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Appeal No. VA05/3/073 AN BINSE LUACHÁLA Grovelands Childcare Ltd. APPELLANT RE: Crèche at Lot No. 10F, Garrycastle, Athlone
East Rural, Athlone 1, County Westmeath B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By Notice of Appeal dated the 5th day of August, 2005 the appellant appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation of €237.00 on the above described relevant property. The Grounds of Appeal are as set out in the Notice of Appeal a copy of which is contained in Appendix 1 to this judgment. This appeal came before the Tribunal at an oral hearing on the 15th November, 2005 at the offices of the Tribunal, Ormond House, Ormond Quay Upper, Dublin 7. At the hearing the appellant was represented by Mr. Tony Brooks B.Agr. Sc., MIAVI, of Messrs. Tony Brooks & Co.. Mr. Ronan Bushell and Mrs. Regina Bushell gave evidence on behalf of the appellant company. Mr. Christopher Hicks, a Valuer in the Valuation Office, represented the respondent. The Property The ground floor accommodation includes two baby rooms, a Montessori room with changing and sleeping facilities, two toddler rooms with changing facilities, four toilets, kitchen with larder/and utility room, buggy store, boiler house, toilet and shower for the disabled, reception area and office. The first floor includes staff room, kitchenette, two staff toilets, games room and Montessori room and two children's toilets. The building is constructed with precast concrete, aluminium framed windows and the entire is covered with a tiled roof. Internally there are carpeted and laminated floors and plasterboard ceilings. There is no lift on the premises. Tenure Services Valuation History Agreed Areas The Appellant's Case 1. He maintained that there was an absence of similar crèches
in County Westmeath. In these circumstances he submitted that, under the
provisions of Section 49(2) of the Valuation Act, 2001, regard should
be had to crèches outside County Westmeath, specifically to crèches
in the adjoining counties of Offaly and Meath. 2. He further maintained that there was a total absence of profile as
the property was situated within an IDA Park and accessed via the internal
estate road. A map showing the access was handed in by Mr. Brooks. 3. Mr. Brooks further maintained that Mr. Hicks had erred in comparing
the crèche (a) with nearby business offices in the IDA Business
Park namely the IDA Regional Headquarters and premises of Athpharma, Pharmaceutical
Research and Development and (b) the drop-in crèche in Golden Island
Shopping Centre. This, he said, was a drop-off facility for customers
of the Golden Island Shopping Centre and was not a full day centre as
was the Grovelands. Charges in the drop-off crèche were on an hourly
rate whereas the Grovelands charges were on a monthly basis. 4. He argued that a first floor in a crèche is not ideally suitable. A crèche, he maintained, should all be on the same level from a fire and safety point of view. A hypothetical tenant would perceive the first floor accommodation as a disadvantage. Mr. Brooks gave two comparison crèches, one in Rathoath Co. Meath which was valued at €47.49 per sq. metre. This was a modern, purpose-built, two-storey building. His second comparison was in Ashbourne, Co. Meath. This was originally a private residence which was rated in 1997 at €34.17 per sq. metre. A third comparison of a sister crèche in Tullamore belonging to the appellants was not proceeded with as it was valued in August, 2005, i.e after the valuation date of the subject. The appellant's comparisons are at Appendix 2 to this Judgment. Opinion of Valuation Witnesses' Evidence 1. The IDA Regional Headquarters referred to in Mr. Hicks' comparisons
(see Appendix 3 to this Judgment) had a lift and was finished to a high
standard. 2. The Eurotel marketing premises (not referred to by Mr. Hicks in his
précis) was roughly the same size as the IDA premises and was valued
at €100 less. That building had a very high standard of finishand
also had a lift. 3. Neither of the aforementioned buildings had a high proportion of space
devoted to toilets for children and staff, large kitchens, sleep rooms
or nappy changing rooms within the building. Both buildings were full
two-storey whereas the upstairs of the subject was built into the attic
of the building and had extremely low ceiling height. 4. The subject could not be converted into offices without significant
expense. 5. No allowance was made in the valuation for the absence of a lift or
for the low ceilings in the subject. 6. Very large areas in the subject were taken up with stairways at either
