Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 03, 2026

FILE NO.: WR 189992

Assessed Person(s): CP REIT Ontario Properties Limited; IPCF Properties Inc.

Appellant(s): Loblaw Properties Limited

Respondent(s): Municipal Property Assessment Corporation Region 09

Respondent(s): City of Toronto

Property Location(s): 10 Lower Jarvis Street; 102 Queens Quay East

Municipality(ies): City of Toronto

Roll Number(s): 1904-064-060-00300-0000

Appeal Number(s): See Schedule A

Taxation Year(s): See Schedule A

Hearing Event No.: 787486 and 788124

Legislative Authority: Sections 36 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties	Counsel/Representative
Loblaw Properties Limited; CP Reit Ontario Properties Limited; IPCF Properties Inc.	Stephen Longo, Jamie Walker
Municipal Property Assessment Corporation	Melissa VanBerkum, Felicia Nacini
City of Toronto	Angus MacKay, Jared Wehrle

HEARD: May 6, 7, 8 and 9, 2025 and June 11, 12 and 13, 2025 by video conference and written submissions

ADJUDICATOR(S): Subuola Awoleri, Member

DECISION

OVERVIEW

1Loblaw Properties Limited (the “Appellant”) appeals the assessment of 10 Lower Jarvis Street, located in the City of Toronto (the “Subject Property”), under s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) for taxation years 2013 to 2016 based on the legislated valuation day of January 1, 2012 and for taxation years 2017 to 2025 based on the valuation day of January 1, 2016. Pursuant to s. 19.2(5) of the Act, the Minister of Finance can set a valuation day, which is different from that provided in s. 19.2(1) of the Act. Accordingly, in s. 48.6 of O. Reg. 282/98 January 1, 2016 is the valuation day for the 2021 to 2025 taxation years.

2Section 19(1) of the Act states that "the assessment of land shall be based on its current value". In accordance with s. 44(3)(a) of the Act, the Assessment Review Board (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.”

3Section 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.

4The Assessed Owner of the Subject Property for the January 1, 2012, valuation day was IPCF Properties Inc. On May 1, 2014 IPCF Properties Inc. transferred the Subject Property to the current assessed owner, CP REIT Ontario Properties Ltd. (“CHOICE”), for no consideration.

5CHOICE is the landlord of all the Appellant’s properties, including the Subject Property.

6The Subject Property is a standalone large-format warehouse food retail store with a two-storey parking structure, leased by the Appellant and owned by CHOICE.

7The Municipal Property Assessment Corporation (“MPAC”) and the City of Toronto (the “City”) are respondents in these appeals.

8The main issue in these appeals is the Subject Property’s Highest and Best Use (“HABU”). The Act does not define HABU. However, under appraisal theory, in order to determine the appropriate valuation methodology to value a property, it has to be based on the property’s HABU. The definition of HABU is derived from the recognized appraisal literature: The Appraisal of Real Estate, 3^rd Canadian Edition (British Columbia: The Appraisal Institute of Canada, 2010) (“The Appraisal of Real Estate”), which will be referred to in detail in this Decision, as the parties recognized it as the authority on appraisal of real property in Canada.

9The Appellant submits that the current use of the Subject Property is the as improved HABU for the valuation days of January 1, 2012, and January 1, 2016.

10MPAC submits that the HABU of the Subject Property for the valuation days of January 1, 2012, and January 1, 2016, is development land for mixed commercial and residential uses with a minimum floor space index (“FSI”) of 9.5. The City agrees with MPAC.

11The determination of the HABU of the Subject Property has a significant impact on its current value assessment (“CVA”). According to MPAC, the Subject Property was returned on the assessment roll based on its development value for the two base years under appeal. The returned assessments of the Subject Property are as seen below:

Roll Number	Effective Date	Base Date	Total CVA	Property Class
1904 064 060 00300	1-Jan-13	1-Jan-12	$67,137,000	Commercial CT
1904 064 060 00300	1-Jan-14	1-Jan-12	$67,137,000	Commercial CT
1904 064 060 00300	1-Jan-15	1-Jan-12	$67,137,000	Commercial CT
1904 064 060 00300	1-Jan-16	1-Jan-12	$67,137,000	Commercial CT
1904 064 060 00300	1-Jan-17	1-Jan-16	$116,370,000	Commercial CT
1904 064 060 00300	1-Jan-18	1-Jan-16	$116,370,000	Commercial CT
1904 064 060 00300	1-Jan-19	1-Jan-16	$116,370,000	Commercial CT
1904 064 060 00300	1-Jan-20	1-Jan-16	$116,370,000	Commercial CT

12For the 2012 and 2016 valuation days, the Subject Property was assessed and returned at $67,137,000 and $116,370,000 respectively, in the commercial property class.

13MPAC’s opinion of value in this proceeding using the direct comparison approach is that the current values of the Subject Property for the 2012 and 2016 valuation days are $76,531,000 and $119,048,000 respectively, in the commercial property class, with no adjustment for equity. The City agrees with MPAC.

14The Appellant used the cost approach to value the Subject Property, and it further carried out an income approach valuation for demonstrative purposes and as a check of the reasonableness of the current values. The Appellant submits that the correct current value for the 2012 valuation day is $21,893,000 and for the 2016 valuation day is $34,635,000, without any equity adjustment.

Issues for the Hearing

15The issues to be determined are:

1. What is the Highest and Best Use of the Subject Property as of January 1, 2012 and January 1, 2016?

2. What is the correct current value of the Subject Property as of January 1, 2012 and January 1, 2016?

3. Should there be an equitable reduction of the current value pursuant to s. 44(3)(b) of the Act, and, if so, what should be the amount of this reduction?

Result

16For the reasons that follow, the Board finds:

1. The Highest and Best Use of the Subject Property is its current use as of January 1, 2012 and January 1, 2016.

2. The correct current value is as follows:

i. For the January 1, 2012, valuation day, the correct current value is $28,731,000 in the commercial property class; and

ii. For the January 1, 2016, valuation day, the correct current value is $43,260,000 in the commercial property class.

3. 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.

PRELIMINARY MATTERS

Admissibility of Evidence

17The Appellant objected to a request by the City to “retract” three documents it had initially filed and served on the parties. The City submitted that these documents were not properly served in accordance with the schedule of events (“SOE”) pursuant to the Board’s Rules of Practice and Procedure (the “Rules”) and that the City did not seek an extension of time to serve and file these documents.

18The three documents are:

• 05 - Reply Witness Report - MPAC Depreciation Analysis for Freestanding Big Box Properties in Ontario for Loblaw Big Box Stores in the City of Toronto.
• 06 - Market Valuation Report - Valuing Commercial Properties in Ontario Using the Cost Approach.
• 07 - Depreciation Analysis for Freestanding Big Box Retail Properties in Ontario by Michael Lambrech.

19Although the Appellant insisted that all three documents should be admitted into evidence, the Appellant did not have any objection to the inadmissibility of “05” and MPAC submitted that “06” is documentary evidence, and it concedes to its admissibility.

20The Board’s Rules are clear regarding admissibility, filing, and serving of documents. Rules 46 and 48 provide that:

No Admission

46. The disclosure of a document is not an admission of its relevance or admissibility.

No New Documents

48. A document, including an expert report, may only be admitted into evidence at a hearing event if it has been served on all other parties and filed with the Board, in accordance with these Rules, unless the Board determines that there are exceptional circumstances.

21There was no request made by the City to extend the SOE based on exceptional circumstances. Therefore, the Board finds that these documents were not properly served.

22The parties consented to the inadmissibility of document “05” into evidence. The Board finds that this document is inadmissible. However, regarding document “06” MPAC’s Market Valuation Report, which is a public document available to any party, although not properly served, the Board admits this document into evidence. Document “07” is Mr. Lambrech’s expert report, which has an Acknowledgement of Expert’s Duty attached to it. The Board finds that this document is inadmissible as it would be prejudicial to MPAC since Mr. Lambrech was not summoned by the Appellant and will not be available for cross-examination, which is contrary to the rules of procedural fairness.

Credibility of Charles Johnstone -The Appellant’s Expert

23The credibility of Mr. Johnstone, (the “Appellant’s expert”), was questioned during the hearing. This was not a preliminary issue; however, the Board will address it here, before the analysis of the issues in these appeals.

24Jamie Walker, one of the Appellant’s counsels, sent an email to the Board dated May 2, 2025 (a few days before the commencement of the hearing) stating that there were some technical issues with the Appellant’s expert report dated April 5, 2021, which was filed with the Board, as some pages were missing in the Appendix. He further advised that MPAC and the City consented to refiling the Appellant’s expert report dated November 18, 2020, as well as the replacement pages. During the hearing, Stephen Longo, the Appellant’s other counsel, advised that there are no substantive differences between the two expert reports.

25MPAC and the City submitted that they only consented to refiling the expert report dated November 18, 2020, but not to retracting the one filed earlier, dated April 5, 2021.

26During cross-examination, the Appellant’s expert testified that he only stands by the November 18, 2020 report, which is the locked version. He added that the April 5, 2021 version of the report, the unlocked version, filed with the Board in accordance with the SOE, was unlocked for the purposes of filing it with the Board, to conform with the Board’s Rules.

27MPAC submitted that the jurisdictional exception in the two reports is different. Specifically, the jurisdictional exception in the November 18, 2020 version does not include exceptions related to the Act’s valuation standard (fee simple as unencumbered) and equity. MPAC further submitted that the Appellant’s expert has failed to comply with the Canadian Uniform Standards of Professional Appraisal Practice (“CUSPAP”). MPAC asserted that this also means that the Board cannot be satisfied that he disregarded the lease between CHOICE and the Appellant, which is an encumbrance, which s. 19 of the Act requires to be ignored for assessment purposes but would be considered in a market fee appraisal. In addition, the April 5, 2021 report provides a jurisdictional exception that the parties agree that the HABU is the current use, which the Appellant’s expert admitted under cross-examination is incorrect.

28The Appellant’s expert admitted during cross-examination that he asked an employee to insert the jurisdictional exception and does not understand why this would be different in the two reports. He testified that the employee no longer works with his organization. He further admitted that in the November 18, 2020 report under jurisdictional exception, there was no reference to the Act and the s. 19 valuation standard as defined by s. 1 of the Act. Although he testified that it may be in other areas of his report.

29The Board finds that the Appellant’s expert is a credible witness. During cross-examination he showed that he understood the requirement of s. 19 of the Act and the definition of current value, that a lease, being an encumbrance, would not be considered in valuing a property. He stated:

It is an encumbrance, but in my experience the leases, when they are available, are analyzed to determine whether or not they are market. But you don't have to accept the lease in valuing a property. That is my understanding. (June 12, 2025 Transcript, page 25, lines 19-23)

30Furthermore, on page 6 of his November 18, 2020, report, he provided the basis of his expert report, which has the definition of current value under s. 1 of the Act.

31In essence, as an appraiser and an expert in this proceeding, he understands the purpose and principle of valuing the Subject Property as though unencumbered, even though the expert report which he relied upon may not have expressly stated it under jurisdictional exceptions. MPAC and the City did not request that the Appellant’s November 18, 2020 expert report be made inadmissible on this basis. The Board finds that the Appellant’s expert has substantially complied with the Board’s Rules by filing his initial expert report in accordance with the SOE, and further seeking MPAC and the City’s consent to refile the November 18, 2020 report, which was provided.

ANALYSIS

Description of Subject Property

32The Subject Property is a standalone large-format warehouse food retail store, with a two-storey parking structure, located in the City. The Appellant’s expert states in his report that, according to Geowarehouse, the site area is 4.12 acres. MPAC’s expert, states it is 4.11 acres. This was not a disputed fact between the parties, as the difference in size between the two experts is minimal.

33The Subject Property has a year built of 1998, with 65,270 square feet (“SF”) of gross floor area (improvements), 10,111 SF of finished mezzanine and 1,067 SF of mechanical mezzanine and approximately 122,096 SF of parking structure.

Issue 1 – What is the Highest and Best Use of the Subject Property as of the January 1, 2012 and January 1, 2016 Valuation Days?

Highest and Best Use

34The Appraisal of Real Estate, chapter 12, defines the HABU of a property as:

The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, and financially feasible and that results in the highest value.

HABU of the Subject Property as though Vacant or Improved

35The Appraisal of Real Estate, page 12.5 provides:

The analysis of land as though vacant focuses on alternative uses, with the appraiser testing each reasonably probable use for legal permissibility, physical possibility, financial feasibility, and maximum productivity. In contrast, the appraiser applies the four tests in the analysis of the property as improved, but the focus is not on alternative uses but on three possibilities: continuation of the existing use, modification of the existing use, or demolition and redevelopment of the land.

36Both experts considered the Subject Property’s HABU as both vacant and improved for both valuation days. The Appellant’s expert testified that the HABU of the Subject Property, as vacant for the 2012 and 2016 valuation days, is as a surface parking lot.

37MPAC’s expert provides on page 44 of his report that, “If the property were vacant land as of January 1, 2012, Mr. Johnstone is likely correct, an informed property owner would choose to use the site as a parking lot and proceed with the rezoning process.” However, MPAC’s expert concluded on pages 44-45 of his expert report that:

No market participant buying or selling property in the City of Toronto would base the value of the Property as vacant on an interim use as a surface parking lot. All market participants would consider this use an interim holding use and of no relevance to market value.

Under these circumstances, combined with the market transactions on adjacent sites, the highest and best use of the Property as vacant for both the 2012 and 2016 base years is a development site for a future high-rise mixed-use development.

38MPAC’s expert further provides that the current use of the Subject Property as a retail warehouse with parking garage represents an underutilization of the property and that the value of the land for redevelopment surpasses the current use value. He therefore concluded that, having considered the HABU of the Subject Property as both vacant and improved, the HABU of the Subject Property is a redevelopment site for a mixed-use development at a minimum gross FSI of 9.5 (12.5 net) for the 2012 and 2016 base years.

39Although the Appellant’s expert considered the HABU of the Subject Property as vacant as a surface parking lot, he concluded that the Subject Property’s HABU for the 2012 and 2016 valuation days is as it is currently improved. He testified as follows:

The depreciated replacement cost is 6.3 million dollars. This, in my opinion, is more...the existing use, the existing improvement is more … profitable than a parking lot. And going on to 2016, again, a similar conclusion that the existing use is...continues to contribute to value, exceeds the value as if vacant, or as a parking lot for the same reasons that I spoke about. So, just scrolling forward and very short for 2012, 2016. The current use is legally permissible, physically possible, financially feasible and, in my opinion, the highest and best use of the properties...property as of those dates. (May 9, 2025 Transcript, page 233, lines 20–25 and page 234, lines 1-7)

40Furthermore, he concluded on page 55 of his expert report:

For the 2012 CVA valuation date, the subject property is currently improved at its highest and best use.

