Appeal No. VA90/3/087
AN BINSE LUACHÁLA
AN tACHT LUACHÁLA, 1988
VALUATION ACT, 1988
Connaught Airport Developments Company Limited APPELLANT
Commissioner of Valuation RESPONDENT
RE: Connaught Regional Airport and land at 6B.7B.36,
Townland of Kilgarrif West, Sonnagh, Co. Mayo
B E F O R E
Mary Devins Solicitor (Acting Chairman)
Brian O'Farrell Valuer
Veronica Gates Barrister
JUDGMENT OF THE VALUATION TRIBUNAL
ISSUED ON THE 5TH DAY OF APRIL, 1991
By notice of appeal dated 28th September 1990, the appellant appealed
against the determination of the Commissioner of Valuation in fixing a
rateable valuation of £658.40 (of which £3.40 is fixed on
land) on the above described hereditament.
The grounds of appeal as set out in the Notice of appeal are that by comparison
with similar undertakings in the country the current rateable valuation
of £655.00 is excessive.
The property consists of a commercial airport with a single main runway
of 2,300 metres long and 45 metres wide, running approximately on a east
west axis. The terminal building consists of a purpose built complex of
buildings containing arrivals lounge, departure lounge and Duty Free area,
a control tower and various ancillary administrative offices and storage
areas. There is a 3 storey observation tower workshop and garage for the
fire engine. There are no hangars or aircraft maintenance facilities,
but the Airport has a fuel-storage capacity of about 72,000 gallons of
gasoline for Aircraft refuelling and a 90,000 gallon water-tank. The rateable
valuation on the runways and parking aprons has been agreed at £160.
and the rateable valuation on the surplus land is fixed at £3.40
The only issue before the Tribunal is the amount of rateable valuation
on the terminal buildings.
In 1986 the Airport was first valued as follows:-
Buildings £250.00, Runways etc., £170.00, Total £420.00.
This valuation was upheld in the Circuit Court in November 1989. In 1989
the subject was again listed for revision and the rateable valuation was
increased to £520.00 on buildings and the runway etc., was reduced
to £160.00 to allow for parts located in the townland of Barnalyra.
This was appealed to the Commissioner of Valuation and at First Appeal
stage the Commissioner reduced the buildings valuation to £495.00
and allowed the valuation on the runway etc., to stand at £160.00.
It is against this determination of the Commissioner on the rateable valuation
on the buildings that the appeal now lies with the Tribunal.
A written submission was received from Mr Frank O'Donnell, of Frank O'Donnell
& Co., Valuation, Rating & Property Consultants on 5th March 1991
on behalf of the appellants. Mr O'Donnell said that in estimating the
N.A.V. his approach had been to first make an estimate of the N.A.V. on
the assumption that it had been adapted to non-airport usage such as a
distribution depot or a light-engineering plant. He then discounted this
to allow for the non-viability of the usage in its actual state. Using
this approach he calculated the N.A.V. and R.V. as follows:-
Lounge Areas, Administration Area and Control Tower as adapted to ordinary
commercial use. 31,312 sq.ft. at £3 per sq. ft. £ 93,936
Garage and Workshop Areas - 2,625 sq. ft. at £2 per sq. ft. £
Add for Tanks, Stand-by motors Car-parking etc. £ 5,000
Allow 50% for non-viability for Airport usage. £ 52,093
N.A.V. say £50,000
R.V. @ .5% £250.00
Mr O'Donnell arrived at the same R.V. using a historic cost, first phase
and second phase totalling outlay of £670,000. This gave an effective
Capital Value of £335,000 resulting in a N.A.V. of £50,250
yielding the same rateable valuation of £250.00.
A written submission was received from Mr Noel Lyons B.Comm, a Valuer
in the Valuation Office, on 7th March 1991, on behalf of the respondent.
Mr Lyons outlined the details of the subject property, valuation history
and the valuation placed on the runway and other aspects of it which are
not being considered by the Tribunal. With regard to the valuation on
the buildings Mr Lyons said that the buildings apart from the observation
tower, could be used by any business person or group of small industries
currently in the market for advance factories. He said that they are of
solid construction and most of the internal partitioning is removable.
