision of the Board is to reduce the assessment of the subject property for the 2015 and 2016 taxation years from $17,538,000 to $16,682,400 with the following breakdown in classification: $4,671,072 Commercial (Full) and $12,011,328 Shopping Centre (Full).

11The decision of the Board is to reduce the omitted assessments from $1,461,000 to $1,145,760 with the following classification breakdown: $320,813 Commercial (Full) and $824,947 Shopping Centre (Full).

Table 2

Appeal No.

Taxation Year

Section No.

Property Classification

Assessment Value $

Decided Value $

2954921

2013

40

Commercial (Full)

4,840,000

4,350,259

Shopping Centre (Full)

11,237,000

11,186,381

TOTAL:

$16,077,000

$15,536,640

3042841

2013

33

Commercial (Full

85,570

320,813

3042842

2013

33

Shopping Centre (Full)

1,375,430

824,947

TOTAL:

$1,461,000

$1,145,760

3024924

2014

40

Commercial (Full)

4,840,000

4,350,259

Shopping Centre (Full)

11,237,000

11,186,381

TOTAL:

$16,077,000

$15,536,640

3042844

2014

33

Commercial (Full)

85,570

320,813

3042843

2014

33

Shopping Centre (Full)

1,375,430

824,947

TOTAL:

$1,461,000

$1,145,760

3089262

2015

40

Commercial (Full)

4,925,570

4,671,072

Shopping Centre (Full)

12,612,430

12,011,328

TOTAL:

$17,538,000

$16,682,400

3156102

2016

40

Commercial (Full)

4,925,570

4,671,072

Shopping Centre (Full)

12,612,430

12,011,328

TOTAL:

$17,538,000

$16,682,400

REASONS FOR DECISION

Legislation

12Section 44.(3)(a) of the Assessment Act (“Act”) requires the Board to “determine the current value of the land.” Current value is defined in s. 1 as “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.” That is, for the 2013, 2014, 2015 and 2016 taxation years, the Board must determine what the subject property would have sold for in an arm’s length transaction on the January 1, 2012 valuation day set by the Act.

13Section 44.(3)(b) of the Act requires that the Board “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 land.”

Current Value - Evidence and Analysis

MPAC’s Position

[14] Mr. Francis Shea, the advocate for MPAC, called evidence from the assessor Mr. Derek McCullough, whom the Board qualified as an expert witness in assessment matters in particular, income producing properties. Mr. McCullough provided evidence on how MPAC arrived at the revised 2012 CVA for the subject property based on the 2013 and 2014 taxation years, the omitted assessment values for the Buffalo Wild Wings restaurant, and the 2015 and 2016 taxation years.

15Mr. McCullough testified that for unique properties like the subject property, there are few sales of commercial properties in the Hamilton market and none for Big or Small Box Power Centres within the valuation period. However, he advised that the subject property sold in 2009 for $15,850,000 prior to the construction of the Buffalo Wild Wings restaurant.

16Mr. McCullough identified the subject as being part of the Meadowlands Power Centre, which is considered the premier retail location in Hamilton and has several national brand stores, which he emphasizes enhances the economic stream. As such, he asserts that this justifies a lower capitalization rate of 7.5% used by MPAC, as they are less risky investments, when compared to the typical neighbourhood shopping centre.

17According to Mr. McCullough, the subject property’s 2012 CVA as returned by MPAC incorrectly applied property code 430 which is a neighbourhood shopping centre rather than property code 426, which is a Small Box Shopping Centre, since the subject property has more than three box stores. The assessment as returned also utilized an incorrect capitalization rate of 7.0%. Under cross-examination, Mr. McCullough, testified that both property code regimes utilize the same income approach to value and capitalization rate, the difference would only relate to the issue of comparable properties. He further testified that the correct capitalization rate of 7.5% is used with other comparable properties in the Meadowlands Power Centre and other Small Box retail properties in Hamilton.

18For the 2013 and 2014 taxation years, Mr. McCullough revised the assessment using the revised capitalization rate of 7.5% and the recalculated GLA of the subject property as 82,854 sq. ft. and he further recalculated the NOI to $1,193,698. This resulted to a revised 2012 CVA for the 2013 and 2014 taxation years as $15,915,000. Mr. McCullough submits this as the revised assessment prior to the construction of the Buffalo Wild Wings restaurant.

19Mr. McCullough further testified that for the omitted assessments of the Buffalo Wild Wings restaurant, he also applied the revised capitalization rate of 7.5% to the valuation of this restaurant and provided a 2012 CVA of $1,364,000.

