METHODOLOGY GUIDE- VALUING MARINAS IN ONTARIO · ∞ Ensure that MPAC’s methodology for valuing...

METHODOLOGYGUIDE

VALUINGMARINASINONTARIO

ValuationDate:January1,2016

AUGUST2016

August22,2016

TheMunicipalPropertyAssessmentCorporation(MPAC)isresponsibleforaccuratelyassessingandclassifyingpropertyinOntarioforthepurposesofmunicipalandeducationtaxes.

InOntario’sassessmentsystem,MPACassessesyourpropertyvalueeveryfouryears.Thisyear,MPACisupdatingthevalueofeverypropertyintheprovincetoreflectthelegislatedvaluationdateofJanuary1,2016.

MPACiscommittedtoprovideOntariopropertyowners,municipalitiesandallitsstakeholderswiththebestpossibleservicethroughtransparency,predictabilityandaccuracyinvalues.Aspartofthiscommitment,MPAChasdefinedthreelevelsofdisclosureofinformationinsupportofitsdeliveryofthisyear’sassessmentupdate.ThisMethodologyGuideisthefirstlevelofinformationdisclosure.

ThisguideprovidesanoverviewofthevaluationmethodologyundertakenbyMPACwhenassessingmarinapropertiesforthisyear’supdateensuringthemethodologyforvaluingthesepropertiesiswelldocumentedandinalignmentwithindustrystandards.

Propertyownerscanaccessadditionalinformationabouttheirownpropertiesthroughaboutmyproperty.ca.Logininformationforaboutmyproperty.caisprovidedoneachPropertyAssessmentNoticemailedthisyear.AdditionalinformationaboutMPACcanbeaccessedatmpac.ca.

AntoniWisniowski

PresidentandChiefAdministrativeOfficer

RoseMcLean,M.I.M.A.

ChiefOperatingOfficer

TableofContents

1.0INTRODUCTION...................................................................................................................4

1.1PROPERTIESCOVEREDBYTHISMETHODOLOGYGUIDE.......................................................................4

1.2LEGISLATION.............................................................................................................................5

1.3CLASSIFICATION.........................................................................................................................5

1.4THEUSEOFTHISMETHODOLOGYGUIDE........................................................................................6

1.5CONSULTATIONANDDISCLOSURE..................................................................................................7

2.0THEVALUATIONPROCESS...................................................................................................8

2.1OUTLINE..................................................................................................................................8

2.2APPROACH...............................................................................................................................9

2.3DATACOLLECTION.....................................................................................................................9

2.4DATAANALYSIS.......................................................................................................................12

2.5VALUATION.............................................................................................................................12

2.6VALIDATINGTHERESULTS..........................................................................................................12

3.0THEVALUATION................................................................................................................13

3.1COSTAPPROACHOVERVIEW......................................................................................................13

3.2LANDVALUATION....................................................................................................................14

3.3MARINASITEIMPROVEMENTS....................................................................................................14

3.4ESTABLISHINGCOSTNEW..........................................................................................................16

3.5DEDUCTINGDEPRECIATION/OBSOLESCENCE.................................................................................16

3.6MARKETVALUECONCLUSION.....................................................................................................18

3.7CURRENTVALUEASSESSMENTS..................................................................................................18

3.8CONCLUSION...........................................................................................................................18

APPENDIXA:SAMPLEVALUATION–MARINA.........................................................................19

©MunicipalPropertyAssessmentCorporation2016Allrightsreserved 4

1.0Introduction

TheMunicipalPropertyAssessmentCorporation(MPAC)–mpac.ca–isresponsibleforaccuratelyassessingandclassifyingpropertyinOntarioforthepurposesofmunicipalandeducationtaxation.

InOntario,propertyassessmentsareupdatedonthebasisofafour-yearassessmentcycle.Thenextprovince-wideAssessmentUpdatewilltakeplacein2016,whenMPACwillupdatetheassessmentsofOntario’snearlyfivemillionpropertiestoreflectthelegislatedvaluationdateofJanuary1,2016.Assessmentsupdatedforthe2016baseyearareineffectforthe2017–2020propertytaxyears.Ontario’sassessmentphase-inprogramprescribesthatassessmentincreasesarephasedinoverafour-yearperiod.Anydecreasesinassessmentareappliedimmediately.

