What one town councillor called a “flawed system” has the town of Smiths Falls paying former County Fair Mall owners RioCan Properties $1 million after the company successful appealed the assessed value of the property.
“It is extremely painful,” commented Mayor Shawn Pankow after town Chief Administrative Officer Malcolm Morris provided a report on the situation at a Nov. 20 council meeting. “We had hoped the outcome would be different.”
Morris reported that the assessed value of the mall property peaked in 2014 at over $15 million. The former Target store moved into the mall at the end of 2013, boosting its value. Property taxes paid by the mall owners, including school board taxes, went from a total of $457,000 in 2014 to $701,585 in 2015. Property values for the purpose of taxation in Ontario are determined by MPAC, the Municipal Property Assessment Corporation.
RioCan applied to the Assessment Review Board (ARB) to have the mall’s assessed value for the tax years 2013 through 2016 reduced. The independent adjudicative body has since determined that the property was “overvalued,” and its re-assessed value should be reduced to $9.5 million in 2013, $6.9 million in 2014, $4.8 million in 2015 and just $3.2 million in 2016. In late 2016 the property was purchased by the Saumure Group and has recently been renamed “Settlers Ridge Centre.”
Not only does the town have to refund taxes paid by RioCan, but is facing much lower revenue from this commercial property in future years, reported Morris.
“We are bringing this forward because the numbers are extremely impactful for the town,” said Morris. He added that the town’s strategy for dealing with the situation involves “using surpluses from the current budget and some other financing as well.” Although no money will have to be borrowed to pay the property tax refund, this will leave the town’s reserves depleted.
“Certainly the process is flawed,” said Councillor Chris Cummings, suggesting that the town should lobby the provincial government to make necessary changes to prevent such a situation from occurring again. “We find out years later we owe money for something we didn’t evaluate in the first place.”
“We do have the reserves to draw upon for exactly this reason,” said Pankow. “We’ll get through this.”
“This was a mistake with MPAC, and I don’t think we should be afraid to say that,” commented Councillor Dawn Quinn.