Minden Gross LLP’s Melissa Muskat represented Urbanspace Property Group in its appeal of the 2013–2020 property tax assessments at 401 Richmond Street West and was successful in reducing the assessment values that more than doubled over eight years. Melissa was also involved in lobbying efforts for property tax reform with municipal and provincial government representatives that would benefit cultural and artistic properties across Ontario, such as 401 Richmond.

401 Richmond is home to over 140 artists, cultural producers, social innovators, microenterprises, galleries, festivals, and shops. This was the vision of Urbanspace’s president and founder, Margie Zeidler, when she purchased 401 Richmond in 1994 and transformed the old industrial building in Toronto’s fashion district into a blossoming arts space, committed to encouraging creative thinkers and entrepreneurs.

The property tax issue first arose in 2013 when all properties in Ontario were re-assessed based on a 2012 current value assessment. In accordance with its mandate under the Assessment Act, the Municipal Property Assessment Corporation (MPAC) valued 401 Richmond based on its interpretation of the property’s “highest and best use” and, in so doing, more than doubled its assessment value from approximately $13 million to over $26 million. In 2017, when all properties in the province were re-assessed based on a 2016 current value assessment, MPAC once again more than doubled the assessment value to $57.6 million. The increased taxes flowing from these assessments were simply not sustainable. An estimate of tax calculations through to 2020 would have resulted in taxes nearly three times the amount paid in 2012 and would have taxed 401 Richmond out of existence.

Urbanspace worked hard to protect their tenants from paying higher taxes in the early years of the re-assessment and absorbed the entire increase in their already limited net income, as they knew the arts community could not. Fortunately, relief was obtained through both the assessment appeal process and legislated tax reform.

Decisions recently issued by the Assessment Review Board reflect a reduction in the 2012 current value assessment from approximately $26 million to $21.6 million and a reduction in the 2016 current value assessment from approximately $57.6 million to $33.2 million. While these reductions in assessment are significant, this was no windfall for 401 Richmond. The property is still being assessed based on “highest and best use” and the taxes are still increasing to an unsustainable level, albeit more gradually. Thankfully, the lobbying efforts with both municipal and provincial representatives, including a petition that garnered more than 12,500 signatures, has committed both levels of government to establishing a new tax category for non-profit arts and culture organizations, in order to keep urban centres as places to grow creativity and culture, at more sustainable tax levels.