GFive Inc v. Municipal Property Assessment Corporation Region 26, 2022 CanLII 42265

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 20, 2022

FILE NO.: WR 178596

Assessed Person: GFive Inc

Appellants: GFive Inc; Alex Jongsma

Respondent: Municipal Property Assessment Corporation Region 26

Respondent: City of Sarnia

Property Locations: 220 Mitton Street North and 327 George Street

Municipality: City of Sarnia

Roll Numbers: 3829-400-012-20100-0000 and 3829-400-014-04614-0000

Appeal Numbers: 3394655, 3410380, 3393764, 3410480, 3463557, 3448617, 3490377

Taxation Years: 2019 and 2020

Hearing Event No.: 765270

Legislative Authority: Sections 32, 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties

Representative

GFive Inc; Alex Jongsma

Bev Seney

Municipal Property Assessment Corporation

Kashifa Aslam

City of Sarnia

No one appeared

HEARD: May 5, 2022 by video conference

ADJUDICATOR: Jean-Paul Pilon, Member

DECISION

OVERVIEW

1GFive Inc. (the “Appellant”) is the owner of two properties located at 220 Mitton Street North (“Mitton”) and 327 George Street (“George”) in the City of Sarnia (together the “Subject Properties”).

2These were lands previously occupied by the former Sarnia General Hospital. All hospital buildings on the Subject Properties, with the exception of medical offices at George, have been demolished.

3The Appellant appealed the assessments for the Subject Properties in the 2019 taxation year but contested only the classifications of the Subject Properties in their appeals. Further appeals were deemed for the 2020 taxation year pursuant to section 40(26) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”).

4Mitton’s roll number was deleted as of the 2021 taxation year, and further deemed appeals for George for the 2021 and 2022 taxation years were withdrawn at the hearing. The appeals for the 2019 and 2020 taxation years were the only ones left to be determined by the Assessment Review Board (the “Board”).

5Mitton was returned as vacant land in the commercial property class. The Appellant’s position was that Mitton should have been returned as vacant land in the commercial and residential property classes.

6George was returned as not vacant land in the commercial property class. The Appellant’s position was that George should have been returned as vacant in both the commercial and residential property classes.

Result

7The Board confirms that Mitton was correctly returned as vacant land in the commercial property class for the 2019 and 2020 taxation years.

8The Board confirms that George was correctly returned in the commercial property class, however the assessment should be altered to indicate that 10% of that land was vacant land in the 2019 and 2020 taxation years.

Issues for the Hearing

9At issue in this proceeding is:

1. The vacancy and classification of Mitton; and

2. The vacancy and classification of George.

PRELIMINARY MATTERS

10As noted above, three appeals were withdrawn at the hearing relating to George for the 2021 and 2022 taxation years.

11The parties agreed to the following:

a. that the correcting assessment of $1,055,000 for the 2019 taxation year and the assessment of $1,068,000 for the 2020 taxation year represented the correct current value of Mitton; and

b. that the assessments of $663,000 for the 2019 taxation year and $609,000 for the 2020 taxation year represented the correct current value of George.

Description of the Properties

12The Subject Properties were roughly bounded by Essex Street to the north, MacKenzie Street North to the east, Bright Street to the south, and Mitton Street North to the west. George Street ran between them, with Mitton on the north side of George Street and George on the south. The letters in brackets correspond to the areas shown on MPAC’s plans in evidence at the hearing.

13Mitton was basically a rectangular parcel of entirely vacant land in the taxation years in question. Most of Mitton was zoned GC1-11, or General Commercial (F & G), except 11 much smaller portions in the northeast corner on Essex Street (less one similarly sized portion not included as part of Mitton) that were zoned UR1-51 or Urban Residential (H to R). According to concept plans submitted by MPAC, the commercial portions occupied 3.5 acres of Mitton, while the residential portions occupied 1.1 acres, for a total of 4.6 acres. MPAC’s witness Robert Socket testified that Mitton’s dimensions were 4.7 acres but the difference was immaterial given the Board’s decision below.

