Tribunals Ontario

Assessment Review Board

Commission de révision de l'évaluation foncière

ISSUE DATE: November 01, 2024 FILE NO.: WR 186997 Assessed Person(s): 227 King Street Waterloo (Nominee) Inc. Appellant(s): 227 King Street Waterloo (Nominee) Inc. Respondent(s): City of Waterloo Property Location(s): 227 King Street South Municipality(ies): City of Waterloo Roll Number(s): 3016-031-200-02900-0000 Appeal Number(s): 3521021 Taxation Year(s): 2022 Hearing Event No.: 784296

Legislative Authority: Section 357 of the Municipal Act, 2001, S.O. 2001, c. 25

APPEARANCES:

Parties	Counsel/Representative
227 King Street Waterloo (Nominee) Inc.	Stephen Longo
City of Waterloo	Paul Hettinga

HEARD: September 4, 2024 by video conference call

ADJUDICATOR(S): Anita Lovrich, Member; Dan Weagant, Member

DECISION

OVERVIEW

Background

1227 King Street Waterloo (Nominee) Inc. (the "Appellant") has brought an appeal to the Assessment Review Board (the "Board") pursuant to s. 357(7) of the Municipal Act 2001, S.O. 2001, c. 25 (the "Municipal Act") relating to 227 King Street South in the City of Waterloo (the "Subject Property").

2While most of the Subject Property is located in the City of Waterloo, the southeast corner of the building is situated in the City of Kitchener ("Kitchener"). As a result, the Subject Property has been partially assessed as 227 King Street South, Waterloo (approx. 84.87%) with the remainder of the building (approx. 15.13%) assessed as 10 Union Boulevard, Kitchener.

3Because of renovations that took place on the Subject Property's fourth floor in 2022, the Appellant filed an application to the City of Waterloo (the "City") for the Subject Property seeking tax relief for the 2022 taxation year pursuant to s. 357(1)(g) of the Municipal Act, which provides as follows:

Cancellation, reduction, refund of taxes

357 (1) Upon application to the treasurer of a local municipality made in accordance with this section, the local municipality may cancel, reduce or refund all or part of taxes levied on land in the year in respect of which the application is made if,

(g) repairs or renovations to the land prevented the normal use of the land for a period of at least three months during the year.

4The Appellant sought a refund of taxes paid, arguing that the correct refund of taxes for the 2022 taxation year for the Subject Property is $166,405.91.

5The City determined a tax refund of $46,023.34 for the 2022 taxation year.

6The Appellant appealed the City's decision to this Board pursuant to s. 357(7) of the Municipal Act, arguing that the City's refund is incorrect and does not adequately address the repairs or renovation of the Subject Property's fourth floor in 2022. The Appellant's position is that the correct refund to be issued by the City for the 2022 taxation year is $166,405.91, as the fourth floor was undergoing repairs or renovations for all of 2022.

7The City attended the hearing to observe and answer questions.

Result

8For the reasons that follow, the Board finds that the correct refund of the taxes levied in the 2022 taxation year is $159,111.49. Recognizing that the City has already refunded $46,023.34, the additional tax to be refunded is $113,088.15.

Description of the Subject Property

9The Subject Property is a large office building that is situated on the southwest corner of King Street South and Union Boulevard, bounded by Park Street and John Street. The building straddles both the Municipalities of Waterloo and Kitchener.

Issues for the Hearing

10The Board must determine whether the Appellant is entitled to tax relief pursuant to s. 357(1)(g) of the Municipal Act for the 2022 taxation year. Specifically, the following issues must be addressed:

1. Issue 1: Did repairs or renovations of the Subject Property prevent its normal use for at least three months of the 2022 taxation year, per s. 357(1)(g) of the Municipal Act?
2. Issue 2: If the answer to Issue 1 is yes, should taxes be cancelled, reduced or refunded and, if so, how much?
3. Issue 3: If the answer to questions 1 and 2 are both yes, is the Appellant entitled to a further refund pursuant to s. 357(7) of the Municipal Act?

ANALYSIS

Issue 1: Did repairs or renovations of the Subject Property prevent its normal use for at least three months of the 2022 taxation year, per s. 357(1)(g) of the Municipal Act?

Evidence and Submissions of the Parties

11The Appellant's witness provided the following testimony relevant to Issue 1:

a. Demolition commenced on August 15, 2021, and went on until February 2022. Renovations began on February 4, 2022, and ended on December 15, 2022.

b. The normal use of the Subject Property was as the head office for Sun Life Insurance Company.

