Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: December 22, 2023
Assessed Person(s): Parkyards Inc.
Appellant(s): City of Ottawa
Respondent(s): Municipal Property Assessment Corporation Region 03
Respondent(s): Parkyards Inc.
Property Location(s): 4221 Moodie Drive
Municipality(ies): City of Ottawa
Roll Number(s): 0614-120-825-22400-0000
Appeal Number(s): 3511157
Taxation Year(s): 2023
Hearing Event No.: 782573
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
Parties
Representative
Parkyards Inc.
Lukas Kwiatkowski
Municipal Property Assessment Corporation
Leo Chapdelaine
City of Ottawa
Guy Tudino
HEARD: November 28, 2023 by telephone conference call
ADJUDICATOR(S): Dan Weagant, Member
DECISION
OVERVIEW
1The subject property sold in July of 2022 for $5,100,000. At the time of the sale, the subject property was assessed at $495,000, in the Residential property class. Owing to the difference between the sale value and the assessment, the City of Ottawa (the “Appellant”) chose to file an appeal for the 2023 taxation year, pleading that the assessment was too low.
2Parkyards Inc., (the “Assessed”) purchased the land as a base for its landscaping company. At the time of purchase, the land was partly developed for a water park amusement centre. A special provision was granted to the previous owner for this specific use, in addition to the other uses permitting in the prevailing zoning by-law.
3The partial development included the addition of aggregate material as the base for a parking and storage area comprising approximately five acres of the subject property. This was the only development on the property for the 2023 taxation year.
4The Assessed believes the subject property should be assessed at the value returned by MPAC.
5The Appellant sought to increase the assessment from $495,000 to $2,529,000 based on the time adjusted sale values of three properties it deemed to be comparable to the subject property and by applying an adjustment for equitable assessment.
6The Municipal Property Assessment Corporation, (“MPAC”) the Respondent, undertook its own comparison of time adjusted sales of six different properties, the addition of value to represent the improvements to the property reflected by the five-acre storage / parking area and applying a downward adjustment to arrive at an assessment of $1,242,000.
Areas of Agreement
7The parties agree that the sale of the subject property having occurred in 2022, is too far removed from the valuation day stipulated in the Act to indicate the correct current value of the subject property. The valuation day for the 2023 taxation year is January 1, 2016.
8The parties also agree that any current value determined by the Board would require a reduction for it to represent equitable assessment when reference is made to the assessments of similar lands in the vicinity.
9Finally, the parties agree that the subject property should remain in the Residential property class.
Issues for the Hearing
10At issue in this proceeding is:
- A determination of the correct current value of the subject property, including:
a. A determination of the most comparable properties for the purpose of determining current value; and
b. Application of Time Adjustment Factors
- Whether an equity reduction in the current value should be made?
Result
11The Board finds that the current value of the subject property is $2,129,295.
12The Board also finds that when reference is made to the assessments of similar lands in the vicinity, the current value determined requires a downward adjustment to reflect equitable assessment.
13Accordingly, the Board finds that the assessment of the subject property is $1,661,000 in the Residential property class.
ANALYSIS
Description of Subject Property
14The subject property comprises 106.3 acres on the east side of Moodie Drive in the southwestern part of the City of Ottawa. Agricultural properties border the site on the east, south and west. To the north, properties with similar attributes as the subject property lie within ongoing established sand and gravel operations.
15The parties describe the property in different ways but agree that it comprises an area of woodland or forest, a mix of scrub brush and some improved land, estimated at approximately five acres. There is open water on the site that resulted from the previous owner’s partial development of the site.
16The subject property lies within the designation of ‘Rural Countryside’ in the City of Ottawa Official Plan. The subject property is zoned ‘Rural Countryside’ which permits existing uses, single family residential uses, agricultural uses, animal care, forestry, and other restricted uses.
17A special provision of the Rural Countryside Zone was placed on the property through a re-zoning process led by a previous owner. That special provision also permits the establishment and operation of a ‘waterpark’ recreation facility. The Assessed made it clear at the hearing that it is not pursuing that use of the property and intends to use the lands for uses permitted in the zoning by-law.
Issue 1 – What is the correct current value of the subject property?
