Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

December 11, 2020

FILE NO.:

WR 167448

Assessed Person(s):

Pinnacle International (Alder Place) LTD

Appellant(s):

City of Toronto

Respondent(s):

Municipal Property Assessment Corporation Region 9

Respondent(s):

City of Toronto

Property Location(s):

5485 Dundas Street West

Municipality(ies):

City of Toronto

Roll Number(s):

1919-031-020-00501-0000

Appeal Number(s):

3244204, 3294451, 3354472 and 3401702

Taxation Year(s):

2017, 2018, 2019 and 2020

Hearing Event No.:

735167

Legislative Authority:

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

APPEARANCES

Parties

Counsel

City of Toronto

Angus MacKay

Municipal Property Assessment Corporation

Melissa VanBerkum

Pinnacle International (Alder Place) LTD

Robert Allen

HEARD:

November 3, 2020 by telephone conference call

ADJUDICATOR(S):

Jennifer Griffith, Member

DECISION

OVERVIEW

1The City of Toronto (the “Appellant’) has filed appeals seeking an increase in assessment value of $12,900,000 for the 2017, 2018, 2019 and 2020 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”).

2Pinnacle International (Alder Place) LTD (the “Assessed”) is the owner of the Subject Property located at 5485 Dundas Street West, in the City of Toronto (the “City”). The Subject Property has a total site area of 85,813 square feet (“sq. ft.”) of vacant commercial land.

3The Subject Property is part of the proposed development known as the Cypress Condos Pinnacle Etobicoke, which includes eight properties (5415, 5421-5435, 5449, 5475, 5481 and 5485 Dundas Street West; and 15 and 25 Shorncliffe Road. The development is located in the Etobicoke South neighbourhood on the corner of Dundas Street West and Shorncliffe Road, in the City.

4The total site area for the development is 566,938 sq. ft. The development is mixed-use project including residential, retail and office uses comprised of four base buildings, with eight tower components. The total Ground Floor Area (“GFA”) for development is 2,513,303 sq. ft. and the Subject Property comprises approximately 15% of the development’s total site area.

5The Municipal Property Assessment Corporation (“MPAC”) has assessed the current value of the Subject Property at $8,495,000 for the 2017, 2018, 2019 and 2020 taxation years in the Commercial Tax Class (“CT”).

6The City of Toronto (the “Appellant”) believes that the returned assessment is too low and has accepted MPAC’s position that the correct value should be $12,812,000 based on the time-adjusted sale price of the Subject Property. MPAC takes the position that the correct current value is $12,812,000 based on the time-adjusted sale price of the Subject Property. The Assessed takes the position that the current value should be $8,581,300 ($100.00 per sq. ft.) based on the sales of the other seven properties which form part of the proposed development.

7Section 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”). MPAC takes the position that an equitable reduction is not required. The Appellant takes the position that an equity adjustment is not required. The Assessed asserts no position on equity. Therefore, equity is not at issue.

Issues for the Hearing

8At issue in this proceeding is:

1. A determination of the correct current value of the Subject Property:

a. Sale of the Subject Property;

b. Direct Comparison Approach based on sales of the other seven properties in the proposed development known as the Cypress Condos Pinnacle Etobicoke; and

c. Direct Comparison Approach based on sales of similar development comparable properties in the vicinity.

Result

9The Board finds the correct current value of the Subject Property is $12,812,000 for the 2017, 2018, 2019 and 2020 taxation years.

10Pursuant to s. 44(3)(b) of the Act, the Board finds that an equity reduction is not required.

11The Board orders an increase in the returned assessment from $8,495,000 to $12,812,000 for the 2017, 2018, 2019 and 2020 taxation years.

PRELIMINARY MATTERS – Video Conference Hearing converted to Telephone Conference Hearing

12The parties requested video conference hearing for today and notice of the scheduled hearing was sent to all parties on July 27, 2020. The hearing was scheduled to start at 9:30 a.m. and unfortunately the Representative for the Assessed, Robert Allen (the “Representative”) did not call into the video conference and when contacted by the Board’s scheduler, indicated that he was experiencing technical difficulties connecting to the video conference. As a result, the event was converted to a telephone conference hearing, which delayed the start time by approximately 30 minutes.