Itisimportanttoensurethatthevaluationmethodologyappliediscapableofprovidingarealisticestimateofcurrentvalueattherelevantvaluationdate,which,inturn,enablesallstakeholderstounderstandthevaluationprocessandhaveconfidenceinthefairnessandconsistencyofitsoutcome.

ThisMethodologyGuidehasbeenpreparedforthebenefitofMPACassessors,propertyownersandtheirrepresentatives,municipalitiesandtheirrepresentatives,AssessmentReviewBoardmembers,provincialofficials,andthegeneralpublic.

Thisguideoutlinesthevaluationprocesstobefollowedbyanassessor,includingstepsthatrequireappraisaljudgment.Itisincumbentupontheassessortomakeinformeddecisionsthroughoutthevaluationprocesswhenarrivingatestimatesincurrentvalue.

1.1PropertiesCoveredbyThisMethodologyGuide

ThisMethodologyGuideappliestomarinasinOntario.Amarinaisaboatbasinthatprovidesdockingandotherservicestopleasurecrafts.Itisastructurethatallowsvesselstobedockedforloadingandunloadingandisusuallyconstructedparalleltoashoreline.

Therearethreemarinacategories:

• recreationalmarinas(whereboatersusetheirboatsforpleasureornon-commercialactivities)

• yachtclubs(recreationalmarinawithlargebuildingsformemberstouse)

• boatyards(whichoffersignificantrepairsandservicesforlargeboats,yachtsandcommercialfishingvessels)


ThefollowingMPACpropertycodesareusedtocategorizethevarioustypesofmarinasinOntario:

• 492Marina–awaterfrontcommercialfacilityforthemaintenance,storage,serviceand/orsaleofwatercraft

• 493Marina-acommercialfacilityforthemaintenance,storage,serviceand/orsaleofwatercraftthatisnotonthewaterfront

Itshouldbenotedthatthesearegeneralguidelinesthatvarydependingonthespecificcircumstancesofaparticularproperty.

AnassessormayalsomakereferencetoadditionalMethodologyGuidesforpropertiesthatdonotfallpreciselywithinthedescriptionofoneofthepropertycodeslistedabove.

1.2Legislation

ThemainlegislationgoverningtheassessmentofpropertiesinOntarioforpropertytaxpurposesiscontainedintheAssessmentAct.1

TheActcontainsimportantdefinitionsandstatesthatallpropertyinOntarioisliabletoassessmentandtaxation,subjecttosomeexemptionsfromtaxation.Section19(1)oftheActrequiresthatlandbeassessedatcurrentvalue,whichisdefinedtomean,inrelationtoland,“theamountofmoneythefeesimple,ifunencumbered,wouldrealizeifsoldatarm'slengthbyawillingsellertoawillingbuyer.”Marinasareincludedinthedefinitionof“land,”whichisdefinedintheActtoencompassnotonlybuildingsandstructuresplacedupon,in,over,underandaffixedtolandbutalsolandcoveredwithwater.

TheMinisterofFinancefiledOntarioRegulation430/15onDecember18,2015,whichaddedadditionalrulesaffectingthevaluationandclassificationofpropertiesonwhichathird-partysign(billboard)islocated.Tocomplywiththeregulation,theincomeattributabletoathird-partysignwillnotbeincludedinthevaluationofanypropertyforassessmentpurposes.

1.3Classification

MPAC’sroleistoaccuratelyassessandclassifyallpropertiesinOntarioinaccordancewiththeAssessmentActandregulationsestablishedbytheGovernmentofOntario.

1AssessmentAct,R.S.O1990,cA.31:https://www.ontario.ca/laws/statute/90a31.


MarinasareincludedintheCommercialPropertyClassinaccordancewithSection5(1)1ofOntarioRegulation282/98,whichincludes“landandvacantlandthatisnotincludedinanyotherpropertyclass.”2Amarinapropertycouldhavevarioustaxandunitclassesdependingupontheownershipandoccupancyoftheland.

