Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: January 22, 2024
Assessed Person(s): Avondale Stores Limited
Appellant(s): Avondale Stores Limited
Respondent(s): Municipal Property Assessment Corporation Region 18
Respondent(s): City of St. Catharines
Property Location(s): 80 Pelham Road
Municipality(ies): City of St. Catharines
Roll Number(s): 2629-020-030-00500-0000
Appeal Number(s): 3513306, 3489470 and 3473357
Taxation Year(s): 2021, 2022 and 2023
Hearing Event No.: 782692
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
Parties
Representative
Avondale Stores Limited
Jonas Perov
Municipal Property Assessment Corporation
Kashifa Aslam
City of St. Catharines
No one appeared
HEARD: January 9, 2024 by telephone conference call
ADJUDICATOR(S): Subuola Awoleri, Member
DECISION
OVERVIEW
1Avondale Stores Limited, (the “Appellant”), owner of 80 Pelham Road (the “Subject Property”), appealed the 2021 assessment of the Subject Property to the Assessment Review Board (the “Board”) under s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) on the ground that the assessment is too high. The Appellant is deemed to have brought the same appeal in respect of the 2022 and 2023 taxation years, pursuant to s. 40(26) of the Act.
2The Appellant argued that the current value assessment (“CVA”) of the Subject Property should be $357,000, with a further downward adjustment to $332,000 to make the current value equitable with the assessment of similar properties in the vicinity.
3The Subject Property was assessed by the Municipal Property Assessment Corporation (“MPAC”) at $420,000, in the commercial property class (COM CT). MPAC’s opinion of current value based on market sales is $510,712, with no adjustment for equity.
Areas of Agreement
4The parties agree that the correct valuation methodology to value the Subject Property is the Direct Comparison Approach.
Issues for the Hearing
5The issues to be determined are:
What is the correct current value of the Subject Property for the 2021, 2022 and 2023 taxation years?
Whether there should be an equitable reduction of the current value pursuant to s. 44(3)(b) of the Act, and, if so, what the amount of this reduction should be?
Result
6The Board determines the correct current value of the Subject Property for the 2021, 2022 and 2023 taxation years to be $376,000 (rounded).
7The Board finds that this assessment at current value is equitable with the assessments of similar lands in the vicinity, and therefore no further reduction is required to achieve equity.
8The Board reduces the assessment of the Subject Property from $420,000 to $376,000 (rounded) for the 2021, 2022 and 2023 taxation years.
ANALYSIS
Description of the Subject Property
9The Subject Property is a one-storey retail store built in 1944 located in the City of St. Catharines. It has a lot with 210 feet (“ft”) of actual frontage and 105 ft. of actual depth for an effective site area of 0.51 acres. It has a total floor area of 3,763 square feet (“sq. ft.”), with a weighted average height of 13 ft.
Issue 1 - What is the correct current value of the Subject Property for the 2021 2022 and 2023 taxation years?
10In accordance with s. 44(3)(a) of the Act, the first mandate of the Board is to determine “the current value of the land”. Section 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”. That is, for the 2021, 2022 and 2023 taxation years, the Board must determine what the Subject Property would have sold for in an arm’s length transaction on the January 1, 2016 valuation day set by the Act.
11The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the Subject Property on the valuation day or close to it. If no such transaction took place, the next best measure of current value is arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the legislated valuation day of January 1, 2016.
12The Board finds the current value of the Subject Property for the 2021, 2022 and 2023 taxation years to be $376,000 (rounded).
MPAC’s Proposed Comparable Properties
13MPAC presented the Board with seven proposed comparable property sales. The Appellant also relied on MPAC’s comparable property sales in providing the Board with the correct current value of the Subject Property. The details of MPAC’s seven comparable property sales are provided in Attachment 1.
14In providing the Board with its opinion of current value for the Subject Property, MPAC used the assessed value of the Subject Property (the building and land value) and the assessed building and land values of the seven comparable property sales to adjust the time-adjusted sale prices of the comparable properties, in order to make these properties comparable with the Subject Property. MPAC submitted that the median adjusted time-adjusted sale price of the seven proposed comparable sales is $510,712, and this is the correct current value of the Subject Property.
15The Board finds that this method is not consistent with the definition of current value in the Act. The legislative mandate of the Board is to determine the correct current value of the Subject Property. The Board finds that the assessed values would not assist the Board in this determination in line with the definition of current value in the Act. The Board’s determination of the correct current value of the Subject Property requires evidence of the value of the comparable properties. A sale price is evidence of value, but an assessed value is not, as properties may be over- or under-assessed. MPAC provides the assessed values of properties, using its model to make an estimation, since most properties would not have been sold on the valuation day of January 1, 2016. This is what is referred to as the assessed value of the Subject Property, i.e., the value that was entered on the assessment roll. Current value is the market value of the Subject Property as defined under s. 1 of the Act.