12The following documents were entered into evidence by the Appellant:

a. A document entitled "Contractor Letter" dated March 19, 2024 from Vestacon Limited confirming that "Construction demolition commenced on "15/08/21" and construction was completed on "15/12/22".

b. A permit issued February 4, 2022 describing "Interior Alterations - Interior Demolition (back to shell) 4th floor - Sun Life."

c. A permit issued July 29, 2021 describing "Interior Alterations – Interior Demolition (back to shell) 4th floor – Sun Life".

d. Construction Photo Progress Report showing construction progress at the fourth floor of the Subject Property from February 22, 2022 to December 13, 2022.

e. A property profile for 227 King Street South.

f. A property profile for 10 Union Boulevard.

Findings on Issue 1

13Based on the Appellant's uncontested evidence, the Board finds that repairs or renovations prevented the normal use of the Subject Property for a period of at least three months during 2022. In making this finding, the Board relies on the Appellant's documentary evidence, including contractor letter, permits, and photographic evidence, as well as the evidence of the Appellant's witness confirming that renovations prevented the fourth floor of the Subject Property being used as an office in 2022.

14The City did not challenge the Appellant's evidence.

15For these reasons, the Board finds that the answer to Issue 1 is that repairs or renovations did prevent the normal use of the Subject Property for at least three months of the 2022 taxation year.

16However, the Board finds that "repairs or renovations to the land" did not take place throughout the entire taxation year as submitted by the Appellant.

17The Appellant's witness testified that renovations were completed by December 15, 2022 and from that date until December 31, 2022, the offices at the Subject Property were closed for the seasonal break. This closure was not necessitated by repairs or renovations, which had already been completed by this date.

18The Board finds that repairs and renovations took place from January 1, 2022 to December 15, 2022. The Board also finds that those repairs and renovations prevented the normal use of the fourth floor.

Issue 2 - If the answer to Issue 1 is yes, should taxes be cancelled, reduced or refunded and, if so, how much?

Evidence and Submissions of the Parties

19At the hearing, the Appellant argued that the City should refund the Appellant an additional $120,373.65.

20As the appeal relates only to the renovations on the fourth floor of the Subject Property, the Appellant isolated the assessed current value of the entire fourth floor and determined that it was $13,436,01. It calculated 85% of that value, which is the portion of the Subject Property located in the City of Waterloo, as $11,420,611.

21The Appellant then applied the City's tax rate to this pro-rated value of the fourth floor to arrive at a total tax levy of $332,812.

22The Appellant argued that the demolition of the Subject Property's fourth floor prior to the repairs and renovations undertaken in 2022 resulted in a 50% current value adjustment. From this adjustment, the Appellant submits that 50% of the taxes levied are still payable and 50% of the taxes should be refunded owing to the repairs and renovations that occurred in 2022. That amount is $166,406.

23The Appellant further submitted that this total refund should be reduced by the refund already determined by Waterloo City Council of $46,023.34, resulting in an outstanding refund of $120,382.70.

24The City did not take any position on the quantum sought by the Appellant.

Findings on Issue 2

25The Appellant's rationale for the 50% adjustment requested was that this would account for the renovation of the fourth floor down to a shell. Although the Appellant did not provide further rationale for this adjustment, the City did not oppose the Appellant's evidence. Accordingly, the Board finds that, based on the uncontested evidence of the Appellant, the full eligible relief pursuant to s. 357 of the Municipal Act for the period of January 1, 2022 to December 15, 2022 is $159,111.49, calculated as follows:

2022 current value assessment of 4th floor of the Subject Property located in the City	$11,420,611
2022 taxes levied on 4th floor of the Subject Property located in the City	$332,812
X 50%	$166,406
Adjusted for 349/365 days	$159,111.49

Issue 3: If the answer to questions 1 and 2 are both yes, is the Appellant entitled to a further refund pursuant to s. 357(7) of the Municipal Act?

Findings on Issue 3

26Based on the Board's findings on Issue 2, the Board finds that the tax refund of $46,023.34 determined by the City is incorrect. The correct refund for the repairs and renovations of the fourth floor in the 2022 taxation year, pursuant to s. 357 of the Municipal Act is $159,111.49. Accordingly, as the City has already issued a refund of $46,023.34 to the Appellant pursuant to an application under s. 357(1)(g), the Board finds that a further refund of $113,088.15 is required to reflect the repairs or renovations on the fourth floor of the Subject Property for the 2022 taxation year.

CONCLUSION

27The Board finds that, pursuant to s. 357(7) of the Municipal Act, a further refund of the property taxes paid for the 2022 taxation year is required, in the amount of $113,088.15.

ORDER

28The Board orders that, for the 2022 taxation year, the City of Waterloo shall issue a further refund of $113,088.15 on the taxes levied for the Subject Property, in addition to the refund already issued by the City for the 2022 taxation year.