The Corporation of the City of London v. 8768013 Canada Ltd., 2017 CanLII 66330

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 04. 2017

FILE NO.: ID 148093

Assessed Person(s): 8768013 Canada Ltd.

Appellant(s): The Corporation of the City of London

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 23

Respondent(s): City of London

Property Location(s): 977 Oxford Street East

Municipality(ies): City of London

Roll Number(s): 3936-030-180-00100-0000

Appeal Number(s): 3069667 and 3158731 (deemed 2016 appeal)

Taxation Year(s): 2015 and 2016 (deemed 2016 appeal)

Hearing Event No.: 679304

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

Heard: July 5, 2017 in London, Ontario

APPEARANCES:

Parties

Representative

8768013 Canada Ltd.

Jeff Pickles and Erin Pickles

MPAC

Toban Edmunds

City of London

Brian Shimla

INTERIM DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1On April 5, 2016, the Board issued Interim Decision 138136, directing the City of London (“City”) to make a determination as to the amount of land in the Commercial property class that might be considered to be in the Commercial – Excess Land sub-class.

ISSUES

2The interim decision requires the Board to determine three things:

• What, if any, is the area of land that is in the Commercial property class that is in excess of the City’s requirements; and
• Should the area determined to be in excess of the City’s requirements be in the Commercial – Excess Land sub-class?
• What is the apportionment of assessment between the Commercial property class and Commercial – Excess Land sub-class?

INTERIM DECISION

3The Board finds that 336 square metres (“sq. m.”) of the Commercial land existing at the subject property is in excess of the City’s requirements.

4The Board also finds that 326 sq. m. are in the Commercial - Excess Land sub-class.

5The Board lacks sufficient evidence to determine the value of that area of land. The Board therefore directs the parties to make written submissions on the apportionment of value between the Commercial property class and the Commercial – Excess Land sub-class.

REASONS FOR THE DECISION

The City’s Submissions

6In response to the Board’s direction in ID 138136, Brian Shimla prepared a report on the Commercial – Excess Land question, where he investigated the Assessment Act and Regulations to determine the approach to take in arriving at the amount of Excess Land a property might include. He found that there is no such direction in the Act. Further, he determined that, to make a determination of the area of Excess Land and that the extent of Excess Land that may or may not be present, the specific character and nature of the use of the property must be considered.

7Mr. Shimla then determined that the minimum land requirement needed to support the residential use was 360 sq. m. He then subtracted the residential area from the total lot area of 1,598 sq. m. to determine the land area in the Commercial property class of 1,238 sq. m.

8Using the “Neighborhood Facility” zone applicable to the site, Mr. Shimla then took the net Commercial class area of 1,238 sq. m. and subtracted the footprint of buildings on the land, the area of the existing parking and driveway and an additional area for parking that is required by the by-law, but has not yet been constructed. The total of these adjustments is 902 sq. m., leaving an area of 336 sq. m. over and above the City’s requirements under its by-laws. Mr. Shimla’s calculations were not refuted by the Assessed Corporation or by MPAC.

9The City submitted that while the calculation of land area suggests that there is land in the Commercial property class that is over and above municipal requirements for its development, this area should not be considered to be ‘Excess Land’ as defined by s. 21.(3) of Ontario Regulation 282/98 (“O.Reg 282/98”) which provides:

• A portion of a parcel of land is included in the sub-class 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.

10Mr. Shimla supported the City’s assertion by calling Carey Devost, an experienced assessor with MPAC. Part of Mr. Devost’s work includes the consideration of whether or not certain Commercial lands should be deemed to be ‘Excess Land’.

11Mr. Devost testified as follows:

• there are no places of worship in the City that he is aware of that include an Excess Land sub-class on a portion of their lands;
• O. Reg. 282/98 stipulates that the Excess Land sub-class is only applicable where a property is in either the Commercial or Industrial property classes; and
• the subject property is the only place of worship that he is aware of that is in the Commercial property class.

12Mr. Devost testified that the onus is on the land owner to demonstrate that any area considered as Excess Land is actually land that is not required to fulfill the requirements of the municipality or that is part of the Commercial enterprise. Mr. Devost also testified that the presence of a site sign on the open area and the fact the area is regularly maintained indicates that it is being ‘used’ and is ‘developed’ in the context of the Regulation.

13The Advocate for MPAC, Toban Edmunds submitted two previous decisions of the Board to support MPAC’s position that the area determined by Mr. Shimla to be over and above the requirements of the municipality should be in the Commercial property class. The first of these is Torontario Properties Ltd. v. Municipal Property Assessment Corp., Region No. 9 (”Torontario”). Torontario involved a Commercial office building on 3.58 acres of land on Leslie Street in Toronto. Despite the obvious differences in use, value and location between the Torontario property and the subject property, the same regulation guides the argument as whether or not the land in question is Commercial – Excess Land.

14In Torontario, the Board found that the evidence was not determinative of the question as to whether or not the subject area was considered development or use,

and therefore found the subject area should be in the Commercial property class.

15In the second case, Stiver House Gift Ltd.v. Municipal Property Assessment Corp., Region No. 14, [2008] O.A.R.B.D. No. 85 (“Stiver House”), the property supported a retail gift shop. An open grassed area existed in conjunction with the site’s surface parking lot. In this case, the Board determined that the landscaped and grassed area served to enhance the property and in doing so provided value to the existing development on the property (the gift shop).

The Assessed Party’s Submissions

16The Assessed corporation submitted that the area determined by Mr. Shimla does meet the requirements of the regulation in that it has not been developed in any way, that it is in excess of municipal requirements for the place of worship (as calculated by Mr. Shimla) and that it is not being used. The Assessed confirmed that the grass is cut regularly as a condition of the lease agreement they have with the tenant, but that this maintenance only reflects the normal activity of the church as a good neighbor. They acknowledge the existence of the sign that exists, but suggest that if the subject area were to be developed, the sign would surely be removed and should be considered temporary in nature, as a result.

Has The Open Area Been “Developed In Any Way”?

17The subject area is free of buildings or parking or any other structure that would be considered ‘development’ in the normal use of the word. There is a sign, roughly four feet wide and four feet tall that sits near the intersection of Quebec Street and Oxford Street East. MPAC and the City submit that the presence of this sign constitutes development in the context of the O. Reg 282/98. The sign displays the times during the week that worship services at the place of worship are offered. The Board finds that the presence of the sign constitutes use for the area immediately adjacent to it.

18The sign occupies an area of approximately 10 sq. m. As the Board considers this to be ‘development’, the area determined by Mr. Shimla, as being in excess of the municipal requirement, is reduced from 336 sq. m. to 326 sq. m. to account for the sign.

Is The Open Area Being Used?

19MPAC and the City also submit that the regular maintenance of the open area (chiefly grass cutting) also constitutes ‘use’ and that, like Torontario and Stiver House, this activity serves to enhance the connected commercial activity on the property; in this case, a place of worship.

20The Board finds that for an area to be considered in ‘use’, there has to be evidence to clearly suggest what that use might be. The Board rejects MPAC’s and the City’s argument that cutting grass is a ‘use’. It is a maintenance operation that in and of itself is not in any way connected with the operation of the place of worship. As a result, the remaining area, after the area attributed to the sign is removed, is included in the sub-class for Excess Lands for the Commercial property class.

Is The Open Area In Excess Of The Municipal Requirement For The Existing Development Elsewhere On The Parcel?

21Mr. Shimla’s investigation and calculation are most persuasive in answering this question. He took a systematic review of the two land uses existing and made a reasonable set of adjustments to arrive at an area of 336 sq. m. (including the site sign) that is in excess of the municipal requirement for the development of the land, as a place of worship. His calculations were not refuted and the Board accepts the result as an accurate calculation of the land area at issue.

CONCLUSION

22The Board finds that 326 sq. m. of the Commercial land existing at the subject property is in the Commercial - Excess Land sub-class.

23The Board did not hear evidence on the value attributable to the area determined to be in the Commercial – Excess Land sub-class. The Board directs the parties to make written submissions on the apportionment between the Commercial property class and the Commercial - Excess Land sub-class. These submissions shall be submitted within 60 days of the release of this interim decision. Alternatively, the Parties may submit, on consent, an agreed-to value of the Commercial – Excess Land sub-class within the same time frame.