20For the 2014 to 2016 taxation years, Mr. McCullough summits that with the inclusion of the omitted assessment of the Buffalo Wild Wings restaurant, the corrections made to the 2013 and 2014 taxation years which result in the recalculation of the subjects GLA to 88,836 sq. ft. and a recalculated NOI to $1,295,994, the 2012 CVA for the subject property is revised to $17,279,000.

21Mr. McCullough admitted under cross-examination that MPAC had not introduced any market sales in testing the correctness of the CVA for the subject property and submits that for properties like the subject this was not uncommon. He further testified that he utilized three approaches to test the reasonableness of MPAC’s CVA for the subject property.

22First, he used a direct comparison of the subject with comparable retail properties in the Meadowlands Power Centre. In this approach, he stated that he identified eight parcels of commercial retail properties within the Meadowlands Power Centre. The ages of these properties range between 1995 and 2001 and have GLA’s between 7,353 sq. ft. and 145,573 sq. ft., all assessed using the income approach and a capitalization rate of 7.5%. For this test, he testified that the average CVA per sq. ft. was $215.48 and median CVA per sq. ft. was $207.59. While the revised 2012 CVA for the subject property for the 2013 and 2014 taxation years is $192.08 and for the 2015 and 2016 taxation years, it is $194.50 per sq. ft. He submits that “the assessment of the subject property is approximately 8% below the median CVA per sq. ft. in the 2013 -2014 taxation years and approximately 6% below the median CVA per sq. ft. in 2014 - 2016 taxation years” and he concludes that this is within an acceptable range.

23In the second approach, Mr. McCullough identified five Small Box Shopping Centres in Hamilton, age range between 1984 and 2010, with GLA’s between 29,887 sq. ft. and 80,014 sq. ft. These were also assessed using the income approach and a capitalization rate of 7.0% to 7.5%. According to Mr. McCullough, this produced an average CVA per sq. ft. of $228.86 and the median CVA per sq. ft. of $234.42 and the revised 2012 CVA for the subject property for 2013 and 2014 taxation years is $192.08 and for the 2015 and 2016 taxation years it is $194.50 per sq. ft. He submits that “the assessment of the subject property per sq. ft. falls within the lower end of the range of assessed values for this property in Hamilton and that the assessment of the subject is approximately 18% below the average CVA per sq. ft. in 2013 and approximately 16% below the median CVA per sq. ft. in 2014 to 2016”.

24In the third approach utilized by Mr. McCullough, he identified five leases signed in 2011 and 2012 on the subject property and compared them with 10 leases signed in the Meadowlands Power Centre within the same time frame, in order to show that the subject property was equitably assessed. Using this approach, Mr. McCullough testified that he “measured the relationship between the lease rate and the 2012 Fair Market Rent to determine the 2012 CVA for the comparable properties” at the Meadowlands Power Centre. He submits that this was carried out as a proxy for market sales due to the lack of sales of similar properties within the vicinity. For the leases signed on the subject property, Mr. McCullough submits that the analysis provides a median relationship of 0.86 and for the leases signed within the Meadowlands Power Centre, it provides a median relationship of 0.85. He concludes that these ratios are an indication that MPAC provided equitable assessments among similar lands within the Meadowlands Power Centre.

25Mr. McCullough submits that based on conclusions derived from these three approaches, the assessment as returned for the subject should be adjusted and the following CVA should be confirmed:

• 2013 and 2014 taxation years:

$15,915,000

• Omitted assessments:

$1,364,000

• 2015 and 2016 taxation years

$17,279,000

MPAC’s Summation

26Mr. Shea emphasized the uniqueness of the subject property in terms of it being a Small Box Shopping Power Center in a large defined vicinity of the Meadowlands

Amended pursuant to Rule 130 of the Assessment Review Board’s Rules of Practice and Procedure, effective January 4, 2016

Power Centre, it is distinct, located on main highways and in large target areas, and

there are no sales, with little market evidence within the 2012 CVA. He advised the Board that there are no outstanding appeals in the Meadowlands Power Centre and that they were all effectively settled and only the Appellant’s appeals are outstanding, that the subject property rents reveal there is no inequity between the properties on the basis of the study carried out by the assessor Mr. McCullough. Mr. Shea submits that the proposed 2012 CVA provided by the Appellant is not reliable based on the following:

• the time adjusted study produced by the Appellant reveals that smaller properties generated smaller adjustment and greater properties greater adjustments; and
• the properties provided by the Appellant in the equity studies are not similar to the subject, they are 14% to 15% under assessed.

27In addressing the issue of the similarity of the comparable sales presented by the Appellant, Mr. Shea posed the question as “is the assessment of the subject equitable with similar lands”? He submits that there is a long history of decisions dealing with the question and he referred the Board to some of these cases.