end of building for safety reasons. 7. Both Eurotel and IDA Headquarters were built in the vicinity of the
roundabout as you enter the Business Park. Grovelands was, he said, tucked
away in a remote corner of the Park. 8. Grovelands had a capacity for 86 children and they had an occupancy
rate of about 75%. 9. In Rathoath the crèche charge was €800 per month whereas
in Athlone it was €550 per month. 10. They could not have built a single storey crèche on the site because of conditions laid down by the IDA in relation to building in the Park. Mr. Bushell, by agreement, handed in a letter dated the 1st November,
2005 from Westmeath County Council (copied in Appendix 4 hereto). This
letter confirmed : Mrs. Regina Bushell, having taken the oath, stated that she ran the crèche and that crèches were regulated to a high degree by the provisions of the Child Care Act, 1991. She maintained that crèches should be exempted from the payment of rates and that she and other crèche owners were lobbying the Government for exemption. The Respondent's Case He maintained that properties do not have to be similar in all respects in order to be comparable. Properties could be compared by a number of parameters, e.g. rent, cost, location, condition, use, size etc. He then referred to the Tribunal decision in the VA04/1/024 - Gerri Cobbe and Mary McGibney ("the Beacon Court case") which related to a crèche at Beacon Court, Ballaly, Dundrum, Co. Dublin and he referred in particular to paragraphs 3 and 5 of the Findings therein. Paragraph 3 states that Section 49(1) of the Valuation Act, 2001 set down the basis for valuing properties at revision stage and dictated that values should be determined by reference to comparable properties in the same rating authority area. In absence of any definition in the Act as to what is comparable the word must be interpreted in the normal sense and mean equivalence, likeness or sameness. That being the case, comparable must be interpreted as being similar in use, location and nature of construction or any other factor which would have a bearing on value. Paragraph 5 of the same judgment states that "no evidence was adduced to show that the price paid for the crèche was proportionately more or less that the price paid for office buildings". Mr. Hicks further pointed out that the Tribunal fixed a 1988 NAV on the crèche at €125.00 per sq. metre and a separate Tribunal judgment, VA04/1/023 - BUY4NOW fixed this same level on offices in the same development. He contended on behalf of the Commissioner of Valuation that the property under appeal could be compared with other nearby properties that have a similar or comparable quality of finish. Mr. Hicks contended for a rateable valuation of €237 calculated
as follows: He also provided the following alternative valuation in accordance with
Section 49(2)(b) of the Act: Findings and Determination 2. The Tribunal accepts that the word "use" is an important ingredient in the concept of "comparable" within section 49 of the 2001 Act. While not specifically mentioned in the 2001 Act as it was in Section 5 of the Valuation Act 1986 which refers to hereditaments "which are comparable and of similar function", yet this does not mean that it is not implied in section 49. The Tribunal is of the view that it is implied in the concept and recent case law of the Tribunal supports this. In its judgment of 1st September 2004 in the Beacon Court case the Valuation Tribunal stated in paragraph 3 of the decision: "In the absence of any definition in the Act as to what is comparable the word must be interpreted in its normal sense and mean equivalence, likeness or sameness. That being the case, comparable must be interpreted as being similar in use, location and nature of construction or any other factor which will have a bearing on value." In this particular case the subject property is restricted under a 999 year lease to use as a crèche only and also the subject property by nature of its physical structure is designed to be a crèche only and cannot easily be converted to another use without incurring much expense. The subject property has sleeping and changing facilities and four toilets on the ground floor. There is a Montessori room, children's and staff toilets and a common room on the first floor. Its structure is entirely different to that of an office. In these circumstances they are not similar for comparative purposes to buildings used as offices. It is also helpful to refer to the Tribunal judgement of 2nd May 2003 in VA02/5/027 - Mr. Jason Bonney t/a Bonney Baby's Crèche. That subject property was restricted to use as a crèche by planning permission for the Clare Hall Housing Scheme. The