How is a property valued when there is no other like it?
That’s at the heart of a dispute between the Fox Harb’r Resort on the Northumberland Strait and Nova Scotia tax assessors.
Owners say an assessment of $19.9 million used for property tax purposes is too high given the complex’s huge losses, which run into the millions each year.
“The appraisal does not adequately reflect market value on the prescribed date,” Fox Harb’r Development Ltd. said in its latest appeal, filed this week with the Nova Scotia Board of Review and Services.
The resort is not satisfied with a reduction in its 2020 assessment delivered by the Nova Scotia Court of Assessment Appeal last month.
The court lowered the valuation from $21 million to $19.9 million, but still well above the $5.7 million Fox Harb’r Development said it was worth.
Fox Harb’r synonymous with luxury
The 1,000-acre private resort has become synonymous with luxury in Nova Scotia since it opened in 2000.
The beautiful facility features a championship golf course, a marina, a private jet landing strip and hangar, a vineyard, stables, and a pheasant preserve.
Ron Joyce, the billionaire co-founder of the Tim Hortons fast-food and coffee chain, developed the complex near his hometown of Tatamagouche.
Records in the tax dispute reveal that, until her death in 2019, Joyce underwrote operating losses, which peaked at $8 million to $10 million annually.
The managers for his heirs reduced the losses to $1.5 million to $2 million a year, according to evidence presented on appeal.
To break even, they are building new homes and planning a 48-unit development.
A community asset, not an investment
Fox Harb’r says that Joyce built the complex as a legacy and community asset and not as an investment.
Jeff Cuzner, director of commercial property tax at real estate services firm CBRE, filed a brief on behalf of the Fox Harb’r appeal, arguing that no potential buyer “would ever consider reproducing the subject as given its location and performance.” fiscal”.
“Subject location is inferior…Fox Harb’r is located in a remote area with no population center or services,” Cuzner wrote.
The owners argued that because the complex has never turned a profit and relies on annual subsidies from the owners to operate, “its value cannot be accurately estimated from its income.”
They said a fairer estimate should be based on the sales value of eight other golf properties with accommodations in Nova Scotia and Prince Edward Island.
Fox Harb’r said the most comparable properties were Glen Arbor in Halifax, which was valued at $91,705 a hole, and Crowbush in Prince Edward Island at $158,000 a hole. Using that metric, Fox Harb’r golf courses and services are worth $125,000 per hole or $3.375 million. He valued the Founder’s Lodge at $1.6 million.
Fox Harb’r ‘unrivaled’ in NS
The appraisal director of Property Valuation Services Corporation (PVSC) rejected the approach.
The Crown Corporation, which sets up property appraisals in Nova Scotia, said no other golf property compares to Fox Harb’r.
“In addition to having accommodations that are unmatched by any other golf facility in the province, Fox Harb’r includes numerous amenities that none of the other properties can offer,” PVSC attorney Robert Andrews said in the court’s appeal. .
It evaluated the resort as a single entity, but used different methods: accommodations were evaluated by income, while golf course costs were evaluated by cost, accommodations and real estate lots were evaluated by direct comparison.
In his appeal to the board of review and utilities, Fox Harb’r said that “the values assigned to all components of the assessment are too high and inconsistent with both market value and the provisions of the Assessment Act.” .
“The appraisal was incorrectly weighted based on an income approach and did not consider a direct comparison valuation that would be a relevant basis for reaching proper value. The appraisal was based on the premise that the property was unique and allowed this to carry more weight than the actual market value basis on which it should have been based,” Fox Harb’r attorney Michael L Ryan said in the appeal filed with the Nova Scotia Board of Review and Services, published Nov. 1.
Important to Cumberland County
Property Valuation Services declined to comment saying it will defend the appraisal with regulators.
Fox Harb’r did not respond to a request for comment.
In a September 2022 Vision podcast interview with Huddle, a maritime business publication, Fox Harb’r president Kevin Toth declined to discuss the amount of taxes paid to the local municipality, saying “we’re in a bit of a dispute with them right now” .
He said the resort spends $7 million a year on goods and services in Nova Scotia and has invested more than $125 million in developing the resort. It operates its own water and sewer system and maintains the roads on the property.
Cumberland County Mayor Murray Scott said the resort draws people from all over the world to the area “for various reasons, some are property owners, some come from the services, some come for the golf part.”
“Fox Harb’r is a huge part of Cumberland County in terms of the assessed value of that property, in terms of what it means for taxes to the township, no question,” he said. “It’s very important to Cumberland County.”
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