16The Appellant submitted that MPAC’s proposed comparable property sale 3 is the best comparable with the Subject Property, which has a time-adjusted sale price (“TASP”) per sq. ft. of $95 and when applied to the total floor area of the Subject Property of 3,763 sq. ft. provides a value of $357,000 (rounded). The Appellant argued that this is the correct current value of the Subject Property. The Board notes that although the Appellant questioned MPAC’s method of using 2016 assessments against sale prices of 126 properties in its price change over time study, submitting that assessment has nothing to do with market value, the Appellant used MPAC’s TASP of sale 3 to propose its correct current value to the Board.
17The Board finds that MPAC’s proposed comparable property sales 1, 2, 3, 5, and 6 are in a superior location, within the GO Transit Station Secondary Plan. Although comparable property sale 7 is not within the GO Transit Station Secondary Plan, it is still in a superior location compared to the Subject Property, which is in a residential area.
18The Board determines that the effective age of the Subject Property remains its original year built of 1944. Mr. Boakye Twum-Donkor MPAC’s expert witness testified that he conducted an inspection of the property on September 7, 2023. He testified that the state and condition of the Subject Property is average and there was no evidence of repairs and renovation needed. He added that an HVAC system was installed. He further testified that due to the state and condition of the Subject Property and accounting for the renovation the effective year built should be 1979.
19Mr. Robert Cushing, the Appellant’s expert witness, testified that installing an HVAC was basically upgrading the heating system, which is just maintaining the Subject Property and does not change the effective age. He further testified that MPAC’s witness did not seek permission before conducting the inspection of the Subject Property and consequently there was no one present with him during the inspection. The Appellant submitted that MPAC’s action was tantamount to not inspecting the Subject Property.
20Mr. Cushing further testified that on the contrary, he carried out an inspection of the Subject Property with MPAC’s former assessor assigned to the appeal and the owner of the property, where all the repairs needed to be carried out by the Appellant were noted. He further referred the Board to the photographs of the Subject Property in the Appellant’s evidence, which showed some areas of the Subject Property in disrepair. MPAC did not object to this evidence.
21The Board finds that the effective age of the Subject Property is its original year built in 1944, based on its state and condition. Moreover, the photographs of MPAC’s seven proposed comparable properties in MPAC’s evidence reveal that they are all in better condition than the Subject Property.
22The Board finds that sales 1, 2, 4, 6 and 7 are not comparable to the Subject Property and therefore did not consider these sales in determining the correct current value of the Subject Property. These proposed comparable property sales would transact differently in the market than the Subject Property due to their state and condition, age, location, and building size.
Sale 1
23The Total Floor Area (“TFA”) of this property is 2,150 sq. ft. It is 1,613 sq. ft. smaller than the Subject Property, resulting in a high TASP rate per square foot (“psf”) of $142, due to economies of scale, which is where the value per acre decreases, when the size of the parcel increases. It has a year built of 1969, which is 25 years newer than the Subject Property. This property is a special purpose built auto garage and due to its size and age it is not comparable with the Subject Property.
Sale 2
24This property has the smallest TFA of 1,799 sq. ft. The Subject Property is 1,964 sq. ft. larger than this property. Consequently, this property also has a high TASP rate psf of $153, due to economies of scale. Although it has a smaller lot size of 0.13 acres, than the Subject Property’s lot size of 0.51, its rate psf is higher than sale 1, which has a lot size of 0.33 acres. This property was built in 1966, making it 22 years newer than the Subject Property. Therefore, it is not comparable with the Subject Property due to its size and age.
Sale 4
25This property is a neighbourhood shopping center, with more than two stores, and therefore it is not comparable with the Subject Property which is a one-storey retail store.
Sale 6
26This property was built in 1964, which makes it 20 years newer than the Subject Property. MPAC’s photographs of this property reveal that it is in a better condition than the Subject Property. This property has the highest height of 16 ft. compared to the Subject Property’s height of 13 ft. It has a TFA of 2,558 sq. ft., which is 1,205 sq. ft. smaller than the Subject Property, resulting in a high TASP rate psf of $153. Therefore, this property is not comparable to the Subject Property due to its age, size and height.
Sale 7
27This property is the farthest from the Subject Property with a distance of 3.2532 kilometers and it is located in a more superior area than the Subject Property. It was built in 1975, making it 31 years newer than the Subject Property. MPAC’s photographs of this property reveal a more superior building than the Subject Property. Therefore, this property is not comparable with the Subject Property, due to its superior location, condition of its building and age.
