Avondale Stores Limited v. Municipal Property Assessment Corporation Region 18, 2024 CanLII 87539

Tribunals Ontario / Tribunaux décisionnels Ontario

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: September 11, 2024

FILE NO.: ID 185247

Assessed Person(s): Avondale Stores Limited

Appellant(s): Avondale Stores Limited

Respondent(s): Municipal Property Assessment Corporation Region 18

Respondent(s): Town of Fort Erie

Property Location(s): 1620 Dominion Road

Municipality(ies): Town of Fort Erie

Roll Number(s): 2703-020-010-65100-0000

Appeal Number(s): 3473358, 3489480 and 3513236

Taxation Year(s): 2021, 2022, 2023 and 2024

Hearing Event No.: 781688

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties	Representative
Avondale Stores Limited	Jonas Perov, Jill Bender
Municipal Property Assessment Corporation	Nakita Ramjeawan
Town of Fort Erie	No one appeared

HEARD: September 19, 2023 by telephone conference call

ADJUDICATOR(S): Pierre R. Lavigne, Member

INTERIM DECISION

OVERVIEW

1The Appellant appeals the correctness of the current value of 1620 Dominion Road, (the “subject property”) in the Town of Fort Erie, in the Regional Municipality of Niagara, used as the base for the property tax assessment for the 2021 and subsequent taxation years. The principal issues are the 2016 current value of the subject property and whether an equitable adjustment is required pursuant to s. 44(3)(b) of the Assessment Act, R.S.O. 1990, c. A.31.

2Pursuant to s. 40(26) of the Act, the Appellant is deemed to have brought the same appeal in respect of the 2024 taxation year.

Background

3For the 2021 taxation year the subject property was assessed at $521,000, apportioned $514,500 to the Commercial property class and $6,500 to the Commercial Excess Land sub-class. The appeal is brought pursuant to s. 40(1)(a)(i) of the Act, on the basis that the current value is incorrect.

4Classification of use is not in issue, however, the Municipal Property Assessment Corporation (“MPAC”) states that the area of the land classified in the Excess Land sub-class should be corrected to 0.19 acres (8,276 square feet (“sq. ft.”)) from 0.012 acres (521 sq. ft.). The Appellant agrees.

5MPAC’s position is that the correct 2016 current value of the subject property is $578,000. MPAC is seeking an increase in assessment based upon this value and pleads that no equitable adjustment is required to this 2016 correct current value.

6The Appellant’s position is that the correct 2016 current value of the subject property is $312,000 and that a reduction to $271,440 is required to produce an equitable assessment.

Issues for the Hearing

7At issue in this proceeding is:

1. A determination of the 2016 current value of the subject property. a. Governing Statutory Provisions b. Methodology c. Comparable Sales of Properties d. Market time adjustments
2. Whether an equity reduction in the 2016 current value should be made? a. Governing Statutory Provisions

Result

8The correct 2016 current value of the subject property is $413,000.00 for the 2021, 2022, 2023 and 2024 taxation years.

9An equitable reduction of 10% is required, pursuant to s. 44(3)(b) of the Act. This will reduce the 2016 current value of the subject property to $372,000 (rounded) for the 2021, 2022, 2023 and 2024 taxation years.

PRELIMINARY MATTERS

10The Appellant contested the jurisdiction of the Assessment Review Board (the “Board”) to increase the assessment as requested by the Respondent MPAC. Rule 43(g) of the Board’s Rules of Practice of Procedure (“Rules”) requires that if a party is claiming a higher assessment, it must include in its Statement of Response the basis of its request and all facts, legal grounds and documents relied upon to support its request for the higher assessment.

11In paragraphs 17 to 22 of its Statement of Response, MPAC described the basis and grounds for its request to increase the assessment to $578,000.

12The Board finds that the Appellant has had sufficient notice of the request for an increase in assessment. Accordingly, the Board has jurisdiction to increase the assessment.

ANALYSIS

Description of Subject Property

13The subject property is lot of 0.95 acres upon which is located a one-storey commercial building with a total floor area of 8,002 sq. ft.

