Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 24, 2020

FILE NO.: WR 164098

Assessed Person(s): North Harwood Centre Holdings Ltd.

Appellant(s): North Harwood Centre Holdings Ltd., Denis Tarsky

Respondent(s): Municipal Property Assessment Corporation Region 13

Respondent(s): Town of Ajax

Property Location(s): Harwood Avenue

Municipality(ies): Town of Ajax

Roll Number(s): 1805-010-010-15651-0000

Appeal Number(s): 3281069, 3300960 and 3355435

Taxation Year(s): 2017, 2018 and 2019

Hearing Event No.: 728596

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

APPEARANCES:

Parties	Counsel*/Representative
North Harwood Centre Holdings Ltd., Denis Tarsky	Self-represented
Municipal Property Assessment Corporation	Jaime Shevchuk
Town of Ajax	Terry L. Simkin, Susan Hewlett (both observed)

HEARD: February 6, 2020 in person

ADJUDICATOR(S): Jennifer Griffith, Member

DECISION

OVERVIEW

1North Harwood Centre Holdings Ltd. and Denis Tarsky (the “Appellants”) have filed appeals for the 2017, 2018 and 2019 taxation years with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”). The Subject Property is located on Harwood Avenue in the Town of Ajax.

2It is the Appellants’ position that the Municipal Property Assessment Corporation’s (“MPAC”) current value assessment of $1,829,000 is too high and that the correct current value should be $822,285. At this hearing, MPAC takes the position that the correct current value is $4,160,000. However, MPAC is not seeking a higher value and, therefore, takes the position that the correct current value is $1,829,000. The Town of Ajax (the “Town”) observes the hearing and takes no position as to the correct current value.

3Pursuant to s. 40(11) of the Act, the Town of Ajax is a party to this proceeding. Terry L. Simkin and Susan Hewlett appear as Representatives for the Town of Ajax (the “Town”) to observe the hearing and therefore, assert no position on the issue of current value.

4Section 44(3)(b) of the Act directs the Board to reduce the current value of the Subject Property if similar lands in the vicinity have been assessed at a lower value (“equitable reduction”). The purpose of this provision is to fairly distribute the municipal tax burden according to the value of the property possessed by each ratepayer. MPAC asserts no position on equity. The Appellants assert no position on equity. Therefore, in this proceeding, this ground for appeal is not in issue.

Issues for the Hearing

5At issue in this proceeding is:

1. A determination of the correct current value of the Subject Property for the 2017, 2018 and 2019 taxation years;

RESULT

6The Board finds the correct current value of the Subject Property is $1,829,000. Therefore, the Board confirms the returned assessment of $1,829,000 for the 2017, 2018 and 2019 taxation years based on the following evidence.

ANALYSIS

Description of Subject Property

7The Subject Property is located at Harwood Avenue in the Town of Ajax. It is a Commercial / Industrial property that is zoned Prestige Employment (“PE”) and is a Property Type 105 - Vacant Commercial Land. The Subject Property has a total lot size of 3.8 acres.

MPAC's Evidence

8Jaime Shevchuk, Advocate for MPAC called on Farah Jahshan, witness for MPAC and he presents a Valuation Report, dated September 19, 2019 which he prepared and testifies to the information contains therein.

9In support of current value, Mr. Jahshan testifies that he relied on market evidence of the following nine sales of suggested comparable properties, which occurred over the period 2015 through 2016. Mr. Jahshan provides both the actual and time-adjusted sale prices; however, he relies on the actual sale prices in his analysis, based on the Direct Comparable Approach to value. The following is the analysis of the nine suggested comparable properties:

SALES ANALYSIS

9 SUGGESTED COMPARABLE PROPERTIES	LOT SIZE (ACRES)	ZONING	SALE DATES	SALE PRICE	SALE PRICE PER ACRE
1811 Liverpool Road	0.63	Prestige Employment (“PE”)	2015	1,600,000	$2,539683
2580 Brock Street	2.33	Mixed Use (“MU”)	2015	$3,100,000	$1,330,472
113 Old Kingston Road	0.45	Village Centre (“VC”)	2016	$475,000	$1,055,556
275 Westney Road	5.16	PE	2015	$6,500,000	$1,259,690
Salem Road	1.64	PE	2015	$800,000	$487,805
Achilles Road	5.5	PE	2016	$2,609,000	$474,364
1399 Dundas Street E	1.93	MU	2015	$2,100,000	$1,088,083
1300 Bayly Street	1.41	MU	2016	$1,553,372	$1,101,682
6875 Baldwin Street N	1.12	Gasoline Bar (“GB”)	2016	$2,100,000	$2,008,929
Median	1.64			$2,100,000	$1,101,682
Subject Property	3.8	PE			Assessed at $481,316 per acre

10Mr. Jahshan testifies that the above nine suggested comparable properties are all vacant commercial land. However, some have zoning similar to the Subject Property and others are different. Mr. Jahshan testifies that the median lot size is 1.64 acres and sold at a median sale price of $1,094,883 per acre. He further states that when the median sale price is applied to the Subject Property it results in a current value of $4,160,554 ($1,094,883X 3.8 acres). This is compared to the Subject Property with an assessment value of $1,829,000.

11On cross-examination Mr. Jahshan agreed that the sale of the suggested comparable property located at Achilles Road in his sales analysis should be removed because the sale price was for two parcels as opposed to a single parcel.

12Mr. Jahshan pointed out on cross-examination that MPAC did not rely on the two sales at Gadsden Court in 2015 and 2017, and that they were not presented into evidence by MPAC.

13Respecting the application of adjustments, Mr. Jahshan testifies that the returned assessment of the Subject Property includes a negative 30% adjustment. Unfortunately, Mr. Jahshan was unable to explain the reasons for the adjustment, because it was done by another assessor prior to him taking over this file.

