Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: July 20, 2022
Assessed Person: Patrick Joseph Gamble
Appellant: Patrick Gamble
Respondent: Municipal Property Assessment Corporation Region 32
Respondent: City of Thunder Bay
Property Location: 567 Memorial Avenue
Municipality: City of Thunder Bay
Roll Number: 5804-010-036-26300-0000
Appeal Numbers: 3383257, 3411366, 3449255 and 3490828
Taxation Years: 2019, 2020, 2021 and 2022
Hearing Event No.: 769670
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
Parties
Representative
Patrick Joseph Gamble
Jonas Perov
Municipal Property Assessment Corporation
Michael Rose
City of Thunder Bay
No one appeared
HEARD: July 13, 2021 by video conference
ADJUDICATOR: Jean-Paul Pilon, Member
DECISION
OVERVIEW
1Patrick Joseph Gamble (the “Appellant”) is the owner of a property at 567 Memorial Avenue in Thunder Bay (the “Subject Property”).
2The Municipal Property Assessment Corporation (“MPAC”) returned an assessment of the Subject Property of $429,000 for the 2019 taxation year and the Appellant appealed that assessment on the basis that it was incorrect as in too high. Further appeals were deemed for the 2020 to 2022 taxation years pursuant to section 40(26) of the Assessment Act, R.S.O. 1990, c. A. 31 (the “Act”) against assessments returned at $440,000.
Subject Property
3The Subject Property is a commercial property consisting of five rental units. It is located on a major service commercial artery in Thunder Bay in what is known as the Intercity area.
4MPAC uses property codes to group similar properties together and, in this case, the assigned property code was 410. Property code 410 was described in MPAC’s expert report and at the hearing as “retail, one-storey, generally under 10,000 square feet (“sq. ft.”).”
5The lot area of the Subject Property is 0.47 acres, and the floor area of the building on the Subject Property is 6,879 sq. ft. This building was constructed in stages with resulting effective built dates of 1972 to 1981. The weighted average height of the building is 11.8 feet.
Areas of Agreement
6The parties agreed that the correct classification of the Subject Property is in the commercial property class as returned.
7The parties further agreed that the cost approach is the correct means of determining the current value of the Subject Property. MPAC also used the direct comparison approach as confirmation, but its brief analysis using that approach was unnecessary in view of the parties’ agreement on the current value of the Subject Property (with the exception of a single costing issue described below).
8Within the cost approach, the parties specifically agreed at the outset of the hearing that the current value of the land included with the Subject Property was $215,764. The Board accepts that this was their agreement even if it was not exactly in accordance with their further indication that this figure was based on a value of $449,508 per acre for 0.47 acres of land.
9For the 2020 to 2022 taxation years, the portion of MPAC’s returned assessment for the building and yardwork on the Subject Property was $224,515. For the 2019 taxation year, this value was $11,000 less because of unspecified and uncontested work later done to the Subject Property.
10MPAC agreed to reduce these values by $3,000 prior to the hearing due to a costing issue that the parties resolved. Apart from the only other costing issue which is described below and any adjustment in equity, the parties agreed that the current value of the Subject Property’s building and yardwork was as follows: $210,515 ($224,515 - $11,000 - $3,000) for the 2019 taxation year, and $221,515 ($224,515 - $3,000) for the 2020 to 2022 taxation years.
Issues for the Hearing
11Two issues remained for the hearing: first, the remaining issue with MPAC’s costing of the building at the Subject Property referred to above, and second, equity of assessments pertaining to the value of the land.
Results
12For the 2019 taxation year, the current value assessment of the Subject Property is reduced from $429,000 to $426,279 or $426,000 rounded in the commercial tax class.
13For the 2020, 2021 and 2022 taxation years, the current value assessment of the Subject Property is reduced from $440,000 to $437,279 or $437,000 rounded in the commercial tax class.
14No adjustment in equity is required.
PRELIMINARY MATTERS
15No preliminary matters were raised at the hearing. However, prior to the hearing, the Appellant brought a motion in which he sought leave of the Assessment Review Board (the “Board”) for his representative, Jonas Perov, to appear at this hearing event both as an advocate and witness pursuant to Rule 14(b) of the Board’s Rules of Practice and Procedure (the “Rules”).
16The resulting decision in this motion, Gamble v. Municipal Property Assessment Corporation, Region 32, 2022 CanLII 21303 (the “Leave Decision”), granted the Appellant’s request allowing Mr. Perov to appear as both an advocate and fact witness pursuant to Rule 14(b).