Ifaportionofthepropertyisusedforotherpurposes,itmaybenecessarytovaluethosecomponentsseparatelyandsumthecomponentvaluestoachievethecorrecttotalcurrentvalue.Itmayalsobenecessarytoapportionthetotalvalueofthepropertybetweenthevarioususestoensurethattheappropriatetaxrateisappliedtotherelevantpartsoftheproperty.

1.4TheUseofThisMethodologyGuide

ThisMethodologyGuideisintendedto:

• EnsureMPAC’sassessedvaluesforthesepropertiesarefair,accurate,predictableandtransparent.

• Providedirectiontoassessorsandclearexplanationstomunicipalities,taxpayersandAssessmentReviewBoardmembers.

• EnsurethatMPAC’smethodologyforvaluingthesepropertiesiswelldocumentedandalignswithindustrystandards.

• Explainthethoughtprocess/decision-makingprocessthatanassessorshouldundertaketoapplythevaluationmethodology.

• Ensureaconsistentapproachtovaluingthesepropertytypes.

• SupportMPACassessorsinconductingtheirduediligencein:

Ø applyingOntario’slegislationandregulationsØ adheringtoindustrystandardsformarketvaluationinamassappraisal

environment

ItshouldbenotedthatthisMethodologyGuideisnotintendedtobeasubstituteforanassessor’sjudgmentinarrivingatamarketvalue–basedassessment(i.e.,currentvalue)foraparticularproperty.However,giventhattheMethodologyGuideexplainsindustrystandardsforpropertyassessment,conformstovaluationindustrynorms,andadherestoprovinciallegislationandregulation,MPACassessorsareexpectedtofollowtheproceduresintheMethodologyGuideandbeabletoclearlyandsatisfactorilyjustifyanydeviationsfromit. 2OntarioRegulation282/98,GENERAL:https://www.ontario.ca/laws/regulation/980282.


1.5ConsultationandDisclosure

MPACiscommittedtoprovidingmunicipalities,taxpayersandallitsstakeholderswiththebestpossibleservicethroughtransparency,predictabilityandaccuracy.Insupportofthiscommitment,MPAChasdefinedthreelevelsofdisclosureaspartofitsdeliveryofthe2016province-wideAssessmentUpdate.

• Level1–MethodologyGuidesexplaininghowMPACapproachedthevaluationofparticulartypesofproperty

• Level2–MarketValuationReportsexplaininghowthemethodologyoutlinedinLevel1hasbeenappliedatthesectorlevelforthepurposesofeachassessment

• Level3–PropertySpecificValuationInformationavailabletopropertytaxpayers,theirrepresentativesandmunicipalities


2.0TheValuationProcess

Thevaluationprocessalwaysbeginswithadeterminationofthehighestandbestuseofthesubjectproperty.

Anyrelianceuponthisguideismadeonlyaftertheassessorhasdeterminedthatthehighestandbestuseofthesubjectpropertyisthatofamarina.

Assessorsdeterminethevalueofapropertyusingoneofthreedifferentapproachestovalue:

• thedirect(sales)comparisonapproach

• theincomeapproach

• thecostapproach

2.1Outline

Inthedirect(sales)comparisonapproach,valueisindicatedbyrecentsalesofcomparablepropertiesinthemarket.Inconsideringanysalesevidence,itiscriticaltoensurethatthepropertysoldhasasimilaroridenticalhighestandbestuseasthepropertytobevalued.

Intheincomeapproach(or,moreaccurately,theincomecapitalizationapproach),valueisindicatedbyaproperty’srevenue-earningpower,basedonthecapitalizationofincome.Thismethodrequiresadetailedanalysisofbothincomeandexpenditure,bothforthepropertybeingvaluedandothersimilarpropertiesthatmayhavebeensold,inordertoascertaintheanticipatedrevenueandexpenses,alongwiththerelevantcapitalizationrate.

Inthecostapproach,valueisestimatedasthecurrentcostofreproducingorreplacingimprovementsoftheland(includingbuildings,structuresandothertaxablecomponents),lessanylossinvalueresultingfromdepreciation.Themarketvalueofthelandisthenadded.

