A ruling is expected by the province's assessment review board within 30 days on whether the Town of Cochrane has properly assessed the value of Spray Lake Sawmills property on Griffin. Rd.
On Aug. 9, chair Edmund Bruton, of the Municipal Government Board, and Lynda Dale and Stuart Ray heard Andy Marshall and lawyer Clint Docken argue that the sawmill operation is under-assessed and should be paying more in municipal taxes for its 57.35-acre property.
With a detailed report, town assessor Ryan Brooks stated the property is being assessed correctly using the cost approach to the value and believes the assigned assessment will stand up in court.
He said the town refutes Marshall's argument regarding the law of diminishing returns, that the contamination of the land has no effect on its value, and noted machinery and equipment are not taxed in the Town of Cochrane.
Due to the uniqueness of the property, the income approach and the direct comparison approach to value would not be viable, Brooks explained. Instead, the Town of Cochrane’s assessment department used the cost approach in determining the assessed value.
Based on the sales data of large future development parcels, the town used a rate of $160,000 per acre as the base assessment rate for non-serviced land of this size, explained Brooks. The assessment was then reduced by $40,000 per acre based on the reclamation costs the site would require for future development.
Like other land adjacent to the former Domtar wood-preserving operation, the SLS property sustained environmental damage. That includes the Quarry commercial district that was extensively remediated to allow for development to occur.
"The complainant himself says that the Springwood land was valuable after remediation, which is true, but Springwood also went through expensive planning, servicing, subdivision and remediation costs," explains the town in its argument. "The land prior to remediation reflected those costs. Contamination just can’t be ignored when determining land values."
Marshall argued the SLS site isn't listed in the Alberta Environment Site Assessment Registry of contaminated sites.
"Because the town has provided no specific evidence on contamination, we propose that any discount made in the Town assessment calculation should be rejected," states his rebuttal. "A review of recent Composite Assessment Review Board hearings shows several cases in which CARB rejected contamination claims where no specific evidence was provided."
Brooks explained the SLS property currently has environmental monitoring wells which monitor the ground water on a scheduled basis. The company employs an environmental coordinator whom oversees a constant monitoring process.
While not a matter to be handled by this board, they also believed that the town’s treatment of the company’s machinery and equipment assessment should be reviewed to create a fairer assessment ratio to other M-1 properties in Cochrane.
Marshall and his agent lawyer Clint Docken argued the per-acre assessment should at least be doubled.
In his presentation, Marshall argued other nearby landowners across the street pay assessments up to eight times higher than SLS. He said the All Span Building Systems Ltd.property located further east on Griffin Rd.,is an 18-acre parcel valued at $551,000 per acre, more than three times that of SLS's rate.
"As a result, SLS pays about $104,000 a year in taxes," states Marshall, "just $3,000 more than the $101,000 paid by All Span for its property, about a third of the size."
"We contend Spray Lake has been given a tax break for many years because of what we consider low annual assessments on their land," says Marshall.
For the 2019 taxation year, the property was assessed at $10.15 million.
The town assessor explained the reason why each property has a different assessment. Several factors contributed including the size of the properties, and the type of operations on the parcels. For those currently void of buildings, their proportions, and lack of environmental contamination, which would allow for immediate development, were among factors influencing the assessments.
A letter from Howard Pruden, SLS manager of Safety/HR and Community Relations, was included in the town's assessment brief. In the letter, Pruden states that the company struggles to identify any validation in Marshall's peculiar vision of the assessment process and believe it doesn't hold any reasonable or compelling facts the support his argument.
"This is not the first time Mr. Marshall has made these complaints, which resulted in the town's assessment staff visiting the site to confirm and validate records of the site a couple years back," states the letter. "After that re-assessment there were no considerable changes made! It is hard to believe Mr. Marshall and his representative continue to attack our business with baseless claims."
Marshall says it has been a concern of his for years.
"I spoke to the managers at the RancheHouse for years about this, and then this year decided to make a formal complaint."
SLS directly employees about 200 people and another 80 indirectly through contractor and service providers.
SLS moved its operations to Cochrane in 1969. The current facility was built in 1974, well before Cochrane's major population boom.