Adelaide Capital Corporation v. Municipal Property Assessment Corporation, 2017 CanLII 39837

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

June 21, 2017

FILE NO.:

WR 146792

Assessed Person(s):

Adelaide Capital Corporation and 802087 Ontario Ltd.

Appellant(s):

Adelaide Capital Corporation

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 09

Respondent(s):

City of Toronto

Property Location(s):

10 Dickens Street

Municipality(ies):

City of Toronto

Roll Number(s):

1904-082-180-00200-0000

Appeal Number(s):

3134962 and 3147564

Taxation Year(s):

2015 and 2016

Hearing Event No.:

673366

Legislative Authority:

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

Heard:

May 4, 2017 in Toronto, Ontario

APPEARANCES:

Parties

Representative

Adelaide Capital Corporation and 802087 Ontario Limited

D. Attard and J. Bender

MPAC

S. Raymond

City of Toronto

No one appeared

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA

INTRODUCTION/ISSUE

1These appeals relate to the property classification of 10 Dickens Street for the 2015 and 2016 taxation years. This property is a 1.95 acre lot currently being used as a parking lot and classified as Commercial (CT) for both 2015 and 2016. The property is divided into the upper and lower tier each consisting of 44,000 square feet of area both currently used to park vehicles.

2Mr. Attard is requesting that the classification for the lower tier portion of the property be changed to Commercial (CU) Excess Land for the 2015 and 2016 taxation years on the basis that this portion of the land was vacant from September 2012 to February 2016. Mr. Attard further requests that the classification for the same lower tier be restored to Commercial (CT) at the end of the vacancy period starting in February 2016, the beginning of the Toyota lease. Mr. Attard also submits that the upper tier portion remain as Commercial (CT) for the 2015 and 2016 years as this portion has continuously been used by the industrial property next door for parking vehicles.

3There is no dispute in the Current Value Assessment of $1,856,000 for 2015 or 2016 taxation years.

DECISION

[4] The Board will confirm the classification of 10 Dickens Street as Commercial (CT) for the total property for the 2015 and 2016 taxation years.

Evidence as presented by Mr. Raymond and Ms. Bender

5The property has a crushed gravel surface, parking curbs, cement platforms, light poles, cameras and a small structure used in the past as a bus shelter, all clearly shown by the photographs in evidence.

6The upper tier is utilized as a parking area for the neighboring industrial facility also owned by the assessed person and the lower tier is currently leased to Downtown Toyota for parking vehicles.

7From September 1, 2009 to August 31, 2012, the lower tier property was leased to Bridgepoint Hospital for vehicle parking and shuttling individuals to and from the hospital.

8The lower tier remained vacant from August 31, 2012 to February 15, 2016 and then was leased to Toyota from February 15, 2016 to February 28, 2021.

9The income relating to the lower tier from the Hospital was $72,000 per year and from Toyota is currently $90,000 per year.

10During the vacancy period the property owner actively sought to lease the property.

MPAC’s Position

[11] Mr. Raymond has taken the position that the classification of land during the vacancy period should be confirmed as Commercial (CT). Mr. Raymond contends that under section 21.(3)(a) of O.Reg 282/98, pertaining to excess land, it is clear that if land has been developed in any way other than to service the land it does not qualify for excess land designation. Mr. Raymond contends that the land had been developed and improved with grading, crushed gravel, parking curbs, light poles, cameras, cement platforms and bus shelter and therefore is not in its natural state. Mr. Raymond therefore requests that the board confirms the classification as Commercial (CT) for both the top and bottom tiers for the 2015 and 2016 taxation years.

Appellant’s Position

12Mr. Attard on the other hand claims that the lower tier portion of land should be changed during the vacancy period to Commercial Excess Land (CU). Mr. Attard asserts that the classification date for 2015 taxation year is June 30, 2014 and for the 2016 taxation year is June 30, 2015 and that the land at that time was completely vacant and not developed in any way. Mr. Attard requests that the top tier be confirmed as Commercial (CT) as it was used for parking by the neighbouring industrial facility throughout 2015 and 2016 and the bottom tier be changed in classification to Commercial (CU) Excess Land as it was completely vacant as of the classification date for both 2015 and 2016 taxation years.

REASONS FOR DECISION

The Legislation

13Section 21 O.Reg 282/98 Excess Land:

Excess Land

21. (1) A subclass for excess land is prescribed for each of the following classes of real property:

22. The commercial property class.

23. The industrial property class.

24. The office building property class.

25. The shopping centre property class.

26. The large industrial property class. O. Reg. 45/02, s. 3.

(2) The office building property class and the shopping centre property class are prescribed for the purposes of subparagraph 3 i of subsection 8 (1) of the Act and the large industrial property class is prescribed for the purposes of subparagraph 3 ii of subsection 8 (1) of the Act. O. Reg. 45/02, s. 3.

(3) A portion of a parcel of land is included in the subclass for excess lands for a class of real property if,

(a) it has not been developed in any way, other than to service the parcel of land;

(b) it is not being used other than for farming purposes; and

(c) it is in excess of the municipal requirement for any existing development elsewhere on the parcel. O. Reg. 45/02, s. 3.

(4) A portion of a parcel of land is included in the subclass for excess land for the commercial property class if,

(a) it is a rail yard owned and used exclusively by a railway company; and

(b) no building or structure is located on it, other than railway tracks. O. Reg. 45/02, s. 3.

(5) This section applies with respect to the 2001 and subsequent taxation years. O. Reg. 45/02, s. 3.