14George was also a rectangular parcel of land measuring 2.09 acres with three residential portions jutting out from the southeast. The three residential portions (C, D and E) had UR1-51 zoning, while the significantly larger portion had GC1-11 zoning which included the existing medical offices (A). MPAC’s expert witness at the hearing testified that the area marked as “B” directly north of the three residential portions and extending slightly beyond them to the east was not included as part of George and therefore not relevant to these appeals.

ANALYSIS

Issue 1 – Mitton

15Mitton was returned as vacant land in the commercial property class. The Appellant argued that Mitton should have been returned as vacant land in the commercial and residential property classes.

Vacant Land

16The first question to be determined is whether Mitton was, in fact, vacant land as described in O. Reg. 282/98 to the Act (the “Regulation”). Section 1(1)1. of the Regulation provides that:

1.(1) The following land, if it is not being used, is vacant land for the purposes of this Regulation:

1. Land that has no buildings or structures on it.

17There was no dispute that Mitton had no buildings or structures on it in the taxation years in question, therefore the Board confirms that Mitton was, in fact, vacant land pursuant to section 1(1) of the Regulation.

Residential or Commercial Classification?

18The next question to be determined is whether the land should have been returned in the residential and commercial property classes when it was returned solely in the commercial property class.

19On this point, the Board refers to section 3(1)1.ix. of the Regulation, which describes when vacant land is considered vacant land in the residential property class. Paraphrased and without paragraph breaks, it says the following: “the residential property class consists of…land used for residential purposes that is… vacant residential land principally zoned for residential development but not principally zoned for multi-residential development.”

20The term “principally” is undefined in the Act and the Regulation, but MPAC cited the Board’s decision in Simcoe Residences Corp. v. Municipal Property Assessment Corp. Region No. 9, [2010] O.A.R.B.D. No. 706 (“Simcoe”), which said the following at para. 100:

The Board also accepts…. that the term “principally zoned” is not a term used by land use planners, and the Board therefore finds that in the context of (the Regulation), the word “principally” must be given its ordinary meaning. An excerpt from The Canadian Oxford Dictionary, 1998 edition…defines “principal” inter alia as meaning “main”, “first in rank”, “first in importance” and “chief”. As the City’s zoning by-laws applicable to some of the subject properties contain a wide range of permitted uses, the Board finds that a reasonable approach to interpreting those by-laws is to determine the principal zoning in terms of the uses that are first in rank or first in importance to the by-law.

21Leave to appeal Simcoe was denied by the Divisional Court in Minto Gardens Inc. v. Municipal Property Assessment Corporation, 2011 ONSC 4020. At para. 12 of that decision, it was further determined that there was no error in the Board considering a dictionary definition, which was consistent with a number of previous decisions.

22Mitton was zoned both residential (UR1-51) and commercial (GC1-11). However, it was not “principally zoned for residential development” because the much larger portion of the parcel was zoned commercial and was intended for commercial uses. The principal zoning was commercial.

23As a result, the Board finds that the returned assessment of Mitton should be confirmed as vacant land in the commercial property class.

Finding on Issue 1

24The assessment of Mitton as vacant land in the commercial property class is confirmed.

Issue 2 – George

25The entirety of George was returned in the commercial property class, and not as vacant land. The Appellant argued that the portion of George that was zoned residential should have been returned as vacant land in the residential property class, and that the rest of George should have been returned as vacant land in the commercial property class.

Vacant Land

26George was unlike Mitton because of the continued existence of medical offices on a portion of that land. As a result, it could not have qualified as vacant land as Mitton did pursuant to section 1(1)1. of the Regulation because it had a building on it.

27However, the Board refers to section 1(3) of the Regulation below:

(3) A portion of a parcel of land is vacant land for the purposes of this Regulation if,

(a) there is no building or structure on the portion of the parcel or there is a building or structure on the portion but not part of the building or structure has yet been used;

(b) there is a building or structure on the rest of the parcel; and

(c) the portion of the parcel is zoned for a kind of development that is different from the development on the rest of the parcel.

28The terms “portions” and “parcels” are also undefined in the Regulation. However, a plain reading of this section of the Regulation suggests that a portion is a subset of a parcel of land based on the opening phrase delineating “a portion of a parcel of land.”