For the 2016 CVA valuation date, the subject property is currently improved at its highest and best use

41Although the Appellant’s expert considered the HABU of the Subject Property as both vacant and improved, he concluded that the HABU of the Subject Property for both base years under appeal is as currently improved.

42The Appraisal of Real Estate at page 12.12 provides:

Demolition can be considered the most extreme form of modification of the existing use of the property as improved. When an alternative use of the site is legally permissible, physically possible, financially feasible, and more profitable (less the cost of demolition and redevelopment of the site) than the continuing use of the existing improvements, then the alternative use will be the highest and best use of the property as improved. …

43The parties did not provide the Board with the cost of demolition of the Subject Property, in order for the Board to determine its HABU as vacant. Therefore, for the 2012 and 2016 valuation days, the Board will only determine whether the HABU of the Subject Property is its current use as improved as submitted by the Appellant’s expert, or as mixed-use development as submitted by MPAC and the City.

The Highest and Best Use Test

44The Appraisal of Real Estate at page 12.2 cautions that “It is critical that a careful highest and best use analysis precede the application of the approaches to value. Otherwise, there is a high likelihood that serious errors will be made in the valuation process.”. On the same page of the text, it further provides the test to determine the HABU of land, which has been adopted by the appraisal industry and courts. The use must be “legally permissible, physically possible, financially feasible and maximally productive”. It further states that:

An appraiser generally considers these criteria sequentially. The tests of physical possibility and legal permissibility can be applied in either order, but they both must be applied before the tests of financial feasibility and maximum productivity.

Physically Possible

45The Subject Property has a slightly irregular rectangular shape. The Appellant submitted that the site supports all legally permissible uses listed in the as-of-right zoning by-laws, and specifically, for the January 1, 2016 valuation day, the Subject Property will support the two-block plan in the UDR (“Urban Design Report”) based on the Subject Property’s acreage. MPAC submitted that there are no known physical attributes that would prevent redevelopment. The Appellant did not make any submissions regarding the physical characteristics of the Subject Property that might affect the proposed use as a redevelopment site for mixed-use development for the January 1, 2012 valuation day. The Board finds that for this first test, MPAC’s proposed use is physically possible for both valuation days under appeal.

Legal Permissibility

46The legal permissibility test considers several factors, such as zoning by-laws, planning policies, official plans, and environmental policies that could restrict a particular use. This part of the test is extremely important because if a particular use is not legally permissible, then the remainder of the test cannot be satisfied. See Canadian Tire Corporation Limited v. Municipal Property Assessment Corporation, Region 09, 2021 CanLII 105789 (ON ARB) at para. 23 (“Canadian Tire”).

47The legal permissibility prong of the HABU test is one of the fundamental disagreements between the parties in these appeals. MPAC’s expert concluded on pages 37-38 of his expert report that:

…market participants would consider the rezoning of the site from commercial/industrial to mixed-uses with increased densities highly probable for both the 2012 and 2016 base years.

48The City agrees with MPAC.

49The Appellant’s expert concluded on page 51 of his expert report that:

For the 2012 CVA valuation date, there was no reasonable probability of rezoning. Therefore, for the 2012 CVA, the legally permissible uses in the as-of -right zoning were the only legally permissible uses.

For the 2016 CVA, there was a reasonable probability of rezoning within 5-10 years; however, the potentially permissible uses and associated densities were not yet clear.

50In Farlinger Developments Ltd v. Borough of East York, [1975] O.J. No. 2429, at para. 44, (“Farlinger”), the Ontario Court of Appeal determined that

… the highest and best use 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. In my opinion probability connotes something higher than a 50% possibility.

51In Toronto Airways Ltd. v. Municipal Property Assessment Corp., Region No. 14, [2014] O.A.R.B.D. No. 500 (“Toronto Airways”), also cited as Enterprises Inc. v Municipal Assessment Corporation, Region 14, 2014 CanLII 104370 (ON ARB) at para. 39, the Board determined that:

Probable rezoning must mean a greater than 50% chance of rezoning within a reasonable time frame, see Petro Canada Inc. v. Coquitlam (S.C.). Anything outside of a reasonable redevelopment horizon is speculative in nature and cannot represent a probable use of the land.

52Therefore, the Board has to determine whether there was a reasonable probability that the Subject Property would be rezoned as a mixed-use development site at a minimum gross FSI of 9.5 (12.5 net) within a reasonable time frame of the January 1, 2012 and January 1, 2016 valuation days. See Canadian Tire at para. 41.

53The parties agree that the current zoning of the Subject Property for the 2012 and 2016 valuation days, including the dates in which the appeals were heard, is IC D3 N1.5 under the former City of Toronto By-Law 438-86. The as-of-right Gross Floor Area (“GFA”) based on the existing zoning is 537,094 SF. (“As-of-right” refers to the zoning by-law permissions in effect at a specific point in time.) The Appellant’s expert testified that this zoning permits a variety of industrial and commercial uses; however, residential uses are not permitted. The maximum density is 3.0 FSI, as indicated by “D3”. The N1.5 indicates that the non-residential density of certain uses is limited to 1.5 FSI, which includes grocery shops and retail stores.

54As stated on page 29 of the Appellant’s expert report, “Density is often expressed in terms of Floor Space Index (FSI). FSI is calculated as follows: Permitted Gross Floor Area ÷ Lot Size = Floor Space Index. For example, a development with a permitted gross floor area of 100,00 m² and a lot size of 10,000 m² will have a density of 10.0 FSI.”.

55As of the dates of the hearing of these appeals, a rezoning application had not been submitted for the Subject Property.

56MPAC’s fact witness, Anthony Kittel, a registered professional planner who works with the City, admitted during cross-examination that the current zoning of the Subject Property, although archaic, is still the in-force zoning. He further admitted that the zoning permits the current use as a grocery store with its parking structure.

57Therefore, the Board finds that the current zoning is the actual zoning as of the valuation days under appeal; consequently, there must be sufficient evidence provided by MPAC that there was a reasonable probability of rezoning the Subject Property for a mixed-use development within a reasonable time frame of the valuation days of January 1, 2012 and January 1, 2016.

58In determining whether MPAC’s proposed use passes the legal permissibility prong of the HABU test, the Board has to review the evidence provided by MPAC through its witnesses, which includes the planning policies, planning documents and land use designations, applicable to the Subject Property as of January 1, 2012 and January 1, 2016.

MPAC’s Evidence

Provincial Policies/Documents and Land Use Designations

59Mr. Kittel provided the Board with the planning policies/documents and land use designations applicable to the Subject Property. In summary, he testified that:

• The Subject Property is located within the Lower Yonge Precinct (“LYP”). The LYP is under the jurisdiction of a government agency, Waterfront Toronto, charged with the task of redeveloping Toronto’s waterfront.
• The Provincial Policy Statement (“PPS”), 2020 provides policy direction on matters of provincial interest related to land use planning and development. City Council’s planning decisions should be consistent with it.
• The Growth Plan for the Greater Golden Horseshoe (which came into effect in 2006) provides a framework for managing growth in the Greater Golden Horseshoe. This plan identified the Subject Property under an intensification area to provide a diverse and compatible mix of land uses. City Council’s planning decisions are to be consistent with the Growth Plan for the Greater Golden Horseshoe.
• The former City of Toronto Official Plan (1994) was adopted by City Council, which includes Chapter 14: Waterfront Policies and sets out goals and objectives for the waterfront. In the former City of Toronto Official Plan, the Subject Property is within the East Bayfront district, part of this policy provides that Council shall encourage residential, commercial, institutional and compatible industrial uses in suitable locations in order to increase the area's public character, promote active and varied use of the area by people throughout the year, assist in meeting Council's housing policies in Section 6 of the Plan. (This Official Plan is in force for the Subject Property.)
• The former Metropolitan Toronto Official Plan (1994) locates the LYP within the Central Area. It requires that Centres be structured through reurbanization to focus employment and population in areas with adequate transit. This is still in force for the LYP area.
• In 2000, the federal and provincial governments and the City committed $1.5 billion to waterfront revitalization.
• In 2001, Waterfront Toronto was established by the three levels of government with the mandate to manage the planning and development of Toronto’s central waterfront, including the LYP, in which the Subject Property is located.
• In 2002, the Amalgamated City of Toronto Official Plan was adopted by City Council, which identified the LYP, where the Subject Property is located, as a Regeneration Area, which are blocks of land that may be subdivided into smaller areas for a wide variety of mixed-use redevelopment. This was appealed to the Local Planning Appeal Tribunal (“LPAT”) now the Ontario Land Tribunal (“OLT”).
• In 2003, the Central Waterfront Secondary Plan (“CWSP”) was adopted by City Council as an amendment to Part II of the former City of Toronto Official Plan. CWSP implemented the 2003 Making Waves document, which recognized the Central Bayfront/Harbourfront area as one of five identified Precincts. The LYP is within the area previously called Central Bayfront. As part of the CWSP policy, retail and other uses which require large areas of unscreened surface parking were not permitted. It also identified the LYP area as a Regeneration Area, which supports mixed-use development and is subject to Precinct Implementation Strategies known as Precinct Plans. These Precinct Plans are used to establish planning context for comprehensive and orderly development. This CWSP was appealed to LPAT.
• The CWSP further protects Redpath Sugar lands. Redpath Sugar is the most modern sugar refinery in Canada and it relies on port access for sugar delivery. This existing industrial use is recognized in all planning documents as a use that will continue due to its economic development of the City. The CWSP specifically provides for “… land use compatibility and noise, vibration, dust, odour, air quality and illumination impacts between the Redpath lands and any development approval applications and public realm initiatives.” (Kittel Witness Statement, page 14, para. 57.)
• Under the CWSP, “… prior to the preparation of zoning by-laws or development permit by-laws within the Regeneration Areas, Precinct Implementation Strategies will be prepared in accordance with the policies contained in Section 2.2.” (Kittel Witness Statement, page 15, para. 59.) The CWSP in its entirety was appealed to LPAT and CHOICE was not an appellant.

The Lower Yonge Precinct Plan (“LYPP”)

• The LYP has properties owned by three owners, one of which is the Subject Property owned by CHOICE. 1-7 Yonge Street is owned by Pinnacle International, and 55-95 Lakeshore Boulevard East and 2 Cooper Street are owned by Menkes Development Ltd. (“Menkes”). The details of these properties will be discussed later in this Decision.
• In 2012 Waterfront Toronto and the City initiated the LYPP planning process in two phases.
• Mr. Kittel testified that in 2012 the three property owners, including the Subject Property, had a Pre-Application Consultation meeting (“PAC”) with the City, where a three-tower concept was advanced by CHOICE. He stated that a PAC meeting is requested by the City in order to review an applicant’s development proposal prior to an application being made and the PAC is initiated through a Pre-Application Consultation Application made by an applicant to the City. MPAC submitted that it had requested that the Appellant produce its PAC information, but nothing was provided. This will be discussed in detail later in this Decision.
• In 2014 the Lower Yonge Urban Design Report (“LYUDR”) was adopted by City Council, which stated the guidelines for streets, density, heights, etc. in the LYP.
• In 2015 City Council endorsed the recommendations of the LYP Transportation Master Plan Environmental Assessment.
• On June 7, 2016 the LYPP and Official Plan Amendment were adopted by City Council, which requested the City staff to ask the OMB, now OLT, to bring the LYPP into force within the CWSP.

60Mr. Kittel testified that the CWSP, as adopted in 2003, only recognized three land use designations: Existing Use Areas, Parks and Open Space Areas and Regeneration Areas. The Subject Property is identified as Regeneration Area. He added that the designation “Regeneration Area Qualified” was introduced in 2016 with the adoption of the LYPP and the Official Plan Amendment, which implemented the Plan. He testified that the Regeneration Area Qualified was introduced to identify lands that were not appropriate to have residential permissions, since one of the strategies for addressing Redpath Sugar’s land use compatibility issue was to create a land use buffer between the northern blocks in the LYP which would have the majority of the density and residential permissions and lands to the south used for employment or other non-residential uses. The south-eastern portion of the Subject Property was designated as Regeneration Area Qualified.

61In addition to Mr. Kittel’s evidence, MPAC’s expert added that in order to consider whether there is a reasonable probability of a zoning change to determine the HABU of the Subject Property “The correct approach is to analyze how market participants are behaving and then apply the same facts to the Property.” (MPAC Valuation Report, page 32)

62He further quoted from the Appraisal of Real Estate text at page 12.7:

The probability of a zoning change may not be 100%, and the challenge is to determine whether market participants will pay a premium over the property’s current value as zoned in anticipation of a potential zoning change and to document the conclusion

63At pages 36 to 37 of his Valuation Report, MPAC’s expert included:

The Official Plan designation of Regeneration Area has encouraged the intensification with residential and commercial uses since 1991. The current Official Plan, Central Waterfront Secondary Plan and the Lower Yonge Precinct Plan all encourage intensification with mixed-uses as well. These plans are not in force because property owners in this area of the City have appealed these plans seeking greater densities and less strict built form policies than these plans propose.

Current development trends and market transactions in the immediate vicinity prior to 2012/1/1 clearly demonstrate that the as-of-right zoning no longer reflects the potential development of the Property and does not correspond with more recent planning policy and guidelines which relate to this site.

Loblaw/CP REIT has been in discussions with the City of Toronto regarding the redevelopment of this site since at least 2014. MPAC has requested the details of these discussions since its Response of July 20, 2020.

The most recent public documentation dated March 2019 indicates Loblaw/CP REIT has settled a mixed-use development proposal with the City with a GFA of 1,700,697 SF and a FSI of 12.5 of the net site area.

The settlement proposal removes any uncertainty as to the achievable density on this site. The market evidence presented later in this report will highlight that market participants would have paid for this future potential long before it was fully realized, knowing that it was almost certainly going to happen.

64MPAC submits that the evidence demonstrates that market players –governments and private interests – negotiated amounts that exceeded both the properties’ current use values and the values that could be generated by their as-of-right zoning.

65The City agrees with MPAC and further submits at paragraph 11 of its August 8, 2025 written submission that:

Both the planning policy evidence and the conduct of market participants, including by the Appellants, overwhelmingly supports the conclusion that, as of both valuation dates, it was reasonably probable that a high-density, mixed-use redevelopment at 10 Lower Jarvis would be achieved.

Appellant’s Evidence

66The Appellant did not dispute the fact that there has been a great deal of change within the vicinity of the Subject Property in the past 20 years with sales of properties that have been redeveloped for higher densities. The Appellant submitted that it is not enough that the Subject Property has the capability of being rezoned, the pertinent question is whether there is a probability or reasonable expectation that rezoning would occur as of the valuation days on appeal.

