Tribunals Ontario Tribunaux décisionnels Ontario Assessment Review Board Commission de révision de l’évaluation foncière
ISSUE DATE: August 29, 2023 FILE NO.: ID 183247
Assessed Person(s): Canadian Tire Corporation Limited Appellant(s): Canadian Tire Corporation Limited Respondent(s): Municipal Property Assessment Corporation Region 09 Respondent(s): City of Toronto,
Property Location(s): 835 and 839 Yonge Street Municipality(ies): City of Toronto Roll Number(s): 1904-101-060-00100-0000, 1904-101-060-00101-0000, 1904-101-060-00251-0000 Appeal Number(s): 3214755, 3296755, 3353940, 3395584, 3442919, 3487775, 3512307, 3269863, 3297695 and 3352131 Taxation Year(s): 2017 to 2023 Hearing Event No.: 777778
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
| Parties | Counsel |
|---|---|
| Canadian Tire Limited | Lauren Lackie and Karina Wong |
| Municipal Property Assessment Corporation | Melissa Van Berkum |
| City of Toronto | Jared Wehrle |
HEARD: December 13, 14 and 15, 2022 by video conference with submissions in writing on various dates ending on April 19, 2023.
ADJUDICATOR(S): Carly Stringer, Member
INTERIM DECISION
OVERVIEW
1Canadian Tire Corporation Limited (the “Appellant”) has appealed the assessments of 835 and 839 Yonge Street in the City of Toronto for the 2017 to 2023 taxation years. These two parcels of land are developed as a single Canadian Tire retail store and gas bar (the “Subject Property”). The assessments were returned on different roll numbers for the 2017 to 2019 taxation years as $6,782,000 and $77,864,000 respectively. They were combined into a single roll number for the 2020 taxation year onwards and returned at $85,014,000.
2The Appellant believes the assessments are too high and that the Subject Property should be valued at $30,000,000.
3The Municipal Property Assessment Corporation (“MPAC”) and the City of Toronto (the “City”) are responding to the appeals. They argue the Subject Property should be valued at $110,849,000, with an equitable adjustment to $104,866,000.
4Obviously, there is a significant difference between these two values. This chasm is attributable to the Parties’ opposing views of the Highest and Best Use (“HABU”) of the Subject Property, which is a core component of the valuation exercise.
5MPAC, the City, and the Appellant (the “Parties”) all agree that the Subject Property’s current use as a large format retail store and gas bar is not its HABU. The Parties agree that the HABU is redevelopment lands.
6Where the Parties disagree is the appropriate degree of redevelopment that reflects the HABU of the Subject Property.
7For development purposes, a municipality will specify the maximum permissible total number of square feet (“sq. ft.”) of floor area permitted for new development on a parcel of land. The permissible floor area is used to determine density. Density is based on a Floor Space Index (“FSI”), which is the development’s gross floor area (“GFA”) divided by the total land area of the parcel on which it is built. By way of example, a 10,000 sq. ft. building on a 10,000 sq. ft. lot will have an FSI of 1.0, while a 50,000 sq. ft. building on a 10,000 sq. ft. lot will have an FSI of 5.0.
8The Appellant’s view is that the HABU should be determined using the as-of-right zoning and density. In that regard, the Appellant submits that i) the HABU is a mixed-use development with a large retail podium at grade and residential condominiums tiered above the base, up to a maximum height of 25 storeys and a maximum GFA of 323,640 sq. ft.; and ii) the associated current value is $30,000,000.
9MPAC says the HABU should not be based on the as-of-right zoning and density. MPAC submits that: (i) the HABU is mixed-use development at a minimum density based on an FSI of 6.5, which would result in a total permitted buildable GFA of 764,478 square feet (“sq. ft.”); (ii) the current value is based on a rate per square foot buildable of $145, resulting in a correct current value of $110,849,000; and (iii) a reduction in this value is required to make it equitable with the assessments of similar properties in the vicinity, resulting in a total equitable assessment of $104,866,000. The City supports MPAC’s position.
10Simply put, the Parties disagree as to whether the current value should be determined as if the Subject Property were developed to the extent of the “as-of-right” zoning, or if it is reasonably probable that a greater density would be approved such that the Subject Property’s value should be determined based on that greater density.
11To adjudicate this matter, the Assessment Review Board (the “Board”) must first determine the HABU of the Subject Property, and then determine the correct current value of the Subject Property as of the January 1, 2016 valuation day based on that HABU. The Board must then have regard for whether this value is equitable with the assessments of similar properties in the vicinity and, if it is not, determine whether a reduction is required.
RESULT
12For the reasons that follow, the Board finds:
a. The HABU of the Subject Property is mixed-use development at a FSI of 6.5 resulting in a total buildable GFA of 764,478 sq. ft.
b. For the January 1, 2016 valuation day, the correct current value of the Subject Property is $106,262,000.
c. An equitable adjustment is not required by s. 44(3)(b) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”), resulting in a final determination of value of $106,262,000.
BACKGROUND
Description of the Subject Property
13The Subject Property consists of two parcels of land improved by a Canadian Tire retail store and gas bar. The lot is irregularly shaped, with a total site area of 2.704 acres, or 117,612 sq. ft.
14The Subject Property is located on the east side of Yonge Street - just north of Church Street - near the Yorkville and Rosedale neighbourhoods. It is close to major public transit, sitting between the Yonge/Bloor and Rosedale subway stations. The Yonge/Bloor subway station is a major transit hub. The Subject Property’s easterly property line abuts the Toronto Transit Commission (“TTC”) rail line.
Zoning and FSI
15The gas bar area of the Subject Property (approximately 0.2 acres) is zoned Commercial Residential. This zoning permits a mix of commercial and residential uses. The zoning permits a maximum commercial density of 1.75 times the area of the lot (FSI of 1.75) and a maximum residential density of 4 times the area of the lot (FSI of 4).
16The remainder of the Subject Property (approximately 2.5 acres) is zoned Medium Density Mixed Commercial Residential under City of Toronto By-Law No. 438-86, with a site-specific provision in City of Toronto By-Law No. 101-2003. This zoning also allows for a wide range of commercial and residential uses. Prior to the site-specific zoning, the maximum commercial density was an FSI of 1 and a maximum residential density was an FSI of 2. The site-specific zoning passed in 2003 allows for a total GFA of 288,096 sq. ft., which includes a maximum residential GFA of 157,422 sq. ft. The maximum allowable density is an FSI of 2.65.
17Combining 2.65 with the maximum allowable density for the gas bar portion of the lot (which is 4), the weighted average density of this “as-of-right” zoning of the Subject Property is reflected in an FSI of 2.75 resulting in a total permitted buildable GFA of 323,640 sq. ft.
