Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 12, 2022

FILE NO.: WR 177842

Assessed Person(s): 1539778 Ontario Inc.

Appellant(s): David Kambiz Goel and Sarah Goel

Respondent(s): Municipal Property Assessment Corporation Region 09

Respondent(s): City of Toronto

Property Location(s): 500 Yonge Street

Municipality(ies): City of Toronto

Roll Number(s): 1904-068-210-01700-0000

Appeal Number(s): 3268186, 3262933, 3295968, 3351725, 3398809, 3441225 and 3487204

Taxation Year(s): 2017, 2018, 2019, 2020, 2021 and 2022

Hearing Event No.: 763693

Legislative Authority: Sections 32 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties	Representative
David Kambiz Goel and Sarah Goel	David Goel
Municipal Property Assessment Corporation	Arianna Combdon
City of Toronto	No one appeared

HEARD: March 29, 2022, by telephone conference call

ADJUDICATOR(S): Jennifer Griffith, Member

DECISION

OVERVIEW

11539778 Ontario Inc. (the “Assessed Person”) is the owner of 500 Yonge Street (the “Subject Property”) in the City of Toronto (the “City”). David Kambiz Goel and Sarah Goel, the Appellants (the “Appellants”) filed appeals for the returned assessment of $6,928,000 for the 2017 taxation year, returned assessment of $14,646,000 for the 2017 taxation year, and returned assessment of $6,928,000 for the 2018 through 2022 taxation years with the Assessment Review Board (the “Board”), pursuant to s. 32 and 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”). Pursuant to s. 40(26) of the Act, the Appellant is deemed to have brought the same appeal in respect of the 2022 taxation year.

2It is the Appellants’ position that the Municipal Property Assessment Corporation’s (“MPAC”) current value assessment of $6,928,000 is too high and that the correct current value should be in the range of $3,100,000 and $4,000,000. MPAC takes the position that the correct current value should be $11,371,000 based on sales evidence. However, MPAC is not seeking a higher current value and is requesting that the returned assessment of $6,928,000 be confirmed.

3Pursuant to s. 19(1) of the Act, the assessment of land shall be based on its current value; and s. 19.2(1)4 provides that, for the 2017 through 2022 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016.

4Pursuant to s. 40(11) of the Act, the municipality in which the land is located is a party to this proceeding; however, no one appeared on behalf of the City.

5Pursuant to s. 44(3)(b) of the Act, MPAC takes the position that an equitable reduction of the current value is not required. The Appellants assert no position and present no evidence in support of equity. As the onus to demonstrate that an equitable reduction is required rests with the Appellants, the Board accepts the Appellants’ position and finds that equity is not at issue and no reduction is required.

Issues for the Hearing

6The issue to be determined on these appeals are:

1. Is the vicinity for selecting the sales of proposed comparable properties only limited to the immediate area of the Subject Property?

2. What is the determination of the current value of the Subject Property for the 2017 through 2022 taxation years based on a direct comparison approach?

Result

7The Board finds the correct current value for the Subject Property at the valuation date January 1, 2016, is $6,928,000.

8The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not required, because equity is not at issue in this appeal.

9Therefore, the Board orders the following:

1. The s. 32 returned assessment of $6,928,000 is confirmed for the 2017 taxation year.

2. The s. 40 returned assessments of $6,928,000 are confirmed for the 2018 through 2022 taxation years: and

3. The s. 40 returned assessment of $14,646,000 is reduced for the 2017 taxation year. to $6,928,000

ANALYSIS

Description of the Subject Property

10The Subject Property is a three-storey commercial property located at 500 Yonge Street, in the City of Toronto (the “City”). It is situated on a lot size of 3,760 square feet (“sq. ft.”) with a total building area of 11,320 sq. ft. and built in 1890.

Issue 1 - Is the vicinity for selecting the sales of proposed comparable properties only limited to the immediate area of the Subject Property?

11Arianna Combdon, MPAC’s Representative, called Elca Tere as a witness for MPAC (“MPAC’S Witness”) and she presents a Valuation Report dated October 28, 2021, which she prepared and testifies to the information contained in the report.