67The Appellant’s expert testified that the requisite planning policies were not in place for the 2012 valuation day. Specifically, he testified that the CWSP required a Precinct Plan to be established before site-specific rezoning is considered, and no Precinct Plan was meaningfully underway as of January 1, 2012 therefore, there was no reasonable probability of rezoning for the 2012 CVA. For the January 1, 2016, valuation day he testified that there was a reasonable probability of rezoning within 5 to 10 years however, the potentially permissible allowable uses and associated densities were not yet clear.

68The Appellant submitted that MPAC’s expert put the cart before the horse, in that he selected sales of properties, which he deemed comparable with the Subject Property, before completing a proper HABU analysis and thereby retroactively applied those sales without proper documentation to inform his HABU analysis. Furthermore, the Appellant submitted that this “reverse-engineered” HABU is contrary to proper appraisal practices and produces an incorrect current value and fails to discharge MPAC’s burden of proof.

69The Board finds that the Subject Property is in a Regeneration Area, subject to intensification, as none of the parties disputed this fact.

Case Summaries

70The parties referenced several authorities in their submissions. The Board summarizes some that are relevant to the determination of the legal permissibility prong of the HABU test.

Toronto Airways Ltd v. Municipal Property Assessment Corp, Region No 14, [2014] O.A.R.B.D. No. 500 (“Toronto Airways”):

71The Appellants, the owners and operators of the Buttonville Airport Lands, began a process of exploring the redevelopment potential of the land due to an end to the subsidy provided by the Greater Toronto Airport Authority. This prompted a sale of a partial interest in the lands, and an increase in the assessment of the land by MPAC, due to MPAC’s opinion that the HABU of the land changed from an airport to urban development land. The Board determined at para. 35 that “… even if the market research were presented to show that a higher use of the land is financially feasible …”, MPAC did not provide any assessment of the probability that the required rezoning approval would be obtained by the Appellants to redevelop the land as high-density commercial and residential. The Board made this determination even though the Appellants had made a redevelopment application for the land. The Board reasoned at para. 36 that the application was “… only one stage in the required approvals and will not be addressed by the OMB until 2015. There are still very significant infrastructure costs to overcome, and it was far from clear on the evidence before the Board that the Buttonville Airport Lands will ever be developed as envisioned”. This appeal was for the 2012 taxation year. The Board decided that the existing use was the HABU and determined at para. 38, 39 and 41 that:

While a planning application had been made at that time, the fact that nearly three years later there is no decision on that application demonstrates the inherent uncertainty of the zoning process.

… Anything outside of a reasonable redevelopment horizon is speculative in nature and cannot represent a probable use of the land. Here the redevelopment of the land is hoped to be permissible in 2016, with actual development starting 2017 and a completed project hoped for in 2030. There is a great deal of uncertainly [sic] on how the project will proceed even at this point in time. The proposed use was not legally permissible on the condition date and MPAC has failed to prove that rezoning was probable on December 13, 2011.

At that point in time, [i.e. December 13, 2011] the evidence is clear that a different use of the property was contemplated, but it was far from probable given the regulatory hurdles still to be overcome and the long development timeframes proposed. It is far from clear that a willing buyer would have considered the land as development land for an urban village on December 13, 2011.

Canadian Tire Corporation Limited v Municipal Property Assessment Corporation, Region 09, 2021 CanLII 105789 (ON ARB) (“Canadian Tire”):

72The Subject Properties are owned by the Canadian Tire Corporation Limited, the Appellant, who argued that there is a presumption that the HABU is the current use (a Canadian Tire store) and that MPAC did not rebut the presumption. MPAC argued that the HABU of the property as of January 1, 2016 is development lands and submitted that based on the evidence it was reasonably probable that the Subject Properties would be rezoned as mixed-use development. The City’s witness, a senior planner with the City, admitted that the site-specific zoning of the Subject Properties permitted the current use. MPAC argued that the current use was contrary to the planning policies, such as the Provincial Policy Statement, Growth Plan and Official Plan, which all have the vision for intensification, since the Subject Properties are located within an area for intensification and redevelopment. MPAC’s witness concluded that the site-specific zoning by-law applicable to the Subject Properties was “archaic”. The Board determined at para. 45 and 47 that:

…there must be more than just development potential for the Board to be satisfied that a rezoning is reasonably probable. In this case, the evidence shows that as of the state and condition date for each and every taxation year under appeal, the Subject Properties were zoned for specific retail and associated automobile service and repair uses.

The Board notes that, as of the hearing date, there were still no applications to amend the site-specific zoning-bylaw, over five years after the valuation date. If Mr. Brown and Mr. Johnstone are correct that it would take three to five years following receipt of an application to complete a rezoning, the Board does not accept that is a reasonable timeframe for a rezoning for the purposes of the legal permissibility prong of the HABU analysis. Overall, the evidence before the Board does not support a finding that the Subject Properties would be reasonably and probably rezoned within a reasonable timeframe.

On the whole of the evidence, the Board is not satisfied that a zoning change was probable within a reasonable timeframe. The Board concludes that the probability of a rezoning on the redevelopment horizon remains speculative.

Claireville Holdings Ltd. v. Municipal Property Assessment Corp. Region No. 9 [2021] O.A.R.B.D. No. 15 (“Claireville”):

73MPAC assessed the Subject Properties with a HABU as a high-rise development. The Appellants disagreed with MPAC, arguing that MPAC had not rebutted the presumption that the HABU is its current use as income-producing commercial 2-3 storey buildings. In 2012, the Appellants commenced discussion with the City regarding a proposed high-rise development and in 2013 submitted a development application, which was opposed by the planning staff, due to the requirement of more land needed to reduce the density requested on the application. More land was acquired, and a revised application was submitted. In 2017, an appeal was made to LPAT, since City Council did not make a decision. In 2019, the Appellants offered to settle the appeals at LPAT. In 2020, City Council supported the settlement offer subject to conditions; however, the zoning change was yet to be made when the appeals were heard at the Assessment Review Board. MPAC argued that an FSI of 21.68 (not the as-of-right FSI) was legally permissible on all state and condition dates, which MPAC said was a refinement derived from an OMB 2013 approval of a similar development on the same street as the Subject Properties. However, the Appellants argued this was an application of hindsight, based on the Appellants’ 2019 settlement offer. The Board determined at para. 43 and 46 that:

It was clear from the evidence of MPAC's expert that the City was regularly increasing the zoning height and density on approved development projects. This was in line with the Provincial Policy, the Official Plan and other planning policies.

The Board finds that a zoning amendment with a density of 21.68 was a reasonably probable legally permissible use at all state and condition dates based on Mr. Brown's evidence and the 2013 OMB approval of a similar development in the area. MPAC has met the first branch of the Highest and Best Use test.

Canadian Tire Corporation Ltd. v Toronto (City), 2023 CanLII 80603 (ON ARB) (“Canadian Tire II”):

74The Appellant appealed the assessment of the Subject Property (a Canadian Tire store). The Appellant argued that it was assessed too high, while MPAC argued that its HABU is redevelopment lands and not its current use as a retail store and gas bar. In deciding that MPAC’s proposed use satisfied the legal permissibility prong of the HABU test, the Board determined that every case must be considered on its own facts and the totality of the evidence must be considered. The Board specifically determined at para. 45 that:

In 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.

The Board then considered several factors in its determination, and it determined at para. 48 that:

Overall, 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.

Findings on Legal Permissibility/Probability

75The Board finds that a rezoning was not probable within a reasonable timeframe of the January 1, 2012 and January 1, 2016 valuation days as the rezoning probability of the Subject Property was speculative. The Subject Property is located in an area designated for intensification, as the provincial policies and planning documents revealed. MPAC’s expert states in his report that the sales in the vicinity of the Subject Property demonstrate that it would sell on the basis of its land value for redevelopment purposes and not on the basis of its current use for both base years. The Subject Property had the capability for rezoning based on the intensification in the LYP. However, having a development potential is not equivalent to a probability of rezoning, within a reasonable timeframe of the valuation days. (See Canadian Tire at para. 45.)

76The Board considered the whole evidence presented by the parties and made its determination based on several factors as discussed below. A single factor was not determinative of this issue.

Key Planning Policies/Documents

77MPAC provided evidence regarding the planning policies applicable to the Subject Property as stated in para. 59-60 of this Decision. Mr. Kittel testified that, in terms of an enforcement mechanism, a zoning by-law must conform with the City of Toronto Official Plan and the CWSP, which are in force; however, the zoning by-laws are applicable.

78Mr. Kittel also testified that the Official Plan 1994, which includes chapter 14: Waterfront Policies, still applies to the Subject Property, even without the Precinct Plan. He further added that if a zoning by-law amendment or a site plan application is made in an area where a Precinct Plan is to be completed, but it has not been initiated or is ongoing, within the central waterfront area, the City will make recommendations to City Council that the application is premature and would not make it (May 6, 2025 Transcript, page 69, lines 14-21). Although Mr. Kittel added that this is not a refusal, but an indication that other steps need to be taken, and the applicant can appeal to OLT, if a decision is not made by the City Council.

79Basically, this reveals that the CWSP and the LYPP are the two most important planning documents within the area in which the Subject Property is located, as confirmed on page 46 of the Appellant’s expert report, where he states:

The two most important planning documents are the Central Waterfront Secondary Plan (adopted April (2003) and the Lower Yonge Precinct Plan (endorsed June 2016). All other planning documents support the use of Secondary Plans for a comprehensive local development framework.

The Central Waterfront Secondary Plan (CWSP) provides a broad framework for waterfront renewal. It is technically not in force but is the de facto policy document for redevelopment. A key provision is the requirement of a complete Precinct Implementation Strategy prior to rezoning and/or subdivision. While the CWSP was subject to various appeals and modified by the OMB, the precinct provisions were never challenged.

80MPAC’s expert was asked during cross-examination if he agreed that the key planning instrument that affects the Subject Property is the LYPP. He stated as follows:

Well, a Precinct Plan can fall under a Secondary Plan, which falls under the Official Plan, which falls under provincial guidelines and plans and the Planning Act. So, there are a number of things in play, but yes. So, it's not the only thing. A Precinct Plan is a more fine-grained plan that implements higher levels of plans. (May 8, 2025 Transcript, page 158, lines 6-13)

81MPAC’s expert further states on page 21 of his expert report that:

The Plan [CWSP] is not yet approved and in force for the Lower Yonge Precinct. Despite this, the CWSP has been used as the guiding policy document for waterfront redevelopment and policy implementation. Similar to the current Toronto Official Plan, the Property lands are designated Regeneration Areas in the CWSP.

82Although the former City of Toronto Official Plan 1994 applies to the Subject Property, and some other planning policies and documents, as testified by Mr. Kittel, a rezoning application within the LYP cannot be approved without the LYPP being in force.

83The parties admitted that the CWSP and the LYPP were not in force on the Subject Property for the valuation days under appeal. Although there were planning processes on-going towards the enforcement of the LYPP, the LYPP was only endorsed by City council in June 2016 and approved by the LPAT in 2019. As will be discussed later in this Decision, the application for rezoning by Pinnacle International (owner of 1-7 Yonge Street, also in the LYP) was not supported by City staff in 2013, since the LYPP was not in force. Therefore, the Board finds that the key planning documents of major significance applicable to the Subject Property for the valuation days under appeal are the CWSP and the LYPP, which were not in force for the valuation days under appeal.

Pre-Application Consultation (PAC) Meeting

84MPAC submitted that the three landowners in the LYP, including CHOICE, participated in a PAC meeting with the City in 2012 where CHOICE advanced a three-tower development model. MPAC further submitted that this proves CHOICE’s intent of redevelopment back in 2012 and proves that rezoning was probable.

85Mr. Kittel testified that a PAC is initiated through a Pre-Application Consultation Application made to the City where the City would review their development proposal prior to a rezoning application being made. MPAC submitted that it requested that the Appellant produce the PAC information in its Statement of Response, but the Appellant did not produce it.

86During cross-examination, Mr. Kittel admitted that he was not employed with the City between 2012 and 2015 and was not personally involved with discussions with CHOICE until 2016. Furthermore, there was nothing filed in his witness statement to prove CHOICE’s intent of redevelopment in 2012. Mr. Kittel further testified that he worked with Willie Macrae, a senior planner with the City, who was the lead on the LYPP at the time, and Mr. Macrae assisted him by providing some historical records proving the PAC meeting with CHOICE occurred. He also stated that a 2016 Staff Final Report on Lower Yonge Precinct referred to the PAC meeting; however, he admitted that it did not proceed beyond the pre-application process.

87The Board will add little weight to this part of Mr. Kittel’s evidence, as the content of this PAC meeting was not provided in Mr. Kittel’s witness statement. Mr. Macrae was not summoned to provide evidence relating to this PAC meeting. Furthermore, MPAC could have filed a motion with the Board requesting the Appellant to produce the information relating to this meeting as requested in its Statement of Response. Any redevelopment intent by the Appellant via this PAC meeting in 2012 has not been proved by MPAC through its witnesses and was further not corroborated by documentary evidence to reveal the content of the meeting, which Mr. Kittel admitted did not proceed beyond the pre-application process.

88In Toronto Airways, the Board determined the existing use was the HABU and not development land, notwithstanding that a redevelopment application was made by the appellant. MPAC’s argument that the PAC meeting indicates an intention to redevelop from 2012, without any proof of the content of the meeting, and the fact that it did not proceed beyond this stage, is purely speculative.

Lower Yonge Precinct Plan - Planning Process

89The Lower Yonge Urban Design Report (LYUDR), which established guidelines for streets and blocks, built form, density, heights and more, was adopted by City Council in August 2014, and the LYP Transportation Master Plan, endorsed by City Council in March 2015, were not in force on January 1, 2012. The two experts referred to the Staff Report dated August 5, 2014, titled “Lower Yonge Precinct Plan - Proposals Report”. The report presented City Council with the LYUDR, the Lower Yonge Transportation Master Plan, and the planning and policy directions for the LYPP. This report provides that the landowners in the LYP expressed agreement and disagreement with some of the recommendations in the report. The report provides in part on page 33:

Most of the landowners were generally in agreement with the intention to create a mixed use district and the overall design principles including: the proposed street and block plan; the extension of Harbour Street and the connection of Church Street to Cooper Street; the nature of the public realm; public art and connectivity to the City. They also expressed general support of the creation of street-related base buildings and their associated development standards.

Landowners expressed concerns with the built form recommendations regarding tower height and density. More specifically, areas of concern about the built form included the proposed height maximums, the minimum separation distances, and the introduction of the "Tower Area Ration" (TAR) that limits the size of the floor plate over the base building. Landowners generally did not agree with the proposed 11.0 times density target and questioned how density would be allocated throughout the Precinct.

90MPAC submitted that since the Appellant was involved in these discussions, with no objections, this also indicates a reasonable probability of rezoning for both base years. During cross-examination Mr. Kittel confirmed that the road plans were not in effect on January 1, 2012, and the Municipal Class Environmental Assessment was also not concluded in 2014. There may have been ongoing discussions towards the planning process of the LYP, but there was also great uncertainty on how this would be achieved. The Board notes that this Staff Report does not state that the concerns of the landowners were addressed.