ISSUES FOR THE HEARING
18At issue in this proceeding is:
a. What is the Highest and Best Use of the Subject Property?
b. What is the correct current value of the Subject Property as of the January 1, 2016 valuation day?
c. Should a reduction in the current value be made to make it equitable with the assessments of similar lands in the vicinity?
ANALYSIS
Issue 1 – What is the Highest and Best Use of the Subject Property?
Current Value
19Section 44(3)(a) of the Act requires the Board to “determine the current value of the land.” Section 19(1) of the Act states that “the assessment of land shall be based on its current value” and s. 1 of the Act defines “current value” 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.”
20Valuation days are set out in s. 19.2 of the Act. January 1, 2016 is the day as of which land shall be valued for the 2017 to 2020 taxation years. Section 48.6 of O. Reg. 282/98 extended this valuation day for the 2021, 2022 and 2023 taxation years.
21As explained by the Board in General Motors of Canada Limited v Municipal Property Assessment Corporation, Region No. 27, 2017 CanLII 3664 (ON ARB) (“General Motors”) at paragraph 15, “[a] property is to be valued at what the market would view as the most productive use of the land because that is how it is most likely to transact.” This is the valuation principle known as Highest and Best Use.
22Therefore, the general task before the Board is to determine the value of the Subject Property as if it sold on January 1, 2016 based on its HABU.
Highest and Best Use Analysis
23To establish the HABU of land, “it must be determined which uses are legally permissible or possible, physically possible and financially feasible and from those potential uses determine which is the most productive use of the land”: see Enterprises Inc. v Municipal Property Assessment Corporation, Region 14, 2014 CanLII 104370 (ON ARB) (“Toronto Airways”) at paragraph 31 (emphasis added).
Legally Permissible
24Legal permissibility considers the fact that certain restrictions like zoning, building codes, and environmental regulations may preclude certain potential uses. However, if there is a reasonable probability that zoning or other such legal restrictions could be changed, that factors into the legal permissibility analysis.
25In Re Farlinger Developments Ltd. and Borough of East York, 1975 CanLII 587 (ON CA), (1976), 9 O.R. (2d) 553 (“Farlinger”), the Ontario Court of Appeal confirmed that establishing legal permissibility “must be based on something more than a possibility of rezoning. There must be a probability or a reasonable expectation that such rezoning will take place. It is not enough that the lands have the capability of rezoning.”
Physically Possible
26As noted in The Appraisal of Real Estate, Third Canadian Edition at 12.6, “the test of physical possibility addresses the physical characteristics associated with the site that might affect its highest and best use.”
Financially Feasible
27Financial feasibility determines profitability of the proposed use. The Appraisal of Real Estate states at 12.7 that “[a]s long as a potential use has value commensurate with its cost and conforms to the first two tests, the use is financially feasible.”
Maximally Productive
28Once the other elements of the HABU are satisfied, the use that produces the highest value is considered maximally productive.
Evidence and Submissions of the Parties
29The Board will describe the evidence and submissions in more depth in its findings below. To summarize, the Parties agree that the existing building is an under-improvement of the land, and there is potential for intensification such that the current use of the Subject Property (as a retail store and gas bar) is not its HABU as of January 1, 2016. The Parties agree that the HABU is redevelopment of the Subject Property.
30Where the Parties diverge is their estimation of the degree of development that would be permitted, and how this factors into the legal permissibility prong of the HABU analysis.
31MPAC’s expert opined that a rezoning to permit an FSI of no less than 6.5 – resulting in a GFA of 764,478 sq. ft. – was reasonably probable as of January 1, 2016.
32The City did not provide expert evidence, but supports MPAC’s position.
33The Appellant’s expert took a different view, relying on the as-of-right zoning only. His opinion was that the HABU of the Subject Property should utilize the land to the extent of its existing zoning, which would permit development up to a total buildable GFA of 323,640 sq. ft.
34The Appellant submits that in circumstances like this one where the current use of a property is not the HABU, the Board should ask if there is a higher and better use of the property which is permitted by the existing zoning. The Appellant submits this approach minimizes speculation as to future uses of a property.
35The Appellant submits that a redevelopment with a 6.5 FSI was not reasonably probable within a reasonable timeframe on January 1, 2016, and that accepting MPAC’s FSI of 6.5 would conflict with previous Board decisions which the Appellant says have found that a development timeframe of three-to-five years is not reasonable. The Appellant relies heavily on Canadian Tire Corporation Limited v Municipal Property Assessment Corporation, Region 09, 2021 CanLII 105789 (ON ARB) (“2681 Danforth”), leave to appeal to Divisional Court dismissed in Municipal Property Assessment Corporation v. Canadian Tire Corporation Limited, 2022 ONSC 1585. This case will be discussed in more detail below.
Findings on Issue 1
Physically Possible
36The Board accepts the evidence of both experts insofar as they agree that redevelopment is physically possible on the Subject Property as of the valuation day. The Board is satisfied that the features of the lot would permit the type of development outlined by both experts. The Board finds that the HABUs proposed by both Parties satisfy the physically possible criterion.
Legally Permissible
a. Appellant’s Proposed HABU
37The Board finds the Appellant’s proposed HABU is legally permissible, based on the as-of-right zoning. The Appellant’s proposed HABU satisfies this prong of the analysis.
b. Case Law Review and the Appropriate Approach to Reasonable Probability of Rezoning
38Before considering whether MPAC’s proposed HABU satisfies the legal permissibility criterion, the Board will consider the appropriate approach to analyzing legal permissibility when it engages the reasonable probability of a rezoning, as reflected in the jurisprudence.
39The Appellant relies heavily on 2681 Danforth, a case relating to a Canadian Tire store on Danforth Avenue in the City of Toronto where the reasonable probability of a rezoning was squarely at issue. In 2681 Danforth, the Appellant argued that the HABU was the property’s current use as a large format retail store based on the as-of-right zoning. The Appellant’s expert testified that the current use was consistent with the as-of-right zoning. In his view, the current use was the only use that satisfied the legal permissibility prong of the HABU analysis. Neither MPAC nor the City disputed that the property’s current use was legally permissible, physically possible, and financially feasible: see 2681 Danforth at paragraph 32. However, they argued that the HABU of the lands was high-rise mixed-use development with a minimum FSI of 3.0. Development of this sort was not permitted under the existing zoning, so MPAC argued that a rezoning was reasonably probable as of the valuation day. Ultimately, the Board found that MPAC’s proposed use did not satisfy the legal permissibility prong of the HABU analysis: see 2681 Danforth at paragraph 48.