Issue 1 – What is the 2016 correct current value of the subject property?

The Governing Statutory Provisions:

14Section 19(1) of the Act provides that the assessment of land shall be based on its current value. 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.”

15Section 19.2(1) paragraph 4 of the Act fixes the valuation day for the 2017 to 2020 taxation years at January 1, 2016. Section 48.6 of Ontario Regulation 282/98 fixes the valuation day for the 2021, 2022, 2023 and 2024 taxation years at January 1, 2016, as well.

16Pursuant to s. 40(17) of the Act, the onus is on MPAC to prove the correct value of the subject property.

17Pursuant to s. 40(26) of the Act, a further appeal is deemed to have been made for the subsequent taxation year(s) if the original appeal is not finally disposed of before March 31 of the subsequent taxation year.

Methodology:

18MPAC proposed two approaches to valuing the subject property: the cost approach and the direct sales comparison approach. The Appellant disagreed that the cost approach should be used to derive an ultimate indication of value as, in its view, there were a sufficient number of sales of comparable properties to indicate current value.

19David Bressi, MPAC’s expert witness, in his report at paragraph 74, indicates that the cost approach was the most appropriate approach to value the property as there was a lack of improved sales to rely upon. The Board rejects this reliance on the cost approach as the Board finds there were a sufficient number of sales in evidence to provide an indication of value by the direct sales comparison methodology.

Comparable Sales of Properties:

20Mr. Bressi relied upon his report which was entered into evidence. The sales he relied upon were described in the following table:

	Subject Property	Property 1	Property 2	Property 3	Property 4	MEAN	MEDIAN
Roll Number	270302001065100	270301003706700	271102001614200	271103003613401	271903000105700
Property Address	1620 DOMINION RD	90 NIAGARA BLVD	129 MAIN ST W	953 ELM ST	51 NIAGARA ST
Property Code	410	411	410	410	411
Lot Size (Ac)	0.95	0.21	0.80	2.3	1.06	1.09	0.93
Building Size Above Grade	8,002	7461.00	6928.0	7484.0	8074.0	7,487	7,473
Number of Storeys	1	2	1	1	1
Mezzanine Area or upper floor area	0	3675.00	0	0	0
Average Height	10.68	12	14	12	14	13	13
Actual Year Built	1,980	1,979	1978	1981	1979
Effective Year Built	1980	1979	1978	1985	1979	1980	1979
RCNLD	$399,810.28	$574,229.23	$400,046.35	$407,352.78	$327,601.00	$427,307	$403,700
Land Value	$121,190.00	$79,770.77	$267,953.65	$62,647.22	$193,399.00	$150,943	$136,585
Building Value Adjustment		-$174,418.95	-$236.07	-$7,542.50	$72,209.28
Land Value Adjustment		$41,419	-$146,764	$58,543	-$72,209
Absolute Value Adjustments		$215,838	$147,000	$66,085	$144,419
Comparability (Based on location, size, age, Lot size)		Slightly Inferior	Relatively comparable	Relatively comparable	Relatively comparable
Date of Sale		20161104	20140730	20150504	20140417
Sale Price		660,000	376,000	375,000	450000	$465,250	$413,000
Time Ajusted Sale Price (TAS)		595,930	460,446	408592	519,324	$496,073	$489,885
Adjusted TAS		$462,930	$313,446	459592	$519,324	$438,823	$461,261
PPSF		$62.05	$45.24	$61.41	$64.32	$58.26	$61.73
Estimated CVA		$496,497.23	$362,037.37	$491,402.35	$514,692.92
2016 CVA	$521,000

21The Appellant made reference to two additional sales that had been referred to in MPAC’s statement of response: 216 Jarvis Street and 210 Courtwright Street. The Appellant made submissions at to why these sales should not be considered as comparable. As these sales were not relied upon in MPAC’s evidence no further comment is required about their use for direct comparison.