91The report further provides on pages 34 and 35:

Staff will continue to assess development potential of the Lower Yonge Precinct, including further consultations with landowners, the SAC, and the broader community. There are a number of outstanding concerns and issues by the landowners within the Precinct and the Phase 2 study process will explore options to address their concerns.

The Lower Yonge Precinct planning process will need to address a number of issues that are fundamental to creating capacity for significant mixed use development. These include, among others:

− measures to ensure that residential development in the precinct is compatible with Redpath Sugar;

− provision of adequate servicing infrastructure;

− delivery of community facilities to support the expected population;

− development of affordable housing to meet the goals of the Central Waterfront Secondary Plan; and

− strategies to promote sustainability and environmental performance standards.

At the time the Precinct Plan is finalized, staff will request that Council endorse the TMP (Transportation Master Plan).

Staff will target 2015 to report on the final Precinct Plan through Toronto and East York Community Council, along with any implementing planning instruments

92In Toronto Airways, in determining that the HABU of the subject land was its current use, the Board also considered that although the appellants had applied for an amendment to develop the airport lands, there was still significant infrastructure costs to overcome. The planning policies were not in existence within a reasonable time frame of January 1, 2012. For the January 1, 2016 valuation day, a willing buyer observing this train of planning policies with uncertainty on how it would apply to the Subject Property would see that a reasonable probability of rezoning was speculative within a reasonable time frame of the January 1, 2016 valuation day. There was still a lot of work to be carried out through comprehensive planning and the staff proposals report in 2014 acknowledged that there are still significant issues to be addressed regarding the LYP planning process.

Premature Redevelopment Application by Pinnacle International

93MPAC submitted that “The actions of other market participants, particularly the Province, Menkes and Pinnacle, demonstrate that rezonings consistent with the 1993 OP, CWSP and LYPP were probable as of the Valuation Dates”. MPAC further submitted that “The fact that the CWSP and LYPP were not finally approved had no bearing on the market’s confidence in the realizable development potential as of the Valuation Dates.” (MPAC Written Submissions, July 25, 2025, para. 16)

94On July 13, 2012 Pinnacle International purchased 1-7 Yonge Street, known as the former Toronto Star office building, one of the three properties in the LYP. In March 2013, Pinnacle International submitted a rezoning application to the City to redevelop the site. The application was appealed to the OMB. City staff did not support this application. The Staff Report dated May 29, 2013, provides in part on pages 3, 10 and 11:

Pre-application consultation meetings were held with the applicant to discuss complete application submission requirements on October 2, 2012 and December 3, 2012. The applicant was advised that the Lower Yonge Precinct plan would be needed to establish the context to review the application.

… the application is within the Central Waterfront Secondary Plan and a precinct plan needs to be completed prior to rezoning.

The development of the Lower Yonge Precinct Plan will provide the necessary comprehensive planning, transportation and urban design framework to evaluate this application, as provided for in Sections 2.1 and 2.2 of the CWSP and 4.7.2 of the Official Plan. Until the precinct plan is completed it is premature to review this application. City Planning Staff do not support the application in its proposed form. [Emphasis added.]

95During cross-examination, Mr. Kittel also admitted that City staff did not support this application, and that City Council chose not to make a decision on the application (May 6, 2025 Transcript, page 182, lines 8-12 and page 184, lines 6-14). A Staff Report dated February 10, 2014 only provided City Council with an update on the Precinct Plan. Mr. Kittel also confirmed during cross-examination that this February 10, 2014 Staff Report was received by Council only for information purposes. (May 6, 2025 Transcript, page 187)

96The two experts agree that the CWSP required a Precinct Implementation Strategy for a rezoning to occur in the LYP (MPAC’s expert report at page 21, Appellant’s expert report at page 36). MPAC’s expert further admitted during cross-examination that LYPP was not in force as of January 1, 2012 and January 1, 2016, valuation days. (May 8, 2025 Transcript, page 158)

97The Staff Report dated April 22, 2016 - Lower Yonge Precinct – City-Initiated Official Plan Amendment and Precinct Plan – Final Report provides:

The purpose of this report is to present the findings of the second and final phase of the Lower Yonge Precinct planning process. The report recommends an area-specific amendment to the Central Waterfront Secondary Plan, as well as the endorsement of the Lower Yonge Precinct Plan.

98This report recommended that City Council instruct the City Solicitor to request that the OMB authorize the CWSP to be brought into effect for lands within the LYP. The report further acknowledges the development constraints in the LYP. It provides on pages 37 and 38 that:

… Planning applications within the Lower Yonge Precinct will be required to conform to the Lower Yonge Precinct OPA and appropriately consider the Lower Yonge Precinct Plan.

The OPA includes necessary changes to the in-force former City of Toronto Official Plan and the Central Waterfront Secondary Plan. Policies specific to the Lower Yonge Precinct are included in the OPA as a Site and Area-Specific Policy amendment to the Central Waterfront Secondary Plan.

The timing of development may be constrained by a number of issues, including the delivery of transportation improvements, adequacy of sanitary servicing infrastructure, acquisition and conveyance of the central park, provision of community facilities, and approval of mitigation measures associated with Redpath Sugar. As a result, holding provisions and phasing restrictions will be used in the implementing zoning by-laws.

99The Official Plan Amendment implementing the LYPP further included holding provisions, which included a list of things that needed to be accomplished when a redevelopment application is filed with the City.

100Mr. Kittel testified that even if a Precinct Plan was not yet implemented, it would not prohibit approval of a rezoning application by the tribunal (OLT), but he indicated that the tribunal considers these planning processes in its deliberation and has in the past waited for approval until certain planning studies are complete and that the only time an approval is advanced before a Precinct Plan process is complete, is if the City agrees. (May 6, 2025 Transcript, pages 220-222)

101MPAC’s expert provides in his report at page 70 that “Market participants and the City of Toronto are not expecting the completion of the Lower Yonge Precinct prior to beginning a zoning amendment.” However, City staff did not support Pinnacle International’s rezoning application, and the City did not make a decision on it due to the LYPP not being finalized or in force.

102Although the three levels of government had invested in the revitalization of the waterfront areas, as the evidence has shown there were development constraints in the LYP. A willing buyer of the Subject Property would not have been able to obtain a rezoning of the Subject Property within a reasonable timeframe of the valuation days under appeal. City Council endorsed the LYPP in June 2016. Pinnacle International and Menkes had settlements approved by LPAT in March 2017 and May 2018, respectively, with Orders issued by LPAT in 2019 and the rezoning by-law passed by the City in 2020. The Orders were issued three years after the January 1, 2016 valuation day and seven years after the January 1, 2012 valuation day.

103In Toronto Airways, the Board determined at para. 38 and 39:

While a planning application had been made at that time, the fact that nearly three years later there is no decision on that application demonstrates the inherent uncertainty of the zoning process.

Anything outside of a reasonable redevelopment horizon is speculative in nature and cannot represent a probable use of the land.

104In Toronto Airways, a development application had been made by the appellants. In this appeal, no development application was made.

105In Canadian Tire the Board noted that the experts did not provide evidence specific to the properties on how long it would take for a rezoning application to be reviewed and approved by the City. The Board also provides at para. 45 that:

… Most notably, there was no evidence before the Board of a site-specific zoning by-law amendment application for the Subject Properties in or around the relevant timeframe. The Board notes that, as of the hearing date, there were still no applications to amend the site-specific zoning-bylaw, over five years after the valuation date.

106Wayne Rasmussen¹ in an article titled - Predicting “Reasonably Near Future” in Highest and Best Use: How much time is reasonable for attaining a property’s highest value? states at pages 36 and 37:

From a legally permissible standpoint, the reasonably near future generally refers to the amount of time needed to accomplish a rezoning or change of other restriction imposed by law in order to have the ability to develop the highest and best use. This time period needs to be predictable and close enough to the date of valuation, based upon credible evidence, to affect the market value of the property.

107Furthermore, in the same article at page 39 Rasmussen states:

The reasonably near future needs to take into account the amount of time needed for a property to become physically developable with regard to land use approvals and the availability of infrastructure, and the extent to which this may affect its market value.

If the amount of time required to overcome the local planning process and the various off-site infrastructure needs or other conditions is generally routine and predictable (based on credible and reasonable evidence), and does not create such a cloud on the property as to preclude investment for future development of the highest and best use scenario, then it should be considered to be developable within the reasonably near future. However, if these conditions prove to be either too unclear or substantial enough, they can postpone the potential for development so far into the future that they cloud the issue of highest and best use. In this situation, the land would not be considered developable with the highest and best use case scenario in the reasonably near future.

108As of the dates of the hearing of these appeals, there has been no application for rezoning for the Subject Property. The Appellant’s expert stated that there was no reasonable probability of rezoning for the 2012 valuation day, and for the 2016 valuation day, the reasonable probability of rezoning was within 5 to 10 years for the Subject Property. From the history of the development applications specific to the two other properties in the LYP, where from the date of application to the City, it took Pinnacle International seven years to obtain a site specific rezoning and Menkes four years, and in reviewing the totality of the evidence, the Board finds that there was no reasonable probability of rezoning within a reasonable timeframe of the two valuation days under appeal and the densities submitted by MPAC’s expert could not have been achieved within a reasonable timeframe of the valuation days.

Compatibility Issues with Redpath Sugar Refinery

109The two experts acknowledge that nearby developments in close proximity to the Redpath Sugar lands, which are south of the Subject Property, are to be constructed to ensure compatibility with the Redpath Sugar lands in terms of noise, dust, odour and air quality. In order to protect the existing use and prevent undue adverse impacts on the Redpath Sugar lands, the CSWP has specific provisions relating to land use compatibility between these lands and any development approval applications.

110Joe Svec, the Vice President Development and Planning at CHOICE from 2017 to 2023 testified that he led the redevelopment of Ontario properties at CHOICE. Mr. Svec testified that Redpath Sugar had an effective “veto” on development. For a developer to proceed with development, Mr. Svec testified that there are negotiations, contracts and mitigation that had to be made with Redpath Sugar for the development to be approved. He concluded that essentially, Redpath Sugar is like a “… third-party approval authority in the sense that they require mitigation for all residential uses and redevelopments …”, in order to protect its primary role of industrial use. (May 9, 2025 Transcript, page 44, lines 9-14)

111The Appellant submitted that this effective “veto” maintained by Redpath Sugar, which is located to the south and eastern portions of the LYP, further supports the fact that there is no reasonable probability of rezoning for the years under appeal. MPAC disagrees.

112In 2019, CHOICE presented a two-tower built form demonstration model based on the Lower Yonge Official Plan Amendment to realize the OPA density permission of 12.5 times lot area (approximately 158,000 square meters of GFA).

113A Staff Report to City Council dated February 28, 2019 – Lower Yonge Official Plan Amendment - Request for Direction Report, reveals that planning staff supported the proposed two-tower policy amendment after considering some planning policies.

114The Appellant presented into evidence an email exchange between Redpath Sugar’s lawyer, Calvin Lantz and the City’s lawyer, Robert Robinson, which the parties agreed was not privileged since it was made public. In the email dated March 25, 2019, Mr. Robinson stated:

... Choice REIT has not submitted any development applications, so the built form is purely theoretical at this point. When they make a rezoning application in future, of course the built form will need to be tested for any compatibility issues.

The proposed OPA policies deal with the testing of compatibility in detail, so I don't understand the comment that Redpath needs the model to assess, at this point in time, if there are any compatibility issues related to the proposed OPA policies.

115In a March 28, 2019 email, Mr. Lantz responding to Mr. Robinson stated:

As stated in our letter to the Community Council of March 18, 2019, Policy 6.5.10(f) of the OPA requires on the ChoiceREIT Site, “Tall buildings on Block 7, as reference[d] on Map J2: … f) [sic] will orient the two towers to maximize the view corridor from Sugar Beach” ….

If the towers are required by OPA policy to be oriented to maximize the view corridor from Sugar Beach, they may also have direct and unimpeded exposure to potential emission impacts from Redpath – particularly from Redpath’s ships that unload at the Jarvis Slip adjacent to Sugar Beach.

It is Redpath’s position that, until a Compatibility Study has been prepared that demonstrates that orienting the towers on the ChoiceREIT Site to maximize the view corridor from Sugar Beach will not cause undue adverse impacts on Redpath or adverse effects from Redpath on the towers, it is premature to include Policy 6.5.10(f) in the OPA.

116Mr. Kittel confirmed during cross-examination that Policy 6.5.10(f) refers to the Tower Area Ratio Concept Diagram. In the OPA the tower area ratio is “… the ratio of the total area of the average tower floorplate(s) above base building to the area of the development block. The tower area is measured as an average of the exterior floor plate dimensions of the tower, exclusive of balconies.” (Staff Report – Lower Yonge Precinct -City-Initiated Official Plan Amendment and Precinct Plan – Final Report, dated April 22, 2016, page 66, para. 6.5.10)

117This email exchange reveals that Redpath Sugar had concerns regarding compatibility issues based on the demonstration model presented by CHOICE, and at this stage, the Appellant had not made an application for rezoning the Subject Property.

118In a Staff Report dated April 3, 2018 - 55 to 95 Lake Shore Boulevard East, 33 – 53 Freeland Street and 2 and 15 Cooper Street - Official Plan Amendment and Zoning Amendment Application - Request for Direction Report, staff recommended a support of the application made by Menkes at the OMB subject to certain matters being addressed, which included land use compatibility issue with Redpath Sugar. The applicant had undertaken the necessary compatibility studies; however, the staff report provided at pages 34 and 43-44:

The City will be undertaking a peer review of these conclusions, in consultation with Redpath Sugar, which will be completed prior to the issuance of the OMB order. It is expected that specific land uses, building orientation, mitigation measures and any other required matters for the 55 to 59 Lake Shore Boulevard East, 33 to 53 Freeland Street and 2 and 15 Cooper Street proposal will be secured through the Zoning By-law Amendment, …

Further discussion/resolution of the following matters needs to occur prior to the OMB issuing an order to bring into force site-specific by-laws for the development:

− acceptance of the conclusions of the noise, odour and air quality studies conducted for the proposed development addressing compatibility with Redpath Sugar's industrial operations and further discussion with Redpath Sugar regarding the proposed mitigation approaches and necessary agreements.

119Notwithstanding the endorsement of the LYPP by City Council in June 2016, there was still a measure of uncertainty regarding rezoning probability within the LYP area. MPAC argued that neighbouring landowners were able to enter into an agreement with Redpath Sugar, however, the timing of this happening was speculative, since Redpath Sugar also had to be involved to ensure compatibility requirements to protect its lands.

120Pursuant to the September 26, 2019, Order issued by LPAT regarding the rezoning application made by Menkes, the former City of Toronto Official Plan was amended, and part of the amendment included the following:

a. Replace Paragraph P51 with the following:

When considering development approval applications and public realm initiatives, regard shall be had to all applicable provincial and municipal policies, regulations and guidelines to ensure that compatibility will be achieved and maintained with regard to noise, dust, odour, and air quality so as to achieve the goals of:

i. preventing undue adverse impacts from the proposed land use on Redpath Sugar lands designated as an Existing Use Area; and

ii. preventing undue adverse effects on the new land use from Redpath Sugar lands designated as an Existing Use Area.

Sensitive land uses may be prohibited in the implementing zoning, limited and/or protected, through phasing, massing and siting, buffering and design mitigation measures in proximity to Redpath Sugar to ensure compatibility. In addition, noise and air emissions reports shall be required in support of development approval requests. Such environmental reports are to specify how compatibility will be achieved and maintained between Redpath Sugar and the proposed development and may include measures aimed at minimizing impacts.

Council acknowledges the important role of the Ministry of the Environment, Conservation and Parks in reviewing and providing comments and recommendations on such reports. The City shall consult with both the Ministry of the Environment, Conservation and Parks and Redpath Sugar during the development approval process and during the design process for public spaces in the vicinity of the Redpath Sugar property to ensure compatibility. [Emphasis added.]

121The “veto” power referred to by the Appellant in this context is such that any development close to the Redpath Sugar lands must be in compliance with the compatibility requirements. The Board notes that although evidence was not presented to prove that Redpath Sugar has the ability to unilaterally stop development, its compatibility requirements have the potential of delaying it. In these appeals, where a rezoning application was not filed in the two base years under appeal, no evidence was advanced regarding any compatibility study done by the Appellant. In the context of the legal permissibility prong of the HABU test, a rezoning will not be probable within a reasonable timeframe of the valuation days under appeal. Furthermore, as admitted by Mr. Kittel during cross-examination, CHOICE’s demonstration model was not backed up with a development application, and as confirmed by Mr. Robinson, it was purely theoretical.

Neighbouring Developments

122MPAC’s expert provides in his report that sales in the vicinity of the Subject Property demonstrate that the Subject Property would sell for redevelopment purposes based on its land value and not on its current use. The two properties located in the LYP with the Subject Property did not have their site-specific zoning by-law passed until 2020, even though City Council had endorsed the LYPP in June 2016. This indicates that there was uncertainty, based on several issues and the timing for development was still constrained by several issues as identified in the City Staff Report dated April 22, 2016.

123Apart from these two properties located in the LYP, there is a property directly east of the Subject Property located in the East Bayfront at 130-132 Queen Quay East and 143-177 Lake Shore Boulevard. East. MPAC’s expert testified that it was sold as a land assembly to Daniels Corporation for a combined sale price of $66,000,000, which was registered in January 2014. MPAC’s expert further added that at the time of sale, there were outstanding appeals to the CWSP and also on the East Bayfront By-law 1049 (see MPAC Valuation Report, page 76), and therefore, it had the same Official Plan and in-force zoning as the Subject Property.

124However, the Appellant’s expert indicated that at the time of sale, the East Bayfront Precinct Plan was already adopted in 2006. MPAC’s expert acknowledged this in his report on page 78 where he stated that “The approved Precinct Plan only allows for slightly faster timing of the development …” He also stated on page 77 that this property had “… the advantage of the approval of the East Bayfront District …”. He further indicated that this approval had minimal impact on the land value. The Board notes that this is different from Pinnacle International’s application, where the LYPP was not in force when the purchase and the rezoning application was made.

125In Canadian Tire at para. 47, the Board determined that:

… Although there was evidence regarding bylaw amending applications being allowed for other developments in the vicinity of the Subject Properties, and Mr. Brown testified that the majority of developments in downtown Toronto are being rezoned after purchase, the Board finds this is insufficient evidence respecting the probability of a rezoning for the Subject Properties, or the specific timeline associated with such a bylaw change.

126In McNally v Etobicoke (City), 2015 CanLII 30373 (ON ARB) (“McNally”) (although not cited by the parties the Board finds this disposition of the Board relevant to these appeals) MPAC assessed the subject property based on its HABU of redevelopment into a high-density condominium development, which the appellant disputed submitting it should be assessed lower at its current use. The owner of the subject property had requested an increase in density to allow a proposed condominium development to proceed. The rezoning by-law amendment had not yet been enacted, although there was a report prepared by the Director, Community Planning, Etobicoke York District to the Etobicoke York Community Council recommending approval of applications for zoning by-law amendments for two separate but abutting sites. MPAC relied on these facts to argue that the subject property’s HABU is redevelopment land and further relied on sales of redevelopment lands. MPAC further submitted that the report is evidence that the density will change, and redevelopment will occur.

127At para. 18 of McNally, MPAC argued that the HABU of the subject property is redevelopment land, “… and that the value has increased even though the density has not yet been increased. He added that all of the properties in the block of properties have been treated similarly and their assessed values increased”.

128The Board determined at paragraph 45 that:

… the probability of rezoning on the redevelopment horizon remains speculative. The Board notes that as at the hearing date, there was no enactment of the applications to amend the zoning by-law, nearly three years after the report reviewed and recommended approval. There remains a great deal of uncertainty on how the redevelopment will proceed, and so the requirement of being legally permissible cannot yet be said to be reasonably probable.

129In McNally, there was a proposal for redevelopment and a report approving rezoning for abutting sites; the Board concluded that rezoning was speculative. In these appeals, the Appellant has not made an application for rezoning, the demonstration model in 2019 still needs a development application, and the two other properties in the LYP did not have the rezoning by-law passed until 2020. This reveals that there was no reasonable probability of rezoning within a reasonable timeframe of the valuation days under appeal, and anything outside the reasonable timeframe is purely speculative.

After-the-Fact Evidence by MPAC

130The Appellant submits that MPAC’s expert used after-the-fact evidence as the basis of his opinion of value. MPAC’s expert states on page 7 of his report that in addition to reviewing comparable property sales using the applicable planning documents for the base years under appeal, he also relied on CHOICE’s plans for the property “… which have recently culminated in an agreement with City of Toronto planning staff of a density of 9.5 times or a development gross floor area (GFA) of 1,700,697 SF of new mixed use space”. On page 37 of his expert report, he provides:

The most recent public documentation dated March 2019 indicates Loblaw/CP REIT has settled a mixed-use development proposal with the City with a GFA of 1,700,697 SF and a FSI of 12.5 of the net site area.

The settlement proposal removes any uncertainty as to the achievable density on this site. The market evidence presented later in this report will highlight that market participants would have paid for this future potential long before it was fully realized, knowing that it was almost certainly going to happen.

131MPAC’s expert is referring to the two-tower built form demonstration model based on the Lower Yonge Official Plan Amendment requested by CHOICE in 2019 which Mr. Kittel confirmed was basically a demonstration plan and not a development proposal, and that CHOICE has not submitted a zoning by-law amendment application or an Official Plan amendment or a Plan of Subdivision for the Subject Property.

132MPAC’s expert testified that for the return rates used for the roll return, he considered a range of FSI between 8 and 9 times, while his opinion of value was higher at 9.5 times, which was based on his refinement of the expected density. He further testified as follows:

He [the Appellant’s expert] is suggesting that I'm using a document that came from 2019 to determine the values for 2012 and 2016. However, as I discussed...as I entered into evidence yesterday, I returned the values on these properties for 2012 and 2016. I had pre-estimated what I thought was achievable at this site, which was, as I said yesterday, was between 8 and 9 times FSI.

Not knowing how long these conversations had been going on for, not having received documentation from the Appellant in regard to their conversations with the City, I used the best evidence available to me, which was a refinement of my earlier estimation. So, essentially, I'm moving from 9 times FSI to 9.5 times FSI based on that later document. (May 8, 2025 Transcript, page 64)

133There are only three properties within the LYP, including the Subject Property. For the 2012 base year the only rezoning application made for any of these three properties was made by Pinnacle International in 2013 for 1-7 Yonge Street, which is a superior property compared to the Subject Property, as its as-of-right density is 6.0 FSI and its zoning permitted commercial and residential uses. The parties did not use the sale of this property in providing the Board with their current value assessments. MPAC’s expert made reference to this sale stating at page 68 in his report that:

The real value of this comparable sale is not to determine a rate per SF buildable but rather to examine how buyers and sellers in the marketplace act under the the (sic) exact same conditions found at the Property.

Conclusion – Market participants as of the 2012 base date believed a site at the same location, with the same planning requirements as the Property had a high probability of being rezoned. The time-line for that rezoning is irrelevant. What is relevant is that market particpants (sic) were willing to pay a premium above and beyond the current allowed uses in place. The actions of an experienced well informed developer in purchasing this site makes this point indisputable.

134Pinnacle International's rezoning application initially proposed a development with 594,112 m² GFA, a total density of 22.01 FSI. In 2020, the final approved GFA was 386,200m². The Appellant’s expert stated that the initial proposal was over 1.5 times higher than the approved GFA.

135The other property in the LYP, 55-95 Lake Shore Boulevard East, was purchased by Menkes. This property was announced for sale by Infrastructure Ontario, which issued a Request for Proposal for its sale in September 2014. Menkes purchased the property in 2016. This sale is far removed from the 2012 valuation day therefore, it is not relevant to the 2012 base year. Menkes filed a rezoning application in May 2016, despite the fact that the LYPP was endorsed by Council in 2016; this application was appealed to LPAT, and it received its rezoning in August 2020 for a final density of 9.27. MPAC’s expert, at pages 106 and 107 of his report, compares this final FSI to that of the Appellant’s demonstration model in 2019 of 9.5.

136The Lower Yonge Urban Design Report proposed 11.0 times the density for the LYP, which all the landowners disputed. This was explicitly provided in both expert reports:

Landowners generally did not agree with the proposed 11.0 times density target and questioned how density would be allocated throughout the Precinct. (Staff Report – Lower Yonge Precinct Plan – Proposals Report, August 5, 2014)

137The LYPP endorsed by Council in June 2016, recommended the following densities for the three properties: 1-7 Yonge, 16.5 times the net property area, LCBO land, -14.5 times the net property area, the Subject Property, 12.5 times the net property area. These recommendations were not passed until 2020 for the two other properties, while a demonstration model only was presented in 2019 for the Subject Property.

138MPAC’s expert admitted during cross-examination that if this density of 9.5 times was not achieved for the Subject Property, his opinion of value may change. MPAC’s expert testified that the Appellant did not provide the requested information regarding its conversation with the City. MPAC could have forced production of this information from the Appellant through a motion for production, but it did not. MPAC’s expert’s opinion of value took into consideration the range he used for the roll return, which is based on how the Subject Property was assessed.

139The Board finds that these final densities passed in 2019 to 2020 were not known within a reasonable time frame of the valuation days under appeal, and there was no reasonable probability for a willing buyer to know that the Subject Property would achieve a density of 9.5 FSI within a reasonable timeframe of these base dates. Consequently, the Board further determines that the MPAC expert’s refinement of the Subject Property’s FSI was primarily based on a 2019 two-tower demonstration model, which could not have been known within a reasonable timeframe of the valuation days under appeal or may not be probable if a site-specific zoning by-law is approved for the Subject Property.

Financial Feasibility

140If the proposed use does not pass either of the first two tests, it is not necessary to consider whether it is financially feasible. The Appraisal of Real Estate states on page 12.3 that “A use may be financially feasible, but this is irrelevant if it is legally prohibited or physically impossible.”. MPAC’s proposed use has not passed the legal permissibility prong of the HABU test; however, the Board still reviewed it for the financial feasibility prong of the HABU test.

141The proposed use should be profitable to pass this prong of the HABU test. The Appraisal of Real Estate states on page 12.7, “As long as a potential use has value commensurate with its cost and conforms to the first two tests, the use is financially feasible”. It further provides on page 12.11:

The existing use of the property as improved is often implicitly legally permissible and physically possible. If the existing use will remain financially feasible and is more profitable than modification or redevelopment, the existing use will remain the highest and best use of the property as improved.

142The Appellant’s expert testified that for both 2012 and 2016, the existing use of the Subject Property as improved is more profitable than a surface parking lot. He states on page 54 of his report:

One must determine if the existing use is financially feasible and if it is more profitable than modification or redevelopment. In this case, we are comparing a 65,270 ft² store with a parking structure to a surface parking lot. The store has existed since 1999 and continues to exist as of the date of this report. Therefore, it is financially feasible. My estimated Replacement Cost New for the store and parking structure is $15,902,116. The depreciated value of the store is $6,360,846. This would improve the value of the land more than the cost of a paved parking lot. Therefore, the existing use is more profitable than modification or redevelopment and remains the highest and best use.

143The Appellant’s expert provides on pages 23-24 of his report:

On November 12, 2020 I consulted with Amy Chan, CHP, Vice President of Planning and Development for CP REIT and Alex Gordon, CHP, Planner, CP REIT. …Ms. Chan stated that “… the store is well located and that they have plans (as of Nov 2020) for renovations to ensure the ongoing viability of this store for at least 10 more years” (2030).

144MPAC submits that the Appellant’s expert did not complete a financial feasibility study. MPAC’s expert states on page 45 of his report:

The Property’s current improvements are clearly physically possible and legally permissible. They are financially feasible as the land was purchased at a time when property values were much lower. It is possible that a renovation of or an addition to the existing structure may increase its value but it is unlikely that these efforts would provide for a significantly greater return on investment.

In its current state, the retail warehouse and parking garage represent an underutilization of the Property. Prudent market participants would not base the value of the Property on a cost or income approach as the existing improvement does not add value to redevelopment potential of the land.

The continued use of the Property as a retail warehouse may be financially feasible in its current form, however, in my judgment the current use is well below its maximally productive land use.

145During cross-examination MPAC’s expert further testified that the current use may be financially feasible, but he is not sure since he did not carry out a financial feasibility study of the store, but he did for the Subject Property. He also confirmed that he did not present a cost or income analysis of the store. The Appellant’s expert testified that the store has been in operation since 1999 to date. He further testified that during his inspection of the Subject Property it was viable, although he did not present any financial data for the store. The only evidence on the financial feasibility of the current use is presented by the Appellant’s expert and the Board finds that this is the best evidence which reveals that the current use is financially feasible.

146The focus therefore is on the proposed use; the profitability of the proposed use.

147MPAC’s expert stated on page 41 of his report that, based on the real estate market and the new development proposals within the immediate vicinity of the Subject Property, “It is clear that a high-rise mixed-use development would be financially feasible at this location.”. He further testified that his entire report is a financial feasibility study. He added that his financial feasibility study constitutes an inferred demand analysis. This is one of the market analyses referred to in The Appraisal of Real Estate, which is carried out to assess financial feasibility and is defined on page 9.9 of that same text as “Demand projected on the basis of current market conditions, rates of change, and absorption patterns.”. He confirmed during cross-examination that this type of analysis required a marketability study. The Appraisal of Real Estate text on page 9.13, identified the components of a marketability study which must answer the following questions:

• Who will the end users be i.e., buyers or tenants?
• What are the characteristics of the expected end users? (e.g., age, family size, space needs, and preferences as to facilities and amenities)
• Does the utility of the improvements, whether proposed or existing, satisfy the requirements of the intended market?
• What is the demand for the proposed or existing property that is to be marketed?
• How many end users would want the property? (desire)
• How many potential users can afford it? (effective purchasing power)
• What share of demand is the property likely to capture? (capture rate)
• What is the supply of competitive properties that will be marketed?
• How many competitive units currently exist?
• How many competitive units are under construction?
• How many competitive units are planned?
• What is the estimated absorption rate for the proposed property to be marketed?
• If already developed, what future rent and occupancy are expected?
• Are there alternative uses for the property that would provide a higher return on the investment?
• What are the relative risks associated with the alternative uses?

148During cross-examination, MPAC’s expert was asked the following specific questions relating to his marketability study (May 8, 2025 Transcript, pages 201-207):

• “Can you show me where have you identified how many end users would want the property?” This was not identified in his report.
• “Can you show me what share of demand the property is likely to capture?” He provided a general answer that there is a demand for housing, and how the federal government and the City are addressing this crisis.
• “Can you show me where you have considered whether the utility of the improvements, whether proposed or existing, satisfied the requirements of the intended market?” He responded that his entire expert report is a marketability study, where he looked at different things including people selling, buying, the different condominiums that are selling. All of which were generalized and not specific to the Subject Property.
• “Where would I find the estimated absorption rate for the proposed property to be marketed?” He indicated that the list of condominiums in the Waterfront that have sold out, is what you would base your estimated absorption rate on, are other properties in the immediate vicinity having difficulty selling units.

149MPAC’s expert also provided on pages 41 and 42 of his report:

In order to provide a snapshot of financial feasibility for the redevelopment of the site with a predominately residential mixed use building, I have consulted the Altus Construction Cost Guide, 2016 and Urbanation’s market report for a condominium near the Property site to construct a basic pro forma analysis.

The Altus Cost Guide, 2016 indicates that GTA construction costs (hard costs) for a condominium building between 13 and 39 storeys ranges from $195-260/SF.

Estimates of soft costs can vary widely. Some sources reviewed indicate soft costs in Toronto are estimated at approximately $150/SF, while Nial Finnegan, an industry expert, has indicated rates as high as 75% of hard costs ($195/SF at the upper end) in the current market.

My estimated rate/SF buildable for the 2016 base year at this location is $70. This produces a total estimated project cost in the range of $415 - $525/SF GFA.

Low End: Hard cost ($195) + soft cost ($150) + land value ($70) = $415/SF

High End: Hard cost ($260) + soft cost ($195) + land value ($70) = $525/SF

There were a number of new condominium projects brought to market between 2014 and 2019 in Yorkville and on the Yonge corridor, as shown in the Urbanation report below. Around the 2016 base date, new condominium units near the Property were selling in the $800 per SF range.

150He concluded on page 43 by stating that:

Although hard and soft cost estimates may vary significantly depending on the data source and preference of the individual developer, it is clear from the sheer volume of new condominiums built and sold in Toronto every year for the past decade that this development form is financially feasible throughout the city.

151The Appellant submitted that this is the same approach MPAC’s expert used to determine the financial feasibility of the properties in Claireville which the Board rejected as being insufficient to satisfy the financial feasibility of the subject properties.

Findings on Financial Feasibility

152MPAC’s expert admitted that the inferred demand analysis, which he used to conduct the financial feasibility of the Subject Property, should have included a marketability study. The Appraisal of Real Estate text states on page 9.11 that a marketability study is property specific. Based on MPAC’s expert’s admission during cross-examination, he did not carry out a complete marketability study of the Subject Property, as some basic studies that should be included in a marketability study were missing in his report.

153Furthermore, MPAC’s expert used the Altus Construction Costs Guide, 2016 and Urbanation’s market report for a condominium development near the Subject Property site to construct a basic pro forma analysis. He produced a total estimate project cost in the range of $415 to $525/SF GFA. He then looked at new condominium projects brought to the market between 2014 and 2019 in Yorkville and the Yonge corridor. He stated that new condominiums were selling in the $800 per SF range around the 2016 base date. He concluded on page 42 of this report that:

Typically, multi-residential buildings are only able to sell 85% of the total GFA as square footage is lost to common areas, stairwells, elevator shafts etc. Reducing this efficiency ratio from the salable rate of $800 reduces the income per SF GFA to $680.

Therefore, a developer would need to keep costs below $600/SF in order to achieve a 12% of gross revenue profit.

154Additionally, on page 43 of his report, he stated that:

In the immediate vicinity 9,417 new condominiums were brought to market between June 2007 and October 2018. The majority of these units are now fully constructed and occupied. The many successful condominium developments in near proximity to the Property indicate a high degree of probable success for a potential redevelopment on this site.

155This, in his view, reveals a market demand for these units. He also testified that this list of condominiums in his report provides the estimated absorption rate and the question being whether other properties in the immediate vicinity are having difficulty selling units. (May 8, 2025 Transcript, pages 206, 270-272)

156The Board finds that MPAC’s expert has not provided sufficient evidence as to how the proposed use of the Subject Property is financially feasible. His evidence does not show when the continued construction of high-rise condominiums in supply in the subject market area will exceed the demand, which will ultimately depress prices and determine if new high-rise condominiums are actually financially feasible in the subject property area (see Clareville at para. 60 and 61, and Canadian Tire at para. 56).

157In Clareville the Board notes at para. 61 that:

A demonstration, in hindsight, that average condominium prices have continued to increase is not evidence of financial feasibility on any given state and condition date. It does not take into account varying development and financing costs over time that may affect profitability and financial feasibility.

158Consequently, the Board is not satisfied that MPAC has met this prong of the HABU test. Having failed to pass the legal permissibility test and financial feasibility test, there is no need to proceed with the fourth test which is to determine if MPAC’s proposed use is maximally productive.

Issue 2 – What is the correct current value of the Subject Property as of January 1, 2012 and January 1, 2016?

159MPAC has not established that its proposed use of the Subject Property as a mixed-use development is the HABU. The Board has determined that the existing use of the Subject Property is the HABU and would therefore, be valued based on its existing use as a large-format retail food store with a two-storey parking structure.

160The Appellant relied on the cost approach to value the Subject Property, and the land value was estimated using the direct comparison approach. The Appellant’s expert further used the income valuation approach for demonstrative purposes and to check the reasonableness of the values. The Board notes there was insufficient data provided by the Appellant in its income approach to value the Subject Property; therefore, the Board could not use it to determine the correct current value of the Subject Property.

161According to The Appraisal of Real Estate in chapter 17, “In the cost approach, a property is valued based on a comparison with the cost to build a new or substitute property. The cost estimate is adjusted for the depreciation evident in the existing property”. The value of the land is derived based on comparable land sales. The value of the building and the estimated value of the land will result in an estimated value of the Subject Property.

162The Appellant used the direct comparison approach, based on its determined HABU of the Subject Property being the current use, to select sales of properties to provide an estimate of the land value of the Subject Property.

163The Appellant submits that for the January 1, 2012 valuation day the correct current value of the Subject Property is $21,893,000 for the 2013 to 2016 taxation years, and for the January 1, 2016 valuation day the correct current value is $34,635,000 for the 2017 to 2025 taxation years, with no equity adjustment for both base years.

164MPAC also used the direct comparison approach to determine the land value of the Subject Property by selecting its proposed comparable property sales based on its proposed use of the Subject Property as high-rise mixed-use development land. MPAC’s expert concluded that the correct current value of the Subject Property for the January 1, 2012 valuation day is $76,531,000 and for the January 1, 2016 valuation day is $119,048,000 with no equity adjustment for either base year. Neither MPAC’s expert nor the City presented the Board with any other alternative valuation methodology should the Board decide that the HABU is not mixed-use development land.

165According to s. 40(17) of the Act, the onus to prove the correct current value of the Subject Property is on MPAC.

MPAC’s Proposed Comparable Property Sales

166The Board determined that the HABU of the Subject Property is its current use. The Board finds that MPAC’s expert selected proposed comparable property sales of development land in line with his HABU of the Subject Property. He provides on page 48 of his report:

In order to determine a current value estimate for the 2012 base date, I have researched and analyzed sales of properties within the vicinity that have similar development potential and market demand. …

For both the 2012 and 2016 base years, I have identified sales in my analysis which were purchased as land assemblies, where there were a multiple number of properties purchased individually to create the existing development lot.

167MPAC’s expert used 18 proposed comparable property sales consolidated into 11 assemblies for the 2012 base year. For the 2016 base year he identified 18 proposed comparable property sales on 9 development sites.

168For the 2012 base year MPAC’s expert testified that the revised median time-adjusted sale price per SF lot is $489 and the mean is $490, while the median time-adjusted sale price per SF. buildable is $52.71 and the mean is $52.69. For the 2016 base year the revised median time-adjusted sale price per SF lot is $598 and the mean $684, while the median time-adjusted sale price per SF buildable is $78.15 and the mean is $81.66. MPAC’s expert added that he used lower rates to value the Subject Property. He used $45/SF buildable for the 2012 base year and $70/SF buildable for the 2016 base year. He used a GFA of 1,700,697 SF to value the Subject Property because he believed it is the HABU that would be achievable on these base dates.

169MPAC’s proposed comparable property sales sold as development lands. Having determined that the Subject Property’s HABU is not development land for the base years under appeal, the Board finds that these land sales are not sufficiently comparable to the Subject Property. In addition, the Board also did not use these sales for the reasons that follow:

Land Assemblies/Size Adjustment

170MPAC’s expert used sales of land assemblies without making adjustments, despite referencing the International Association of Assessing Officers (“IAAO”) which cautions against the use of multiple parcel sales unless adequate adjustments are made.

171On page 49 of his report, he quotes the IAAO Standard on Ratio Studies, stating:

Regardless of whether the parcels are contiguous, any multiple-parcel sale that also involves multiple economic units generally should not be used in ratio studies because of the likelihood that these sales include some plottage value or some discount for economies of scale, unless adequate adjustments for these factors can be made to the sale price.

172He further provides on the same page of his report:

The obvious concern in the IAAO Standards is that multiple-parcel sales may reflect something other than normal market value. In my opinion, this is a valid concern but where the evidence clearly shows the sales are within the normal market range and where multiple-parcel sales make up the majority of transactions in the market, as they do in the former City of Toronto, it is illogical to exclude them without justification.

173During cross-examination, he confirmed that he made no adjustment for size. He provides at page 51 of his report:

… My past research has indicated that small developments generally under 80,000 SF of GFA often sell at a premium over developments larger than 120,000 SF GFA. I have never determined a specific reliable trend as data of this nature is difficult to find. Rarely do small sites and large sites sell in close proximity, near the same dates in time.

This trend ceases to exist in my experience, once developments become larger than 150,000 SF GFA. At this point there does not appear to be any downward adjustment for significantly larger developments ranging all the way past 1,000,000 SF GFA.

174The Board notes that this research was not included in his report. He further testified that this statement is supported by his size adjustment charts, which had about 9-10 properties, which he relied on in his report. During cross-examination he was referred to the Appellant’s expert report, which referenced an American appraiser, Michael Wolf, who indicated that generally, a larger dataset has more statistical strength than a smaller one. His response was:

… if that larger dataset includes properties that are relevant to each other, then, yes, a larger dataset is better than a smaller dataset. (May 8, 2025 Transcript, page 218, lines 7-10)

175In the MPAC expert’s size adjustment chart, he used 9-10 data points to make his conclusions about large developments, which contradicts his response during cross-examination about large datasets. His response to the question about whether his smaller size dataset is sufficiently large to test his hypothesis about large developments was:

I believe the evidence I already gave is that I wouldn't rely heavily upon any analysis of this nature, other than to do a general, kind of, look and see, does it make sense or not. (May 8, 2025 Transcript, page 219, lines 10-14)

176The Board finds that the Appellant’s expert provided the best evidence for size adjustment using a total of 107 sales. The Appellant’s expert used a larger dataset for his size adjustment in his report. He provides on page 157of his report:

Best efforts were made to use all “market” land sales in Toronto categorized as commercial (retail, commercial, and office) lands. Selected sales resulted in a total of 107 sales.

177He testified that 107 sales actually refers to the sales that occurred between 2013 and 2017, that he had more than 107 sales due to sales from 2008 to the end of 2012, which would be appropriate for the 2012 base year. However, some of the sales were removed due to their sale dates, as was shown in his analysis.

178MPAC submitted that the Appellant’s expert’s use of the Richmond-George assembly as part of his size adjustment is irrelevant to the valuation of the Subject Property, since this property is not comparable in size to the Subject Property as the total lot area of this assembly is no larger than a single residential property of approximately 5,500 SF while the Subject Property is 4.11 acres.

179The Board finds that this was not the only basis of the Appellant’s expert’s size adjustment. As the Appellant’s expert provided on page 37 of his Commentary on MPAC’s Assessment Report:

To clarify, I am not suggesting this illustration should be used as a definitive means of adjusting for size. I am providing this analysis as further evidence that size impacts value.

180The Appraisal of Real Estate provides at page 10.9:

Size differences can affect value and are considered in site analysis. Reducing sale prices to consistent units of comparison facilitates the analysis of comparable sites and can identify trends in market behaviour. Generally, as size increases, unit prices decrease. Conversely, as size decreases, unit prices increase.

181The Appellant’s expert considered this in his report. He testified that using the 107 sales that he reviewed of commercial retail sales in Toronto, he observed that the influence of size was confirmed, and economies of scale existed. He added that the median rate of the time-adjusted sales for sales greater than 5 acres was $1,144,000 per acre and for sales between 1 and 4.9 acres was $1,962,000, which is a difference of 72%. The Appellant’s expert used a power curve, a statistical analysis, to determine and quantify the impact of size on price. He further presented a graph and table to illustrate the impact of size on price, which further reflected his conclusion that size influences sales price.

182Although MPAC disagrees with some of the sales having different Official Plan designations, and that they are different from the Subject Property, these properties are not high-density residential developments, even though MPAC says they could be developed for high-density residential developments. These properties are not all perfect and ideal; however, these sales are from the larger dataset of retail, commercial and office lands within the City.

Time Adjustment

183MPAC’s expert testified that land values, most especially in the downtown area in the City, have increased over the past 20 years, and to determine the market value of the Subject Property at the base dates it is important to recognize that market conditions can change between two periods. Therefore, the sales have to be adjusted to reflect the market conditions at the time of sale, or sales that are close enough to the base dates should be used. He applied a time adjustment of 1% per month for 2012 to 2016 sales and a downward adjustment of -2.5% per month for sales after 2017 to 2019. He then tested the reasonableness of his time adjustment using different sources, one of which was a two paired sales analysis.

184The Appellant’s expert, in arriving at his time adjustment factors, provides at page 91 of his report:

For those properties within the GTA, an extensive review of all resales occurring between 2009 to 2017 were analyzed. Resale analysis is a variation of paired data analysis, with the exception being that resales analysis is where a singular property sells multiple times in the defined market period.⁹⁹ In other words, a property that has sold and then resold within the defined timeframe – in this case between 2009 and 2017. Resales is the most accurate method of market (time) adjustment analysis, being that all things are equal, with the exception of the market conditions.

In the GTA a total of 10 resales were reviewed for vacant lands or redevelopment lands between 2009 and 2017 (Appendix iii). Best efforts were made to ensure that no elements of comparison (i.e. size or zoning) changed between the two sale dates, which provided a median monthly adjustment of 1.00%.

185MPAC submits that the Appellant’s expert’s time adjustment was incorrectly derived because he consistently miscalculates values when adjusting backwards, because he does not divide, he multiplies, which is algebraically incorrect. The Appellant’s expert testified that his approach is confirmed by Rick Binsell (“Binsell”), a University of British Columbia (UBC) Real Estate Division instructor and former MPAC employee. The Appellant’s expert testified that Binsell confirmed through an email to him that if the base of the time adjustment was January 1, 2016, and the sale prices from that period increased by 16%, then multiplication would be correct.

186MPAC’s expert considered several sources to come to his conclusion, which included paired sale analysis, MPAC land value reports, MLS home price index, Urbanization data, and he concluded on page 64 of his report that:

Having considered several sources of data, I am satisfied that two different time adjustments between the periods of 2005 to 2016 and 2016 to 2020 are required. Although the data sources referenced are each imperfect on their own, they do provide consistent reporting of a market increase over those two periods of time. With this research, I am confident in applying a conservative time adjustment of 1% per month for the 2012 through 2016 sales and a more significant downward adjustment of -2.5% per month for the sales occurring after 2017.

187During cross-examination, he admitted that he did not include in his report whether the increase in sale price between the two paired sales may have been the result of changes to the development application status of the two sales. He further admitted that there were changes to the site areas of some of the properties. For example, for the sale of 183–189 Avenue Road (which he used in his paired sale analysis), he confirmed that there was a significant change in site area, with an increase from 2,974 to 12,639 between the 2012 and 2016 sales, since it was assembled with two other properties at 109 and 111 Pears Avenue. This was the same for two other properties in his chart, 50 Cumberland and 355 King Street West. (May 8, 2025 Transcript, pages 224-226)

188It was put to him during cross-examination that the changes in his sale price per square foot are due to the physical changes to the sites and not the passage of time. His response was:

Well, no, because the changes I'm looking at is a rate per square foot of lot, so, if you think the size of these little lots makes much of a difference, then I suppose you could come to that conclusion, but in this case, I was attempting to do the best I could with a paired sale analysis. And, again, it's difficult to find properties that don't change a little bit here and there over time. (May 8, 2025 Transcript, pages 226-227)

189He later confirmed that it is possible that changes in sale price per square foot could be the result of changes in the physical site rather than the passage of time. However, he had admitted earlier that in a paired sale analysis, ideally, there is no change between the two sales.

190The best evidence of time adjustment is that of the Appellant’s expert who confirmed in his report that best efforts were made that no elements of comparison (i.e. size or zoning) changed between the two sale dates, which are missing in MPAC’s expert report as confirmed during cross-examination.

The Lower Yonge Precinct (“LYP”) Properties

191The Lower Yonge Precinct encompasses three properties, which includes the Subject Property. MPAC submitted that the sale of the two other properties reveals how the Subject Property would transact in the market, not based on its current use.

1-7 Yonge (Toronto Star lands)

192This property was sold in 2012 for $250,000,000 to Pinnacle International. Although MPAC’s expert referenced it for his 2012 CVA analysis, he did not use it in arriving at his land value for the Subject Property. This property has an existing zoning of CR T6 C6 R6, which MPAC’s expert admitted is superior to the Subject Property as it allows both commercial and residential use up to an FSI of 6. However, he provided in his report that the sale price far exceeds the value of any potential uses that could be contemplated under its as-of-right zoning. Neither MPAC nor the Appellant used this sale in arriving at their land values. The Appellant’s expert testified that it was purchased for a highly superior use for redevelopment, with a proposed total GLA of approximately 6,400,000 SF for a density of 22 FSI and its proximity to Union Station, although it was later refined to 16.5 times density.

193MPAC’s expert provides on pages 73-74 of his report that:

While I agree that this sale does not provide a clear reference point to market value, I fail to understand Mr. Johnstone’s logic in eliminating it entirely from his analysis.

This sale demonstrates that market participants would have viewed the highest and best use of the Property to be a potential development site for the 2012 base year. Market value would have been determined based on the probable achievable GFA, not on the existing zoning or current use.

194The Board finds this is the sale of development land and it is superior to the Subject Property with an as-of-right density of 6.0, where the purchaser, Pinnacle International, had the initial intention to obtain a 22 FSI (although it did not get it and got an FSI of 16.5 times density), which could also have influenced the purchase price.

55-95 Lake Shore Boulevard East (LCBO Lands)

195This property was sold to Menkes in 2016. It is a large assembly of 11.436 acres. The rezoning application proposed seven mixed-use buildings of 85, 80, 76, 74, 70, and 65-storeys, plus a 24-storey office tower, totaling 4,739,823 SF for a density of 9.61 FSI. The proposal included 5,192 residential units representing 358,833 m² (3,862,466 SF) of residential GFA. The Appellant’s expert testified that this sale was a government sale, which was made through an RFP (Request for Proposal) process. It included a sale-leaseback to a high-quality tenant (LCBO), portions of the existing heritage LCBO building were to be retained, and the office building was at the end of its economic life. The development application showed a higher density than the Subject Property. MPAC’s expert provides on pages 106 and 107 of his report:

The RFP process added significant complexity to the transaction, the closing of this agreement from the purchase submission date of September 4, 2015 to the signing of the Agreement of purchase and sale date of March 30, 2016 was an unusually long time. It is my opinion that as the offer to purchase was submitted prior to January 1, 2016, no downward time adjustment is warranted for the later registration date.

Due to the conditions set out in the APS which would negatively affect the purchase price, the Property would sell at a higher rate per SF buildable and a higher rate per SF of lot. In addition, as the Property has a slightly higher gross density potential, this extra potential density increases the rate per SF of lot value on the Property.

196MPAC’s expert testified that this is the most comparable property to the Subject Property for the 2016 CVA and is useful for the 2012 CVA. During cross-examination, the following important facts were derived regarding this property (May 8, 2025 Transcript, pages 237-249):

• The property’s as-of-right GFA was 1,475,904 SF.
• May 9, 2016, Menkes filed a zoning amendment application for this site requesting 4,739,823 SF GFA with an FSI of 9.61.
• April 3, 2018, a revised GFA of 4,531,014 SF
• August 2020, a zoning by-law was passed permitting a final GFA of 4,571,486 SF
• The time-adjusted sale price (“TASP”) of $294,068,000 may not be the actual TASP for the following reasons:
  • The Agreement of Purchase and Sale (APS) was signed on March 30, 2016.
  • The sale was registered in June 2016; no downward adjustment was made to the selling price, as MPAC’s expert determined that the actual offer to purchase was submitted prior to January 1, 2016 which he admitted was not in evidence in his report.
  • Furthermore, he made a $19,500,000 upward adjustment to the sale price, noting that some important clauses in the APS necessitated this adjustment. He also admitted during cross-examination that there was nothing in evidence that substantiates how he calculated this amount, and the APS was not filed in evidence.
• A downward adjustment of $19,500,000 from the TASP of $294,068,000, provides a value of $274,568,000.
• Dividing $274,568,000 by the as-of-right GFA of this property of 1,475,904 SF provides $186.03 rate per SF buildable, lower than what was provided in his report of $199 as-of-right buildable.
• Dividing $274,568,000 by the lot size of this property of 491,968 SF, the sale rate per lot size reduces from $598 (in MPAC’s expert report) to $558.1.
• Dividing $274,568,000 by the final GFA (of this property) of 4,571,486 SF provides a new rate per SF buildable of $60.06 from $64.33 in MPAC’s expert report.
• Multiplying the Subject Property’s as-of-right GFA of 537,093 by this property’s revised as-of-right rate per SF buildable of $186 provides a value of $99,899,298.
• Multiplying the Subject Property’s lot size of 179,031 SF by the revised rate per lot size of $558.1, provides a value of $99,917,201.
• Multiplying the Subject Property’s GFA of 1,700,697 (which was used by MPAC) by the revised rate per SF buildable of $60.06, provides a value of $102,143,861.

197On page 103 of MPAC’s expert report, which shows his 2016 proposed property sales chart, four properties that have the same zoning as the Subject Property, in the same market area, excluding 215 Lakeshore Boulevard East, their time-adjusted sale price per SF buildable is less than $65, while the Subject Property is at $70. MPAC’s expert testified that they are reasonable ranges within the neighbourhood.

198Apart from the fact that 55-95 Lakeshore Boulevard East sold as development lands, with Menkes’ initial rezoning application for 4,739,823 SF of GFA to an approval of a final GFA of 4,571,486 SF, it is also superior to the Subject Property with 11.4 acres and with a sale lease-back, the rates applied by MPAC’s expert, as revealed during cross-examination, were not accurate. He could not explain how he arrived at an upward adjustment of $19,500,000 on the TASP. No adjustments were made for size, despite being sold as a land assembly. Having determined that the Subject Property’s HABU is its current use and MPAC’s expert’s proposed comparable properties are all development lands, the Board finds that MPAC’s proposed comparable properties will not assist the Board in determining the correct current value of the Subject Property.

199Therefore, MPAC has not discharged its onus to prove the correct current value of the Subject Property.

Appellant’s Evidence – Land Value

200The Appellant’s expert identified 21 proposed comparable property sales for the 2012 base year and 11 proposed comparable property sales for the 2016 base year. He testified that since he determined the HABU of the Subject Property is the current use and there is no possibility of rezoning for the 2012 base year, nor for the 2016 base year, there was no reasonable probability of rezoning in the near future of the Subject Property being anything other than a low density retail or industrial use, he reviewed sales of properties of lower density and not sales of mixed-use commercial and residential uses of higher density. His focus was on commercial land, retail, commercial, office as defined by RealNet in the City, which provided him with a large dataset.

201He added that since replacement cost new captures the building and yard improvements and soft costs such as development charges, building permits, etc. He had to ensure that the comparable property sales he selected excluded them.

202For the 2012 CVA, out of the 21 proposed comparable property sales, he chose four comparable sales based on his HABU of the Subject Property after removing the outliers and invalid transactions and making necessary adjustments for time and size.

Appellant’s Proposed Comparable Property Sales

203The Appellant’s proposed comparable property sales for the 2012 valuation day are in Table 1 below:

Table 1

Address	Land Type	Area(A)	Sale Date	Sale Price ($)	SP/Acre ($)	Time ($) adjustment/acre	Location adjustment/ Adj. $/Acre	Size Adjustment/ Size Adj. $/Acre
130-132 Queens Quay East	Office	1.54	01/14	17,000,000	11,038,961	8,271,861		0.52/4,272,570
2 Fraser Avenue	Office	2.7	10/13	12,650,000	4,685,185	3,663,815		0.75/2,761,377
1608 The Queensway	Retail	2.943	07/11	3,500,000	1,189,263	1,252,294	200% 2,504,587	0.80/2,000,398
777 Dundas Street East	Retail	2.015	12/13	6,300,000	3,126,551	2,377,221		0.62/1,468,997

204The Appellant’s expert testified that the proposed development for these comparable property sales is as follows:

a. 130-132 Queens Quay East - SPA (Site Plan Application) submitted September 30, 2014 (14 230224 STE 28 SA) proposed 10- and 13-storey office towers linked by a 4-storey podium. Total GFA 445,834 SF. Approved April 2015.

b. 2 Fraser Avenue - Purchaser considering constructing a new 400,000 SF office building or renovating part or all of the existing structure to create 90,000 SF office space.

c. 1608 The Queensway - Purchased to develop retail.

d. 777 Dundas Street East - A Site Plan Application (No. 13 210727 STE 30 SA) was submitted on July 25, 2013, pertaining to the land in this transaction. The application proposed the development of a 4-storey automobile dealership. The development would have a total gross floor area of 62,054 SF.

205The Appellant’s expert testified that there is no single comparable that shows the best indicator of value for the Subject Property since the Subject Property is located along the waterfront and its land use restrictions make it unique and difficult to obtain comparable sales. However, he added that the four sales represent the best indicator of value, with most weight attributed to 130-132 Queens Quay East due to its location across the street from the Subject Property, its commercial office use and the date of its transaction. He testified that this property is also in a Regeneration Area Qualified as is the Subject Property, meaning no residential uses due to its proximity to Redpath Sugar. However, he indicated that this sale is superior since, at the time of its sale, the East Bayfront Precinct Plan, which was adopted in 2006, was in force compared to the Subject Property, which had no Precinct Plan. He further added that it has a higher density of 6.6 FSI, while the Subject Property has a permitted density of 1.5 FSI. He further testified that it sold as a land assembly with 143-177 Lake Shore Boulevard East, which would require a large size and time adjustment. There were separate vendors for the two properties, with slightly different sale dates.

206The Appellant’s expert removed the sale of 143-177 Lake Shore Boulevard East, due to its atypical financing, superior development timing and superior density of 11.5 FSI, and most importantly, due to its predominant residential use. The Board notes that MPAC’s expert also used 130-132 Queens Quay East and 143-177 Lake Shore Boulevard East, however, MPAC’s expert did not make any adjustment for size, despite it being a land assembly. 130-132 Queens Quay East is the south part of the property used as a retail and office two-tower building, with non-residential uses. MPAC’s expert acknowledged this on page 79 in his expert report, stating: “The commercial GFA is entirely on 130-132 Lake Shore Blvd E.”

207The Appellant’s expert testified that using the four proposed comparable property sales, after making all the necessary adjustments for time and size, the average rate of the sales is $2,622,000 per acre and the median rate is $2,377,000 per acre, with the adjusted sale prices ranging from $1,469,000 to $4,273,000 per acre. He added that the higher end being 130-132 Queens Quay East and having testified that this is superior to the Subject Property, he estimated that the Subject Property should be lower than this, but higher than 2 Fraser Avenue (due to its inferior density of 1.05 FSI) and selected $3,750,000 per acre as the correct current value for the land of the Subject Property. Multiplying this amount by the Subject Property’s land size of 4.12 acres provides a land value of $15,450,000.

208The Appellant’s expert further tested the reasonableness of this value, to ensure consistency and an equitable land value, by reviewing all vacant commercial land 2012 assessed values in the City between 3 and 5 acres, which provided a median of $1,097,214 per acre. He further highlighted the properties that were 3.5 to 4.5 acres, which are more similar to the Subject Property with 4.12 acres, the median was $1,270,000 per acre. He further added that the only property in that chart that was assessed over $4,000,000 per acre is 215 Queens Quay East, which is a property for a high-density residential redevelopment, which was incorrectly categorized as vacant commercial land. He concluded that his land value of the Subject Property includes a premium considerably higher than what the assessment of other commercial lands of similar size were assessed at in the City.

209For the 2016 CVA, out of the 11 proposed comparable property sales, he used four sales, three from the 2012 sales and 2277-2295 Sheppard Avenue West, which has a commercial land type. He applied a large 200% upward location adjustment to 2277-2295 Sheppard Avenue West since it is in an inferior area compared to the Subject Property. He testified that the development application proposed a development of a commercial shopping centre of $57,700 SF, and 192 parking spaces. He added that this is the same as the HABU of the Subject Property with an inferior location. Therefore, after implementing adjustments for time, development timing, location, and size, he provided a rate of $2,241,000/acre for this property.

210The Appellant’s expert made the necessary adjustment for time, size and location for the four comparable property sales and he concluded at page 114 of his report that “It is reasonable to estimate a current value of the subject lands at $7,400,000 per acre, with most weight attributed to 130-132 Queens Quay East given its location immediately across the street from the subject, commercial (office) use, and date of transaction.”. Multiplying this rate by the Subject Property’s land size of 4.12 acres provides a land value of $30,488,000.

211As he did for the 2012 base year, he also tested the reasonableness of this land value to ensure consistency and an equitable land value. He reviewed all vacant commercial land 2016 assessed values in the City between 3 and 5 acres, which provided a median of $1,311,012 per acre. He further highlighted the properties that were 3.5 to 4.5 acres, which are more similar to the Subject Property with 4.12 acres; the median was $1,567,364 per acre. He testified that he applied a significant premium above what the assessments of vacant commercial lands are assessed at when he applied the rate of $7,400,000 per acre to the Subject Property for the 2016 valuation day.

212The Appellant’s expert referred to the MPAC expert’s chart on page 140 of his report, which he says is illustrative of the relationship between density and the price per SF that, as the density increases, the sale price per SF of lot area also increases. The lowest density of 4.0, which applies to 351-363 Lake Shore Boulevard East, with a lot SF of 224,334, provides a time-adjusted sale price per SF lot of $233. If $233 is divided by 4.0, this provides a value of $58.25. If this value is multiplied by the maximum density of the Subject Property at 3.0, it gives a rate of $175.75. If this rate is multiplied by the lot area of the Subject Property of 197,031 SF it provides a value of $31,285,000 which he testified is close to his land value for 2016 at $30,488,000 which he argued is very similar. He also carried out the same exercise for 130 Queens Quay East using a density of 8.11 (for the South portion) where he arrived at a value of $20,749,692. He further used the total density applying to the whole assembly of 130 Queens Quay East and 143 Lakeshore Boulevard East which MPAC’s expert provided as 9.9, but the Appellant’s expert provided on page 50 of his report as a density of 10.97 (North and the South portions of the total land assembly used by MPAC). The time-adjusted sale price per SF lot in MPAC’s expert report was $633. The Appellant’s expert divided this value by the density of 10.97, which provided a value of $57.70. He multiplied it by 3.0, which is the maximum density of the Subject Property, which provided a value of $173. Multiplying this value by the land area of the Subject Property of 179,031 SF provided an indicated value of $30,972,000, which he testified is close to his land value of $30,488,000. (June 11, 2025 Transcript, pages 178-180)

213During cross-examination, the Appellant’s expert admitted that he used the final density of some of the comparable properties in MPAC’s expert report, against the as-of-right density of the Subject Property. However, during re-examination, he used the as-of-right density for 351 Lakeshore Boulevard East of 3.0, as opposed to the final density of 4.0, and divided it by the time-adjusted sale price per SF lot of $233, which provides a value of $77.67. Multiplying this value by the as-of-right density of the Subject Property of 3.0 provides a value of $233. Multiplying this value by the Subject Property’s land area of 179,031 SF provides a value of $41,714,223. This is close to the 2016 land value presented by the Appellant’s expert of $30,488,000.

214MPAC’s expert criticized the Appellant’s expert proposed comparable properties testifying amongst other things that:

• Location - The distance of some of the proposed comparable properties from the Subject Property.
• The Official Plan designations of some of the comparable properties are in core employment areas and general employment areas, while the Subject Property is in a Regeneration Area, which could limit the development and use. MPAC submitted that the current use of the Subject Property is not permitted on some of the comparables.
• Ignored sales of other commercial properties close to the Subject Property.

215The Appellant’s expert testified that there was a limited number of retail land sales in the Subject Property’s vicinity and that there is no single comparable property that can be used as the best indicator of the current value of the Subject Property. He further stated on page 102 of his report that:

The subject property presents a valuation challenge in that it is centrally located along the waterfront; however, it has land use restrictions that make it unique and difficult to compare with the sales available for analysis. None of the available transactions ideally mirror the subject property however these four sales represent the best indicators.

216MPAC submitted that the Appellant’s expert testified that the HABU of the Subject Property is its current use but has ignored the sales of properties in the vicinity that have as-of-right grocery store permissions. The Board finds that these sales were for redevelopment, predominantly residential development, and the Appellant’s expert focused on large format hybrid big box grocery warehouse like the Subject Property, which had limited sales within the downtown core of the City.

217The Board also notes that some of the Appellant’s expert’s proposed comparable property sales are not close to the Subject Property; however, necessary adjustments such as location were made, which MPAC’s expert did not make, even though he admitted that some areas in downtown are more superior than others. The Board has determined that the HABU of the Subject Property is its current use. The Appellant choosing to use some properties that are development land adds a higher value to the Subject Property’s land value since it is valued on its current use. The Appellant’s expert acknowledged that he did not have perfect comparable properties to compare to the Subject Property since the Subject Property presents a valuation challenge due to its location on the waterfront and its land use restrictions. The Board finds that the Appellant’s expert has presented the best evidence to determine the land value of the Subject Property based on the determined HABU of the Subject Property being its current use.

Value of Improvements

218The Appellant’s expert valued the improvements using the Marshall & Swift guide to develop the unit costs and the Replacement Cost New (“RCN”). The Appellant’s expert provides at page 58 of his report that the Marshall Valuation Service is “… a complete, authoritative appraisal guide for developing replacement costs, depreciated values and insurable values of buildings and other improvements in the United States, Puerto Rico, Guam and Canada.”.

219The Appellant’s expert testified that he inspected the Subject Property on April 12, 2016, which the City questioned because it was four years before he was retained as an expert in the appeals, as his retainer letter is dated November 2, 2020. He testified that, as the retainer letter states, it merely formalized the agreement. He also testified, that he carried out another inspection before the date of the hearing. He further added that these assignments start off with an oral instruction, which usually gets formalized if the parties do not reach a settlement.

220Table 2 below shows the improvement values the Appellant’s expert used for the 2012 and 2016 valuation dates (Appellant’s Expert Report, page 115):

Table 2

	2012 CVA	2016 CVA
Buildings
Site Area (acres)	4.12	4.12
Gross Floor Area (sf)	65,270	65,270
Cost New Rate per Square Foot	$243.64	$259.08
Reproduction Cost New (net of HST)	$15,902,116	$16,910,151
Year Built	1998	1998
Effective Age (years)	15	19
Straight Line Depreciation Rate / Year	4.00%	4.00%
Depreciation	$9,541,270	$12,851,715
Current Value of Buildings	$6,360,846	$4,058,436
Percent Good	40%	24%
Yardwork
Yardwork Area	1.32	1.32
Yardwork Reproduction Cost New	$125,000	$135,000
Yardwork RCN	$164,633	$177,803
Depreciation	50% $82,316	50% $88,902
Current Value of Yardwork	$82,316	$88,902
Land
Land Rate	$3,750,000	$7,400,000
Land Value	$15,450,000	$30,488,000
Revised Current Value of Store	$21,893,000	$34,635,000

221The Appellant’s expert also confirmed during cross-examination that he did not complete any analysis of building plans, but he looked at a plan signed by an Ontario Land Surveyor provided to him by the Appellant. He further confirmed that he verified the information in the plan based on his inspection of the Subject Property. The Appellant’s expert could have conducted a more thorough inspection, which he admitted, but he concluded that his inspection gave him the information he needed, which was verified with the plan.

222The Appellant’s expert admitted during cross-examination that he did not perceive a difference between reproduction and replacement costs, so he costed what was in the Subject Property as being both. He also confirmed that MPAC did not assess the Subject Property using the cost approach, which the Board notes does not have any impact on the legislative mandate of the Board which is to determine the correct current value based on the best evidence presented at the hearing and not the assessed value of the Subject Property. Neither MPAC nor the City provided an alternative approach to assist the Board in determining the correct current value of the Subject Property should the Board determine that the HABU is not mixed-use development. Therefore, the Board determined the value of the improvements based on the evidence presented by the Appellant’s expert.

223The City submitted that the Appellant’s expert used unwarranted depreciation rates in his cost approach. Specifically, that he “… deducted a 4.00% annual depreciation rate from the building value to arrive at his “current value of buildings” …” which was due to his “… flawed use of the Market Extraction Method (MEM) to estimate depreciation.” The City further submitted that “The MEM produces a single, blended depreciation rate that incorporates all three forms of depreciation: physical, functional and external (or economic).” (City of Toronto Written Submissions August 8, 2025, page 8)

224The Appellant’s expert admitted during cross-examination that both functional and external obsolescence may be included in his depreciation rate of 4.00%, which the City submitted cannot be reasonably applied to an active, viable and well maintained grocery store in the City. He further admitted that he did not observe any functional obsolescence in the store. The City’s witness, Dr. Frank Clayton, an expert qualified to give opinion evidence on land economics and in particular, on the existence of economic or external obsolescence, and market level conditions affecting Loblaw’s freestanding big box stores in Toronto, provides in his reports that for the January 1, 2012 and January 1, 2016 valuation days “… there was no evidence of economic obsolescence associated with the portfolio of freestanding big box stores operated by Loblaw in the City of Toronto under appeal …”. (Opinion on Economic Obsolescence: Loblaw Big Box Stores in the City as at January 1, 2008 and 2012 dated June 17, 2019, page 2 and Opinion on Economic Obsolescence: Loblaw Big Box Stores in the City as at January 1, 2016 dated May 14, 2019, page 2)

225The Board finds that Dr. Clayton is a credible witness. The Subject Property is part of the Loblaw stores, even though the Appellant argues that Dr. Clayton did not specifically provide an opinion regarding the Subject Property or its current value. The Appellant’s expert testified that if MPAC’s OR 50 Depreciation Table, contained in the City’s document, which is MPAC’s Valuation Report Valuing Commercial Properties in Ontario, is used rather than using his straight-line depreciation rate of 4.00% per year, without changes to the current value of the yardwork, the revised CVA would be as provided in Table 3 below:

Table 3

	2012 CVA	2016 CVA
MPAC OR-50 Depreciation Table	17%	25%
Percent Good	83%	75%
Current Value of Buildings	$13,198,756	$4,227,538
Revised Current Value	$28,731,000	$43,260,000

226The Board accepts these values. The Appellant used MPAC’s own table to provide a revised value of the improvements.

227Based on the cost approach, the Board finds that the correct current value of the Subject Property is as follows:

• $28,731,000 for the January 1, 2012 valuation day
• $43,260,000 for the January 1, 2016 valuation day

Issue 3 - Should there 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#sec44subsec3_smooth)(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 should the amount of this reduction be?

228Section 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.

229The Assessment to Sales Ratio (“ASR”) is a tool often used to determine if a reduction in the assessment below the 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.

230MPAC’s expert used its proposed comparable property sales, which the Board determined as development properties, to indicate that no equity adjustment is required. The City agreed with MPAC, as the City did not provide its own equity analysis.

231In the Appellant’s expert’s equity study, he determined the difference in the returned and revised assessed values for big box stores within the City, specifically focusing on Canadian Tire and Home Depot stores which had been appealed. The result showed that an equity adjustment was not necessary.

232The parties have all determined that no equity adjustment is necessary, even though the Board notes that MPAC used its development land sales which the Board did not use as the Board determined that the current use is the HABU, albeit, the evidence provided by the parties does not lead to a finding of equity, therefore, the Board finds that an equity adjustment is not necessary to the determined current value.

CONCLUSION

233The HABU of the Subject Property on both valuation days is its current use. MPAC and the City have failed to prove that it is mixed-use development land and MPAC has also not discharged its onus to prove the correctness of the Subject Property’s current value.

234The Board finds that the correct current value of the Subject Property is $28,731,000 for the January 1, 2012 valuation day and $43,260,000 for the January 1, 2016 valuation day with no adjustment for equity.

ORDER

235The Board makes the following orders:

1. For the 2013, 2014, 2015 and 2016 taxation years the current value is reduced from $67,137,000 to $28,731,000 without any adjustment for equity.

2. For the 2017, 2018, 2019, 2020, 2021, 2022, 2023, 2024 and 2025 taxation years the current value is reduced from $116,370,000 to $43,260,000 without any adjustment for equity.

"Subuola Awoleri"

SUBUOLA AWOLERI

MEMBER

Assessment Review Board

Website: www.tribunalsontario.ca/arb

SCHEDULE A

Roll Number: 1904 064 060 00300

Taxation Year	Appeal No.	Assessed Value	Property Classification
2013	2958771	IPCF Properties Inc	$67,137,000
2014	3009881	CP REIT Ontario Properties Limited	$67,137,000
2015	3077398	CP REIT Ontario Properties Limited	$67,137,000
2016	3146307	CP REIT Ontario Properties Limited	$67,137,000
2017	3243682	CP REIT Ontario Properties Limited	$116,370,000
2018	3329095	CP REIT Ontario Properties Limited	$116,370,000
2019	3352143	CP REIT Ontario Properties Limited	$116,370,000
2020	3402332	CP REIT Ontario Properties Limited	$116,370,000
2021	3442019	CP REIT Ontario Properties Limited	$116,370,000
2022	3487929	CP REIT Ontario Properties Limited	$116,370,000
2023	3512344	CP REIT Ontario Properties Limited	$116,370,000
2024	3524951	CP REIT Ontario Properties Limited	$116,370,000
2025	3534768	CP REIT Ontario Properties Limited	$116,370,000

Footnotes

1. 1President of Rasmussen Planning, Inc., a land use planning consulting firm in San Ramon, California.