28In Bayview Summit Development Ltd. V. Ontario (Regional Assessment Commissioner, Region No. 14), [1998] O.J. No. 410, 107 O.A.C. 302, Justice Southey reiterated the fundamental principle of Ontario assessment law as “property is to be assessed at a level such that the ratio between the assessment and market value of the property in question is the same as that in similar property in the vicinity”. In line with this principle, the Divisional Court held that the Ontario Municipal Board erred “in law by accepting the 1967 assessment per square foot for comparison as satisfying the test of equity under s. 60. (1) of the Assessment Act”. Furthermore, that “any method of valuing income producing properties that fails to take into account the relative values resulting from a comparison of income producing potential of the properties cannot satisfy the test of equity under s. 60. (1)”.

29In Regional Assessment Commissioner, Region No. 13 et al. v. Downtown Oshawa Property Owners Association et al., (1978), 8 O.M.B.R. 447 (C.C.C.) the Supreme Court of Canada (“SCC”) reviewed the decision of the Ontario Municipal Board, which was appealed to the Court of Appeal based on the Board’s interpretation of s. 90 of the Assessment Act, adopting the test of similar property to be that “of the same general nature, character or function” and that similarity is not limited to physical attributes”. Justice Spence of the SCC disagreed with Justice Blair of the Ontario Court of Appeal, stating that the decision of the Ontario Municipal Board was not restricted to “physical attributes” and that the Board in its decision had considered other factors, in reaching the conclusion that the properties were not similar. Justice Spence held that “the Ontario Municipal Board did not fall into any error of principle in considering the applicability of the words “similar property in the vicinity” to the sets of comparable property submitted to it”.

30In 508306 N B Inc. v. Ontario Property Assessment Corp., Region No. 13 [2001] O. A. R. B. D No. 540, 42 O. M. B. R. 315, the Assessment Review Board had to determine which properties presented by the parties are comparable properties to the subject according to s.447.34.1 of the Municipal Act. Member Wyger referred to several decisions including the Supreme Court of Canada decision in Regional Assessment Commissioner, Region 13 et al (supra), that have held that “similarity is not restricted to physical attributes, several other factors must also be considered”. The Board determined that “being industrial in the broadest sense is not enough to consider the complainant’s proposed properties to be sufficiently similar to the subject property”.

31In Home Depot Holdings Inc. v. Municipal Assessment Corp., Region No. 13 [2005] O. A. R. B. D. No. 465, 50 O. M. B. R. 411, the Board had to determine what properties were comparable to the subject. “Location, size of the parcel, function (utility and purpose) and nature and character of building (size and construction style), were used in determining the comparability of properties, even though no single criterion was paramount”. The Board accepted these criteria to be “substantially correct when applied to “box stores” of the type that is being dealt with.

32In Canadian National Railway Company v. Municipal Property Assessment Corporation and City of Vaughan, 2013 ONSC 7802, the Divisional court had to determine if the Assessment Review Board erred in law in its interpretation of “similar land in the vicinity”, by refusing to accept one of the Applicant’s comparable properties. Justice Sanderson determined that the Board correctly applied the appropriate legal test to determine similar properties. That the Board had regard to “the general nature, character and function of the two properties. Its failure to use the word “general” in its reasons is not indicative of a failure to apply the appropriate test””. Justice Sanderson held that “the Board concluded correctly that there were significant and stark differences between the CN and CP sites, in terms of size zoning, total building area, building to land ratio, miles of track, numbers of trains passing through the site daily and assessed value”.

33The Board notes that the Canadian National Railway Company (supra) case was a Municipal Act appeal under s. 447.70 of the Municipal Act requiring the Board to select comparable properties to ensure that eligible properties are taxed at the same level as comparable properties. Whereas the appeal before us is a s. 40 appeal of the Assessment Act which requires that the Board have reference to similar properties for the purpose of establishing equity.

Appellant’s Position

34Mr. Daniel Attard, the advocate for the Appellant, called evidence from Mr. Andrew Attard. Mr. A. Attard testified that the two approaches employed by him to arrive at the CVA for the subject property result in lower CVA’s than what MPAC has provided as returned assessment for the subject property.