13At the commencement of the hearing, the Board ask for submissions from the Representative as to the reasons why he was unable to join the video conference hearing. The Representative apologized and stated that his computer was not equipped with a camera and because of that, he was unable to connect to the video conference hearing this morning.

14In response to the Representative’s submission, MPAC and the City raised an objection, because they felt that the Representative had more than ample time to ensure that his computer was equipped for video conferencing hearing and if that was not possible, should have contacted the Board and other parties to the hearing to make other alternate arrangements to comply with the hearing date and time. They also submit that the Representative has being consistently late meeting the Schedule of Events timelines for submitting disclosure documents and today’s event is just another example.

15MPAC and the City submit that they had spent a considerable amount of time and resources preparing and serving the required documents by the dates prescribed in the Schedule of Events (“SOI”) and were very disappointed of the lack of professionalism demonstrated by the Representative for not complying with the SOI deadlines and waiting until today’s hearing to advise the Board that his computer was not equipped for video conferencing.

16MPAC submits that the request to have a video conference hearing was due to a hearing impairment issue and having to change to a telephone conference hearing and/or an adjournment to a later date will prejudice its case because of the amount of time and resources already invested in the preparation for today’s hearing. To avoid adjourning the video conference hearing to a later date, MPAC and the City agreed to convert the hearing to a telephone conference hearing and seek redress by asking the Board to restrict the Representative’s evidence to only the “materials filed with the Board”.

17In consideration of the submissions of MPAC and the City, the Board finds that the Representative in fact demonstrated a lack of professionalism by waiting until the start of today’s hearing to realize that its computer was not equipped for video conferencing hearing. The Board finds that the Representative ought to have known that its computer was not equipped with video conferencing. Even if it did not realize that the computer was not equipped with a camera, the Representative had more than ample time to make alternate arrangement by contacting the other parties and the Board well in advance of today’s hearing. The Board therefore, accepts MPAC and the City’s cooperation and agreement to convert the video conference hearing to a telephone conference hearing and restricts the Representative evidence to only the materials filed with the Board.

ANALYSIS

Issue 1 - A determination of the correct current value of the Subject Property for the 2017, 2018, 2019 and 2020 taxation years

18In 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”. The valuation date for the 2017 to 2020 taxation years is January 1, 2016.

19For the reasons discussed below, the Board finds the correct current value is $12,812,000 for the 2017, 2018, 2019 and 2020 taxation years.

20Reviewing the following evidence presented in support of current value, the Board finds that MPAC presents the best evidence of the sale of the Subject Property on January 21, 2016 at a time-adjusted $12,812,000. The Board finds this sale is the best indicator of current value pursuant to s. 1 of the Act, which states that:

“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.

The Subject Property was listed on the open market and the sale price realized by the willing seller and willing buyer is $12,900,000 (time-adjusted sale price $12,812,000 to the valuation date of January 1, 2016).

21The Assessed evidence is that the Subject Property was listed on the open market with Nucorp Realty Ltd. and that the sale price of $12,900,000 (time-adjusted sale price $12,812,000) was negotiated and agreed to by the buyer and seller. The Board finds that the sale price of the Subject Property is what a willing buyer paid to a willing seller in an arm’s length transaction in the open market. Therefore, the Board finds that the sale of the Subject Property is an open market sale and rejects the Assessed argument that the sale is not reflective of the open market.

22The Assessed presented no sales of comparable properties in support of its argument that the sale of the Subject Property was a hold out and the sale price of $12,900,000 (time-adjusted sale price of $12,812,000) is not reflective of the open market.