Finding on Current Value
28The Board used MPAC’s comparable property sales 3 and 5 to determine the correct current value of the Subject Property. The Board finds that these properties are relatively comparable with the Subject Property.
Sale 3
29This property has a year built of 1953, which is similar to the Subject Property’s year built of 1944. It also has a similar TFA of 4,407 sq. ft., which is 644 sq. ft. larger than the Subject Property, with a TASP rate psf of $95. Although located in a superior location than the Subject Property, this is accounted for in the Subject Property’s larger lot size of 0.51 acres. MPAC’s photographs of this property reveal that the building is similar to the Subject Property, however, the Subject Property’s state and condition is poorer than this property.
Sale 5
30This property also has a similar year built with the Subject Property. It was built in 1954, while the Subject Property’s year built is 1944. It has a smaller lot size of 0.22 acres. Its TFA is 2,153 sq. ft., which is 1,610 sq. ft. smaller than the Subject Property, with a TASP rate psf of $105. This high rate psf is accounted for by the Subject Property’s larger lot size of 0.53. This property is also in a more superior location than the Subject Property and the photographs reveal that it is in a better condition than the Subject Property.
31Using the TASP rate psf of comparable sales 3 and 5 of $95 and $105 respectively, provides an average TASP rate psf of $100. Applying this to the TFA of the Subject Property of 3,763 sq. ft. provides a value of $376,300. The Board finds that the correct current value of the Subject Property is $376,000 (rounded).
Issue 2 - Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html)(b) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html), and, if so, what the amount of this reduction should be.
32Section 44(3)(b) of the Act directs that after determining current value, 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.
33The Assessment to Sales Ratio (“ASR”) is a tool often used to determine if a reduction in the assessment below current value is required to make an assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the time-adjusted sale price.
34MPAC presented an equity analysis of 21 commercial properties with sales that occurred from January 1, 2014 to December 31, 2017, within 6.0 kilometers from the Subject Property. MPAC also used the following search criteria: building area from 2,000 sq. ft. - 6,000 sq. ft., lot size within the range of 0.15 acres - 0.95 acres, weighted average year built within the range of 1850 - 1990 and weighted average height within the range of 10 ft. – 17 ft. MPAC submitted that the median ASR of the sales is 0.98. MPAC submitted that the International Association of Assessing Officers Standards states that the level of appraisal for all properties should fall between 0.90 and 1.10. MPAC takes the position that equity is achieved if the median ASR falls between 0.95 – 1.05.
35MPAC submitted that with a median ASR of 0.98, based on its equity analysis, similar properties in the vicinity have been assessed at or near their current value and an equity adjustment is not required.
36The Appellant provided 19 properties, which provide a median ASR of 0.93. The Appellant submitted that this should be applied to the current value it proposed to the Board of $357,000 for an equitable value of $332,000. Mr. Cushing admitted that he did not use any parameters to select these properties, he simply took it from MPAC’s former Statement of Response (“SOR”), which MPAC had initially served on the Appellant and is not part of MPAC’s evidence that was filed with the Board.
37The Appellant further questioned MPAC on its parameters of the properties it used for its equity study, suggesting that MPAC presented all types of commercial properties with different sale prices not comparable with the Subject Property.
Finding on Equity
38The goal of the Act is to determine the correct current value. Any reduction in the current value based on equity results in an incorrect current value. Consequently, a reduction on account of equity should only be made where there is clear evidence to support that such a reduction is warranted. In this regard, the burden of proof rests with the party that alleges that it would be inequitable to assess the Subject Property at its current value, and, in this appeal, is the Appellant. The Appellant has to establish, on a balance of probabilities, that an equitable reduction is required.
39The Board finds that MPAC provided the best evidence to determine that similar properties in the vicinity have been assessed at or near their current value. The Appellant did not present any evidence on how it arrived at its ASR of 0.93. Mr. Cushing testified that he replicated the former MPAC assessor’s equity analysis, in MPAC’s SOR, which is not part of MPAC’s evidence.
40For equity, the comparable properties need not be similar as it is needed in the determination of the correct current value. As determined by the Ontario Divisional Court in Municipal Property Assessment Corporation v. Loblaw Properties Limited., 2017 ONSC 1299, applying the decision in Trizec Equities Ltd. v. Ontario (Regional Assessment Commissioner, Region No. 27), [1988] O.J. No. 182, “…All points of comparison must be considered…” In addition to the search parameters provided by MPAC, the selection of these 21 properties from MPAC provides similar properties as the Subject Property, in terms of location; they are all within 6.0 kilometers from the Subject Property and their use - all commercial properties.
