Carl Prescott v. Municipal Property Assessment Corporation Region 30, 2020 CanLII 26224

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 30, 2020

FILE NO.: WR 164101

Assessed Person(s): Carl Prescott, 1732840 Ontario Inc.

Appellant(s): Carl Prescott, 1732840 Ontario Inc.

Respondent(s): Municipal Property Assessment Corporation Region 30

Respondent(s): City of Greater Sudbury

Property Location(s): 2231 Lasalle Boulevard

Municipality(ies): City of Greater Sudbury

Roll Number(s): 5307-020-015-00100-0000

Appeal Number(s): 3188659

Taxation Year(s): 2016

Hearing Event No.: 728464

Legislative Authority: Section 32 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties	Counsel*/Representative
Carl Prescott	Denis A. Michel*
Municipal Property Assessment Corporation	Brittany Kee Dale Barhydt
City of Greater Sudbury	Joe Rossanese

HEARD: February 25, 2020 by telephone conference call

ADJUDICATOR: Anthony LaRegina, Member

DECISION

OVERVIEW

1Carl Prescott, owner of 1732840 Ontario Inc. (the “Appellant”), filed an appeal for the 2016 taxation year with the Assessment Review Board (the “Board”). It is the Appellant’s position that the Municipal Property Assessment Corporation’s (“MPAC”) current value assessment of $1,433,000 is too high and that the correct current value should be $1,100,000. At this hearing, MPAC takes the position that the correct current value should be confirmed as returned at $1,433,000.

2MPAC takes the position that an equitable reduction is not required. The Appellant did not assert that an equitable reduction is required and presented no evidence in support of an equity argument. Therefore, in this proceeding, this ground for appeal is not in issue.

Background

3Mr. Prescott is the owner of 1732840 Ontario Inc. (the “Corporation”). The Corporation is the owner of the property at 2231 Lasalle Boulevard (the “Subject Property”). The Subject Property is currently leased by the Corporation to a used car dealership.

4Pursuant to s. 40(11) of the Assessment Act, R.S.O. 1990, c, A.31 (the “Act”), the City of Greater Sudbury is a party to this proceeding. Joe Rossanese appeared at the hearing on behalf of the City of Greater Sudbury as an observer.

Issues for the Hearing

5The issue in this proceeding is determining the correct current value of the Subject Property.

RESULT

6The Board finds that the correct current value for the 2016 taxation year is $1,433,000.

7The Board confirms the 2016 assessment of the subject property at $1,433,000.

ANALYSIS

Description of Subject Property

8The Subject Property is utilized as a used car dealership located in the City of Greater Sudbury. The Subject Property has a site area of 2.31 acres. The two-storey structure was built in 2015 and, according to the MPAC Assessor, is a good quality building. The total building area is 9,491 square feet with 7,911 square feet on the main level and 1,580 square feet on the second floor. The first floor consists of two garages, a lobby with offices, a parts room and washrooms. The second floor consists of a full kitchen with a dining room, offices and a 3-piece washroom. The site was purchased by the current owner August 7, 2014 for $800,000.

Issue - Current Value

9The issue to be determined on this appeal is the correct current value of the Subject Property for the 2016 taxation year. Pursuant to s. 19(1) of the Act the assessment of land shall be based on its current value. The Act also provides that, for the 2012 to 2016 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2012 (“current value”). As defined in the Act, 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.” Which translates into the market value of the Subject Property as of January 1, 2012.

10In order to determine the property value MPAC has utilized both the cost approach and the direct sales comparison approach and submitted into evidence the the replacement cost new, depreciation and land value in support of the cost approach and the sale of five suggested comparable properties in the vicinity in support of the direct sales comparison approach.

Cost Approach

11Utilizing the automated cost system MPAC determined the replacement cost new of the structure and deducted depreciation to determine the current value of the structure. MPAC’s position is that the structure was built in 2015 and was relatively new and therefore, had little depreciation and no functional or economic obsolescence. The costing values established by MPAC are as follows:

Replacement Cost New	$ 994,918
Life Table Depreciation	$ 9,954
Functional Obsolescence	0
Replacement Cost New Less Depreciation	$ 984,964
Land Value	$ 642,358
Current Value	$ 1,627,358

The land value was established based on the sale of four land parcels in the vicinity of the Subject Property. Because the land parcels were of different sizes MPAC conducted a regression analysis in order to factor in the economies of scale. Plotting the points and finding the best fit line produced a land value of the Subject Property of $278,077 per acre for a total value of $642,358 based on the 2.31 acre site.