Sales Analysis

22The Appellant, by its witness Mr. Cushing objected to the use of Property No.1, 90 Niagara Boulevard, for direct comparison. The basis of the objection was that the property was too dissimilar to be competitive and comparable to the subject property. Property No. 1 was two stories with a 7,461 sq. ft. on the ground floor and 3,675 sq. ft. on the second floor, for a total of 11,136 sq. ft. compared to 8,002 sq. ft. on the ground floor for the subject property. The lot size was much smaller: 0.21 acres, compared to 0.95 acres for the subject property. In the opinion of MPAC’s witness Mr. Bressi, he considered this property to be inferior, though only slightly. The Board agrees with the Appellant’s objections and finds that Property No. 1 is not comparable for use in the direct sales comparison methodology.

23Property No. 2, 129 Main Street West, was comparable in lot size, building area and effective age. In the opinion of MPAC’s witness Property No. 2 was relatively comparable. The Appellant objected on the basis that this property was in the downtown area whereas the subject property is in a rural area. No evidence was provided by the Appellant to support any adjustment based on market area. The Board retains this sale for direct comparison, Property No. 2, 129 Main Street West, was sold on July 30, 2014, for $376,000.

24Property No. 3, 953 Elm Street: Though this property is of comparable building area, the lot size is very much larger, 2.30 acres compared to 0.95 acres for the subject property. The Appellant attempted to support a substantial adjustment by reference to land sales, but in the end the Board is persuaded that the magnitude of the required adjustment simply supports the conclusion that the property is not comparable to the subject property. Accordingly, this sale will not be retained for direct comparison.

25Property No. 4, 51 Niagara Street: This property is of similar lot size and building area to the subject property. In the opinion of MPAC’s witness Property No. 2 was relatively comparable. In the opinion of the Appellant’s witness, Property No. 4 was the most comparable. The Board retains this sale for comparison purposes. Property No. 4, 51 Niagara Street was sold on April 17, 2014, for $450,000.

Market time adjustments:

26Market time adjustments applied by MPAC to infer a January 1, 2016, value were contested by the Appellant on the basis that the properties used to calculate the market adjustments cover an extremely wide area encompassing a mix of urban and rural areas. It was submitted that the subject property is in a rural depressed area and should not be compared with sales that are market adjusted using data derived from sales in urban areas. The Board finds the submission has merit. The Board finds that MPAC has not provided sufficient support for its market time adjustments when its calculations have aggregated inferred price changes from both urban and rural areas where the data set covers a very large area and the evidence demonstrates the subject area is a rural depressed area. Accordingly, sale prices will not be adjusted to reflect changes to value over time.

Conclusion:

27Sale No. 2, 129 Main Street West, sold on July 30, 2014, for $$376,000. Sale No. 4, 51 Niagara Street, sold on April 17, 2014, for $450,000. The average of these sale prices is $413,000. The Board finds this is the correct current value.

Issue 2: Whether an equity reduction in the 2016 current value should be made?

The Governing Statutory Provisions:

28Section 44(3)(b) of the Act provides for a reduction, if justified, of an assessment based on current value to make the assessment equitable to similar properties in the vicinity.

Analysis

29The Board agrees with the submission made by the Appellant that as the subject property is in a rural area, a data set limited to the rural area is the better evidence of similar vicinity. The Board finds that the vicinity used by MPAC for its equity calculations is overbroad. For this reason, the Board finds that the calculations of the Appellant are a more accurate reflection of vicinity and indicate a 10% overassessment of rural properties. A 10% reduction in the correct current value of subject property ($413,000), produces an equitable assessment of $372,000 (rounded).

CONCLUSION

30The Board finds that the correct current value of the subject property is $413,000 and that an equitable adjusted is required reducing the current value to $372,000.

ORDER

31The Board orders that the assessment for the 2021, 2022, 2023 and 2024 taxation years is reduced from $521,000 to $372,000.

32The parties are to confer on the apportionments, taking into account the finding of the Excess Land area.

1. If the parties agree on the apportionments, they are to submit minutes of settlement to that effect within 20 days of the issue date of this Interim Decision.
2. If the parties do not agree, MPAC is to make written submissions on the apportionments within 30 days, the Appellant is to respond within 40 days and any Reply by MPAC is to be made within 45 days of the issue date of this Interim Decision.