23The Board finds that the following analysis of the sales of the seven other comparable properties in the same proposed development as the Subject Property presented by MPAC supports its argument that the sale of the Subject Property is an open market sales transaction. The reason being that the time-adjusted sale price of $12,812,000 for the Subject Property falls within the time-adjusted sale price ranges of $1,553,393 and $14,214,230 of the other seven properties. The analysis shows that the Subject Property’s time-adjusted sale price is the third highest in the sale price ranges and it has the third largest parcel of land in the proposed development.

24The Board also finds that the following analysis of the six comparable properties of development land presented by MPAC also supports the time-adjusted sale price of $12,812,000 for the Subject Property as a true open market sale. These six comparable properties are sold at a median sale price $193.95 per sq. ft. and when applied to the Subject Property it results in a value of $16,626,268.75 ($193.75 x 85,813 sq. ft. of total site area) higher than the time-adjusted sale price of $12,812,000 for the Subject Property.

MPAC’s Sales Evidence

Issue 1a - Sale of the Subject Property

25MPAC calls Erika Greer, as a witness and she presented a Valuation Report dated January 8, 2020 and testifies to the information contained in the report.

26Ms. Greer testifies that she conducted an external inspection of the Subject Property on January 8, 2020 and reviewed the sale and the valuation of the Subject Property. She also testifies that she reviewed the sales and data of the other development properties used in her analysis on March 12, 2019.

27In support of current value, MPAC presents the sale of the Subject Property on January 21, 2016 at a sale price of $12,900,000 (time-adjusted sale price of $12,812,000) in the open market. There was no dispute that the Subject Property was listed on the open market by the Appellant.

28MPAC presents a copy of the Instrument Details Report, LRO: 80 Registration Number AT4124517, registered date January 21, 2016 which shows amongst other information the seller’s name as 2019579 Ontario Inc.; the buyer’s name Pinnacle International (Alder Place) Ltd. and the sale price of $12,900,000 in total consideration at item (g) for the value of land, building, fixtures and goodwill subject to land transfer tax (total of (a) to (f)).

29MPAC also presents a copy of the City’s Preliminary Report for 5415 – 5481, 5485 and 5487 Dundas Street West, and 15 and 25 Shorncliffe Road—Zoning By-law Amendment Application—Preliminary Report dated April 29, 2019 which shows the Planning Application number 18 272108 WET 03 0Z; Notice of Incomplete Application issued January 28, 2019; and the Decision History which states at its meeting on November 29, 2011 to December 1, 2011, City Council adopted a report from City Planning recommending approval of development application on two adjacent sites: Dunshorn Holdings Inc. at 5415, 5421 – 5429, 5435, 5475 and 5481 Dundas Street West, and 15 and 25 Shorncliffe Road; Alder Place at 5485 and 5487 Dundas Street West. The approval is for a mixed-use development … Section 37 benefits were secured, including $1,500,000 for above park improvements at a new on-site public park or improvements at Cloverdale park.

30MPAC argues that although the development application was not approved by the City, the Preliminary stage of the Subject Property was already advanced as per the Preliminary Report dated April 29, 2019 discussed above.

31MPAC also testifies that it relied on the Instrument of Sales for the Subject Property and did not investigate other sales in the assembly. However, the Marsh Report and RealNet which provide real estate information services, were used to investigate other sales for comparison to the Subject Property to ensure that these sales are arm’s length transaction in the open market. However, MPAC states that it did not contact the owners of these sold properties to inquire about the nature of the sales.

32MPAC argues that although properties on Dundas Street West would become a Park and would generally not be as valuable, in this case, because the Dundas Street West properties would be the forefront of the assembly, are on a major traffic route, easily accessible, good exposure, and attract people. This location would be in demand and would be able to command a higher sale price than other lands generally used for a park. Therefore, the sale price $12,900,000 (time-adjusted sale price of $12,812,000) paid for the Subject Property is what a willing buyer pays to a willing seller in the open market.