judgement stated that it was common case that it would require physical alteration in order to render it suitable for use as a shop, if planning permission was obtained for a change of use. It further stated that the subject property had to be valued "in its actual state". Hence it was necessary to take into account the mode or category of use as well as the physical state and circumstance of the building. As the subject property was built, designed and used as a crèche, the Tribunal was of the view that it should be valued as a crèche and distinguished from a standard unit in the Shopping Centre in which it was located. Accordingly the usage element is very important and the crèche should be compared to other crèches in the same rating authority area, and not with other units used as offices in the Business and Technology Park. 3. What the Tribunal finds most astonishing is that the subject premises is the only day-care crèche in County Westmeath that is valued for rating purposes. This is a very odd situation. The letter from Westmeath County Council of 1st November 2005 to the appellant confirms this. It appears to us unfair that appellant should be singled out as a rateable occupier, while occupiers of other crèches in Westmeath are not liable for rates. This creates a situation of no comparable properties in the same rating authority area. In these circumstances the appellant was entitled to go outside the rating authority area under section 49(2)(b) of the Act as there are no comparable properties within the said area and also section 49(2) further applies as we are dealing with an "existing" valuation list. 4. Comparative analysis: as there were no suitable comparisons in County Westmeath where the subject is situated, the appellant was entitled to look at crèche valuations in counties Meath and Offaly in search for comparisons. Their comparison No. I, the Rathoath Childcare Centre, has an area of 716 sq. metres valued at €47.49 per sq. metre on a gross external basis and rated in 2000. It is a modern, purpose-built, two-storey crèche similar in size and quality to the subject. Their comparison No. 2, Tiny Tots in Ashbourne, County Meath is much smaller than the subject property with an area of 385 sq. metres valued at €34.17 per sq. metre and formerly a private home and rated in 1997. Unfortunately, we cannot consider their comparison No. 3, Grovelands Child Care Centre in Tullamore, County Offaly as it was only valued in August 2005 and therefore not available as a comparison at the relevant date. The Respondent's first two comparisons are in the same Business and Technology
Park as the subject. Comparison No. 1, the IDA office, is the regional
headquarters of the IDA. It is a similar quality building to the subject
but is much larger with a gross internal area of 1,449 sq. metres valued
at €67.63 per sq. metre. This building is not comparable to the subject
either as regards function or size. Comparison No. 2, the Athpharma building,
is also not a suitable comparison as it is a smaller area of 240 sq. metres
and also not similar in purpose to the subject. 5. Regulations under the Child Care Act, 1991: the Tribunal appreciates the fact that crèche and pre-school services are highly regulated businesses which adds further costs to running the businesses. Under section 50 of the Child Care Act 1991 the Minister for Health shall make regulations for the purpose of securing the health, welfare and safety of children attending pre-school services which may include heating, lighting, ventilation, cleanliness, repair and maintenance of premises, and also the repair and maintenance of equipment provided in pre-school services. Further, section 52 imposes duties on every person carrying on a pre-school service in respect of the welfare of children. Inspection of the crèche premises can be carried out by authorised persons. 6. The subject property cannot be used for any purpose other than that of a crèche as per the existing lease agreement and again this would be taken into account by the hypothetical tenant. 7. The subject property was built as a two-storey building under the policy IDA who are the owners of the Business Park. The first floor is not ideal as far as care and safety are concerned and ground level or single floor usage is more suited for the purposes of a crèche. The building is disadvantaged in that respect as it does not have a lift. Accordingly, in view of the aforementioned facts and evidence, the Tribunal determines the net annual value and rateable valuation of the subject as follows: Ground Floor 479 sq. metres @ €50 per sq. metre = €23,950 Total NAV = €32,815 And the Tribunal so determines |