75 Westmore Drive Inc. v. Municipal Property Assessment Corporation, 2017 CanLII 27539

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 3, 2017

FILE NO.: WR 145892

Assessed Person(s): 75 Westmore Drive Inc.

Appellant(s): 75 Westmore Drive Inc. c/o Mansoor Electronics Ltd.

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09

Respondent(s): City of Toronto

Property Location(s): 75 Westmore Drive

Municipality(ies): City of Toronto

Roll Number(s): 1919-044-382-00600-0000

Appeal Number(s): 2960365, 3011462, 3075703 and 3148033

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

Hearing Event No.: 666570

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

Heard: March 9, 2017 in Toronto, Ontario

APPEARANCES:

Parties	Representative
Westmore Drive INC	Chris Ratnasingham
MPAC	Damian Bernacik
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY SONIA LIGHT

ISSUE

1The subject property located at 75 Westmore Drive is an industrial property consisting of a site area of 3.01 acres improved with a 76,799 sqaure foot(“sq. ft.”) industrial building . The building was constructed in 1972 and additions were constructed in 1974 and 1977. The ceiling height is 22.5 sq. ft. and the building is located in an industrial/commercial area in the former City of Etobicoke, near Pearson International Airport. It is also close to Highways 427, 27, 409, 400, 401, Kipling Avenue, Martin Grove Road, Rexdale Boulevard and Albion Road.

2MPAC returned the assessment for the subject property at $4,474,000 for the 2013, 2014, 2015 and 2016 taxation years. After performing a sales analysis of comparable sales the representative for MPAC recommends a current value of $4,147,000 for the respective taxation years under appeal based on an adjusted sale price per square foot (“psf.”) of $54.

3The representative for the Appellant argues that based on its own sales analysis the current value should be $3,763,000 based on an adjusted rate psf. of $49 and that the assessments for the respective taxation years should be reduced accordingly.

4The Assessment Review Board (“Board”) must determine whether the 2013, 2014, 2015 and 2016 assessments are correct and equitable.

DECISION

5For the reasons stated below and as directed by s. 44.(3)(a) of the Assessment Act (“Act”), the Board finds that the current value of the subject property is $4,147,000.

6The Board finds that the current value should not be adjusted for equity pursuant to s. 44.(3)(b) of the Act.

7The assessment of the subject property is reduced accordingly for the 2013, 2014, 2015 and 2016 taxation years.

REASONS FOR DECISION

Legislation

8Section 19.(1) of the Act states:

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

9Section 1 of the 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.

10Section 19.2(1)2 states:

Valuation days

19.2 (1) 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.

11Section 44.(3) 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.

12Section 40.(26) of the Act directs:

40.(26) Deemed appeals, 2009 and subsequent years. – 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.

Current Value Analysis

13Bashir Mohamed, a Property Valuation Analyst with MPAC, prepared a valuation report which he submitted to the Board as Exhibit 3. His report contains a sales analysis consisting of six suggested comparable sales. The adjusted sales prices ranged from $44 psf. to $62 psf. and he calculated the median price psf. of these sales to be $54 psf. When that value is applied to the 76,799 sq. ft. of building area of the subject property, it results in a current value of $4,147,146, which MPAC rounded to $4,147,000.

14In addition to adjusting the sale prices of the suggested comparable sales in his study for time, Mr. Mohamed also methodically adjusted the sale prices of the comparable sales to take into account differences in land to building ratios, age and ceiling heights between the suggested comparable properties and the subject property.

15Chandelle Hamilton is a consultant with an A.I.M. A. designation. She presented the report prepared by the Altus Group for this appeal and submitted it to the Board as Exhibit 8. This report relied on three of the same properties as the MPAC report but excluded three others. It included another property not included in the MPAC report as a suggested comparable property. This additional property, namely 81 Akron Road, was however, included in an analysis by MPAC to demonstrate that the inclusion of this property would not affect its conclusion that the correct current value for the subject property should be calculated based on a price per square foot of $54.

16The Board reviewed the properties not agreed to by the parties and finds that they are all appropriate comparables that should be included in the analysis to determine current value of the subject property. The property at 81 Akron Road, relied on by the Appellant, is a sale that included the assumption or discharge of a pre-existing mortgage by the purchaser. The relevant purchase and sale agreement (Exhibit 4) for this transaction shows that the purchase price of $2,800,000 is comprised of $2,570,000 for the property and approximately $230,000 for the assumption or discharge of a pre-existing mortgage. In any event, the median sale price is not impacted by the mortgage adjustment.

17The Appellant’s and MPAC’s studies relied on different assumptions to adjust the sales prices. As the Board was not presented with sufficient information to determine which adjustments would be most suitable, the Board is relying on the adjusted sales prices presented in the report submitted by MPAC. This is because the MPAC report not only included all of the suggested comparable properties presented but the adjusted sales prices in the MPAC report are also lower and beneficial to the Appellant.

18The Board also finds that the comparable sales submitted by MPAC respecting 27 and 31-35 Leading Road and 46 Meridian Road are appropriate comparable sales and there is no reason to exclude them in the Board’s determination of the correct current value. The representative for the Appellant argued that the sale at 31-35 Leading Road should be excluded on the basis of a conflict between the Realnet report, which states that the property was not on the market, and the Marsh report, which indicates it was on the market for a year and five months. There is no evidence to suggest that the property did not sell at fair market value or that there was some pre-existing relationship between the vendor and purchaser. The Board considers 31-35 Leading Road to be a relevant sale.

19The Board has recalculated the adjusted sale price per square foot of 81 Akron Road based on a sales price of $2,800,000 and applied the assumptions Mr. Mohamed used in adjusting the sales prices of the suggested comparable sales in his report. The Board calculated the adjusted sale price per square foot of this property to be $42 psf. This revision does not change the result in Mr. Mohamed’s report as the median price per square foot of the property remains $54 psf. The Board agrees that is the most likely current value of the subject property. Applying $54 to the subject property results in a rounded current value of $4,147,000.

Equity Analysis

20There was no evidence before the Board that would support a reduction to the assessment based on equity considerations pursuant to s. 44.(3)(b) of the Act.

21Accordingly, the Board finds that the current value should not be adjusted for equity pursuant to s. 44.(3)(b) of the Act.

22Accordingly, the Board reduces the assessment of the subject property from $4,474,000 to $4,147,000.