41The Board finds the correct current value of the Subject Property to be $376,000 (rounded), without any equity adjustment.
CONCLUSION
42The Board finds that the correct current value of the Subject Property for the 2021, 2022 and 2023 taxation years to be $376,000 (rounded).
ORDER
43The Board orders that the assessment of the Subject Property is reduced from $420,000 to $376,000 (rounded) in the commercial property class for the 2021, 2022 and 2023 taxation years.
"Subuola Awoleri"
SUBUOLA AWOLERI
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb
Attachment 1
MPAC Appendix E – Market Analysis Grid
Subject Property
Property #1
Property #2
Property #3
Property #4
Property #5
Property #6
Property #7
Roll Number
262902003000500
262902002300200
262902002013100
262902002514700
262902002702500
262902002704800
262902002110700
262901002800600
Address
80 PELHAM RD.
69 PELHAM RD.
179 ST PAUL CRES.
231 ST PAUL ST. W.
137-139 LOUTH ST.
197 LOUTH ST.
58 ST PAUL ST. W.
90 HARTZEL RD.
Neighbourhood
A07 - 4011
A07 - 4011
A08 - 4011
A07 - 4011
A08 - 4011
A08 - 4011
A08 - 4011
Q04- 4016
Property Code & Desc.
(410) Retail – One-storey Generally Under 10,000 S.F..
(421) Specialty Automotive Shop/Auto Repair/ Collision Service/ Car or Truck Wash
(411) Restaurant- Conventional
(411) Restaurant- Conventional
(430) Neighborhood Shopping Centre - with more than 2 Stores Attached, Under One Ownership, Without Anchor - Generally Less than 150,000 S.F.
(400) Small Office Building (Generally Single Tenant Or Owner Occupied Under 7,500 S.F..)
(400) Small Office Building (Generally Single Tenant Or Owner Occupied Under 7,500 S.F.)
(410) Retail – One- Storey, Generally, Under 10,000 S.F..
Distance in Km
0.2084
0.6357
0.7354
0.7389
0.759
0.8136
3.2532
Valuation
Current Value Assessment
$565,000
$324,000
$235,000
$366,000
$626,000
$222,000
$337,000
$445,000
Building Value
$160,053
$98,395
$118,375
$170,192
$59,775
$161,558
$239,087
Total Land Value
$311,688
$226,402
$117,726
$196,290
$173,436
$176,348
$206,770
Sale
Sale Date
20170719
20141117
20140530
20150109
20140704
20160826
20151125
Sale Amount
$340,000
$250,000
$365,000
$640,000
$200,000
$410,000
$380,000
Time Adjusted Sale Price (TASP)
$304,335
$275,072
$417,557
$690,984
$226,549
$391,317
$385,013
Site
158.2
Actual Frontage
210
158
121
63
80
96
66
128
Actual Depth
105
91
92
183
120
100
151
112
Actual Site Area (Acres)
0.51
0.33
0.13
0.28
0.22
0.22
0.23
0.32
Zoning
Commercial
Commercial
Mixed Use
Mixed Use
Commercial
Mixed Use
Mixed Use
Mixed Use
Official Plan
Low Density Residential
Low Density Residential
Mixed Use 1
Mixed Use 1
Low Density Residential
Mixed Use 1
Mixed Use 1
Mixed Use 1
Attachment 1 - Continued
MPAC Appendix E – Market Analysis Grid
Subject Property
Property #1
Property #2
Property #3
Property #4
Property #5
Property #6
Property #7
Source Improvements
Total Floor Area (SF)
3,763
2,150
1,799
4,407
3,846
2,153
2,558
3,198
Weighted Average Year Built
1944
1969
1966
1953
1954
1954
1964
1975
Weighted Average Height
13
14
14
12
13
12
16
14
Median
Mean
TASP/SF
$142
$153
$95
$180
$105
$153
$120
$142
$135
Adjustments
Building Value Adjustment
$61,658
$41,678
($10,139)
$0
$100,278
($1,505)
($79,034)
Land Value Adjustment
$85,287
$193,962
$115,399
$0
$138,252
$135,341
$104,919
Absolute Value Adjustment
$146,945
$235,640
$125,538
$0
$238,530
$136,846
$183,953
Median
Mean
Adjusted TASP
$451,280
$510,712
$522,816
$690,984
$465,079
$525,153
$410,898
$510,712
$510,989
Final Value
Proposed Value as per TASP/SF
$532,657
Proposed Value as per Adjusted
$510,712