Appeal No. VA97/5/006 & VA97/6/039
AN BINSE LUACHÁLA
Aer Rianta APPELLANT
RE: VA97/5/006 - Airport Terminal and Land at Map Ref:
1, Lehenagh More,
VA97/6/039 - Airport and Land at Map Ref: 1A.3.9AB.19,
B E F O R E
JUDGMENT OF THE VALUATION TRIBUNAL
By Notices of Appeal dated the 8th day of August 1997 and the 19th day of October 1997 respectively, the appellant appealed against the determinations of the Commissioner of Valuation in fixing rateable valuations of £5,982 and £1,445 on the above described hereditaments.
The grounds of appeal as set out in the said Notices are:-
A written submission prepared by Mr. Desmond Killen, FRICS, FSCS, IRRV a fellow of the Society of Chartered Surveyors in the Republic of Ireland was received by the Tribunal on 19th February 1998. Mr. Killen has 35 years experience as a Valuer.
A written submission prepared by Mr. Peter Conroy, District Valuer in the Valuation Office was received by the Tribunal on 23rd February 1998.
The appeal proceeded by way of an oral hearing which took place at the District Court Office, Angelsea Street, Cork on 5th March 1998. The Appellant was represented by Mr. Owen Hickey B.L. with the Respondent being represented by Mr. Peter Conroy, District Valuer. In accordance with the rules of the Tribunal and following established practice the parties had, prior to the hearing exchanged their written submissions. At the oral hearing both valuers, having taken the Oath, adopted their written submissions respectively as their evidence in chief and supplemented same by way of further evidence and by way of opening and concluding submissions. The following facts, either agreed or so found, emerged as being the relevant facts for the purposes of determining this appeal:
In addition, there are taxiways, altrium and aprons in close proximity to these runways consisting of 57,135 sq.m. as well as 230 acres of land inside the perimeter fence and perimeter fencing of 7,260 linear metres.
The main runway had a 1,000 ft. extension completed in 1989 and those improvements also included the installation of new instrument landing systems, touchdown zone lighting and centre line lighting. This runway extension facilitated the use of larger aircraft on certain routes.
Submissions of the Parties
Mr. Conroy, on behalf of the Commissioner of Valuation, assessed the
R.V. by reference to the Contractor's Basis of Valuation. He stated that
as there is no evidence of letting values for Airports in Ireland, it
was his intention to rely on this basis. Mr. Conroy estimated a fair rateable
valuation of the subject premises as £3,295. Mr. Conroy's calculation
of this valuation is set out in Appendix Two annexed to this judgment.
Due to the nature of the hereditaments under appeal, no evidence is available with regard to similar properties being rented. However, in the opinion of the Tribunal, reference to the Contractor's Basis of Valuation is not appropriate in this case. Such a basis is used only as a last resort where no other, more direct, valuation method can be used. The R.V.s in respect of the runways at Dublin and Shannon Airports have been agreed at appeal stage by the Appellant and Respondent. The valuation at Shannon Airport was agreed in 1997 and was based on comparative evidence previously agreed in respect of similar hereditaments at Dublin Airport. The valuation in respect of Shannon was agreed on the basis of 50% of the N.A.V. applied at Dublin Airport.
Mr. Conroy suggested that, on a comparative basis, Cork Airport currently enjoyed a better performance all round than Shannon Airport. He referred to the level of profitability in Cork in 1996 (£2.404m) as compared with Shannon (£2.375m).
In addition, he referred to the return on turnover, levels of staffing and general state of repair of the properties at Cork Airport as compared with Shannon Airport.
In general, he suggested that Cork was a "tighter" unit on the edge of Cork City, compared with the "sprawling" nature of Shannon in a rural location. For these reasons and others, he suggested that Cork Airport was more valuable (in proportion to its size) and that this should be reflected in the R.V.
On the other hand, Mr. Killen pointed out that Cork Airport is over 35 years old, the exception being the runways which have more recently undergone extensive rebuilding and refurbishment. While there was a 1,000 ft. extension to the main runway at Cork Airport, the equivalent runway at Shannon is approx. 3,000 ft. larger. As a result, Shannon can accommodate the use of large (Jumbo) aircraft on the Transatlantic routes, which is not possible at Cork. In arriving at the valuation agreed for the runways at Shannon Airport, the Appellant used the "five year summary of traffic statistics" for Dublin, Shannon and Cork Airport as a guide towards the rent which a hypothetical tenant would pay for the runways. These statistics referred to the period 1992 to 1996, which were prepared by Aer Rianta, and were reproduced in Mr. Killen's written submission. The Appellant submitted that the hypothetical tenant could pay similar rental prices for both Shannon and Cork and at most, 50% of the unit pricing which is applicable to Dublin Airport.
While the Tribunal accepts that substantial refurbishment work was carried out on the runways at Cork Airport in the relatively recent past and overall the Airport is a tightly-run unit, nevertheless we consider that the only realistic basis for determining a valuation in this case is by comparison with the agreed valuation at Shannon Airport in 1997. In our opinion, it is not realistic to value the runways at Cork Airport on a higher basis than those of Shannon. In the Tribunal's view, the N.A.V. should be calculated by reference to the figure of £1.70 p.s.m. as was applied to the runways at Shannon Airport. However we note that the land inside the perimeter fencing was valued by the Appellant at £150 per acre. While we accept there are substantial restrictions on the usage of this land given its location within the perimeter fencing of the Airport, we contend that a more realistic valuation would be £500 per acre.
In the circumstances and in the light of the evidence provided, the Tribunal
determines the rateable valuation of the runways, taxiways, aprons and
land is as follows:
R.V. @ 0.5% £2,413.90
The balance of the rateable valuations attributable to the hereditaments under appeal, having been previously agreed between the parties, remain unchanged.
Perimeter Fence : 7,260 sq m @ £1.00 psm = £ 7,260
Land inside perimeter
Balance of Runway 885,682 sq.ft. @ £6.32 = £5,597,510
Secondary Runway 634,538 sq.ft. @ £5.50 = £2,093,965
Aprons 535,000 sq.ft. @ £2.40 = £1,155,600
Taxiways 80,000 sq.ft. @ £5.50 = £ 308,000
Land 75 acres @ £10,000 = £ 750,000
Perimeter Fence 25,000 feet @ £6 = £ 151,200
N.A.V. @ 0.5% = £ 650,000