29In addition, the word “and” at the end of subparagraph (b) means that all three requirements must be met for a portion of a parcel to be considered vacant land.

30Assuming that George was a “parcel” of land, the next question to be determined is the number of “portions” it contained.

31On this point, section 1(3)(c) of the Regulation suggests that portions are delineations that are zoned differently. As noted earlier in this decision, George included two zoning designations: GC1-11 commercial zoning on portion A, where the medical offices were located, and UR1-51 residential zoning on portions C, D, and E to the southeast, which were vacant. The Board therefore finds that George included two portions as the term is used in the Regulation.

32The Board finds that the portion zoned GC1-11 where the medical offices were located could not have been considered vacant land because it did not meet the first requirement of section 1(3)(a) of the Regulation. This is because there was a building or structure on that portion and it had been used, where the Regulation provides it would have been vacant if there was a building or structure on the portion where “no part of the building or structure has been used.” As a result, this portion of the parcel could not have been vacant land.

33The remaining and much smaller portion of the parcel with residential zoning was vacant and met the requirement of section 1(3) of the Regulation as vacant land. This is because there was no building or structure on that portion of the parcel (subparagraph (a)), there was a building or structure, the medical offices, on the rest of the parcel (subparagraph (b)), and the portion of the parcel was zoned for a kind of development that was different from the development on the rest of the parcel (subparagraph (c)), where this portion was zoned residential and the other portion commercial.

34The Appellant’s written submission posited that George included 2.09 acres of land. The Board finds that this was likely the case when the only other indication of its dimensions was from a preliminary site plan in MPAC’s material that included a small portion of land to the northwest that was not part of George which stated those dimensions to be a total of 2.22 acres. The parties were otherwise in agreement that 0.21 acres of the parcel was the residential portion, which the Board finds was the vacant portion of land at George.

Residential or Commercial Classification?

35Unlike in section 1 of the Regulation describing vacant land, the relevant portions of the next part of the Regulation on residential and commercial classifications make no references to portions of land.

36The Appellant argued that George should have been returned in both the residential and commercial property classes in accordance with their respective zoning designations. However, taken as a whole George did not qualify as “land used for residential purposes” because it did not fall into any of the categories set out in section 3(1)1. of the Regulation describing the residential property class, nor was it used for residential purposes. It also did not qualify as vacant “land not used for residential purposes” because it was not “vacant land principally zoned for residential development” pursuant to section 3(1)2.ix. of the Regulation referred to above. The principal zoning for the parcel was commercial zoning.

37As a result, the Board confirms that the entirety of George should have been returned in the commercial property class.

Findings on Issue 2

38George was correctly returned in the commercial property class. However, the Board finds that a 10% portion of the land at George (0.21 acres of 2.09 acres) was vacant land pursuant to section 1 of the Regulation, and the rest, 90% was not vacant land.

CONCLUSION

39The assessed values of the Subject Properties were not at issue in these appeals.

40The Board confirms that Mitton was correctly returned as vacant land in the commercial property class for the 2019 and 2020 taxation years.

41The Board confirms that George was correctly returned in the commercial property class. However, it further determines that the assessment should be altered to indicate that 10% of that land was vacant land in the same classification.

ORDER

42220 Mitton Street North had returned assessments as follows:

a. For the 2019 taxation year pursuant to section 32 of the Act, $1,055,000 as vacant land in the commercial property class; and

b. For the 2020 taxation year, $1,068,000 as vacant land in the commercial property class.

The Board confirms these assessments.

43327 George Street (also indicated as simply George Street on the docket) had a returned assessment for the 2019 taxation year of $663,000 as not vacant land in the commercial property class. The Board varies the assessment so that $66,000 of the current value is attributable to vacant land in the commercial property class, and $597,000 of the current value is attributable to not vacant land in the commercial property class.

44327 George Street had a returned assessment for the 2020 taxation year of $609,000 as not vacant land in the commercial property class. The Board varies the assessment so that $61,000 of the current value is attributable to vacant land in the commercial property class, and $548,000 of the current value is attributable to non-vacant land in the commercial property class.

45All other appeals for 327 George Street for the 2021 and 2022 taxation years were withdrawn at the hearing.