He said that he proposed a valuation on buildings based on :-
1. Comparison with the valuation fixed by the Circuit Court.
2. Comparison with I.D.A. industrial units and offices attached being
rated at £2.00 per sq. ft. on warehouse/factory and £3.00
per sq. ft for offices.
Mr Lyons then outlined his calculations of the N.A.V. and R.V. under
1. The old valuation of £250.00 fixed by the Circuit Court (and
he outlined how this might devalue)
2. The additional buildings as follows:-
Infill to original terminal building
21.28m² = 229 ft² @ £3.25 per ft² = £ 744
New ground floor extension to terminal building
808.52m² = 8703 ft² @ £3.25 per ft² = £28,285
New first floor extension to terminal building
805.58m² = 8671 ft² @ £2.50 per ft² = £21,677
52.9m² = 569 ft² @ £1.00 per ft² = £ 569
Office/store at fuel tanks
41.5m² = 447 ft² @ £1.00 per ft² = £ 447
Car parks - Avis and "charge area" 92
spaces @ £480 per space (construction
cost) X 5% return = £ 2,208
Estimate of net annual value on additions £54,000
Rateable valuation of addition = Estimate of NAV
£54,000 X 0.5% = £270.00
Allow 10% Say £245.00
Total R.V. on building - old valuation per Circuit Court £250.00
Additional per 1989 £245.00
At the oral hearing which took place in Galway on the 13th March, 1991,
Mr Stephen Roche, Barrister-at-Law, instructed by Messrs McEllin &
Sons, Solicitors, appeared on behalf of the appellant, together with Mr
Frank O'Donnell, B.Agr.Sc., M.I.A.V.I., M.I.R.E.F. of Frank O'Donnell
& Co. Mr Noel Lyons, B.Comm, Valuer, represented the respondent. Also
present was Mr J.P. Ryan, Airport Secretary, Connaught Airport Development
Mr O'Donnell referred to his written submission dated the 4th March, 1991
and stated that the hereditament was located in a very remote area where
there were no industries, and therefore very little employment and no
possibility of freight traffic.
He pointed out that in spite of the enormous State subvention the Airport
was making a loss. In view of that situation, it would, in his view be
impossible to envisage a "hypothetical tenant".
Mr O'Donnell said that apart from the particular difficulties experienced
by the Airport, there was a general world downturn in flights.
Mr Ryan stated that the Airport could be said to have "peaked"
in 1988/1989. He said that since the Autumn of 1990 there has been a drop
in passenger traffic due, in part, to the recession in the U.K. whence
most of their passengers came.
My Lyons disputed the 50% reduction for non-viability referred to in Mr
O'Donnell's precis and said that if the Airport were not viable it could
not get the necessary airport licence.
Mr Lyons said that in spite of the alleged downturn in the fortunes of
the Airport, since 1986 additional buildings, including a duty-free shop,
had been completed at a cost of £350,000. The cost of the buildings
in the First Phase, completed in 1985 was approximately £320,000.
He said that in his view there would be tenants who would be prepared
to lease the hereditament, either as a commercial airport or for alternative
In reaching its determination the Tribunal has taken into account the
valuation fixed by the Circuit Court in 1989 on the buildings as they
existed in 1986. Since that time evidence had been given of additional
buildings constructed at a total cost of £350,000.
The Tribunal notes Mr O'Donnell's argument for 50% reduction in N.A.V.
on the grounds of non-viability for airport usage.
However, in view of the extensive new buildings which have recently been
completed, the Tribunal, in applying the "rebus sic stantibus"
rule, accepts broadly the breakdown and estimate of N.A.V. of the extension
put forward by Mr Lyons. It notes too that he has allowed a further reduction
of 10% in R.V., supposedly in view of the particular nature of the hereditament.
The Tribunal accepts the evidence as to the downturn in flight traffic,
generally and in particular from the U.K.
In all the circumstances, and accepting the R.V. fixed so recently by
the Circuit Court on the old buildings, the Tribunal finds that the correct
R.V. of the buildings is £445. The Tribunal therefore fixes the
rateable valuation of the total hereditament at £608.40