ANALYSIS
Issue 1 – Costing Issue
17MPAC’s Subject Property Profile document set out its costing of the building and yardwork on the Subject Property. It listed the rate for light gauge metal roofing at $6.26 per sq. ft. on the Subject Property, which its witness testified was derived from MPAC’s Automated Cost System (“ACS”) costing manual. Mr. Perov, however, testified that a different manual or costing system, RSMeans, valued the same roofing material at $3.10 per sq. ft. He therefore argued that the assessed value of the structure should be reduced accordingly, by $14,694, because MPAC overvalued this specific roofing material.
18In his capacity as a fact witness, Mr. Perov testified that the RSMeans costing manual is more accurate than ACS because it estimates square footage rates that take into account materials, installation and soft costs such as architect fees in a single square footage rate, unlike ACS’s piecemeal analysis valuing individual structural components. In his testimony he also quoted the Board’s decision in Webber v. Municipal Property Assessment Corporation, Region No. 9, [2013] O.A.R.B.D. No. 37 (“Webber”) at para. 57, where the Board accepted evidence “using the valuation tables in the widely-used RSMeans Costing Data (sic).”
19MPAC’s expert witness, Eric Chicoine, testified that MPAC instead uses its ACS system across Ontario, and that to use a different costing for this single item would introduce inequity into its costing assessments involving this material across the province. He also testified that unlike RSMeans, the use of local multipliers is unnecessary using ACS, and that ACS takes into account all components including building improvements and the cost of labour.
Findings on Issue 1
20First, it may well have been the case that RSMeans was widely referred to in 2013 at the time of the Webber decision. However, a simple search of, where almost all Board decisions are now reported, revealed only a single decision making reference to RSMeans with many more referring to MPAC’s ACS costing system.
21In any event, the Leave Decision limited the scope of Mr. Perov’s testimony to factual evidence alone, which on this subject amounted to little more than statements taken from the manual itself. MPAC’s expert witness was more convincing on this point, particularly as to the inequity that would result if this item was assessed at a different rate for the Subject Property and not for others where ACS was used. In addition, there was no explanation for this oddly specific single anomaly, nor was there any further evidence submitted to support any lower value for this individual item.
22As a result, the Board finds that MPAC’s costing, including the adjustments above, correctly sets out the value of the building and yard work on the Subject Property as $210,515 for the 2019 taxation year and $221,515 for the 2020 to 2022 taxation years.
Issue 2 - Equity
23Section 44(3)(b) of the Act provides that after determining the current value of the land, the Board “shall have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.”
Evidence
MPAC
24MPAC’s position was that no adjustment in equity was required. This was set out in its Equity Report which determined a median assessment to sales ratio (“ASR”) of 0.982 arising from its study of 20 properties that sold from 2013 to 2016 within five kilometers of the Subject Property, which had the same 410 property code as the Subject Property and others.
25In addition, MPAC relied on its further analysis which considered the assessments of similarly irregularly-shaped corner lot properties with structures on the same street and within a single kilometer of the Subject Property. These were also similar in size to the Subject Property of 0.47 acres, with four of the six ranging between 0.42 and 0.49 acres, one at 0.57 acres and another at 0.64 acres.
26MPAC’s Equity Report indicated that the median size of these properties was 0.47 acres, the same size as the Subject Property, and that they had a median assessment per acre of $459,070 (which in the Board’s calculation was actually $455,364). This, in MPAC’s submission, demonstrated no inequity when the parties agreed to a land value of $449,508 for the Subject Property. Using the Board’s calculation, this is a difference of 1.3%.
Appellant
27The Appellant relied on a list of 43 properties in his equity analysis, all having the same 410 property code. All were smaller than one acre and one was significantly larger at five acres. These properties had median assessments of $219,845 for per acre which, when applied to the acreage of the Subject Property, should have resulted in a substantial equitable adjustment in the land value downward in the Appellant’s submission.
28The Appellant also relied on an analysis of four properties for comparison by square footage of building space being “within the vicinity of the subject…(with) a similar size, construction, age and height with some being superior to the Subject.” Mr. Perov conceded, however that one of these four, having more than ten times the land of the Subject Property at five acres, was not similar to the Subject Property.
29In Mr. Perov’s submission, these four had a lower median land value per acre of $213,305.
Analysis
30Mr. Perov raised a number of issues relating to MPAC’s ASR study: that it did not consider the costing component of assessments; that the properties listed were not comparable to the Subject Property, with different property codes and asset types; that some were assessed using the income approach and not the cost approach; and that MPAC’s time adjustment factors were unexplained.