MPACusesthecostapproachtovaluemarinas.Thisapproachseparatelyvaluesimprovementsandlandtoproduceacurrentvaluefortheproperty.

Thecostapproachformarinapropertiesrequiresthefollowingstepstovaluethemarinabuilding(s):

1. Determinereplacementcostnew(RCN)ofmarinabuildingimprovements.

2. Determinephysicaldepreciation.


3. Determinefunctionalobsolescence.

4. Determineexternalobsolescence.

5. Determinenetimprovementvalue.

Thefollowingstepsdeterminethevalueofthemarinasiteimprovements:

1. DetermineRCN.

2. Determinephysicaldepreciation.

3. Determinefunctionalobsolescence.

4. Determineexternalobsolescence.

5. Determinenetimprovementvalue.

Theassessorconsidersthelandvalueasfollows:

1. Determinethelandvalueformarinaland.

2. Addvaluesforotherpurposes(e.g.,excessland).

3. Determinecurrentvalueassessment.

2.2Approach

TherearethreemainphasesinthevaluationprocessusedbyMPAC:

• datacollection

• analysisofthedatacollected

• valuation

2.3DataCollection

Thedatarequiredformarinavaluationscomefromanumberofsources:

• MPACconductsperiodicinspectionsofmarinas.

• MPACalsocollectsinformationaboutsalesandtransfersofmarinas.

• Thereareanumberofguidesandotherpublishedinformationaboutmarinas.


MPACgenerallycollectsthefollowingtypesofdataformarinas:

• generaldata

• financialdata

• propertydescription

• salesdata

• grossleasablearea(GLA)

• boatslipandstoragerentalrevenue(regularandseasonal)

• boatingservices,repairsandsupplies,fuel,foodrevenue

• otherincome

• operatingcosts(administration,utilities,propertymaintenance,etc.)

Marinalandiscategorizedaccordingtothefollowinguses:

• tableland/upland

• waterlots/submergedlandusable

• waterlots/submergedlandunusable

• vacant/excessland

• conservationland

• residentialsite

Marinasiteimprovementsmayinclude:

• breakwaters/piers

• jetties

• boatslips

• boatstorage(indoororoutdoor)


• fuelfacilities

• watersupply(municipalorother)

• sewagedisposalsystem

• pumpout

• otherrecreationalfacilities

Marinastructuresmayinclude:

• marinaoffice

• boatservicefacilities

• boatsupplyfacility

• foodoutlets/restaurant

• retailoutlets

• washrooms

• laundryfacility

• lockers

• storagesheds

Confidentiality

Asoutlinedabove,itisimportanttobeawarethat,inordertoenableMPACtoproduceanaccuratevaluationofthepropertyconcerned,informationneedstobeobtainedfromavarietyofsources.

ThiswillincludeinformationfromMPAC’srecords,fromtheowneroroperatoroftheproperty,fromthemunicipalityinwhichthepropertyislocated,fromtheassessor’svisittotheproperty,andfromothersources.

AllstakeholdersinthepropertytaxsystemhaveaninterestinensuringthatthecurrentvalueprovidedbyMPACiscorrect;inordertoachievethis,itisnecessaryforallpartiestocooperateintheprovisionofinformation.


Itisappreciatedthatsomeoftheinformationoutlinedabovemaybeofacommerciallysensitivenature.MPACrecognizestheneedtoensurethatanyinformationprovidedtoitisproperlysafeguardedandonlyusedforthepurposeforwhichitissupplied.Assessorsmustappreciatethenatureofthisundertakingandensuredataistreatedaccordingly.

If,afteranappealhasbeenfiled,MPACreceivesarequestforthereleaseofactualincomeandexpenseinformation,orothersensitivecommercialproprietaryinformation,theusualpracticeistorequirethepersonseekingtheinformationtobringamotionbeforetheAssessmentReviewBoard(ARB),withnoticetothethirdparties,requestingthattheARBorderproductionoftherequestedinformation.ThereleaseofsuchinformationisatthediscretionoftheARBandcommonlyaccompaniedbyarequirementforconfidentiality.