MPAC’s Evidence and Submissions
18To determine the current value of the subject property, MPAC selected six properties in Ottawa with the same property code and description as the subject property. Those properties are located between 13 and 27 kilometres from the subject site. The properties selected by MPAC were between 50 and 197.6 acres with a median size of 87.5 acres. Sale values of these six comparable properties ranged from $2,173 per acre to $4,343 per acre. MPAC adopted the median rate per acre to apply to the subject property of $2,973 per acre for a total of $316,028.
19MPAC then added the improvement value derived from the assessed value of 5505 Albion of $216,000 for the five-acre storage / parking area. This subtotal of $1,080,000 was then added to the $316,000 land value applied for a total current value of $1,396,000.
Appellant’s Evidence and Submissions
20The Appellant disclosed its expert report, indicating a current value of $3,084,401, based on the time adjusted sale values of 15 proposed comparable properties. Sale dates of these properties ranged from November 2012 to May 2018.
21The 15 properties were in areas zoned “RU”, the same as the subject property as well as “RG5”, “RH”, and various “AG” zone variations. Property sizes in the Appellant’s sample ranged from 18 to 99 acres, with a median of 50 acres.
22Acknowledging that the sample of properties used for comparison to the subject property had multiple differences, the Appellant adjusted the sale values at a rate of 0.43% per month to account for the effect of time on sale values. The Appellant also applied a 25% downward adjustment to the time adjusted sale values per acre for differences in zoning between 9 properties in the sample and that of the subject property.
23The result of the Appellant’s analysis was a median per acre value of $29,016. When applied to the subject property’s 106.3 acres, the Appellant arrived at a current value of $3,084,401.
Evidence and Submissions of the Assessed
24The chief issue raised by the Assessed was a perceived inequity of the process undertaken by the City in its pursuit of this appeal. The Assessed believes the Board should disregard the City’s submissions and reports entirely because the opinions adduced through the process changed. The Assessed viewed these changes in opinion to be evidence of unreliability.
25Through the Request for Reconsideration process and the appeal process at the Board, the Assessed also changed its position on value, indicating a value of $1,000,000 was fair in its view. The Assessed did not submit any documentary evidence to support this or any other value.
Findings on Issue 1
Land Value
26The comparable sales adduced by the Appellant and MPAC were dramatically different and were derived from different approaches and criteria in their selection. MPAC’s six comparable properties were at least 13 kilometres away from the subject property with some as far as 27 kilometres away. The Board disregards these properties as being too far from the subject property to be suitably comparable for the determination of current value.
27The Appellant’s proposed comparable list included six different property codes and eight different zoning by-laws. Both property codes and zoning by-laws are important characteristics of comparability because they define a property’s current and permitted uses. Use is an important criterion in determining a property’s current value.
28Property code 100, as applied to the subject property is ‘vacant residential land’. Of the Appellant’s 15 proposed comparable properties, only two carry the same code. Of the same sample of 15 properties, only three have the same zoning.
29The Board disregards all the Appellant’s proposed comparable properties that are neither within the property code 100 nor in the RU zone. This leaves a single property from the Appellant’s sample of 15, at 4139 Moodie Drive (“4139 Moodie”).
304139 Moodie is a neighbour of the subject property. It is on the same rural block, on the east side of Moodie Drive, between Barnsdale Road and Brophy Drive. 4139 Moodie has a modified RU zone applied by the City. While the modification of the RU zone is not the same as the modification made at the subject property, it does provide for a wider range of uses than the unmodified zone. The Appellant applied a 25% downward adjustment to the time adjusted sale value of 4139 Moodie to account for the differences in zoning between it and the subject property.
Improvement Value
31MPAC determined the value of improvements on the land by comparing the assessment value of another property in Ottawa, on Albion Road. The Albion Road property exhibited no other similarities with the subject property. It is a three-acre property, located in an emerging development area (urban residential uses are across the street, and other urban uses are encroaching from the adjacent neighbours). Those conditions are clearly not present at the subject property. The Board disregards this method of determining the value of the improvements on the subject property. There being no other documentary evidence of the value of improvements, the Board applies a value of zero for that component of the valuation process.
32The Board finds that the best evidence of current value of the subject property is the Appellant’s adjusted value per acre of 4139 Moodie at $20,031. This property is near to the subject property and is exposed to the same locational attributes that affect value. When applied to the 106.3 acres of the subject property, the result is $2,129,295.
