Saskatchewan Municipal Board Assessment Appeals Committee Appeal: 0144/2006 RESPONDENT: City of Regina In the matter of an appeal to the Assessment Appeals Committee, Saskatchewan Municipal Board, by: E.M.J. Enterprises Ltd. et al c/o Archie Fieldgate Deloitte and Touche LLP Property Tax Services 900 2103 11 th Avenue Regina, Saskatchewan S4P 3Z8 respecting the assessment of: for the year 2006; Parcel M, Plan 80R21533 1011 N. Devonshire Drive Account Number: 10001929 BEFORE: Wade Armstrong, Chairman Gordon Hubbard, Member Robert L. Edwards, Member Sandra Sylvester, Acting Secretary APPEARED FOR THE APPELLANT: Archie Fieldgate APPEARED FOR THE RESPONDENT: Robert Schultz, Gerry Krismer, Jane Krueger This appeal was heard in Room 460, 2151 Scarth Street, in Regina, Saskatchewan, on December 14, 2006.
APPEAL 0144/2006 [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 discount store with a Market Adjustment Factor (MAF) of 0.77 being the MAF for retail for the year 2006? 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 1980. 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. Most recently, it was 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) The appealed assessment of the property to the Board was $1,202,200 fair and assessed value. As a commercial property, the assessed value equals 100% of fair value. At the time of appeal, the MAF was 0.77 as the assessor costed the property as a Discount Store. (6) The grounds of appeal to the Board were: The Depreciated Replacement Cost New (DRCN) for the subject property is excessive and incorrect. The Market Adjustment Factor (MAF) for the subject property is excessive and incorrect.
APPEAL 0144/2006 [Page 3] (7) The decision of the Board is as follows: The Board is guided by the provisions in the Manual, as it relates to the descriptions of a discount store and a skating rink. The subject building is a large, open shell, containing some interior finishing and partitioning, with certain amenities. The evidence shows that it has been used for a variety of commercial enterprises with little change required over the years. In applying the facts to the descriptions in the Manual, the Board finds that the discount store occupancy classification fits the description of this building. It does not fit the description of the skating rink as set out in the Manual. The Board defers as well to the Assessor s discretion in this respect. As such, this ground of appeal fails. On the matter of the MAF, as the Board has found that the discount store properly applies for the occupancy classification, the Retail2 MAF is the proper MAF for this property, as opposed to the School MAF suggested by the Agent. The Retail 2 MAF is applied to other recreation type facilities in the city. As such this ground of appeal must also be dismissed. (8) The record of the Board includes: a) Notice of appeal dated February 22, 2006; b) An appeal package prepared by Deloitte & Touche LLP date stamped by the Board on May 29, 2006 consisting of a four page report and Appendices 1 through 14; c) An assessment report prepared by the city assessor date stamped by the Board on May 19, 2006 consisting of a 22 page report and Appendices A through J; d) A request for court reporter order signed by the Board Chair dated June 5, 2006; e) A transcript of the Board hearing; and, f) The decision of the Board, dated July 14, 2006. (9) The grounds of appeal to the Committee are: 1. The Board of Revision erred in its decision that the Assessor was correct in costing the subject property as a discount store. 2. The Board of Revision erred in its conclusion that the subject property does not fit the description of a skating rink as set out in the Manual. 3. The Board of Revision erred in its disregard for the testimony of the owner and the real estate agent, which was presented by the Appellant via
APPEAL 0144/2006 [Page 4] the transcript for the 2005 hearing for the subject property. 4. The Board of Revision erred in its disregard for the Manual s discretion that if the designed use and the actual use differ, the design determines the cost to be used in estimating the basic replacement cost, while the depreciation or obsolescence is affected by the present use. 5. The Board of Revision erred in its decision that the subject property was correctly assessed with the 0.77 Retail market adjustment factor. 6. The Board of Revision erred in its determination that the subject property should not receive the 0.17 market adjustment factor, which has been applied to other recreational property, such as Racquetball Clubs and Indoor Tennis Clubs, throughout the city. (10) The Committee received a written submission from the respondent, which was marked as Exhibit R1. LEGISLATION: The Cities Act: 165(2) All property is to be assessed at its fair value as of the applicable base date. (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.