35In the first approach, Mr. A. Attard submits that the time adjusted 2009 sale of the subject property is $18,496,000. He time adjusted the 2009 sale value of $15,850,000 for the subject property for 29 months at 0.58% per month derived by using seven sales of commercial properties in Hamilton, with sale dates ranging from June 2008 to March 2012. Mr. A. Attard further provided the Board with four equity studies, based on sales between 2010 and 2014 of commercial properties and plazas in Hamilton. He indicated that the appropriate equity analysis are the studies with sales within the shoulder years of 2011 and 2012 as the sales values had not been time adjusted. The first study includes the sale of 30 commercial properties in the immediate vicinity of the subject property yielding a median ASR of 0.85 and the second study includes the sale of seven commercial plazas in the larger vicinity of the City of Hamilton yielding a median ASR of 0.68. He further applied the ASR of the seven commercial plazas of 0.68 to the time adjusted sale value of the subject property and provided the Board with an indicated equity adjusted value of $12,577,000, without the $1,364,000 addition of the Buffalo Wild Wings restaurant. Mr. Attard further requested that the Board also apply the same ASR of 0.68 to the Buffalo Wild Wings restaurant’s assessments.

36Secondly, Mr. A. Attard adopted a higher capitalization rate of 8.5% based on sales of similar properties in the vicinity, (which utilized the same capitalization rate) to the same potential gross income of $1,247,108, less 6% vacancy allowance of $74,826 and less 4% expense allowance of $46,891.00 to arrive at a NOI of $1,125,391 which was capped at 8.5% to provide a CVA of $13,239,000 without the $1,364,000 addition of the Buffalo Wild Wings restaurant’s assessments. Mr. Attard also requested that the Board apply the same capitalization rate of 8.5% to the Buffalo Wild Wings restaurant’s assessments, resulting in a value of $1,203,000.

37Mr. A. Attard concluded by stating that this reveals that the subject property is inequitably assessed by MPAC.

Appellant’s Summation

38Mr. D. Attard commenced his summation by withdrawing an earlier objection he made to increase the omitted assessments for the Buffalo Wild Wings restaurant representing the Commercial portion from $85,570 to $381,900 as proposed by MPAC. He submits that the cases provided by Mr. Shea that discusses comparability are not in the context of equity, but in the context of current value. In his summation, he stated that under cross examination, the assessor admitted that there was a difference in comparing market value and equity. He submits that out of all the equity analysis studies carried out by Mr. A. Attard, Study 4 is preferred with a 0.68 ASR. He asserts that in Study 4, the comparable sales of commercial properties were all plazas with sales that had occurred within the shoulder years 2011 and 2012. Mr. D. Attard submits that this has satisfied reference to similar properties within the vicinity in accordance to s. 44(3) of the Act. He further submits that MPAC’s method of using a relation of Fair Market Rent as a proxy for value does not meet the requirement of s. 44(3) of the Act.

39Mr. D. Attard concludes by stating that the Appellant accepts the assessor’s income approach to current value with a cap rate of 7.5% yielding a total value of $17,279,000 for the 2015 and 2016 taxation years and $15,915,000 for the 2013 and 2014 taxation years but submits further that the appropriate approach to equity should be applied and the only one that fulfills the requirement of the Act is the Appellant’s equity Study 4 with an ASR of 0.68. Mr. D. Attard requests that the Board reduce the total assessed value of the subject property to $11,749,720 for the 2015 and 2016 taxation years and to $10,822,200 for the 2013 and 2014 taxation years.

Board’s Analysis and Decision

40The thrust of the Act is to rely on current value as the basis for assessed value. 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.”

41The best evidence of current value is the sale of the subject property on or close to the valuation day of January 1, 2012. In this case, the subject property sold in July 2009 for $15,850,000. This sale excluded the value of the Buffalo Wild Wings restaurant which was built in 2013 and 2014.

42During summations both parties essentially agreed to the current value using the income approach of 7.5 % producing a value of $15,915,000 for the 2013 and 2014 taxation years and $17,279,000 for the 2015 and 2016 taxation years. While this is definitely one approach the Board is of the view that the sale of the subject property is still the best evidence to establish the market value and therefore, the current value of the subject property.

43Using the time adjustment factor of 0.58 per month supplied by the Appellant as the only time adjustment study in evidence the Board will set the current value of the subject property at $18,496,000 as of January 1, 2012 valuation. This value is determined by applying the 0.58 per month increase in value over a 29 month period to the sale value of $15,850,000 which occurred in July 2009. This excludes the value of the Buffalo Wild Wings restaurant.

44During cross examination, Mr. Shea pointed out that the time adjustment study presented by the Appellant had a total of seven commercial properties and that if you isolate the value of the properties over one million dollars the average time adjustment factor would be 0.88 per month and that would be a more appropriate value to apply to the subject property because of its size. The Board prefers to use the largest possible sample to determine a time adjustment factor representing the market in general and therefore will defer to the sample of seven properties for a monthly increase of 0.58. Furthermore, this was the only time adjustment data in evidence.