40While the Board has given due consideration to the analysis in 2681 Danforth, every case must be considered on its own facts. In this regard, the Board does not accept the Appellant’s submission that MPAC and the City are attempting to re-litigate issues previously decided by the Board and Divisional Court, or that accepting MPAC’s evidence in this case is inconsistent with 2681 Danforth and would constitute an error.
41The Board notes that, in 2681 Danforth, the Board explicitly considered the totality of the evidence in finding that MPAC did not establish that it was reasonably probable as of January 1, 2016 that the lands would be rezoned for development. While the Board made a finding that three to five years for a rezoning was not the “reasonable development horizon”, this was but one factor that led to the Board’s decision. It was not the determinative factor. The Board explicitly considered the “whole of the evidence” before it: see 2681 Danforth at paragraph 47. In particular, the evidence before the Board included a planning context that supported intensification; however only four properties nearby sold within a relevant timeframe to the 2016 base year, with only three securing post-sale zoning amendment applications for mid-rise development. MPAC’s expert also provided only generalized evidence that “the majority” of developments in downtown Toronto are being rezoned after purchase: see 2681 Danforth at paragraph 42. It is in considering all of these circumstances that the Board determined that “a three to five year timeframe following an application – when there is no evidence of an application either filed or pending, nor evidence of Council’s support for a rezoning – is simply too speculative”: see 2681 Danforth at paragraph 47.
42The Board took the same approach in Toronto Airways. In that case, MPAC argued the property should be valued using a HABU of development lands for a mixed-use urban village: see Toronto Airways at paragraph 28. The Board found that MPAC failed to prove that rezoning was probable, considering the totality of the evidence including that:
a. MPAC’s witness did not provide an assessment of the probability that the appellants would be able to obtain zoning approvals to redevelop the land as high density commercial and residential: see Toronto Airways at paragraph 35.
b. There was a planning application made at the time, but MPAC brought no evidence regarding the probability of success in rezoning such as evidence of similar rezoning applications in the municipality, or the use of neighbouring parcels of land: see Toronto Airways at paragraph 39.
c. The applicable valuation day was January 1, 2012. The redevelopment of the land was “hoped to be permissible” in 2016 (four years after the valuation day), with actual development starting in 2017 (five years after the valuation day) and a completed project “hoped for” in 2030 (18 years after the valuation day): see Toronto Airways at paragraph 39. There was “a great deal of uncertainty” regarding how the project would proceed: see Toronto Airways at paragraph 39.
d. MPAC’s expert did not address the existing structures and regulations on airport lands that would need to be addressed for development to occur: see Toronto Airways at paragraph 40.
43In Farlinger, the Court of Appeal extensively recited the facts that it considered, as a whole, in determining that there was no reasonable probability of rezoning.
44In McNally v Etobicoke (City), 2015 CanLII 30373 (ON ARB) (“McNally”), MPAC argued the property should be valued based on a HABU as a high-density development, while the property owners argued it should be valued based on its current use. The property owners had submitted a development application to allow a high-density condominium building on the property, seeking an increase in density from 3.5 to 4.2. MPAC supported its position by relying on that application, a planning report concerning zoning bylaw amendments for two separate abutting sites, and sales of three nearby properties that became or were approved for high density condominium development: see McNally at paragraphs 38 and 41. The existing zoning did not permit a high-density development, and MPAC did not provide an assessment of the probability of a zoning change. Further, the property owners were required to enter individual contracts regarding several issues prior to development, and the evidence was that one of the third Parties was “not in a hurry” to enter into an agreement: see McNally at paragraph 44. It is in this context that the Board decided that, given the “great deal of uncertainty on how the redevelopment will proceed”, it could not find that a rezoning was reasonably probable.
45In the Subject Appeals, the Board will take the same approach as 2681 Danforth, Toronto Airways, Farlinger, and McNally. The appropriate approach to determining the reasonable probability of a rezoning is to consider the facts as a whole, with no single factor being determinative.
46At paragraph 22 of their responding submissions on these appeals, the Appellant states that the Board should ask whether “… there is a higher and better use of the property which is permitted by the existing zoning”, suggesting that “this approach minimizes speculation as to future uses of a property.” The Board does not accept that the applicable standard is what use “is permitted by the existing zoning.” As confirmed by the Court of Appeal in Farlinger, when the actual zoning as of the valuation day precludes a particular use, the legal permissibility prong requires asking whether “there is a probability or reasonable expectation”, as of the valuation day, that rezoning would occur. That is the standard the Board will apply.
c. MPAC’s proposed HABU
47On the whole of the evidence, the Board finds that MPAC’s proposed HABU satisfies the legal permissibility prong of the analysis. In this regard, the Board finds that a rezoning to permit a FSI of 6.5 was reasonably probable as of January 1, 2016. In making this finding, the Board accepts and relies on the following evidence:
a. Planning documents support intensification and higher density development at the Subject Property, including the Provincial Policy Statement, the Growth Plan for the Greater Golden Horseshoe, and the City of Toronto’s Official Plan. In particular, the Official Plan identifies the Subject Property within Downtown and Central Waterfront, and directs that intensification and growth be directed to that area. The Subject Property is also designated “Mixed Use Area”, designated for a range of commercial and residential uses. Further, the Downtown Tall Buildings: Vision and Supplementary Design Guidelines locates the Subject Property on the section of Yonge Street called a “High Street”, an area appropriate for tall buildings. Tall buildings include a tower-base form, being a tower atop a wider base. Finally, the Subject Property is proximate to the Yonge-University TTC subway line, including Yonge/Bloor which is the busiest subway station in the City of Toronto. Intensification is specifically targeted to areas near public transit.
b. In or around 2001/2002, the Appellant had filed a zoning amendment application to develop a 41,077 sq. ft. portion of the lot. This portion of the lot was severed and the Appellant sold it to a different owner in 2005. In 2003, site-specific zoning by-law 101-2003 was enacted and a density of 7.7 times was permitted on this severed portion of the property - as stated by MPAC’s expert, “[b]etween application and approval was less than a year and a half.” This density was increased to an FSI of 8.24 by the Committee of Adjustment, and eventually a single tower of 37-storeys atop an eight-storey base with a GFA of approximately 330,000 sq. ft. was built. This building, immediately adjacent to the Subject Property, is now known as Milan Condos. While what a neighbouring property is approved for, or likely to be approved for, is unlikely to be sufficient evidence on its own that redevelopment of a subject property is reasonably probable, such evidence is weighed, together with all other evidence - when determining whether rezoning is reasonably probable.
c. The Board notes the Appellant’s expert’s evidence that the increased density on the Milan Condos property resulted in a decreased density on the Subject Property, such that both properties must be considered at the same time. The Board does not accept this view, noting that the planning staff report to Council explicitly examined the density applicable to the proposed building on the portion of the site to be used for residential use, and determined that a density of 7.7 times compared to the densities of residential development within the surrounding area. Further, the Committee of Adjustment variance to a density of 8.24 occurred after the property had been severed.