MPAC’s Proposed Comparable Properties in same development known as the Cypress Condos Pinnacle Etobicoke

Issue 1b – Direct Comparison Approach

33MPAC presents the following direct comparison sales analysis of the other seven properties in the proposed development known as the Cypress Condos Pinnacle Etobicoke to demonstrate that the time-adjusted sale price of the Subject Property is reflective of open market sales prices.

Direct Comparison Approach

7 COMPARABLE PROPERTIES

2016 CVA

AREA (sq. ft.)

SALE DATES

SALE PRICE

Time Adjusted SALE PRICE

25 Shorncliffe Road

$3,019,000

30,492

January 2016

$3,108,900

$3,088,843

15 Shorncliffe Road

$13,714,000

138,521

January 2016

$13,792,680

$13,703,695

5481 Dundas Street West

$6,167,000

62,291

January 2016

$6,364,860

$6,323,796

5475 Dundas Street West

$1,515,000

15,290

January 2016

$1,563,480

$1,553,393

5449 Dundas Street West

$3,725,000

37,636

January 2016

$3,863,550

$3,838,624

5421 – 5435 Dundas Street West

$12,985,000

139,392

January 2016

$14,306,530

$14,214,230

5415 Dundas Street West

$5,692,000

57,499

January 2016

$7,400,000

$7,352,258

SUBJECT PROPERTY (5485 DUNDAS Street West)

$8,495,000

85,813

January 2016

$12,900,000

$12,812,000

Time-adjusted sale price ranges from $1,553,393 to $14,214,230

The Subject Property time-adjusted sale price is $12,812,000

34Based on the above analysis, MPAC argues that the Subject Property was not a “hold out” and sold during the same time period (January 2016) as the other seven properties in the development. MPAC argues that the time-adjusted sale price of $12,812,000 for the Subject Property falls within the sale price ranges of $1,553,393 and $14,214,230, which is the third highest time-adjusted sale price which does not support the Representative’s argument that time-adjusted sale price is not reflect of the open market.

MPAC’s Proposed comparable properties of development sites in the vicinity

Issue 1c – Direct Comparison Approach

35MPAC also presents the following sales analysis of six development sites as the Subject Property to demonstrate that the sale of the Subject Property is reflective of the open market.

Direct Comparison Approach

6 COMPARABLE PROPERTIES

2016 CVA

SALE DATE

SALE PRICE

Time Adjusted SALE PRICE

Area per sq. ft.

Sale Price / sq. ft.

3 Aukland Road

$3,869,000

June 2012

$2,650,000

$3,789,500

11,260

$336.55

5247 – 5349 Dundas Street West

$2,500,000

January 2012

$1,840,000

$2,704,800

7,242

$373.49

5245 Dundas Street West

$2,250,000

May 2012

$1,370,000

$1,794,700

6,518

$275.35

5239 - 5243 Dundas Street West

$2,250,000

January 2014

$3,450,000

$4,278,000

6,518

$656.34

144 Berry Road

$1,682,000

August 2013

$18,444,444

$23,793,333

243,500

$97.71

150 Berry Road

$22,425,000

August 2013

784 The Queensway

$6,815,000

September 2016

$7,100,000

$6,461,000

41,309

$156.41

880 The Queensway

$2,626,000

November 2014

$3,000,000

$3,420,000

17,652

$193.75

884 The Queensway

$285,000

4000 Eglington Avenue West

$30,474,000

November 2015

$33,000,000

$33,660,000

222,166

$151.51

4010 Eglington Avenue West

$3,331,000

3998 Eglington Avenue West

$2,851,000

68 Daisy Avenue

$8,305,000

August 2014

$7,550,000

$8,833,500

112,820

$78.29

Average sale price/sq. ft. $257.71

Median sale price/sq. ft. $193.75

36MPAC argues that the median time-adjusted sale price of $193.75 when applied to the Subject Property, it results in a value of $16,626,268.75 ($193.75 x 85,813 sq. ft. of total site area for the Subject Property) which supports the time-adjusted sales price of $12,812,000 for the Subject Property.