45The Board will accept the current value of the newly built Buffalo Wild Wings restaurant as agreed by both parties at $1,364,000 as of January 1, 2012. This value was determined based on the income approach using a 7.5% capitalization rate.

46Therefore, the total current value of the subject property for the 2013 and 2014 taxation years will be $18,496,000 and for the 2015 and 2016 taxation years it will be $19,860,000.

Equity Analysis

47Section 44.(3)(b) mandates and directs that after determining current value, the Board shall have reference to the value at which similar lands in the vicinity are assessed. The Assessment to Sale Ratio (“ASR”) is a tool often used to determine if a reduction in the assessment below current value is required to make an assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment value as returned by the sale price.

48The Appellant presented four studies in support of an equity argument. The studies are as follows; a) produced an ASR of 0.83 based on the sale of 30 commercial properties in the vicinity, within 6 kilometers, from 2010 to 2014, b) produced an ASR of 0.72 based on the sale of 17 commercial plazas in the Hamilton area from 2010 to 2014, c) produced and ASR of 0.84 based on the sale of 30 commercial properties within 6 kilometres from the subject property during 2011 and 2012, and d) produced and ASR of 0.68 based on the sale of seven plazas in the Hamilton Area during 2011 and 2012.

49Mr. D. Attard submitted that the best evidence for current value is the 2011 and 2012 study of seven plazas in the Hamilton area because they were the most similar and furthermore the sale values were not time adjusted and therefore the 2011 and 2012 sales were within the shoulder period and therefore not requiring time adjustments. Mr. D. Attard requests that the Board apply the 0.68 ASR to the current value to ensure that the subject property is equitable with the assessments of similar properties in the vicinity.

50MPAC on the other hand has advanced the case that the subject property is unique in that it is the only Power Centre in the area and therefore, the only comparable properties in the vicinity are the ones in the Meadowlands Power Centre. In light of the fact that there were no sales of the Meadowlands Power Center properties, MPAC submits that the best evidence in support of equity, and therefore a “proxy on equity”, is a comparison of the Fair Market Rents (“FMR”) in relation to the Actual Market Rents for all the other tenants in the Meadowlands Power Centre. MPAC completed this analysis on page 21 of Exhibit 1 showing that the FMR/Actual Rents for the tenants is 0.85 while the FMR/Actual Rents for the subject is 0.86. Mr. Shea submits that based on the fact that the ratio of Fair Market Rents to Actual Market rents is similar in fact equity has been achieved within the Meadowlands Power Centre and no further adjustment to current value is required.

51Mr. Shea also argues that the properties submitted by Mr. D. Attard in support of equity are not similar and therefore are not valid comparables in support of an equity adjustment. Mr. Shea presented five decisions to support his argument in this matter. The Board agrees with Mr. Shea on the considerations to be employed in assessing comparability of similar properties in the vicinity as correctly determined in the cases he cited when it applies to current value not equity. In the case of equity, depending on the method adopted to determine inequity, the degree of similarity can differ. In this case, the Appellant presented an equity analysis comparing the level of assessment in relation to the level of sales value of commercial properties in the vicinity of the subject property. This analysis does not necessarily require a high degree of similarity, rather a determination of the relationship between assessments and sales ratio for the entire grouping. As correctly admitted by Mr. McCullough under cross examination, the degree of similarity of property for current value differs from that for an equity analysis.

52The Board is in agreement with Mr. D. Attard that using Fair Market Rents does not have reference to the assessments of similar lands in the vicinity and therefore does not comply with the intent of s. 44. (3)(b) of the Act which clearly states that the Board shall have reference to the value at which similar properties are assessed. The Board will therefore reject the argument that the ratio of Fair Market Rents to Actual Rents be a proxy on equity.

53With regards to equity, the Board is of the view that the comparable properties can be similar in general nature, character and function within a close proximity or vicinity of the subject property. In addition, the Board believes that the greater the sample of comparable properties utilized in an equity study the greater the accuracy of the study. The Board will therefore accept Mr. Attard’s study of 30 commercial properties within a six kilometer radius of the subject property which sold in 2011 and 2012 producing a median ASR of 0.84. Based on the fact that the sales occurred in 2011 and 2012 the Board will accept the sales value without time adjustments.

CONCLUSION

54The decision of the Board, therefore, is to make a further equity adjustment to current value based on the Assessment to Sale Ratio of 0.84 from $18,496,000 to $15,536,640 for the 2013 and 2014 taxation years, from $19,860,000 to $16,682,400 for the 2015 and 2016 taxation years and a similar adjustment to the omitted assessments from $1,364,000 to $1,145,760 for the 2013 and 2014 taxation years.