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Client profile

Altus Group was engaged to assist in all property tax matters, including appeal conduct (if warranted), for a 1,000,000 square foot Regional Shopping Center in Winnipeg. Based on Altus Group’s review, an appeal was recommended and subsequently filed with the Board of Revision concerning the 2016/2017 realty assessment. However, unlike many other jurisdictions, Manitoba’s Municipal Assessment Act allows only the owner (or sole tenant) to file a realty assessment appeal. As a result, tenants of a multi-tenant property do not have a right to appeal only their portion of the assessment. This is a serious cause for concern with large anchor tenants whose leases stipulate that their contribution to the overall property tax expense would be based on their portion of the assessed value as opposed to a proportionate share. Altus Group’s deliberately inclusive approach produced a result that was fair and equitable, and preserved the positive business relationship between the owners and its critical anchor tenants.

Challenge

In order to not only achieve the lowest fair and equitable tax position for the overall property, but also to mitigate tenant grievances with the owner with respect to their portion of the tax expense, Altus implemented a multi-step process to the appeal. In Step One, Altus determined which tenants were not on a “proportionate share” basis for tax recovery. Second, attempts were made to contact the representative or agent for each of those tenants. Third, the valuation methodology for that tenant was shared with the tenant’s agent, and the agent was invited to express their opinion on how that unit should be valued. Fourth, Altus negotiated with the Assessor on the overall value of the property, while taking into account the positions advocated in Step 3.

While the overall negotiation was successful in significantly reducing the tax burden of the property, not all tenants were satisfied. Therefore, a formal appeal was filed with the Board of Revision. At the hearing, Altus invited the agents of the anchor tenants to speak on each unit’s valuation as expert witnesses, in addition to Altus handling the remainder of the property’s valuation (including an overall capitalization rate argument). Great care was taken to ensure the position of one tenant did not jeopardize the position of the overall property.

Results

The Board of Revision accepted the position of Altus Group and the respective tenants’ agents in full,  and a further significant reduction was achieved. However, the Assessor appealed the Board’s decision to the Manitoba Municipal Board seeking an increase in the revised assessment. At this point, Altus took full conduct of the appeal to ensure that the owner’s interests were paramount, while still consulting with the anchor tenant’s agents.

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Last updated on July 29th, 2019 at 03:29 pm

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