TheAssessmentActoutlinesinsection53(2)thatdisclosedinformationmaybereleasedinlimitedcircumstances“(a)totheassessmentcorporationoranyauthorizedemployeeofthecorporation;or(b)byanypersonbeingexaminedasawitnessinanassessmentappealorinaproceedingincourtinvolvinganassessmentmatter.”

2.4DataAnalysis

Havingcarriedoutthedatacollectionoutlinedpreviously,theassessorneedstoanalyzeitandreachaconclusionregardingtheappropriatevaluationmethodtouseandhowitshouldbeapplied.

Asalreadyindicated,forthepurposesofthisMethodologyGuide,itisassumedthattheassessorwillconcludethatthereisinsufficientevidenceavailabletoenableeitherthedirectcomparisonapproachorincomeapproachtobeadopted.Forthatreason,theassessorwillbeadoptingthecostapproachandusingthedatacollectedtoensurethatthecostapproachisproperlyapplied.

2.5Valuation

Havingundertakenthenecessarystepsoutlinedabove,theassessorshouldnowbeinapositiontoapplytheappropriatevaluationmodel.

2.6ValidatingtheResults

Oncetheassessorhascompletedthevaluation,itisnecessarytocarryoutaseriesofcheckstoensurethatallrelevantpartsofthepropertyhavebeenincludedinthevaluation,therehasbeennodouble-countingofanyadjustmentsmadefordepreciation,theresultingvaluationhasbeencomparedwithanymarketevidencethatmaybeavailableinrelationtosimilarproperties,andthefinalvaluationisinlinewiththevaluationofothersimilarpropertiesinOntario.


3.0TheValuation

3.1CostApproachOverview

Thetheorybehindthecostapproachtovaluefollowstheprincipleofsubstitution:thevalueofapropertyisequaltotheamountitwouldcosttoreplaceitwithasubstituteofequalutility.

Therearetwoprincipletasksinestimatingmarketvalueusingthecostapproach:valuethelandandvaluetheimprovements.

ValuetheLand

Landvalueisusuallyestablishedthroughanalysisofcomparablemarketsalesdata.

ValuetheImprovements

Avaluationofimprovementsincludesthefollowingsteps:

1. Collectthephysicalanddescriptivedataaboutthemarinasite.Inspectthebuildingsandotherimprovements,quantifyareas,noteconditionsandanalyzetheirutility.

2. Quantifythebuildingareasfromplansandlayouts,or,ifnecessary,duringthepropertyinspection.

3. UsingMPAC’sautomatedcostsystem(ACS),estimatethecostnewoftheassessableimprovementsasofthevaluationdate.

4. Deductfromcostnewvalueanamountreflectingallformsofdepreciation,whichmayincludephysical(age-lifedepreciation),functionalobsolescence(curableorincurable)andexternalobsolescence(economicand/orlocationalobsolescence).

Theresultingvaluewillbeanestimateofthecontributionoftheimprovementstothemarketvalueofthesubject,depreciatedforallcauses.

FinalValue

Thesumoflandvalueplusimprovementvalueistheestimatedmarketvalueoftherealestateatthesubjectlocation.


3.2LandValuation

Thevaluationofmostmarinaswillincludetheconsiderationofthefollowingtypesofland:

• waterfront

• tableland/upland

• submergedlandorwaterlots

• landthatmaybesubjecttorestrictionsonuse

Waterfrontvaluationmethodsinclude:

• direct(sales)comparisonapproach

• incomeapproach

Whereverpossible,thedirectcomparisonapproach(basedonactualsalesoflandformarinas)willbeutilizedindetermininglandvalues.Iftherearenosalesoflandformarinasinthevicinitytheassessorwillhavereferencetoothersalesoflandandmaketheappropriateadjustmentstoaccountforanydifferencesbetweenthesoldpropertiesandthesubjectproperties.

Ifthewaterfrontlandisleased,theincomeapproachmaybeusedifthereissufficientmarketdataavailableforanalysis

AnexampleofhowthevalueoflandisincorporatedinthevaluationofamarinaonthecostapproachisshowninAppendix1.