d. The Board accepts that the Subject Property falls into the height ridge area along Yonge Street, consistent with the City of Toronto’s Site and Area Specific Plan 211 (“SAS 211”). The Board finds that an FSI of 6.5 is reasonable given that SAS 211 indicates that as one moves north from Bloor along Yonge Street, heights are expected to diminish. Milan Condos has a 37-storey tower with an eight-storey base. An FSI of 6.5 would permit multiple configurations of buildings on the Subject Property including towers consistent with a diminishing height ridge.
e. There is extensive – in fact, overwhelming – market evidence supporting that a rezoning for higher density is reasonably probable. Of the dozens of property sales near the Subject Property that were referenced by the experts, all had rezoning applications filed seeking approval for densities exceeding as-of-right zoning. While not all applications were approved for the densities sought in the application, all were approved for densities exceeding the as-of-right zoning. Every single property was rezoned for higher densities than those provided for in Zoning By-law 438-86. Without addressing every single sale, the Board highlights the following market evidence:
i. The Appellant’s expert analyzed 28 nearby developments. All 28 had rezoning applications filed between December 2008 to December 2016 seeking medium- and high-density development. All 28 requested densities exceeding 5.8. Of these 28 developments, the “approved” GFA following the rezoning application was unknown in 13. The remaining 15 were approved for medium- and high-density development. Three of these 15 were approved for smaller GFAs than proposed in their development applications, but still had FSIs of 17.4, 10.8 and 7.1 respectively. Two of these 15 were approved for the proposed GFAs, resulting in FSIs of 18.7 and 12.6. Perhaps most importantly, nine of these 15 sites were approved for greater densities than were actually proposed in the rezoning applications. Looking at 126 Hazelton Avenue, which the Appellant’s expert opined was the “most comparable” to the Subject Property, it was rezoned to an FSI exceeding 6.1 Notably, this property is in a low-rise area with more restrictive planning policies in place than those applying to the Subject Property.
ii. MPAC’s expert analyzed over 60 individual sales of 27 different development sites near the Subject Property. In every case, zoning amendment applications were filed to seek allowances far more than the as-of-right zoning in place at the time of sale. In every case, zoning amendments exceeding the as-of-right zoning were granted by either the City or the Ontario Municipal Board/Ontario Land Tribunal.
48Overall, the Board finds that the evidence shows there has been a significant number of properties situated within reasonable proximity to the Subject Property which have been sold as mixed-use development properties with higher density zoning granted following the sale. In this context, the Board is satisfied there is a reasonable probability of rezoning at the Subject Property as of January 1, 2016 to permit the development contemplated in MPAC’s proposed HABU.
49In making its findings, the Board gives no weight to evidence that the Appellant filed a zoning amendment application relating to the Subject Property in 2022, nor does the Board give weight to a planning report prepared in August 2022 that proposes a high-density mixed-use development on the Subject Property with a large podium and two residential towers at 49 and 41 storeys respectively (the “Bousfields Report”). In the zoning amendment application, the Appellant sought an FSI of 8.8 with a total GFA of approximately 1,028,000 sq. ft. In the circumstances of this case, the Board finds the application and the Bousfields Report are too far removed from the valuation day to be reliable indicators of what was reasonably probable as of January 1, 2016.
50In addition, the Board gives no weight to the evidence that the Subject Property’s 2012 assessment was returned at its land value using an FSI of 6.5, cited by MPAC as a fact in support of its HABU. The previous returned assessment is not relevant to what was reasonably probable with respect to a rezoning as of January 1, 2016.
51The Appellant has argued extensively that a rezoning was not reasonably probable “within a reasonable timeframe”, relying on 2681 Danforth. The Board has given due consideration to 2681 Danforth and finds as follows:
a. First, as the Board has stated above, the entire context must be considered. Most notably, the evidence is that dozens of properties surrounding the Subject Property were approved for development exceeding the as-of-right zoning, including Milan Condos immediately adjacent to the Subject Property. On this fact alone, the circumstances are different than what was before the Board in 2681 Danforth, Toronto Airways and McNally.
b. Second, the evidence in this case regarding the development timeline is slightly different than 2681 Danforth, Toronto Airways and McNally, in the sense that there is evidence that the Milan Condos rezoning happened in under two years from application. To be clear, the Board does not find that there is a specific window of time that renders a rezoning reasonably probable – for instance, the Board does not take the view that three to five years is unreasonable, but two years is reasonable. However, on the facts of this case, weighing all the evidence including the overwhelming evidence that dozens of developments in the vicinity of the Subject Property were approved for higher densities than the as-of-right zoning, the Board is satisfied that rezoning was reasonably probable.
52To find that MPAC’s proposed HABU is legally permissible, the Board is required to determine the reasonable probability of a rezoning to a density of at least 6.5 as of January 1, 2016. Considering all of the circumstances and the evidence cited at paragraph 47 above, the Board finds that it is reasonably probable. This is not inconsistent with previous Board decisions, but rather entirely consistent with the Board’s approach of addressing each case on its own facts. In this case – relying on all of the information cited above, weighed together with no single fact being determinative – the Board is satisfied that it is reasonably probable that a rezoning to permit a density of at least 6.5 would occur. Therefore, MPAC’s proposed HABU satisfies the legal permissibility criterion.
Financial Feasibility
53In its post-hearing written submissions, the Appellant argues that MPAC has not proven that its HABU is financially feasible.
54The Board notes that, at the hearing of the Subject Appeals, neither Party nor expert disputed that high-rise mixed-use redevelopment of the Subject Property was financially feasible.
55The Appellant’s position is inconsistent with its own expert’s evidence. At paragraph 41 of his report, the Appellant’s expert stated:
Based on the number of tall building developments in the area, any medium- and high-density residential use would likely turn out a positive cash flow. Given the high density of residential uses in the area, it is likely that most commercial and retail uses would turn out a positive cash flow. Mixed retail and residential use would also likely turn out a positive cash flow, based on the number of mixed-use development proposals (emphasis added).
56The Board accepts the Appellant’s expert’s evidence in this regard.