12MPAC’s Witness testifies that the Subject Property is located in the Downtown-Yonge Corridor Core area in the City, which is accessible by transit, subway, streetcar lines other motor vehicles. The area includes a narrow north-south stretch between Yonge and Jarvis Streets, reaching from Front Street up to Bloor Street. It is the most densely built-up area of Toronto with a mix of retail, single family, modern high-rise dwellings, hotels, and major attractions.

13MPAC’s Witness also testifies that the Subject Property is located on the retail strip at Yonge and Grosvenor Street and is surrounded by either work in progress development, or land in transition waiting for approval to be developed.

14MPAC Witness argues that the three proposed comparable properties presented in support of current value are also located on Yonge Street within the same Downtown-Yonge Corridor Core area, and within 1.39 kilometres of the Subject Property. MPAC Witness further argues that the Subject Property is exposed to all the same market influences (e.g., accessibility to transit, subway, major attractions, traffic, large number of pedestrians, market value etc.) as the three proposed comparable properties. In support of expanding the search for sales of proposed comparable properties in the vicinity, MPAC cited Trimble v. Municipal Property Assessment Corp., Region No. 15, [2019] O.A.R.B.D. No. 308 at paragraph 54.

15The Appellants argue that the Subject Property is located in a less desirable location on Yonge Street and suffers prolonged vacancy on the ground floor over the past 2-3 years. The Appellants argues that the prolonged vacancy is not limited only to the Subject Property and that the general area suffers from prolonged vacancies which they believe is due to other activities which may not attract new tenants to the area. In support of this argument, the Appellants presents photographs showing the for-lease signs in the Subject Property’s area.

16The Appellants further argue that the Subject Property’s location is not designated as a Business Improvements Area (BIA) and is not eligible for BIA government grants, which the proposed comparable properties presented by MPAC receive, because they are located in areas designated as BIAs.

17The Appellants argue that MPAC’s proposed comparable properties are located in more desirable areas, because they are very close to the Eaton Centre and to the Yonge and Dundas area where businesses in both locations benefit from the many more pedestrian and vehicle traffic than in the Subject Property’s immediate area.

Findings on Vicinity

18Regarding the Appellants’ arguments, that the location of the Subject Property is less desirable than MPAC’s proposed comparable properties, because the Subject Property is not located in a BIA designated area and not eligible for BIA government grants; and because the area suffers from prolonged vacancies. Firstly, the Board finds that the Subject Property is located in the same neighbourhood, exposed to the same market influences, and that MPAC’s proposed comparable properties are located within 1.39 kilometres (the closest comparable property is only 0.636 kilometres) from Subject Property.

19Secondly, the Appellants present no quantitative evidence to demonstrate the impact that the Subject Property’s less desirable location (no BIA grants and prolonged vacancies) have on the assessed value of the Subject Property. Therefore, the Board puts no weight on these arguments.

20Regarding the Appellants argument that MPAC’s sales of proposed comparable properties are located in a more desirable location. The Board finds that the vicinity in which the proposed comparable properties are located is not defined in the Act. The Board takes the approach that sales of proposed comparable properties closest to the Subject Property is preferred. However, if there are insufficient sales in the Subject Property’s immediate area, then the vicinity should be expanded in order to finds a sufficient number of sales to assist the Board in its determination of current value. This finding is supported by Trimble v. Municipal Property Assessment Corp., Region No. 15, [2019] O.A.R.B.D. No.308 at paragraph 54 which states:

Like the term 'similar', the term 'vicinity' is not defined in the Act. In relation to equity, it is widely accepted that vicinity refers to the appropriate geographical area that will yield meaningful comparable properties. That vicinity could mean an entire municipality or a smaller portion thereof (see Ontario Regional Assessment Commissioner, Region No. 3 v. Graham, 1993 CanLII 8621 (ON CA)). In other words, vicinity has no set parameters, but one ought to stay as close as possible to the Subject Property to find sufficient number of comparable properties.

Issue 2 - What is the determination of the current value of the Subject Property for the 2017 through 2022 taxation years based on a direct comparison approach?