ANALYSIS

14The Board must consider whether the changes made to the subject property i.e. grading, curbs, light poles, cement platforms and bus shelter are not enough to meet the requirement that “it has not been developed in any way other than to service the parcel of land” as per section 21.(3)(a)of O. Reg. 282/98.

15Mr. Attard introduced a number of decisions claiming to support his assertion that the changes made to the property did not improve the value or benefit the owner and that the land has not been developed in any way other than to service the parcel of land.

16In Torontario Properties Ltd v. Municipal Property Assessment Corp., Region No. 9, [2005] O.A.R.B.D. No. 445. Member Cowan concluded that the caring of the lawn in the excess portion of land was not in its natural state and added value to the entire property including the portion which had a commercial building. Member Cowan concluded that the excess portion was cared for and not in its natural state. Mr. Attard pointed out that the subject property has no grass, and therefore no improved street appeal as compared the Torontario property.

17London (City) v. Municipal Property Assessment Corp., Region No. 23, [2007] O.A.R.B.D. No. 492 (“London City”). In this case, the property was used as an auto dealership and three retail stores with a central section consisting of an asphalt paved parking lot that had also been vacant for some time. Member Birnie concluded that the property had been improved by asphalt paving and therefore denied the excess land classification. Member Birnie also noted that the fact that minipavers, one of the tenants, used the central portion to access the northern portion of the land, was covered under the “de minimus principle” because access occurred only on rare occasions and only involved itself with a small portion. Citing the legal principle de minimus non curat lex means that the law does not concern itself with the little things. Mr. Attard pointed out that in the London (City) case the parking lot was paved as opposed to the subject property which only has crushed gravel. In addition Mr. Attard requests that the Board consider the bus shelter which was built in 2009 for the hospitals use be considered a de minimus or trivial point and that the Board should not deny the excess land classification based on this minor point.

18Stiver House Gift Ltd.v. Municipal Property Assessment Corp., Region 14, [2008] O.A.R.B.D. No. 85. In this decision, Member Marques concluded that the well maintained green space enhanced the overall appeal of the parking area and the commercial building and therefore denied the excess land classification. Once again, Mr. Attard notes 10 Dickens Street has no building or beautification on the site and therefore is not similar to the Stiver House case.

19In JS & JB Holdings Inc. v. Municipal Property Assessment Corp., Region 3, [2015] O.A.R.B.D. No. 279, (“JS & JB Holdings”), Member Fenus concluded the excess land was maintained with cut grass but was not being used for any other purpose or being developed in any other way for the benefit of the Appellant or his employees. Member Fenus pointed out that intent by the landowner coupled with the actual use or development of the land, for their benefit, are paramount considerations. In this case, the maintenance of the lawn was viewed as not being a benefit and the excess land classification was granted for that portion of the property. Mr. Attard submits that there is no grass to beautify the subject property at 10 Dickens Street and is therefore no benefit to the owner or to the neighboring building to the east of the subject property. Again, Mr. Attard points out the circumstances of the JS & JB Holdings case are totally different from 10 Dickens Street.

20Magna International Inc. v. Municipal Property Assessment Corp. Region 15, [2016] O.A.R.B.D. No. 243. In this case, Member Awoleri determined that whether the owner of this industrial facility maintains the grass does not constitute usage and that it is less likely that maintaining the grass outside the facility would impact the decision of a likely purchaser of the property. Member Awoleri granted the excess land classification.

21After the careful analysis of the evidence, legislation and case law, in the case of 10 Dickens Street, it is not a question of beautification and the impact on value or benefits which have been derived from cutting the grass or trimming the hedges as in many of the cases presented by Mr. Attard and Mr. Raymond. The subject property is a standalone property with no buildings which prior to 2009 has been developed and improved from its natural state so that it could be used for a two tier parking lot system resulting in a classification of Commercial CT. The top tier has always been used by the industrial facility to the east of the subject and is therefore not in question with regards to classification. From the photographs in evidence the lower tier was improved with light poles and cameras, graded with crushed gravel and clearly some kind of aggregate substructure to be able to maintain the weight of the vehicles as well as cement platforms and bus shelter to service the needs of a parking lot.

22Contrary to Mr. Attards request these improvements cannot be considered as “de minimums” points which are trivial in nature. The income of $72,000 per year between 2009 and 2012 and $90,000 per year starting in February 2016 are tangible financial benefits to the property owner that could never have been possible if the property was in its natural state or not developed in any way other than to service the land. Furthermore, this panel does not distinguish between paving a surface or applying crushed gravel to a graded surface as both can be functionally used for the same purpose of parking vehicles.

23The Board further supports Member Fenus’ view that the intent of the landowner coupled with the actual use of the land to be paramount considerations. In this case, it is quite clear that the intention of the owner prior to 2009 was to build a parking lot in order to provide an income.

24With regards to the vacancy period, the Board is inclined to agree with Mr. Raymond that the vacancy period between the two leases is consistent with other parking lot businesses as witnessed in the London (City) decision where that parking lot was also vacant and the excess land classification was also denied.

CONCLUSION

25The Board finds that the subject property has been developed into a parking lot prior to 2009 and since that time is no longer in its natural state, and so does not fall within the criteria set out in section 21(3)(a) for excess land classification. Therefore the Board confirms the classification as Commercial (CT) for the 2015 and 2016 taxation years for the entire property. The Board also confirms the Current Value Assessment of the subject property at $1,856,000 for the 2015 and 2016 taxation year with no further adjustment for equity.