57The Board finds that MPAC’s proposed HABU satisfies the financial feasibility criterion for the following reasons:
a. First and foremost, both experts agreed that medium and high-density residential use would be financially feasible.
b. MPAC’s expert provided uncontested evidence that the projected sales revenue from constructed units in Yorkville and along Yonge Street as of January 1, 2016 was roughly $816 per sq. ft. after adjusting for square footage lost to common areas, stairwells, and so on. He opined that this would exceed land and building costs (estimated at a high end of $760 per sq. ft.) and therefore development was financially feasible.
c. MPAC’s expert also provided evidence of property sales in the Yorkville area and along the Yonge corridor, reflecting that 7,589 new condominiums were brought to market between April 2014 and September 2019 with a median number of sold units per development of 97%. This is a sufficient range on either side of the valuation date to infer demand after January 1, 2016 in the Subject Property’s market area.
d. Finally, MPAC’s expert also provided extensive evidence of property sales in the same area as the Subject Property, including focusing on his 15 “most similar” sales in the time frame between 2011 and 2019. While the Board is not making a determination as to whether these 15 properties are comparable for the purpose of determining the specific quantum of the current value of the Subject Property (this determination will occur in the Board’s analysis of Issue 2, below), the Board considers that this evidence is sufficient for the purposes of determining whether there is market demand for medium and high-density mixed use development properties in the area of the Subject Property. The Board finds that MPAC’s evidence indicates that properties in the vicinity of the Subject Property have been sold as development properties for at least these eight years, reflecting a relatively stable market demand during the relevant time. The Board finds that this evidence supports the conclusion that medium and high-density mixed-use development properties were being bought and sold before and after the January 1, 2016 valuation day. Put another way, the evidence shows that demand for medium and high-density mixed-use properties was not satisfied by existing properties in the market area of the Subject Property as of the valuation day.
e. As noted above, the experts referenced dozens of sales and, in each instance, development applications were filed seeking rezoning for higher densities. While the outcome of each application is not known for every sale, in each case where the outcome was known, the properties were zoned for higher densities than in their as-of-right zoning. The Board finds there is a preponderance of sales evidence in this case, from the same market area as the Subject Property, to support a trend analysis and infer that properties are being bought and sold for medium and high-density development and that MPAC’s proposed HABU is financially feasible.
58Accordingly, the Board finds that both Parties have established that their proposed HABU is financially feasible.
Maximally Productive
59The Parties agreed that the Subject Property’s current state as a large format retail store and gas bar is an underutilization of the property. The experts provided extensive evidence on value, based on their proposed HABUs. The Board will make findings respecting value later in this decision. However, considering the expert evidence on value based on the Parties’ respective HABUs (MPAC at over $100,000,000 and the Appellant at $30,000,000) the Board finds that development in accordance with MPAC’s proposed HABU would be the maximally productive use.
Conclusion Respecting HABU
60The Board finds that the HABU of the Subject Property is mixed-use development at a minimum FSI of 6.5, which would result in a total buildable GFA of 764,478 sq. ft.
Issue 2 – What is the correct current value of the Subject Property for the January 1, 2016 valuation day?
61Having determined the HABU is mixed-use development at a minimum density reflected in the FSI of 6.5 resulting in a total buildable GFA of 764,478 sq. ft., the Board must now determine the current value of the Subject Property based on that HABU.
Evidence and Submissions of the Parties
62The Parties agree that the Subject Property should be assessed based on its land value. The Parties agree that the Direct Sales Comparison approach is the appropriate valuation methodology. They disagree on the appropriate rate to apply. More specifically, they disagree on which property sales should be included in the analysis to determine the appropriate rate per buildable sq. ft., and how the sale prices should be adjusted to develop that rate.
63Given the significant volume of evidence provided to the Board, the Board will only summarize the evidence that is most relevant to its analysis.
MPAC’s Evidence and Expert Opinion of Value
64MPAC’s expert proposed a rate per sq ft. of buildable GFA of $145.
65In support of this value, he reviewed over 60 sales consolidated to 32 assemblies that occurred between February 2011 and May 2019 along the Yonge Street corridor and in Yorkville near the Subject Property. 19 of these sales were sold with an as-of-right FSI of 3.0 or lower. With limited exceptions, MPAC’s expert relied on sales where development applications, including zoning bylaw amendment applications, were filed after the sale. MPAC’s expert then narrowed his sales to the 15 “most similar” sales and divided the time-adjusted sale prices by the approved GFA after post-sale zoning bylaw amendment applications. He also applied location adjustments to address inferior or superior locations. This resulted in a mean rate/sq. ft. of buildable GFA of $145 and a median rate of $149.
MPAC’s Sales Evidence2 - 15 “Most Similar” Sales
| Address | Sale Date | Time Adjusted Sale Price | Lot Size in Sq. Ft. | Approved GFA Following Zoning Amendment Application | Rate Per Sq. Ft. Buildable | Rate Per Sq. Ft. Buildable with Adjustment |
|---|---|---|---|---|---|---|
| 50 Cumberland | February 2011 | $161,096,040 | 50,094 | 911,905 | $177 | $159 |
| 2131 Yonge, 32 Hillsdale Ave and 29-31 Soudan Ave | October 2011 | $64,009,200 | 69,513 | 549,766 | $116 | $140 |
| 581 Bloor St W | November 2013 | $90,000,000 | 151,028 | 867,172 | $104 | $125 |
| 20 Edward | February 2014 | $63,345,000 | 32,000 | 512,095 | $124 | $124 |
| 826-834 Yonge Street | October 2014 | $53,586,000 | 15,376 | 317,535 | $169 | $169 |
| 1521 Yonge | August 2015 | $25,268,100 | 18,359 | 186,895 | $135 | $149 |
| 363-385 Yonge Street | February 2016 | $155,172,414 | Not provided | 1,017,189 | $153 | $153 |
| 21 Yorkville Ave | January 2018 | $18,243,902 | 8,968 | 139,452 | $131 | $118 |
| 1507 Yonge Street | May 2016 | $12,015,311 | 8,987 | 91,488 | $131 | $144 |
| 8-10 Price St, 5 Scrivenor Square | June 2016 | $40,758,294 | 35,358 | 256,181 | $159 | $159 |
| 50 Cumberland | June 2017 | $188,421,053 | 63,106 | 1,148,724 | $164 | $148 |
| 11 Yorkville Ave | August 2017 | $30,508,475 | 13,402 | 208,401 | $146 | $161 |
| 836-848 Yonge Street | January 2012 to August 2013 | $54,491,440 | 23,384 | 437,014 | $125 | $125 |
| 50 Charles Street East | September 2012 | $75,363,020 | 32,015 | 495,140 | $152 | $152 |
| 2400-2444 Yonge and 35 Roselawn Avenue | January 2015 to May 2017 | $81,145,711 | 87,557 | 589,309 | $138 | $158 |
| Median | $149 | |||||
| Average | $145 |
66MPAC’s expert then applied the rate of $145 per sq. ft. to the GFA of 764,478 sq. ft. (which he derived by multiplying the FSI of 6.5 by the total lot area of 117,612 sq. ft.) and determined a total current value of $110,849,000 (rounded).