Direct Comparison Approach Based on Sales

21The Direct Comparison Approach estimates the market value by comparing the sale prices of similar properties in the vicinity (in terms of lot size, total building area, year built etc.) that have sold within a reasonable timeframe of the valuation date of January 1, 2016, to the Subject Property.

22In 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”.

23For the reasons discussed below, the Board finds the correct current value at the valuation date of January 1, 2016 is $6,928,000.

24Reviewing the evidence in support of current value, the Board finds the two sales presented by MPAC at 346 Yonge Street and 241 Yonge Street, located within 0.82 kilometres of the Subject Property, represents the best evidence of current value determined by the Direct Comparison Approach.

MPAC’s Evidence in Support of Current Value

25MPAC’s Witness testifies that the Subject Property had extensive renovation in 2011 and MPAC issues a Property Assessment Change Notice (“PACN”) in 2015. MPAC’s Witness also testifies that the Subject Property was inspected on January 1, 2017, in order to verify MPAC’s property data of the Subject Property because of the extensive renovation.

26In support of current value, MPAC’s Witness relies on the Direct Comparison Approach and presents three proposed comparable properties, sold in 2017 and 2015 within 1.39 kilometres from the Subject Property. MPAC’s Witness provides both actual and time-adjusted sale prices and relies on the time-adjusted sale prices in her analysis.

27The following Table 1 is the analysis of the sales of the three proposed comparable properties:

Table 1 - MPAC’s Sales Analysis

3 PROPOSED COMPARABLE PROPERTIES	LOT SIZE (sq. ft.)	TOTAL BUILDING AREA (sq. ft.)	YEAR BUILT	SALE DATE	SALE PRICE ($)	Time Adjusted SALE PRICE (TAS) ($)	TAS per sq. ft. based on total lot size ($)	TAS per sq. ft. based on total building area ($)
146 Yonge Street	2,706	8,190	1933	2017	10,000,000	8,184,778	3,025	999
346 Yonge Street	2,741.86	7,393	1900	2015	8,100,000	9,141,047	3,334	1,236
241 Yonge Street	2,541	12,585	1883	2015	6,900,000	7,293,456	2,870	580
Median							3,025	999
Subject Property	3,780	11,320	1890	NIL	N/A	N/A	N/A	N/A

28MPAC’s Witness states that the above analysis of the three sales demonstrate a median time adjusted sale price of $3,025 per sq. ft. based on total lot size. When this median time adjusted sale price is applied to the Subject Property it results in a current value of $11,434,500 ($3,025 x 3,780 sq. ft. of total lot size).

29MPAC’s Witness also states that the above analysis demonstrates a median timed adjusted sale price or $999 per sq. ft. based on total building area. When this median time adjusted sale price is applied to the Subject Property it results in a current value of $11,308,680 ($999 x 11,320 sq. ft. of total building area).

30Based on the average of the values determined by the above two analyses MPAC’s Witness is of the opinion that the current value should be $11,371,000 ($11,434,500 + $11,308,680)/ 2).

Appellants’ Evidence in Support of Current Value

31In support of current value, the Appellants present an evidentiary package including the following:

1. A documented list of issues.

2. A copy of a written decision issued on July 3, 2014, by the Board (WR 125236) for the Subject Property’s appeals for the 2013 and deemed 2014 taxation years.

3. A spread sheet of four proposed comparable properties, plus an additional proposed comparable property detailed in the Appellants list of issues (for a total of five proposed comparable properties).

4. Photographs of vacant spaces for lease at the Subject Property and at other locations within two blocks north of the Subject Property; and

5. A copy of MPAC’s response to the Statement of Issues (“SOI”) for the January 1, 2016, Current Value Assessment (“CVA”) showing the taxation year starting point assessed value is revised from $3,033,000 to $2,268,000 and that the revised total assessment for the 2017 through 2020 remained the same at a returned value of $6,928,000.