3.3MarinaSiteImprovements

Varioussiteimprovementsareessentialtothefunctioningofamarina.Theymayinclude:

• breakwaters/piers

• jetties

• boatslips

• boatstorage(outside)

• fuelfacilities

• water supply (municipal or other)

• sewage disposal system

• pump out

• water facility

• other recreational facilities

An example of the way in which site improvements are included in a valuation on the cost approach is shown in Figure 3.3.

Figure 3.3 – Marina Site Improvements

Use Year Built RCN Good Depreciation RCNLD

Jetty Type 1- South Side 1 1990 $141,729 50% $70,865 $70,865

Jetty Type 1 - South Side 2 1990 $35,432 50% $17,716 $17,716



Jetty Type 1 - North Side 1 1990 $35,432 50% $17,716 $17,716

Jetty Type 1 - North Side 2 1990 $35,432 50% $17,716 $17,716

Jetty Type 2 - A Dock 1990 $294,771 50% $147,386 $147,386

Jetty Type 2 - B Dock 1990 $372,792 50% $186,396 $186,396

Jetty Type 2 - C Dock 1990 $464,505 50% $232,253 $232,253

Jetty Type 2 - D Dock 1990 $228,733 50% $114,367 $114,367

Pumping Dock 1990 $31,898 50% $15,949 $15,949

Boardwalk 1 1990 $18,885 50% $9,443 $9,443

Boardwalk 2 1990 $89,347 50% $44,674 $44,674

Light House 1970 $46,902 50% $23,451 $23,451

Totals: $1,866,706 $933,361 $933,361

© Municipal Property Assessment Corporation 2016 All rights reserved 15


3.4EstablishingCostNew

Threeapproachescanbeusedtoestablishcostnew:

• historicalconstructioncost–usefulforrelativelynewmarinas(5to10years)

• reproductioncost–usedmoreofteninanalyzingunusualand/orspecialpurposebuildingimprovements

• replacementcost–appliedintheanalysisoftypicalbuildingimprovementsandmarinaimprovements

Dependingonthefunctionalutilityofthemarina,MPAC’sassessorwillselectthemostrelevantoptionforthesubjectproperty.

AsshowninFigure3.5,typicalbuildingimprovementsatamarinainclude:

• marinaoffice

• boatservicefacilities

• boatsupplyfacility

• food/restaurant

• retailoutlets

• washrooms

• laundryfacility

• lockers

• storagesheds

Figure3.5alsoprovidesanillustrationofhowreplacementcostnew(RCN)iscalculatedforthevarioussiteimprovementsatamarina.

3.5DeductingDepreciation/Obsolescence

Depreciationmayincludephysicaldeteriorationduetoage,conditionand/oruseoftheproperty.Depreciationmayalsoincludeobsolescence.

Obsolescencereflectstheabnormaldepreciationthatarisesinsomepropertiesduetofunctionaland/orexternallygeneratedeconomicproblems.

Functional obsolescence can be the result of numerous factors, including poor or outdated designs, inadequate areas, excess operating costs, etc. Obsolescence is not related to the age of the property but to its ability to adequately perform its intended functions.

To determine whether obsolescence exists in a property, ask the question: “Could the existing facility be replaced with a more modern, efficient substitute, and if so, what would constitute this modern facility?”

Knowledge of current trends and building designs for marinas are important in recognizing obsolescence. Functional obsolescence can usually be recognized through poor design and lay-out, poor or inferior construction and the existence of excess operating costs.

External obsolescence is the result of a change of circumstances outside the control of the marina owner. This could be a large-scale factor such as economic recession or a more localized factor such as a new marina being constructed nearby that takes away some of the business from the marina being valued.

There are a variety of methods that can be used to quantify depreciation. However, while it is important to quantify all aspects of depreciation, it is equally important not to double count for the same aspect of depreciation while using the various approaches.

After the amount and degree of depreciation have been determined and quantified (if any), the end result should reflect the replacement cost new of the building improvements less any depreciation (RCNLD) found in the improvements.