67MPAC’s expert also provided evidence regarding a third-party review of market rates per buildable sq. ft. in Toronto performed by MCAP, an independent mortgage finance company. According to MCAP’s “Lot and Land Value Report” for fall 2015 ending November 27, 2015, the going market rate per buildable sq. ft. for the Subject Property’s neighbourhood of Bloor Yorkville is $135 to $145. MPAC’s expert confirmed that his proposed rate of $145 per buildable sq. ft. is in line with that range.
68The City did not provide the Board with expert evidence, but supported MPAC’s position.
Appellant’s Evidence and Expert Opinion of Value
69After noting his opinion that there were no sales of similar land in comparable locations with comparable lot sizes and/or comparable density, the Appellant’s expert ultimately relied on five land sales/assemblies that occurred near the Subject Property between 2012 and 2016, with a size range from 0.1 to 1.5 acres. The Appellant’s expert opined that the dearth of market data required significant adjustments to align with the Subject Property (“far greater than what is typically warranted or accepted”). He then applied several adjustments to these land sales/assemblies, including adjustments for time, size, location, and development applications.
Appellant’s Sales Evidence3
| Address | Sale Date | Sale Price | Lot Size in Acres | Rate Per Acre with Adjustments for Time, Size, Development Application and Location | Buildable GFA | Rate Per Sq. Ft. Buildable with Adjustments for Time, Size, Development Application and Location |
|---|---|---|---|---|---|---|
| 9-11 Scollard Street and 874-878 Yonge Street | July 2015 | $13,000,0004 | 0.1165 | $14,274,300 | 190,050 | $64 |
| 50-64 Charles Street East and 61 Hayden Street | March and December 2013, January 2014 | $50,449,999 | 1.049 | $9,458,164 | 558,200 | $95 |
| 33-49 Avenue Road and 140, 122-150 Yorkville Avenue | January 2012 and November 2013 | $54,218,000 | 0.55 | $12,279,647 | 341,040 | $146 |
| 109-111 Pears Avenue and 183-189 Avenue Road | May 2016 | $15,350,000 | 0.29 | $8,026,801 | 81,386 | $93 |
| 159 Wellesley Street East | February 2015 | $15,900,036 | 0.353 | $7,004,498 | 248,593 | $87 |
70After adjustments, the Appellant’s expert determined a median rate per acre of $9,458,164 and a median rate per buildable sq. ft. of $93. He confirmed that, given the range of values, the most probable price lies between $25,000,000 and $34,000,000, while the irregular shape of the lot would push the most probable value to the downward end of the range. Ultimately, the Appellant’s expert proposed a rate per sq. ft. buildable of $92. He applied this rate to 323,640 buildable sq. ft. for a current value of $29,774,000 or $30,000,000 rounded.
Findings on Issue 2
Appellant’s Expert’s Opinion of Current Value
71The Board does not accept the Appellant’s expert’s ultimate opinion of current value at $30,000,000, primarily because the Appellant’s expert based his opinion on a buildable GFA of 323,640 sq. ft. The Board has found this does not reflect the HABU of the Subject Property. The Board finds that the evidence indicates that the sale price negotiated by a willing seller and buyer would be based on a projected development density that is higher than the as-of-right zoning.
Excluded Sales
72The Board accepts the approach proposed by MPAC’s expert of relying on sales with similarly zoned as-of-right densities to the Subject Property at the time of sale with higher densities approved as part of a post-sale rezoning. Not only does this approach ensure an element of comparability between the proposed sales and the Subject Property, but it avoids the necessity of having to apply an adjustment for development applications. For this reason, the Board does not accept the 2017 sale of 50 Cumberland Street and 363-385 Yonge Street (both relied on by MPAC’s expert), or the sale of 33-49 Avenue Road and 140, 144-150 Yorkville Road (relied on by the Appellant’s expert), as the evidence shows there were development applications filed or approved before these transactions occurred.
73The Board will not rely on the development at 50-64 Charles Street East and 61 Hayden Street (relied on by both experts). Although both experts used this sale in their analyses, they calculated different rates per buildable sq. ft. because they used different sale dates. The sale dates for this assembly matter for two reasons: first, for the time adjustment; and second, for determining whether the zoning bylaw amendment application, which was filed in July 2013, occurred before or after the sales. As noted above, the Board has determined that it will only consider sales where zoning bylaw amendment applications were filed after the sale. Ultimately, neither party’s expert satisfied the Board regarding the applicable sale dates for this assembly. Since the Board cannot be certain of the sale dates and, therefore, whether the development application was filed before or after the sales, the Board will not rely on 50-64 Charles Street East and 61 Hayden Street.
74The Board will not rely on the development at 9-11 Scollard Street and 874-878 Yonge Street (relied on by the Appellant’s expert in his analysis) for the following reasons:
a. Both experts agreed that i) the final sale price of the entire assembly was unknown; ii) the purchase price appeared to capture a highly speculative density, as a post-sale zoning bylaw amendment application filed in June 2016 sought a 59-storey residential tower with a 7-level underground parking garage with an FSI of 37.5; and iii) it is a clear outlier.
b. The Appellant’s expert opined in his report that this sale should only be used “with caution”. However, he used this sale equally alongside the others in determining his proposed rate, without any “caution” applied.
75The Board will not rely on 159 Wellesley Street East (relied on by the Appellant’s expert in his analysis) for the following reasons:
a. The Appellant’s expert opined that the property has many differences to the Subject Property including that it is in the inferior neighbourhood of St. James Town; that it is an “Apartment Neighbourhood” in the Official Plan compared to the “Mixed Use” designation of the Subject Property; and that there were requirements that a number of units be sold at below market rates. The Board accepts this evidence. The Appellant’s expert indicated that “[a]ll of this combined makes this Comparable Land Sale a secondary indicator of value.” However, the Appellant’s expert did not define what a “secondary indicator of value” actually means for his analysis, nor is there any indication that the Appellant’s expert ultimately treated 159 Wellesley Street East as a “secondary indicator of value”. In fact, he relied on it equally with the other sales in his analysis.
b. The Appellant’s expert opined that there should be an upward adjustment made to the $87 per sq. ft. buildable, but then did not perform that adjustment. The Appellant’s expert attempted to address this critique in examination when he stated that his conclusion of value of $92 per sq. ft. buildable was higher than $87. The Board is not satisfied by this explanation for the expert’s failure to make the adjustment.
c. The Appellant’s expert report identifies that 159 Wellesley Street East was zoned “Residential” at the time of sale, which is different than the Subject Property’s mixed-use zoning designation. There was little discussion or analysis relating to whether an adjustment was necessary due to this difference.