14Mr. Jahshan further testifies that the Subject Property has a municipal 30 meters set-back requirement from the railroad located at the back of the property. Mr. Jahshan states that MPAC provides no negative adjustment for municipal set-back, because the land is useable despite the set-back. He also testifies that there is an easement on the Subject Property to allow access to the neighbouring properties which MPAC values at $22,000.

Appellants’ Evidence

15Mr. Tarsky, the Appellant also relies on the Direct Sales Comparison method and he presents the sales of two suggested comparable properties, located at Station Street (1.45 acres sold in 2017 at $241,379 per acre ); and 493 Bayly Street West (2.24 acres sold in 2017 at $312,500 ). These two suggested comparable properties have an average lot size of 1.84 acres and an average sale price of $276,939 per acre.

16Although Mr. Tarsky presents the above two sales in support of current value, he based his opinion of value on an average sale price of $368,011 per acre based on five sales (3 sales from an MPAC report which shows that Gadsden Court, sold in 2015 at $302,222 per acre and again in 2017 at $464,925 per acre; Achilles Road, sold in 2016 at $519,031 per acre; and his two sales presented above at Station Street and 493 Bayly Street West).

17Using the average sale price of $368,011 per acre Mr. Tarsky applies a 40% negative adjustment which he believes account for the differences in lot size, location, quality, set-back requirement and easement on the Subject Property to arrive at a value of $220,807 per acre ($368,011 - $147,204). Mr. Tarsky applies the adjusted value of $220,807 to the Subject to arrive at a value of $839,066 ($220,807 x 3.8 acres) and further reduces it by a negative 2% adjustment for inflation to arrive at a current value of $822,285 ($839,066 - $16,781).

18On cross-examination Mr. Tarsky agrees that the two sales at Gadsden Court were not presented into evidence by MPAC. He also states that he is not going to rely on these two sales, because Gadsden Court is significantly larger than the Subject property with 10.4 acres and therefore, not similar.

19On cross-examination Mr. Tarsky agreed that the two sales at Station Street and 493 Bayly Street West were purchased through a “bidding” process from the Town and were subject to municipal restrictions and conditions as can be seen on the Agreement of Purchase and Sale signed in 2017 for 493 Bayly Street West.

Findings

20In determining the correct current value, the Board references s. 19(1) of the Act which states that the assessment of land shall be based on its current value, which is defined 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. In other words, the best evidence the Board can receive of current value is an arm’s length and market-tested sale of the property on the valuation date or close to it. The valuation date for the 2017 to 2020 taxation years is January 1, 2016.

21In reviewing the following evidence presented in support of current value, the Board finds the best evidence to be the two sales presented by the MPAC at 275 Westney Road and Salem Road North with similar uses and zoning (Prestige Employment) as the Subject Property. These two comparable properties are similar to the Subject Property, with an average total lot size of 3.40 acres and sold in 2015 at an average time-adjusted sale per acre of $873,747. This is compared to the Subject Property with a total lot size of 3.8 acres and assess at $541,124 per acre.

22When the average sale price of $873,747 is applied to the Subject Property it results in a market value of $3,320,240 ($873,747 x 3.8 acres). Included in the Subject Property’s returned assessment is a negative adjustment of 30%. The Board applies the same adjustment to the market value to arrive at a value of $2,324,168 ($3,320,240 – $996,072). Pursuant to s.9 of the Act which states Assessment of easements - …the assessment of the land that, as the servient tenement, is subject to the easement shall be reduced accordingly. Therefore, the Board applies a $22,000 negative allowance for an easement on the Subject Property which provides access to the neighbouring properties to arrive at a correct current value of $2,302,000 rounded ($2,324,168 - $22,000).

23The Board did not rely on MPAC’s seven remaining sales at 1811 Liverpool Road; 2580 Brock Street; 113 Old Kingston Road; 1399 Dundas Street East; 1300 Bayly Street; and 6875 Baldwin Street North, because they are either significantly smaller and/or zoned differently than the Subject Property as shown on the above analysis. In the case of the seventh suggested comparable at Achilles Road, the Board accepts the consent of the parties to remove this sale because it is not similar and included two parcels of land.

24The Board rejects the Appellants’ two sales of suggested comparable properties located at Station Street and at 493 Bayly Street West in Ajax. The Board finds that the sale at Station Street in 2017 is too far removed from the valuation date of January 1, 2016 too provide any meaningful tests of current value. Regarding the reported sale at 493 Bayly Street West in 2017, the Board finds that this suggested comparable property was not sold in 2017, and in fact, an Agreement of Purchase and Sale was signed in 2017, with a potential closing date in 2020.

25Regarding the issue of adjustment, the Board rejects the negative 2% inflation adjustment and the 40% negative adjustment for differences between the suggested comparable properties and the Subject Properties presented by Mr. Tarsky, because he presents no factual evidence to show how he arrived at these values. Instead, the Board accepts the 30% negative adjustment already included in the returned assessment of the Subject Property; and accepts the $22,000 attributed to the easement and applied it to the market value to arrive at the correct current value of $2,302,000 as stated above.

CONCLUSION

26Although the Board has found that the evidence supports a finding that the correct current value of the Subject Property is $2,302,000 for the 2017, 2018 and 2019 taxation years, MPAC's position is that the value should be $1,829,000. While the Appellant has asserted that the correct current value is lower than $1,829,000, he certainly agrees that it should be no higher than this amount. Accepting the parties’ position on this issue, the Board, therefore, accepts that the correct current value is $1,829,000.

ORDER

27The correct current value of the Subject Property is $1,829,000. Therefore, the Board confirms the returned assessment of $1,829,000 for the 2017, 2018 and 2019 taxation years.