31In many decisions, the Board has expressed a preference for equity studies that consider sales prices as well as assessments as MPAC’s ASR study did, over those considering assessments on their own. These decisions are summarized at para. 34 of Ottawa (City) v Municipal Property Assessment Corporation, Region 03, 2020 CanLII 77936 and need not be repeated here. In addition, in a review decision, Menard v Municipal Property Assessment Corporation, Region 28, 2021 CanLII 59499 at para. 29, the Board determined that while sales data was not necessary, “its absence… makes any conclusion significantly less reliable unless such properties are very similar to the property at issue in an appeal, so that their assessments can be compared to one another (italics added).” Otherwise, the Board wrote, “the analogy would be comparing apples to oranges, instead of comparing apples to apples when comparing assessments alone.”
32The Board concurs with MPAC’s expert who testified that the Appellant’s list of 43 properties were not comparable to the Subject Property. While agreeing that they all had the same 410 property code, MPAC’s expert testified that they were located in entirely different neighbourhoods that included areas of heavy industrial activity and semi-rural locations which evidence was not refuted at the hearing. Moreover, the Board notes that few of the Appellant’s properties were very similar in site area, the only other indication by which similarity to the Subject Property could be measured.
33Similarly, the Board found that the Appellant’s chart comparing current value assessments per square foot of building space was not reliable where all but one of those properties were on land of sizes very different to the Subject Property. Only one of these, 1182 Russell Street, included a similar quantity of land to the Subject Property of 0.45 acres where the Subject Property is 0.47 acres. It had a land value of $435,256 per acre, within 4% of the land value agreed to by the parties of $449,508 per acre, which also did not demonstrate any inequity in assessment.
341182 Russell Street also had a current value assessment per sq. ft. of $55.89 compared to the Subject Property’s $63.96, which may have been indicative of inequity. However, equity of the assessment of the building portion was not in dispute where the parties agreed to that value. In any event, the Board has previously determined that two or three examples of inequity, let alone a single one in these circumstances, would not to be sufficient to determine inequity: 2002556 Ontario Inc. v. Municipal Property Assessment Corp., Region 13, [2014] O.A.R.B.D. No. 84 (ON ARB) at para. 30.
35MPAC’s Equity Report, on the other hand, dispensed with these uncertainties, as well as the use of different approaches to valuation, the isolation of different property components in assessment and economies of scale by simply considering assessments with sales prices. It addressed the “vicinity” requirement in section 44(3)(b) of the Act where all properties were within five kilometers of the Subject Property and, in its expert’s testimony, in the same “economic neighbourhood” as the Subject Property. As to the requirement of “similar” properties, it did go beyond the single 410 property code but considered properties not so dissimilar from the Subject Property, such as small office buildings, automotive shops and dealerships and standard industrial properties. These were also similar to the Subject Property to the extent that they had assessments in the range of $231,000 to $599,000 and sale prices ranging from $235,000 to $905,000.
36As the Board noted in Tse v. Municipal Property Assessment Corporation. Region 09, 2018 CanLII 62978 at para. 34, “for the purposes of determining equity, properties only need to be of the same general nature, character or function in relation to the Subject Property.” The Board finds that MPAC’s comparable properties met those parameters.
37Finally, the Appellant’s representative correctly noted that MPAC’s ASR study both lacked time adjustments and considered transactions occurring between 2013 and 2016 where the valuation date is January 1, 2016. However, these issues could have been addressed by removing all transactions occurring beyond the shoulder years of 2015 and 2016. In the Board’s analysis, this left a total of nine properties with a median ASR of 1.01. This conclusion also demonstrates no inequity in assessments.
Findings on Issue 2
38The Board finds that no adjustment for equity pursuant to section 44(3)(b) of the Act is required.
CONCLUSION
39For the 2019 taxation year, the current value of the Subject Property is $426,279. Of this, $215,764 of the current value is attributable to the land at the Subject Property, and $210,515 is attributable to the building and yardwork at the Subject Property.
40For the 2020, 2021 and 2022 taxation years, the current value assessment is $437,279. Of this, $215,764 of the current value is attributable to the land at the Subject Property, and $221,515 is attributable to the building and yardwork at the Subject Property.
41No adjustment in equity is required.
ORDER
42The Board orders that:
a. for the 2019 taxation year, the current value assessment is reduced from $429,000 to $426,279 or $426,000 rounded in the commercial tax class; and
b. for the 2020, 2021 and 2022 taxation years, the current value assessment is reduced from $440,000 to $437,279 or $437,000 rounded in the commercial tax class.
"Jean-Paul Pilon"
JEAN-PAUL PILON
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb