Saskatchewan Municipal Board Assessment Appeals Committee

Transcription

1 Saskatchewan Municipal Board Assessment Appeals Committee Appeal: 0008/2005 RESPONDENT: City of Regina In the matter of an appeal to the Assessment Appeals Committee, Saskatchewan Municipal Board, by: respecting the assessment of: for the year 2005; E.M.J. Enterprises Ltd. c/o Archie Fieldgate Deloitte and Touche LLP Property Tax Services th Avenue Regina, Saskatchewan S4P 3Z8 Parcel M, Plan 80R N. Devonshire Drive Account Number: BEFORE: Wade Armstrong, Chairman Harvey Fishbook, Member Ron Hilton, Member APPEARED FOR THE APPELLANT: Archie Fieldgate APPEARED FOR THE RESPONDENT: Al Bishoff This appeal was heard in Room 460, 2151 Scarth Street, in Regina, Saskatchewan, on December 13, 2005.

2 APPEAL 0008/2005 [Page 2] This appeal is against the decision of the Board of Revision (the Board) for the City of Regina, pursuant to section 216 of The Cities Act (the Act). ISSUE: Did the Board err in its decision to uphold the assessment of the subject property as a retail building with a Market Adjustment Factor (MAF) of 0.77 being the MAF for retail for the year 2005? FACTS: (1) The subject property is a commercial building civically located at 1011 N. Devonshire Drive. (2) The subject property was built as a roller skating rink in It was then used as a Bingo Hall for approximately 18 years before becoming vacant for about four years. For part of 2003 it was used as a youth recreation centre involving dancing, roller skating, pool table, video games, etcetera. On January 1, 2005 it was in the process of being converted to an indoor miniature golf facility. (3) The subject property was listed for sale during its vacant period and there was little or no interest. The assessor has applied an obsolescence factor of 50% for non or partial exposure adjustment for commercial land. The adjustment has been applied to only the land value portion of the assessment. (4) Two sports club facilities in the city, the indoor Tennis Club at 20 Henderson Drive and the Racquetball Club at 3615 Pasqua Street have been assessed as Churches, Theatres, and Auditoriums under the Saskatchewan Assessment Manual (the Manual) and a MAF of 0.17 was applied to these properties. (5) Under Tab I of the appellant s submission to the Board, Section 16, page 1 of the Manual indicates that roller skating rinks are also assessed as Churches, Theatres and Auditoriums. (6) The appealed assessment of the property to the Board was $1,827,100 fair and assessed value. As a commercial property, the assessed value equals 100% of fair value. At the time of appeal the MAF was 0.78 as the assessor costed the property as a Retail Store. (7) The grounds of appeal to the Board are:

3 APPEAL 0008/2005 [Page 3] 1. The MAF (market adjustment factor) of 0.78 utilized by the assessor to calculate the fair va1ue/assessment for the subject improvement is excessive, thus in error. 2. The subject 0.78 MAF, being a city wide retail factor, should not have been used in the fair value calculation of the subject improvement. The correct MAF should be at least The subject improvement has been rated in error as being a retail store. Its costing should be less than that of a retail store. 4. The valuation that was assigned to the subject property has not been conducted in accordance with the Cities Act & the Provincial Assessment Manual. 5. Pursuant to subsection 165 (4)(a)(b) of the Cities Act, the subject property valuation does not bear a fair & just proportion to the value at which all similar property within the City has been assessed. (8) The decision of the Board is summarized as follows: While receptive to the arguments that the subject property should not be classified as a Retail Store and that it may be included in the wrong neighbourhood, no evidence was presented by the appellant to challenge the calculation of the 0.78 MAF neighbourhood (changed to 0.77 MAF due to error in sworn value of one of the sales used for neighbourhood). Therefore, the Board finds the MAF for the subject property should be 0.77 and the assessment reduced to $1,806,900. (9) The record of the Board includes: a) Notice of appeal dated January 6, 2005; b) A request from the Board secretary dated January 27, 2005 to perfect the grounds of appeal; c) A perfected notice of appeal filed February 10, 2005; d) An appeal package prepared by Deloitte Property Tax Services submitted March 21, 2005 consisting of five pages and Appendices A to I; e) An assessment report prepared by the city assessor dated February 7, 2005 consisting of 10 pages and Appendices A to G; f) A request for court reporter order signed by the Board Chair dated March 23, 2005; g) A transcript of the Board hearing consisting of 39 pages; and, h) The decision of the Board, dated April 28, 2005.

4 APPEAL 0008/2005 [Page 4] (10) The grounds of appeal to the Committee are: In rendering its decision for the appeal # , the Board of Revision (BOR) for the City of Regina erred in the following manner: 1. Erred by upholding the assessor's retail MAF (market adjustment factor) of 0.78, now revised to 0.77; 2. Erred by not acknowledging on the decision's front cover, that there were two witnesses that also appeared for the appellant; 3. Erred in its facts by not stating that the subject property has been [sic] sale for $500,000; 4. Erred in accepting that the respondent was unclear as to whether the present PUD Zoning allowed for a retail use. The respondent, being the assessor, is suppose to know what a property can be used for. Such information should form part of the assessor's written explanation (to the Board) that is required pursuant to sec 200 (4) (b) of the Cities Act; 5. Erred in concluding that an indoor miniature golf facility should not be included in the same "occupancy" as arcade buildings or handball/racquetball clubs that are talked about on page 1, section 16, of the Manual (Volume 4); 6. Erred in stating that the appellant did not pose a request that the subject improvement should be assessed as a roller skating rink; and; 7. Erred in failing to recognize the principle of" fair & just proportion of similar properties" that is talked about in subsection 165 (4) of the Cities Act. The subject property is far from being similar to the "big box" retail buildings & shopping centres that are also being assessed with the 0.77 MAF. (11) The Committee received written arguments from the appellant which were marked as A-1 as well as written arguments from the respondent which were marked R-1. LEGISLATION: The Cities Act: 165(2) All property is to be assessed at its fair value as of the applicable base date.

5 APPEAL 0008/2005 [Page 5] (3) The dominant and controlling factor in the assessment of property is equity. (4) The value at which any property is assessed is to bear a fair and just proportion to the value at which all similar property is assessed: (a) in the city; and (b) in any school division situated wholly or partly in the city or in which the city is wholly or partly situated. (5) In determining the value of any property, the assessor shall take into consideration and be guided by: (a) any applicable formula, rule or principle set out in the assessment manual; and (b) any facts, conditions and circumstances of the property that may affect its value. (6) For the purposes of subsection (5), the assessment shall reflect all the facts, conditions and circumstances of the property on January 1 of each year as if they had existed on the applicable base date. 210(3) Notwithstanding that the value at which any property has been assessed appears to be more or less than its fair value, the amount of the assessment may not be varied on appeal if the value at which it is assessed bears a fair and just proportion to the value at which all similar property is assessed: (a) in the city; and (b) in any school division situated wholly or partly in the city or in which the city is wholly or partly situated. 216 Subject to subsection 196(5), any party to an appeal before a board of revision has a right of appeal to the appeal board: (a) respecting a decision of a board of revision; and (b) against the omission, neglect or refusal of a board of revision to hear or decide an appeal. 223(1) The appeal board shall not allow new evidence to be called on appeal unless it is satisfied that: (a) through no fault of the person seeking to call the new evidence, the written materials and transcript mentioned in section 220 are incomplete, unclear or do not exist; (b) the board of revision has omitted, neglected or refused to make a decision; or (c) the person seeking to call the new evidence has established that relevant information has come to the person s attention and that the

6 APPEAL 0008/2005 [Page 6] information was not obtainable or discoverable by the person through the exercise of due diligence at the time of the board of revision hearing. 226(1) After hearing an appeal, the appeal board may: THE MANUAL: (a) confirm the decision of the board of revision; or (b) modify the decision of the board of revision in order that: (i) errors in and omissions from the assessment roll may be corrected; and (ii) an accurate, fair and equitable assessment for the land or improvements may be placed on the assessment roll. Volume 4, Chapter 10, Section 13, page 1 (Date: 03/11/14): Retail stores are buildings designed for retail sales and display and usually have display and/or decorative fronts. Both one- and two-story stores are included in the averages. They will include stores occupied by so-called secondary or junior department stores with limited merchandise lines, specialty shops and commercial buildings designed for general occupancy. Volume 4, Chapter 10, Section 16, page 1 (Date: 03/11/14): Arcade buildings are designed mainly for coin-operated game entertainment, while the better qualities will include limited food service and lounges typically found at fun centers, miniature golf complexes, etc. Costs exclude all game or food service equipment. Skating rinks are typically lower-quality auditoriums modified for that particular use. Costs are averages of both ice and roller skating rinks and include all necessary plumbing and electrical connections, but do not include any equipment or fixtures such as seating, snack bar equipment or other trade and chattels. The roller rinks will include the basic skating surface. Ice rinks will include the basic floor structure, but not the ice-making equipment, which can be priced from Section 67. CONCLUSIONS AND REASONS: [1] This Committee has received an appeal against a decision of the City of Regina Board of Revision, and on the basis of the presentations of the appellant and respondent, must decide if the record shows that an error has occurred. The

7 APPEAL 0008/2005 [Page 7] role of the Committee is not to redo the hearing. Rather, the Committee is to review the evidence from that hearing and determine whether the Board came to the proper conclusion in rendering its decision. Should the Committee conclude that the Board did not come to the proper conclusion based upon the evidence before it, the Committee is then required to do what the Board ought to have done. The onus is upon the appellant to demonstrate to the Committee where the Board has erred. [2] It appears that the issues before the Board can basically be summarized as one issue. Is the subject property a retail building competing in the market place with other retail buildings and therefore assessed as a retail building and receive the retail MAF of 0.77? [3] The Board in its Analysis and Conclusions states that: The Assessor has relied on the last portion of the definition for 'Retail Stores' - "... and commercial buildings designed for general occupancy" -- to cost the subject property. The subject property is a large, open structure that was originally used as a roller skating rink. The Board was not made aware of any structural changes made to the property that would prevent it from being suitable to general occupancy. The Board does, however, understand the argument that when using the entire definition, "Retail Stores" does not appear to be the most appropriate classification for costing the subject property. With regard to the second issue, as to whether the subject property is in the wrong MAF neighbourhood, the Board relies on its analysis of the first issue and is sensitive to the Appellant's arguments that support the subject property is in the wrong MAF neighbourhood. In the view of the Board, the Retail Stores classification was used as a catch-all for large, open structures that can be used for other purposes. The subject property has never been used for retail purposes and, because it is not in an area of the city where the majority of retail developments are occurring, it will likely continue to be relatively unattractive to retail possibilities. (Committee Emphasis)

8 APPEAL 0008/2005 [Page 8] [4] The appellant maintains that the subject property was offered for sale during its vacant period as indicated by his witness on pages 15, 16 and 17 of the transcript. Despite the effort of marketing the property across Canada for a period of about five years no buyers were found. [5] The respondent maintains that the property is similar to other properties in the area such as the Marks Work Warehouse building on the adjacent property and the Sherwood Mall property and properly fits in the last portion of the definition for retail stores, and commercial buildings designed for general occupancy". [6] The Committee agrees with the Board that "Retail Stores" does not appear to be the most appropriate classification for costing and assessing the subject property. It does not fit in an assessment that has been derived in a similar manner as those that have been assigned to big box stores, shopping centres and strip malls most of which are located on high traffic roadways. [7] If you look to Volume 4, Chapter 10, Section 16, page 1 of the Manual, skating rinks (roller rinks) are listed under occupancies which also includes churches, theatres, indoor tennis clubs, handball and racquetball courts. Being that the building was originally constructed as a roller skating rink suggests it should be costed under the classification of churches, theatres, and auditoriums in Section 16, page 1 of the Manual. [8] The Board appears to agree on page 5 of its decision: Continuing with the third issue, the Appellant then argued that the subject property is similar to 'sports clubs' which are referred to in the manual's "Churches, Theatres and Auditoriums" classification. Two examples of sports clubs in the city were used to illustrate the argument: an indoor tennis club at 520 Henderson Dr. and a racquetball club at 3615 Pasqua Street. Sports clubs, however, have features that are not present in the subject property, in particular, dividing walls, courts, showers, and change rooms/locker areas. In comparison, the subject property is a large open space that the Board does not see as being

9 APPEAL 0008/2005 [Page 9] similar to the sports clubs. The Board is of the opinion that there may be a more suitable classification for the subject property in the 2005 version of the Manual, based on its initial use as a Roller Skating Rink - however, it must be noted that the Appellant did not pose any request, nor offer any evidence, in this direction. [9] In regard to the Appellant did not pose any request nor offer any direction, page 29 of the transcript states the following: MR. FIELDGATE: CROSS-EXAMINATION CONTINUES: Q Just go to tab five of my submission, Mr. Bishoff. A Yes. Q Do you agree that page talks about, and in that group of buildings it includes skating rinks, both ice and roller skate rinks and also has arcade buildings which include miniature golf complexes? Do you agree that they are in the same category along with the racquetball clubs at the bottom? A Yes, Section 16, page one, does list those buildings or descriptions. Q Do you recall that Mr. Mehlsen said that in the recent five years of which this was vacant there was an interest to use it again as a roller rink and that he could find no interest in anybody to use it for a retail building? Did he not say that? A I believe he mentioned something along those lines that he discovered that roller rinks were typically marginal operations. [10] The Committee believes that cross examination of Mr. Bishoff by the appellant clearly indicates the desire to be treated similar to the racquetball club and indoor tennis facility. Further, on page 31 of the transcript the appellant s argument is: It was built as a roller rink and it was never used as a retail building and it's clear that the Assessor has a.17 MAF for handball and racquetball clubs. That is in my evidence and the Manual has this in the same grouping as that of the roller blade rink or the miniature indoor golf. No matter how you look at it, they are all in the same group. And you heard testimony that they have the assessment sitting at 1.8 million dollars. You heard my witness tell you that they tried to get a half million dollars for it and they couldn't get it, so clearly something is wrong in this assessment. There is no question

10 APPEAL 0008/2005 [Page 10] about it, so I am asking again for the Board to give me a MAF of.17 for this property. [11] The respondent s position is that the subject property is not comparable to the two properties in the city that are receiving the 0.17 MAF being 520 Henderson Drive and 3615 Pasqua Street. These particular buildings are very distinct in design with change room, locker rooms, showers, etcetera, along with courts for tennis and racquet ball respectively. [12] The appellant s position is that they are comparable and should be costed under the same section in the Manual and given the MAF of [13] The Committee while having sympathy for the respondent s position of non-compatibility of the subject property to the two properties above, does find the subject property is more compatible with these properties than to other retail properties such as big box stores, enclosed malls and strip malls. The building was originally constructed for a non-retail type use and its later uses have not seen any major structural change to that state. The building has never been used for the retail purposes described by the Manual. [14] The Committee therefore concludes that the Board erred in upholding the assessment and MAF of 0.77 for this property and orders that the property be assessed as an indoor rink building with a MAF of 0.17 applied resulting in a total assessment for the property of $612,500 in accordance with an undertaking requested by the Committee and provided by the respondent dated December 14, DECISION: This appeal is sustained and the filing fee shall be refunded.

11 APPEAL 0008/2005 [Page 11] DATED AT REGINA, Saskatchewan this 15 th day of August, SASKATCHEWAN MUNICIPAL BOARD Assessment Appeals Committee Per: Wade Armstrong, Chairman Per: Cynthia J. Schwindt, Secretary I concur: Ron Hilton, for the Committee Harvey Fishbook, Member