Issue 2 – Does the current value determined require a downward adjustment for it to be considered equitable when reference is made to the assessments of similar lands in the vicinity?
City of Ottawa’s (Appellant’s) Evidence and Submissions
33The Appellant submits that the current value of the subject property must be reduced for it to be considered equitable assessment, and that the best approach is to apply an assessment to sale ratio (‘ASR’) to the current value determined. The Appellant developed its ASR by comparing the assessments to the time adjusted sale values of its 15 comparable sales sample. The median ASR of this process was 0.82. The Appellant believes the current value determined should be reduced by a factor of 18% for it to be considered equitable.
MPAC’s Evidence and Submissions
34MPAC also produced an ASR study, relying on the assessments of the six properties it adduced for the purposes of determining current value. These six ASRs range from 0.35 to 1.44 with a median of 0.89.
35MPAC submitted that these six properties are the most similar in evidence, and they provide a strong case for the resultant level of assessment indicated by the median of 0.89.
Evidence and Submissions of the Assessed
36The assessed submitted that whatever result is adopted by the Board it must be fair and equitable. The assessed maintained that an assessment of approximately $1,000,000 would be fair. The assessed did not adduce any documentary evidence to support this value.
Findings on Issue 2
37In reducing the correct current value determined to create equitable assessment, the Board requires there to be clear evidence that the current value determined is not fair or equitable. The parties generally agree that a reduction in the current value determined is necessary for it to be considered equitable. Both MPAC and the Appellant produced ASR studies to indicate that similar properties in the vicinity of the subject property are assessed at a rate well below their respective time adjusted sale price.
38The Board agrees that a reduction in the current value is necessary for it to represent equitable assessment. The question before the Board is the amount of that reduction.
39The Appellant submits the correct reduction is 0.82, based on the ASR’s in its sample of 15 proposed comparable properties. MPAC submits the correct reduction is 0.89 based on its sample of six properties it deems to be most comparable to the subject property.
40Subsection 44. (3)(b) of the Assessment Act (“Act”) requires the Assessment Review Board (“ARB”) to 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. An assessment made at the correct current value (i.e. at 100% CVA) would be an inequitable assessment if similar lands in the vicinity were assessed at some percentage of current below one hundred.
41The purpose of the determination of equitable assessment is to ensure that the tax burden is distributed fairly among similarly situated properties. One way to demonstrate whether an assessment is equitable is to consider the ASRs of similar lands in the vicinity.
42The courts have determined that all points of comparison must be analyzed to make an appropriate determination of similarity when considering equitable assessment. The Board relies on Municipal Property Assessment Corporation v Loblaw Properties Limited, 2017 ONSC 1299 (“Loblaw”), where Justice Nordheimer wrote, in paragraph 25:
In my view, the proper approach to be taken to determining what are “similar lands in the vicinity” is that set out by Saunders J. in Trizec, that is, that all points of comparison must be considered.
43In this case, those similar lands in the vicinity of the subject property to be considered by the Board as a means of determining equitable assessment must be comparable in as many ways as possible, as is available in evidence.
44There are a total of seven properties in evidence that are most similar to the subject property, in that they are all within the City of Ottawa, all are vacant residential land, and they are all in a RU zone. Six of these most similar properties are in MPAC’s comparable property sample and the seventh is the property adduced by the Appellant and found to be the best comparable for the purposes of determining current value.
45The ASRs of those seven properties range from 0.35 to 1.44 with a median of 0.78. The Board finds that the best indicator of the equitable assessment of the subject property is the current value determined of $2,129,295, multiplied by the median assessment of the most similar properties in evidence of 0.78, for a result of $1,660,850 or $1,661,000, rounded.
CONCLUSION
46The Board finds that the current value of the subject property, for the 2023 taxation year is $2,129,295 in the Residential property class.
47The Board also finds that when reference is made to the assessments of similar lands in the vicinity, the current value determined requires a downward adjustment for the value to reflect equitable assessment.
ORDER
48The Board orders that the assessment of the subject property at 4221 Moodie Drive is increased, from $495,000 to $1,661,000 in the Residential property class.
"Dan Weagant"
DAN WEAGANT
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb