Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 14, 2017

FILE NO.: WR 145543

Assessed Person(s): Samuel Springer & Sons Properties Ltd.

Appellant(s): Samuel Springer & Sons Properties Ltd. and Springer Bryon

Respondent(s): City of Kingston

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 05

Property Location(s): Princess Plan 60 Lot 3 PT Lot 4

Municipality(ies): City of Kingston

Roll Number(s): 1011-080-180-08200-000

Appeal Number(s): 2971509, 3018084, 3072988 and 3145716

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

Hearing Event No.: 649965

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

Heard: October 19, 2016 in Kingston, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Samel Springer & Sons Properties Ltd. and Springer Bryon	Peter Radley+
MPAC	Roxanne Poulain
City of Kingston	Maureen Peterson, (observing but not participating)

DECISION OF THE BOARD DELIVERED BY TERRY DENISON AND SUBUOLA AWOLERI

INTRODUCTION

1The subject property is a vacant parcel of land on Princess Street at its intersection with Taylor Kidd Boulevard in the western part of the City of Kingston. It is zoned as Vacant Commercial Land and has frontage of 144.57 feet, a depth of 188.92 feet, and area of 27,312 square feet (or 0.63 acres). It is an irregular shape and the abutting lands surrounding it are similarly zoned and vacant. The abutting land has the same owner.

2MPAC assessed the subject property for the taxation years under appeal using a January 1, 2012 valuation day with a current value of $443,000.

3Samuel Springer & Sons Properties Ltd. (“Appellant”) says that the assessment of the subject property is too high and sought a reduction based on the evidence presented during the hearing.

Issues

4What is the correct current value of the subject property?

5Should the assessment of the subject property be adjusted to achieve equity with the assessment of similar properties in the vicinity?

Decision

6The correct current value of the subject property is $250,000 and there is no evidence to support a further adjustment of the assessment to make it equitable with the assessment of similar properties in the vicinity. Consequently, the assessment of the property should be reduced from $443,000 to $250,000 for all the taxation years based on a January 1, 2012 valuation day.

Legislation

7The initial task for the Assessment Review Board (“Board”) is to determine the current value of the subject property as required by s. 44. (3)(a) of the Assessment Act (“Act”).

8Section 19(1) of the Act states: that the assessment of the land shall be based on its current value. Current value is defined in s. 1 to mean, 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.

9Section 19.2(1)(3) of the Act provides that for the period consisting of the four taxation years from 2013 to 2016, land is valued as of January 1, 2012, the valuation day.

10In determining the value at which the land shall be assessed, s. 44(3)(b) requires that, after current value is determined, the Board must 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.

11Section 40(17) Of the Act provides that, where value is the ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.

12After hearing the evidence and the submissions of the parties, the Board shall determine the matter pursuant to s. 40(19) of the Act.

MPAC’s Position

13MPAC called Brian Leggett to give evidence on the assessment of the subject property. Mr. Leggett has been a Property Valuation Analyst with MPAC for over 20 years. He has a Bachelor of Arts from Queen’s University and he has the designation MIMA of the Institute of Municipal Assessors. As well, he has taken many professional development courses in property valuation and assessment. He is an experienced assessor. He indicated that, although he is an employee of MPAC, his evidence before the Board must be fair, objective and non-partisan and that his duty to assist the Board must prevail over any obligation he might owe to any party by whom or on whose behalf he might be engaged. The Board found that Mr. Leggett was qualified to give opinion evidence on assessment and valuation.

14Mr. Leggett prepared a Valuation Report for this hearing, which he said relied on a “Cost Approach to Value” by selecting other vacant commercial properties in the vicinity of the subject. He considered effective street frontage to be more important than effective lot size in determining the value of small commercial properties because, in his experience, a larger frontage would result in a higher value for two lots with equal areas.

15Mr. Leggett selected five properties to determine the current value of the subject property. All were small commercial vacant lots of less than one acre, ranging from 0.31 acre to 0.94 acre. The frontages ranged from 66.92 feet to 173.88 feet. He considered the size, frontages and zoning of the five properties to be comparable to those of the subject.

16Of the five, he considered the sales of three of the properties on Princess Street: 2443 Princess Street, 2293 Princess Street, and 2394 Princess Street. These sales occurred in 2009, 2008, and 2010 respectively. No time adjustment was made for these sales to make the sales price reflect a sale on the statutory valuation day, January 1, 2012. The other two sales were 1106 Midland Avenue, which sold in 2013 and another Midland Avenue property (roll number 1011 080 200 02705), which sold in 2011.

17Mr. Leggett considered the subject property to have a greater effective frontage than the median of the five comparable properties and therefore to have a greater value than the $400,000 median sales price of his five selected comparables. Therefore he considered the returned current value of $443,000 to be “not over-assessed”.

18Mr. Leggett provided the following information on his selected comparables:

	Subject Property	Comp 1 2443 Princess St.	Comp 2 2291-2293 Princess St.	Comp 3 2394 Princess St.	Comp 4 1106 Midland Ave.	Comp 5 Midland Ave.
Sales Date		2009	2008	2010	2013	2011
Sale Price		$240,000	$400,000	$575,000	$452,205	$195,000
Site Area	0.627 acre	0.31 acre	0.34 acre	0.92 acre	0.77 acre	0.94 acre
Site Frontage	144.57 feet	89.65 feet	100 feet	130.7 feet	173.88 feet	66.92 feet
Zoning	C2-1-H	C1-H	C2-1-H	C3	C5-11	C2-24

19Peter Radley cross-examined Mr. Leggett on his report and evidence. In his answers Mr. Leggett acknowledged that the zoning of his comparables were not identical and that differences in zoning affected the development potential and value of the properties. He also admitted that frontage is not always the most important factor in the value of a property.

Appellant’s Evidence

20The Appellant engaged Stephen Rayner of S. Rayner & Associates Ltd. to provide an opinion of value for the subject property as of January 1, 2012.

21Mr. Rayner is the President and General Manager of S. Rayner & Associates Ltd. He has the designation AACI of the Appraisal Institute of Canada. He was employed with the Great West Life Assurance Company between 1972 and 1980 in its mortgage and real estate divisions and responsible for appraisals of various kinds of real property. Since 1980 he has been an appraiser with S. Rayner & Associates Ltd. and has conducted all kinds of appraisal assignments and has been accepted as an appraisal expert in proceedings before courts and tribunals. His clients have included government agencies, financial institutions, and a variety of businesses, individuals and others. He has acknowledged that despite his engagement by the Appellant, his first duty is to this tribunal by providing opinion evidence that is fair, objective and non-partisan, only within his area of expertise, and to provide assistance that the tribunal may require to determine a matter in issue. The Board recognized Mr. Rayner as having the necessary education and experience to provide opinion evidence on the appraisal and valuation of real property.

22Mr. Rayner’s report, dated September 8, 2016, is in the format and has the content required by the Appraisal Institute of Canada, including a signed Certification by Mr. Rayner that in his professional opinion the market value of the subject property as of January 1, 2012 is $250,000.

23In his report, Mr. Rayner provided a detailed narrative describing the subject property and its vicinity. He described the subject property as “a small, irregular shaped tract of land near a major intersection that has very difficult access given its location at a curve in the road and presence of a median”. He also noted that there is presently a good supply of vacant land available on Princess Street indicating that the subject property would have greater value if the supply were less than it is presently.

24Mr. Rayner provided the Board with a detailed description of the subject, its relationship to other lands, its development potential and constraints, and its zoning, all of which are factors in the value of the property. In particular he elaborated on the frontage of the property, such as it being on a curve and being affected by a median, and the difficulties of its access.

25Mr. Rayner utilized the sales of five properties for a direct comparison approach to value, noting that the preferred date range for valuation for assessment purposes was one year before and one year after the valuation day of January 1, 2012. Four of the five sales he relied on fell within that range and the fifth was on December 30, 2010, one day outside the range. Unlike Mr. Leggett who used frontage as a primary factor in valuing properties Mr. Rayner looked at the price per acre to make comparisons and rankings.

26Mr. Rayner’s comparables are summarized as follows:

	Sale 1	Sale 2	Sale 3	Sale 4	Sale 5	Subject Property
Address	823 County Road 15	1316 Princess Street	1284-1288 Bath Road	1071 Midland Avenue	2628 Princess Street
Date of Sale	July 30, 2013	April 23, 2012	February 16, 2012	March 31, 2011	December 30, 2010
Lot Area	0.85 acres	2.35 acres	2.04 acres	0.94 acres	0.81 acres	0.627 acres
Zoning	D – Development Low Density Residential	C2 – Commercial	C2-General Commercial	C2-24-H General Commercial Core Area	C7-6 Industrial Commercial Zone	C2-46-H
Sale Price	$550,000	$1,197,000	$880,000	$195,000	$431,000
Price per sq. ft.	$14.81	$11.64	$9.87	$4.76	$12.18
Price per acre	$647,059	$509,362	$431,373	$207,447	$532,09

27In his evidence Mr. Rayner provided detailed information about the characteristics of each of the properties including similarities and differences in their zoning, topography, access, and development potential. His report included aerial photos of the subject site, relevant excerpts from the zoning by-law, as well as maps and photos of the comparable properties.

28Mr. Rayner’s analysis of his selected five comparables is set out in his report and summarized as follows:

• Sale 1 ($647,000 per acre): This is a prime corner site at a signalized intersection in Kingston East is similar in size to the subject. It was developed with a Shoppers Drug Mart. The site is far superior to the subject because of its corner aspect at a signalized intersection. It would attract a higher price than the subject.

• Sale 2 ($509,000 per acre): This is a sale of a larger parcel on Princess Street east of Portsmouth Avenue. It is comparable to the subject, but with superior access and a more regular shape than the subject. The zoning is superior with a wider variety of permitted uses and without the “H” holding designation that the subject has. The subject would have a lower cost per acre.

• Sale 3 ($431,373 per acre): This sale is located at Bath and Armstrong Roads, a similar location to the subject. It has superior access, compared to the subject, because it is a corner site at a signalized intersection, and a secondary westbound access. The lot configuration is more regular than the subject making it more functional. It had been improved with a Swiss Chalet (demolished prior to sale). Overall, a similar slightly superior site on a per square foot (or acreage) basis.

• Sale 4 ($207,447 per acre): This sale is located on Midland Avenue north of Princess Street, across from Loblaws, a slightly inferior location. Access is superior, as there is no road median, and a larger lot with a reverse L-shape. Zoning is similar, but overall an inferior site.

• Sale 5 ($532,099 per acre): This sale is on the north side of Princess Street between Gardiners Road and Midland Avenue, across from the Cataraqui Town Centre. It is considered to be a superior location. Access is slightly superior, as it is not a curve in the road, but like the subject, there is a median. Zoning is similar, slightly more restrictive, and not subject to a holding designation. Overall a superior site.

29Mr. Rayner stated that Sale 4 is substantially inferior primarily because of its awkward configuration. Sale 1 is substantially superior, given its corner location at a signalized intersection in a rapidly growing area with limited retail competition. Sale 3, at $431,373 per acre, required the least overall adjustment. Taking all of that into account he opined that the subject would have a market value of $400,000 per acre, just slightly less than Sale 3.

30His analysis concluded that taking into account all of this information that the subject site would have a market value of $400,000 per acre. Applying that to the 0.627 acre site results in a value of approximately $250,000.

31Mr. Rayner noted that the assessed current value of the subject site returned by MPAC at $443,000 translated to a resulting per acre value of approximately $700,000, which was significantly too high based on his analysis.

Submissions by MPAC

32Ms. Poulain urged the Board to accept that the current value of the subject property was $443,000. She argued that the assessor’s use of a frontage rate based on MPAC’s five comparables supported the returned value and asked that the assessment be confirmed.

Submissions by the Appellant

33Mr. Radley asked the Board to give more weight to the opinion of Mr. Rayner as it included a more detailed analysis of the subject site and relevant comparables which sold within a reasonable time range of the January 1, 2012 valuation day. He urged the Board to reduce the assessment to $250,000, the value which Mr. Rayner determined by his analysis.

Submissions by the Municipality

34The City of Kingston, a statutory party to these appeals, was present throughout the hearing but presented no evidence or submissions.

Analysis by the Board

35The Board is persuaded that the analysis given by Mr. Rayner leads to the correct current value of the subject property. Only two of the comparables used by MPAC were sales that occurred within the shoulder years of the valuation day of January 1, 2012. The other MPAC sales were in 2008, 2009 and 2010. Only one of the sales selected by Mr. Rayner was outside the shoulder years, and then only by one day.

36The Board was not convinced that a frontage rate was the best method to value these properties as suggested by MPAC. Mr. Rayner illustrated that the particulars of the subject property’s frontage, principally because of access problems, would not be the best indicator of its value and used an acreage rate from the comparables he selected. The Board accepts his reasoning. But whether a frontage rate or an acerage rate is used, what matters most is that relevant comparable sales information is used to derive the rate. Mr. Rayner used more relevant sales information, as described above, to arrive at an acerage rate and the current value of the subject.

37Overall, the Board preferred the evidence of Mr. Rayner because it provided a more detailed and site specific understanding of the valuation issues for the subject property. Using Mr. Rayner’s analysis of the five sales, Sale 3, which required the least adjustment, yet more superior than the subject property due to its lot configuration being more regular than the subject property, it is reasonable that the subject property would have a market value of $400,000 per acre.

38The evidence before the Board concerning equity was sparse. MPAC provided evidence that the Assessment to Sales Ratio for its five comparables was 1.03. The Appellant provided no evidence concerning equity. No submissions were made urging and equity adjustment. Based on what was before it the Board concludes that there is no need to adjust the assessment to achieve equity with the assessment of other properties in the vicinity.

Conclusion

39The Board finds that the correct current value of the subject property for the taxation years based on a January 1, 2012 valuation day is $250,000. The taxation years under appeal are 2013, 2014, 2015 and 2016. No further adjustment is required to make the assessment equitable with the assessment of similar properties in the vicinity.