Appellant’s Evidence

37The Appellant submits that it adopts MPAC’s position on the current value and will not be advancing any evidence at today’s hearing. The Board accepts the Appellant’s submissions.

Assessed Evidence

38The Representative called John Italiano, Vice President of Nucorp Realty Ltd. as a witness (the “witness”), who testifies to a letter he co-authored dated January 16, 2020 in support of the Assessed argument that the sale of the Subject Property was a “hold out”.

39In his letter, the witness stated that:

As Brokers and negotiators for the sale of the property at Shorncliffe Rd and Dundas St W., we have been asked to comment on the market value of 5485 Dundas St W.

…the owners realized that their property was a critical piece of the land assembly and held out for substantially more than market value.

40The witness testifies that his clients were both the vendor and the buyer; and that he was personally involved in the negotiation of the sale of the Subject Property. He testifies that the Subject Property as part of the assembly decided to go on its own to hold out for a better sale price and that the Subject Property was sold for $12,900,000 ($150.00 per sq. ft.) on January 21, 2016.

41Based on the evidence, the Assessed is of the view that the sale price of the Subject Property is not reflective of the open market, because the vendor requested more money and received more.

Findings on Issue 1

42Reviewing the following evidence presented in support of current value, the Board finds that MPAC presents the best evidence of the sale of the Subject Property on January 21, 2016 at a time-adjusted $12,812,000. The Board finds this sale is the best indicator of current value pursuant to s. 1 of the Act, which states that current value is 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. The Subject Property was listed on the open market and the price realized in the open market by the willing seller and willing buyer is $12,900,000 (time-adjusted sale price $12,812,000 to the valuation date of January 1, 2016).

43The Board finds that the sales of the seven other comparable properties in the same proposed development as the Subject Property presented by MPAC supports its argument that the sale of the Subject Property is an open market sales transaction. The reason being that the time-adjusted sale price of $12,812,000 for the Subject Property falls within the time-adjusted sale price ranges of $1,553,393 and $14,214,230 of the other seven properties in the same development, which demonstrates it is not the highest time-adjusted sale price. In fact, it is the third highest sale price, third largest parcel of land and sold in the same month (January 2016) as the sales of the other seven properties in the proposed development. Therefore, the Board finds that the Assessed argument that the sale of the Subject Property is not reflective of the open market is unfounded.

44The Board also finds that the six comparable properties of development land presented by MPAC also supports the time-adjusted sale price of $12,812,000 for the Subject Property as a true open market sale. Although these six comparable properties are significantly smaller and significantly larger than the Subject Property, they sold at a median sale price $193.95 per sq. ft. Based on this analysis, the Board finds that the Subject Property is likely to sell at that same median sale price per sq. ft. and when applied to the Subject Property it results in a value of $16,626,268.75 ($193.75 x 85,813 sq. ft. of total site area) higher than the time-adjusted sale price of $12,812,000 for the Subject Property. The Board finds that this analysis does not support the Assessed argument that the sale of the Subject Property is a “hold out” and not reflective of the open market.

45The Assessed evidence is that the Subject Property was listed on the open market with Nucorp Realty Ltd. and that the sale price of $12,900,000 (time-adjusted sale price $12,812,000) was negotiated and agreed to by the buyer and seller. The Board finds that the sale price of the Subject Property is what a willing buyer paid to a willing seller in an arm’s length transaction in the open market. Therefore, the Board finds that the sale of the Subject Property is an open market sale and rejects the Assessed Person’s argument that the sale is not reflective of the open market.

46The Assessed presents no sales of comparable properties in support of its argument that the sale of the Subject Property was a “hold out” and is not reflective of the open market.

CONCLUSION

47The Board finds that the correct current value is $12,812,000 for the 2017, 2018, 2019 and 2020 taxation years.

48Equity is not at issue. Pursuant to s. 44(3)(b) of the Act, the Board finds that an equity reduction is not required.

ORDER

49The Board orders an increase in the returned assessment from $8,495,000 to $12,812,000 for the 2017, 2018, 2019 and 2020 taxation years.