32The following are the five proposed comparable properties (not sold) presented by the Appellants and analyzed in Table 2 below:

Table 2 Appellants’ Comparable Properties Analysis (No Sales)

5 PROPOSED COMPARABLE PROPERTIES	FRONTAGE (ft.)	LOT SIZE (sq. ft.)	TOTAL BUILDING AREA (sq. ft.)	YEAR BUILT	ASSESSED VALUE
619 Yonge Street	80	12,000	Not provided	Not provided	$9,856,000
531 Yonge Street	45.41	5,903	Not provided	Not provided	6,067,000
579 Yonge Street	40	5,080	Not provided	Not provided	6,724,000
663 Yonge Street	39.82	4,164	Not provided	Not provided	3,500,000
558 Yonge Street	125.3	5,303	Not provided	Not provided	5,651,000
Subject Property	30	3,780	11,320	1890	6,926,000

33Based on the site area and assessed values of the above five proposed comparable properties the Appellants are of the view that the assessed values for the Subject Property should be $3,100,000 based on 619 Yonge Street, $3,889,100 based on 531 Yonge Street, $3,100,000 based on 579 Yonge Street, $3,81,818 based on 663 Yonge Street, and $4,036,428 based on 558 Yonge Street.

34Based on the above values, the Appellants are of the view that the current value should be in the range of $3,100,000 and $4,000,000.

35The Appellants have made a number of comments regarding their experiences with MPAC relating to assessment issues dating back to the previous assessment cycle (valuation date January 1, 2012, applicable to the 2013 through 2016 taxation years) which the Appellants present for historical background.

Finding of the current value for the 2017 – 2022 taxation years for the Subject Property

36Reviewing the evidence presented in support of current value, the Board finds that MPAC presents the best evidence with two sales of the comparable properties located at 346 Yonge Street, sold in 2015 at a time adjusted sale price of $9,141,047, and 241 Yonge Street, sold in 2015 at a time adjusted sale price of $7,293,456.

37These two comparable properties are located within 0.82 kilometres of the Subject Property and have on average a total building area of 9,989 sq. ft., a lot size of 2,641 sq. ft., year built 1891 (effective year built 1895) and sold at an average time adjusted sale price of $8,217,000. This is compared to the Subject Property with a total building area of 11,320 sq. ft., lot size of 3,780 sq. ft., and year built 1890 (effective year built 1973) and a quality of construction rating 9.

38Based on the above analysis, the Board finds the current value of $8,217,000 represents the best evidence of arm’s length transaction between a willing buyer and a willing seller pursuant to s. 19(1) of the Act. Therefore, the Board determines the current value to be $8,217,000.

39The remaining sale presented by MPAC at 146 Yonge Street was not relied on because it was sold in 2017, which the Board finds it too far removed from the valuation date of January 1, 2016, to provide any meaningful test of current value.

40In reviewing Appellants’ five proposed comparable properties presented in support of current value as stated above in Table 2, the Board rejects these proposed comparable properties because they were not sold, and rejects the alternate proposed current value, because it is not based on sales evidence. Therefore, the Board finds that these five proposed comparable properties provide no market evidence to assist it in the determination of current value between a willing buyer and a willing seller pursuant to s. 19(1) of the Act.

41Regarding the Appellants’ issues with MPAC concerning the previous assessment cycle, which was for the 2013 through 2016 taxation years, and with a valuation date of January 1, 2012, for determining the current value based on sales evidence. The Board finds that these issues have no relevance on the appeal at hand, because the current assessment cycle under appeal is for the 2017 through 2022 taxation years, with a valuation date of January 1, 2016, for determining the current value based on sale evidence. Therefore, no weight is given to issues related to the 2012 current value assessment.

42Based on all the evidence, the Board finds the correct current value for the Subject Property at the valuation date January 1, 2016, is $8,217,000. However, MPAC is not seeking an increase for the 2017 through 2022 taxation years, therefore, the Board finds the correct current value is $6,928,000.

CONCLUSION

43The Board finds the correct current value for the Subject Property at the valuation date January 1, 2016, is $6,928,000.

44The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not at issue and no equity reduction is required.

ORDER

45The Board orders that the s. 32 returned assessment of $6,928,000 for 2017 taxation year, and the s. 40 returned assessments of $6,928,00 for the 2018 through 2022 taxation years are confirmed.

46The Board orders that the s. 40 returned assessment of $14,646,000 is reduced to $6,928,000 for the 2017 taxation year, because the above s. 32 appeal was filed to correct the returned assessment value for this s. 40 appeal.