APPEAL 0144/2006 [Page 5] 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 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): Discount stores are typically large open shells with some partitioning for offices and storage areas. Often called department stores, the best quality approaches the lowquality department store in cost. This category will also
APPEAL 0144/2006 [Page 6] include the large off-price center and furniture- and homeimprovement-type shell outlets.... 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. PRELIMINARY MATTER [1] The assessor took the position that the notice of appeal contained six statements listing where the appellant disagreed with the decision of the Board and that these should not be considered grounds of appeal. Therefore, the appeal should be dismissed, as it does not comply with the requirements of the Act. The assessor then appeared to apply the test for the Board appeal, which requires grounds and a summary of the material facts to be relied upon by the appellant as the basis for his complaint. Whereas, it should be noted the requirement for a notice of appeal to this Committee only requires grounds. Both appeal notice formats are defined by regulation.
APPEAL 0144/2006 [Page 7] [2] At this point, the Committee makes no comment on the validity of any of the grounds or statements. However, the Committee sees that each is an expression of where the appellant finds a basis for this complaint. [3] The Committee recognizes that this is the second time this building has been appealed on the same issue in the two years. [4] Unfortunately, the Committee sees this protest as a patterned response from the assessor and not a reflection of the circumstances at hand. The Committee ruled that the notice of appeal contained a sufficient expression of the grounds of the appeal and is in a form that affords the Committee jurisdiction to proceed. CONCLUSIONS AND REASONS: [5] 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 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. [6] It appears that the issues before the Board can be summarized as one issue. Is the subject property assessed equitably with other buildings in the market place and therefore correctly assessed as a store with the retail MAF of 0.77?
APPEAL 0144/2006 [Page 8] [7] The appellant maintains that the subject property was offered for sale during its vacant period as indicated by his witness presented for the appeal in 2005. Despite the effort of marketing the property across Canada for a period of about five years no buyers were found. The 2005 hearing transcript was tendered to show this information. [8] The agent argues that this building is not comparable to other discount stores, such as Canadian Tire and Toys R Us. The assessment classification should reflect its historic uses of arcade, bingo hall and indoor golf, none of which are retail related. [9] The respondent maintains that the property has a good industrial shell, some interior partitioning and very little storefront. Whereas the category requested by the appellant is merely a shell building. [10] His position is that this is comparable to the buildings noted by the appellant and claims it is comparable to the nearby building, formerly occupied by Mark s Work Wearhouse. Other similar discount buildings in less than ideal locations for visibility have sold well within the range of those sales in this retail neighbourhood. [11] The appeal for this property was heard previously on December 13, 2005 and the decision was not released until August 15, 2006, after the Board hearing on June 6, 2006. The appealed assessment at that time was based on a retail store classification. The Board and this Committee were presented with two alternatives, first, to uphold the classification or second, to change it to the rink classification requested by the appellant. Changing between these two cost codes carried with it a new neighbourhood and a different MAF. No other alternatives were discussed.
APPEAL 0144/2006 [Page 9] [12] The Board found in its decision that the description for retail store did not fit this building, but proceeded to decide not to make any changes. The Committee agreed with the finding that the retail store did not describe this building and then decided that the requested change should be made. [13] This situation is now different in that the assessor has used another retail classification with significantly lower base costs ($51.87 versus $67.16). [14] The Board and now the Committee are faced with a building cost that is approximately two-thirds the starting point from 2005. The assessor refutes the rink classification and has described the levels of finish found here as something more than a shell building. He has recognized that there is some store finish on the front of the building, albeit at a minimum level and he has described other similar buildings in the retail neighbourhood. [15] The Committee accepts these comparisons as reasonable and finds that the Manual s description employed by the assessor here is correct. The Board did not err when it decided to uphold the assessor s cost classification as discount store. [16] As the MAF follows the building type in this case, the Committee finds therefore that the Board did not err when it upheld the retail MAF of 0.77. DECISION: This appeal is dismissed. For 2006, the assessed value shall remain at $1,202,200. The filing fee shall be retained.
APPEAL 0144/2006 [Page 10] DATED AT REGINA, Saskatchewan this 11 th day of April, 2007. SASKATCHEWAN MUNICIPAL BOARD Assessment Appeals Committee I concur: Per: Wade Armstrong, Chairman Per: Cynthia J. Schwindt, Secretary Gordon Hubbard, Member Robert L. Edwards, Member