76The Board will not rely on 109 to 111 Pears Avenue and 183 to 189 Avenue Road (relied on by the Appellant’s expert), 20 Edward Street, 826-834 Yonge Street, 1521 Yonge Street, 21 Yorkville Avenue, 1507 Yonge Street, 8-10 Price Street/5 Scrivenor Square, 11 Yorkville Avenue, 836-848 Yonge Street, and the 2011 sale of 50 Cumberland (all relied on by MPAC’s expert) because these properties are significantly smaller than the Subject Property’s 2.704 acres. MPAC’s expert opined that a size adjustment is not warranted to any sales, while the Appellant’s expert testified that there is a significant difference in rates for small properties compared to larger properties. To alleviate the need for any size adjustment, the Board excludes these properties on the basis that they are simply not comparable to the Subject Property in terms of size.
Reliable Sales Evidence
77This leaves i) 581 Bloor Street West; ii) 2131 Yonge Street, 32 Hillsdale Avenue and 29-31 Soudan Avenue; and iii) 2400-2444 Yonge Street and 35 Roselawn Avenue (relied on by MPAC’s expert).
78The Board finds these sales are sufficiently comparable to the Subject Property and will rely on them for the following reasons:
a. With respect to 581 Bloor Street West, the assembly is of comparable size to the Subject Property, albeit slightly larger at over 3 acres in size. The zoning at the time of sale allowed for a total GFA of roughly 377,555 sq. ft. buildable based on an average site density of 2.5, which is comparable to the as-of-right zoning at the Subject Property. Applications were filed in July 2015, and approval was granted in April 2017 for an 844,428 sq. ft. development. It sold roughly two years and one month ahead of the valuation day, which could be considered too far removed from the valuation day to be a reliable indicator of market value. However, given the dearth of sufficiently comparable properties for the purposes of determining current value, the fact that the experts agree on a 1% market adjustment prior to January 1, 2016, and the other elements of comparability with the Subject Property, in this instance the Board will accept and rely on this sale.
b. With respect to 2131 Yonge Street, 32 Hillsdale Avenue and 29-31 Soudan Avenue, it is almost 1.6 acres in size and was zoned to permit mixed-use development with a maximum density of 3 times, as was the Subject Property. The zoning by-law amendment application was filed in January 2013, and eventually a development was approved with a final total GFA of 549,766 and a FSI of 7.91. It sold in October 2011, over four years ahead of the valuation day, which could be considered too far removed from the valuation day to be a reliable indicator of market value. However, given the dearth of sufficiently comparable properties for the purposes of determining current value, the fact that the experts agree on a 1% market adjustment prior to January 1, 2016, and the other elements of comparability with the Subject Property, in this instance the Board will accept and rely on this sale.
c. With respect to 2400-2444 Yonge Street and 35 Roselawn Avenue, this assembly is the closest in size to the Subject Property, forming a 2.058-acre parcel. Sales occurred between January 2015 and May 2017, relatively close to the valuation day. A development application was filed in June 2017 seeking a GFA of 565,433 sq. ft. with a FSI of 6.34. This application was refused by the City. It was appealed to the Ontario Land Tribunal, but no decision was issued at the time of MPAC’s report. Following Official Plan Amendment 405 issued on June 5, 2019, which increased the height allowances of several districts in the Yonge and Eglinton development node, a revised application seeking an increased GFA of 589,309 sq. ft. with a FSI of 6.61 was filed in 2019. MPAC’s expert relied on a GFA of 589,309 with a FSI of 6.61 based on the 2019 application but did not provide any further information regarding the status of this application, including whether the proposed GFA was ultimately approved. Although there is no evidence in the record to substantiate whether this proposed 589,309 sq. ft. GFA was approved, the Board finds that it is likely it would have been approved on the basis of OPA 405 and therefore it is reasonable to use the proposed GFA of 589,309. Given the dearth of sufficiently comparable properties for the purposes of determining current value, and the numerous elements of comparability between this sale and the Subject Property, the Board accepts and relies on this sale.
Applicable Rates and Adjustments
a. 581 Bloor Street West
79MPAC’s expert report states that the time-adjusted sale price of 581 Bloor Street West is $90,000,000, producing a rate per sq. ft. buildable of $101 based on the rezoned GFA. The rezoned GFA, stated on page 92 of the expert’s report, is 844,428 sq. ft. However, on the chart on page 50 of MPAC’s expert report (replicated in this Decision at paragraph 65), he used a rezoned GFA of 867,172 to determine a time-adjusted rate per sq. ft. buildable of $104 (90,000,000 / 867,172 = 103.79). The Appellant’s expert stated in his reply report that approval was granted in April 2017 for a 844,428 sq. ft. development, which is consistent with page 92 of MPAC’s expert report. Therefore, the Board finds that the buildable GFA that should be used is 844,428 sq. ft.
80When the Board performs the arithmetic based on the 844,428 sq. ft. of approved GFA, the Board determines a time-adjusted rate per sq. ft. buildable of $107 (rounded): $90,000,000 / 844,428 = 106.58.
81Both experts agreed that this site is in an inferior location to the Subject Property. MPAC’s expert applied an upward location adjustment of 20% to a time-adjusted rate per sq. ft. buildable of $104, arriving at a rate per sq. ft. buildable of $125, adjusted for time and location.
82The Appellant’s expert disputed this adjustment, although he did not propose a revised rate. He challenged the location adjustment on two grounds:
a. The website condos.ca shows that this area sells for 12.32% less than the Subject Property’s neighbourhood; and
b. A comparison between a whole neighbourhood and a specific development is not a sufficient indication of value to derive a locational adjustment.
83The Board does not accept the Appellant’s expert’s challenge to the location adjustment applied by MPAC’s expert. First, the Appellant’s expert did not substantiate his statement that condos.ca suggests the area sells for 12.32% less despite MPAC’s expert being unable to replicate that data. Second, MPAC’s expert did not derive his adjustment from only one development. He explained his location adjustment starting at page 116 of his expert report, noting that he used data from condos.ca and used Milan Condos, 77 McMurrich Street, 21 Scollard Street and 8 Scollard Street as proxies for the Subject Property. The Board accepts MPAC’s expert evidence respecting location adjustment.
84Applying a 20% location adjustment to a time-adjusted sale price of $107, the Board determines a rate per buildable sq. ft., adjusted for time and location, of $128 (rounded):
i) 107 x 0.2 = 21.4
ii) 107 + 21.4 = 128.40
b. 2131 Yonge Street, 32 Hillsdale Avenue and 29-31 Soudan Avenue
85MPAC’s expert determined a time-adjusted sale price of $64,009,200. He divided this by the approved buildable GFA of 549,766 to result in a time-adjusted rate per sq. ft. buildable of $116. He then applied an upward adjustment of 20% for location to arrive at a rate per buildable sq. ft. of $140.