Figure 3.5 – Value of Building Improvements at Marina

Building use Height(ft.) Area(sf) Year Built Cost/sf RCN % Good RCNLD

Assembly hall/lounge 12 4791 1920 $99.82 $478,238 20% $95,647

STG-1 Storage Shed 8 1151 1975 $20.88 $24,033 35% $8,411

STG-2 Storage Shed 8 800 1975 $26.95 $21,560 35% $7,546

STG-3 Storage Shed 8 800 1975 $26.95 $21,560 35% $7,546

STG-4 Boat Storage 12 1051 1975 $26.72 $28,083 35% $9,829

STG-4 Boat Storage 12 1000 1920 $22.69 $22,690 20% $4,538

STG-6 Crane House 12 1080 1975 $24.48 $26,438 35% $9,253

Totals 10,673 $622,602 $142,77

© Municipal Property Assessment Corporation 2016 All rights reserved 17


3.6MarketValueConclusion

Addingthevalueofthelandtothevalueofthebuildingandsiteimprovementsproducesthemarketvalueofthepropertybasedonthecostapproachanalysis.

3.7CurrentValueAssessments

Thefinalstepintheprocessistoconsolidateacurrentvalueassessmentfortheproperty.Oncethedeterminationofvaluehasbeencompletedusingthecostapproach,theassessorwillconsiderwhetherthereisanyothervalueintherealestatethathasnotbeencaptured,oranyotheradjustmentthatmayberequired.Anexampleofsuchafactormaybeexcessland.

ExcessLand

Excesslandislandthatissurplustocurrentneeds.Thevalueofexcesslanddependsonitslocationwithinthesiteandhowwellitsuitsfuturedevelopments.Suchsurpluslandisvaluedseparatelyandaddedtothecurrentvalueassessmentarrivedatforthemarina.

Beforearrivingatanexcesslandconclusion,asiteinspectionisrequiredtoensurethatadditionaldevelopmentwouldbepossible.Thedeterminationofexcesslandinvolvesareviewofcurrentzoningbylawsaswellasthecurrentcoverageandconfigurationoftheproperty.Theratetobeappliedtovalueexcesslandistypicallyderivedusingmarketsalesstudiesofvacantlandsites.

Asimplifiedexampleofamarinavaluation,usingthevaluesderivedforsiteandbuildingimprovementsalreadycalculatedinthisguide,isshowninAppendix1.

3.8Conclusion

ThisguidesetsouthowMPACassessorsapproachthevaluationofmarinasforpropertyassessmentpurposes.

Althoughitoutlinesthegeneralapproachadopted,itdoesnotreplacetheassessor’sjudgmentandtheremaybesomecaseswheretheassessoradoptsadifferentapproachforjustifiablereasons.

ForfurtherinformationaboutMPAC’srole,pleasevisitmpac.ca.


AppendixA:SampleValuation–Marina

RollNumber AddressMarinaNameAssessedOwner

LANDRATEUSED %Adjustment Acres Rate/Acre ValueCommercialLandValuePerAcreCommercialLandValuePerSqFt

$1,524,600$35

LOTSIZEANDUSEUnitofMeasure AcresParkLand 0.00MarinaLand 10.02MarinaUseWaterlot 11.25Waterlotnotusable 0.00LANDVALUECALCULATIONSLandValueParklandLandValueMarina

$1,524,600 x 50% x Acres 0$1,524,600 x 50% x Acres 10.02

$762,300$762,300

/ac/ac

==

$0$7,638,246

CommercialLandValueisreducedby50%toarriveat"ProvincialRecreationLandValue"fortheabovecalculation WATERLOTVALUECALCULATION

$1,524,600 x 50%"ProvincialRecreationLandValue"isreducedby50%toarrive

x Acres 11.25 xat"WaterLotAreasleasedtoyachtclubs/marinas"

50%

$381,150 /ac =

$4,287,938

WATERLOTVALUENOTUSABLECALCULATION$1,524,600 x 50% x Acres 0 x 50% x 20% = $0

"Notusablewaterlot"valueis20%ofusablewaterlotvalue TOTALLANDVALUE

$11,926,184SITE IMPROVEMENTSYardWork $933,361StructureRCNLD $498,084TOTALASSESSMENTCVA $13,357,629AsAssessed $13,357,629

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