Direct Sales Comparison Approach

12MPAC submitted five suggested comparable property sales, sold between 2011 and 2012, in the vicinity of the Subject Property (see table below).

	Subject Property	Property 1	Property 2	Property 3	Property 4	Property 5
Address	2231 Lasalle Blvd	1715 Regent Street	833 Lorne Street	Old Falconbridge Road	2333 Regent Street	28 Mumford Drive
Current Value Assessment $	1,433,000	335,000	217,000	860,000	1,075,000	794,000
Sale Date		Nov 2012	Dec 2011	July 2011	Jan 2012	Jun 2011
Sale Value $		333,000	145,000	1,192,500	1,550,000	858,500
Site Area Acres	2.31	0.62	0.22	0.99	2.91	1.10
Weighted Yr. Built	2015	1999	1996	2009	1992	1991
Total Footprint Area Square Feet	7,911	1,046	630	6,000	12,100	13,260
Sale $/square foot		318.46	230.16	198.75	128.10	64.74
Distance from Subject kms		10.06	9.22	1.37	10.07	17.61

13Based on the 5 suggested comparable properties, Dale Barhydt, the valuations officer for MPAC, conducted a regression analysis of the sale values per square foot and once again established the best fit line. Based on his regression analysis he determined that the value per square foot for the Subject Property should be $168.12. Applying this value to the footprint of the Subject Property of 7,911 square feet resulted in a current value of $1,330,000.

14MPAC submits that the returned assessment of $1,433,000 is very reasonable considering the cost approach results in a value of $1,627,322 and the direct sales comparison approach results in a value of $1,330,000.

15The Appellant introduced one property as a comparable property located at 2015 Lasalle Boulevard in an industrial mall that houses a Good Life Fitness. The Appellant claims that this is a new construction very similar to the Subject Property. The current value assessment of this property is $2,043,000 and the site area is 2.43 acres. This property did not sell in the last five years and furthermore the Appellant did not submit any detail on the building area or age of the structure.

16The Appellant requested a value for his property of $1,100,000 based on his best estimate of market value and general knowledge of the area. The Appellant presented no other evidence in support of current value.

Findings on Issue - Current Value

17The Board has analyzed MPAC’s case and concludes that the detailed analysis utilizing both the cost approach and direct sales comparison approach is very reasonable and well documented.

18The direct sales comparison method has the advantage of being a market driven approach to establish the current value of any given property, and, therefore, in this case, the Board will rely on this method to determine the correct current value of the Subject Property.

19The Board accepts that the properties utilized by MPAC to establish the sales value per square foot, are comparable. However, they have older structures that were built between 1991 and 2009 whereas, the building on the Subject Property was built in 2015. Therefore, if anything, the sale value per square foot determined by MPAC for the Subject Property is somewhat understated because the analysis reflects the older structures of the five comparable properties. It is therefore highly likely that the Subject Property has a current value that would be somewhat higher than the $1,330,000 derived by MPAC using the direct sales comparison approach. The Board therefore concludes that a current value of $1,433,000, which is $100,000 more than the $1,330,000 value using the direct sales comparison approach, is reasonable considering the new superior construction of the building on the Subject Property. The $1,433,000 value for the Subject Property is also reasonable in that it is greater than $1,192,500 the sale value of Comparable Property 3 which has 6,000 square feet of building area and 0.99 acres of land and less than $1,550,000 which is the sale value of Comparable Property 4 which has 2.91 acres of land and 12,100 square feet of building area.

20The Board also analysed 2015 Lasalle Boulevard, the only property introduced by the Appellant, and concludes that, based on no building area detail and no sale of the property, it is difficult to determine the similarity of the two properties and therefore, the Board rejects 2015 Lasalle Boulevard for the purpose of establishing the current value of the subject property.

CONCLUSION

21The Board finds that based on the best available evidence the correct current value of the Subject Property, as of the January 1, 2012 valuation date, is $1,433,000.

ORDER

22The Board orders that the assessment of the Subject Property for the 2016 taxation year is confirmed at $1,433,000.