86The Appellant’s expert disputed this location adjustment, stating it is unclear how MPAC’s expert derived this adjustment and that condos.ca data suggests that this area historically sold for 12% less than the Subject Property’s area.
87The Board does not accept the Appellant’s expert’s challenge to the location adjustment applied by MPAC’s expert, for the same reasons outlined above in relation to 581 Bloor Street West. The Board also accepts MPAC’s location adjustment for the same reasons.
88Applying a 20% location adjustment to a time-adjusted sale price of $116, the Board determines a rate per buildable sq. ft., adjusted for time and location, of $139 (rounded):
i) 116 x 0.20 = 23.2
ii) 116 + 23.2 = 139.20
c. 2400-2444 Yonge and 35 Roselawn Avenue
89MPAC’s expert determined a time-adjusted sale price of $81,145,711. He divided this by a GFA of 589,309, which is the GFA sought in the revised application filed in 2019. This resulted in a time-adjusted rate per sq. ft. buildable of $138. He then applied an upward adjustment of 15% for location, to arrive at a rate per buildable sq. ft. of $158.
90The Appellant’s expert disputed this location adjustment, although he did not propose a revised rate. He challenged it on the basis that MPAC’s expert did not explain the basis for the adjustment. He noted that per condos.ca, the average price of condominium units in the Yonge and Eglinton neighbourhood was just under a 6% discount when compared with the neighbourhood in which the Subject Property is located.
91For the same reasons outlined above in relation to 581 Bloor Street West, the Board does not accept the Appellant’s expert’s challenge of MPAC’s location adjustment. For the same reasons, the Board accepts MPAC’s location adjustment.
92Applying a 15% location adjustment to a time-adjusted sale price of $138, the Board determines a rate per buildable sq. ft., adjusted for time and location, of $159 (rounded):
iii) 138 x 0.15 = 20.7
iv) 138 + 20.7 = 158.7
Final Calculation of Current Value
93The Board finds that the adjusted rates per square foot buildable of the comparable properties are $128, $139, and $159 respectively. The median rate is $139.
94The reasonableness of a $139 per sq. ft. buildable rate is reinforced by the fact that it is within the range identified by MCAP of $135 to $145 for the Bloor Yorkville neighbourhood for the period ending November 27, 2015.
95Applying a rate per sq. ft. of $139 to a 764,478 sq. ft GFA buildable, which the Board has determined is the HABU of the Subject Property, results in a current value of $106,262,000 (rounded): 139 x 764,478 = 106,262,442.
96The Board finds that the correct current value of the Subject Property is $106,262,000.
Issue 3 – Should a reduction in the current value be made to make it equitable with the assessments of similar lands in the vicinity?
Applicable Law
97Section 44(3)(b) of the Act requires that the Board have reference to the assessments of similar lands in the vicinity of the Subject Property and, if there is evidence of an inequity, lower the correct current value to an equitable assessment.
Evidence and Submissions of the Parties
98The Appellant did not identify or explicitly advance evidence to support an equitable reduction, nor did they provide submissions on this issue.
99MPAC’s expert provided an assessment to sale ratio (“ASR”) analysis of 12 of the 15 “most similar sales” used in its report. MPAC derived an ASR for each property by dividing the returned current value assessment for January 1, 2016 by the time-adjusted sale price of each property. MPAC determined a median time-adjusted ASR of 0.92 for the 2017 taxation year and 0.94 for the 2018 and 2019 taxation years. An ASR of 0.92 and 0.94 suggests that similar properties in the vicinity to the Subject Property are generally assessed 8% and 6%, respectively, less than their time-adjusted sale prices.
100In its written submissions following the hearing, MPAC submits that its proposed current value of $110,849,000 (based on an FSI of 6.5 at the development rate of $145 per sq. ft. buildable) should receive an equitable reduction of 6% based on an ASR of 0.94, to set an equitable current value of $104,866,000. MPAC submits that in all other circumstances, there should be no adjustment for equity.
Findings on Issue 3
101While the Appellant did not raise the issue of an equitable adjustment, this Board has held that it has a statutory duty to consider whether an equitable adjustment is required pursuant to s. 44(3)(b) of the Act regardless of whether the parties have raised it as an issue in dispute. In this instance, the Board must determine whether it has sufficient evidence before it to determine whether an equitable adjustment is required and, if there is sufficient evidence, decide whether it supports a reduction in the current value.
102The Board finds that it does not have sufficient evidence to support an equitable reduction in this case. In the circumstances, only MPAC has identified evidence on which the Board may consider equity. The Board is not satisfied that MPAC’s ASR study, with a sample size of 12 properties, is enough in these circumstances for the Board to determine whether the Subject Property is being equitably assessed compared to similar properties in the vicinity.
103For this reason, the Board finds that an equitable adjustment is not required by s. 44(3)(b) of the Act.
CONCLUSION
104Accordingly, the Board finds:
a. The HABU of the Subject Property is mixed-use development at a FSI of 6.5 resulting in a total buildable GFA of 764,478 sq. ft.
b. For the January 1, 2016 valuation day, the correct current value of the Subject Property is $106,262,000.
c. An equitable adjustment is not required by s. 44(3)(b) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”), resulting in a final determination of value of $106,262,000.
ORDER
105The Board orders that the assessment of the Subject Property be increased to a current value of $106,262,000 for all taxation years under appeal.
106The Parties are directed to confer with one another and, within 15 days of this Decision being issued, advise the Board of their positions regarding the allocation of this value as between the roll numbers for each taxation year under appeal.
"Carly Stringer"
CARLY STRINGER MEMBER Assessment Review Board Website: www.tribunalsontario.ca/arb
Footnotes
- The experts disagreed regarding the FSI of 126 Hazelton Avenue. The Appellant’s expert stated at the hearing that the allowed density was 6.18. MPAC’s expert stated that 126 Hazelton has a site area of 3042 sq.ft; that the development proposal includes 128 Hazelton, with the combined site area being 9,495 sq. ft.; and that by-law 1265-2016 approved a GFA of 62,000 sq. ft. for the development, resulting in an approved FSI of 6.53.
- Information compiled from Exhibit 2, “Current Value Assessment Report, 835 and 839 Yonge Street, Toronto” by Blake Brown dated March 6, 2019 at pp. 49 and 51.
- Information compiled from Exhibit 6, “Retrospective Consulting Report For: 835 and 839 Yonge Street, Toronto” by Charles Johnstone dated October 31, 2019.
- 878 Yonge sold for an undisclosed price, making the total purchase price for the assembly unknown.
- Not including 878 Yonge