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Appeal No. VA05/3/054
AN BINSE LUACHÁLA Pfizer Ireland Pharmaceuticals APPELLANT RE: Factory at Lot No. 5Ca, Ringaskiddy, Carrigaline,
Cork Lower, County Cork. B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By Notice of Appeal dated the 21st day of July, 2005 the appellant appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation of €12,590.00 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 at Appendix 1 to this judgment. 1. This appeal has been the subject of a hearing dealing with the preliminary issue set out at paragraph 6(a)(i)1. of the Notice of Appeal namely the alleged non-compliance of the respondent with section 30 of the Valuation Act 2001. Another Division of the Tribunal heard evidence/submissions on this issue on 17th October 2005 and issued its written judgment on 3rd November 2005. 2. The hearing dealing solely with the matter of quantum was held at the offices of the Tribunal, Ormond House, Ormond Quay Upper, Dublin 7 on the 12th of December, 2005. At the hearing the appellant was represented by Mr. Alan McMillan, ASCS, MRICS, MIAVI, a Director of GVA Donal O Buachalla, Property & Rating Consultants. Mr. McMillan's Co-Director Mr. Desmond Killen was in attendance but took no part in the proceedings. Mr. James Devlin, BL, instructed by the Chief State Solicitors Office, appeared on behalf of the respondent the Commissioner of Valuation and expert valuation evidence was given by Mr. Terence Dineen, B. Agr. Sc., a District Valuer with the Valuation Office. 3. The Property Concerned 4. The Subject Property 5. Rating History
No change was made on foot of an appeal to the Commissioner of Valuation pursuant to Section 30 of the Valuation Act, 2001 and it is against this determination by the Commissioner that the appeal to the Tribunal now lies. 6. Appellant's Evidence In evidence Mr. McMillan outlined the details of the ongoing development of the plant over the past twenty years and its most recent rating history. Mr. McMillan said that Mr. Dineen as the revision officer issued a Valuation Certificate (proposed) on the 14th of November, 2004 to the effect that the valuation of the property concerned was to be assessed at a rateable valuation of €12,480. Following representations a valuation certificate was issued on the 6th of December, 2004 to the effect that the rateable valuation had been assessed at €12,590. Mr. McMillan said that the increase in valuation was primarily due to an extension to the building known as CB1. This extension, he said, was similar in construction, specification, height and function to the existing buildings CB1 and CB2. These buildings he said were used for manufacturing purposes and were about 18 metres high. Internally floors are provided at different levels and at different locations within the structure to facilitate the manufacturing process. For valuation purposes it was agreed that the extension be treated as being 3 storeys in configuration although strictly speaking this was not quite the case. Mr. McMillan said that in arriving at his opinion of net annual value he had adopted the same valuation methodology as used at earlier revisions: i.e. to assess the valuation of the new accommodation by comparison with established levels of net annual value within the plant and to add or "bolt on" the valuations so determined to the existing valuation. This practice he said was well-established and used on many occasions. In the circumstances, Mr. McMillan said, he could see no good reason as to why this should not be appropriate in this instance. The existing buildings CB1 and CB2 were valued at the 1999 and 2000 revisions at €116 per sq. metre and hence it was only fair and reasonable that the extension be valued at the same rate per square metre as it is virtually identical in all respects to buildings CB1 and CB2. In evidence Mr. McMillan put forward the following opinion of net annual
value: Rateable Valuation @ 0.5% €12,063 Under examination Mr. McMillan agreed that the height of the various floors within the extension varies from two to seven metres in places. He further agreed that the cost of construction was about €13.1 million but contended that this was not of particular relevance in that he had valued the extension at exactly the same rate per sq. metre as that applied to existing buildings CB1 and CB2 which were similar in construction and use. These levels of value he said had been agreed with the Valuation Office at earlier revisions and hence it was not open to Mr. Dineen to alter what was an established level of valuation within the plant. In relation to Mr. Dineen's comparisons No. 5 and No. 7 Mr. McMillan said that he was aware of the facts in relation to these properties but did not necessarily agree with Mr. Dineen's analysis. 7. Respondent's Evidence Previous NAV agreed €2,320,000 CB1 Extension € In evidence Mr. Dineen said that in arriving at his valuation of the extension he formed the view that he was not of necessity constrained to value it at the same rate per sq. metre as that applied to the existing buildings CB1 and CB2. His opinion in this regard, he said, was strengthened by virtue of the fact that these buildings had been valued without reference to their cost and that there was evidence of other buildings of a similar nature which had been valued at more realistic levels in recent times. Indeed Mr. Dineen said his valuation of the extension was quite modest having regard to the fact that the construction cost was €13.1 million. Actual building cost he said is the best evidence of value and could not be ignored in the valuation process. Mr. Dineen referred to his comparisons (see Appendix 2 hereto) and commented that a number of these had been assessed on the contractor's method of valuation or a modified version of it (comparisons No. 6, No. 7 and No. 9, he said, were relevant in this regard). Under examination Mr. Dineen accepted that there were no other similar type facilities in the County Cork area that had been valued in excess of €215 per sq. metre. He also agreed that the existing buildings CB1 and CB2 were essentially the same in terms of construction and use as the extension but said that this did not mean that the extension should be valued at the same level. In his opinion uniformity was not an end in itself. He had to value the extension having regard to the provisions of the Valuation Act, 2001. Section 49 of the Act, he said, obliged him to have regard to the valuation of other comparable properties in the same rating area. He had done this and bearing in mind the capital costs incurred he had come to the conclusion that the extension should be valued as he had proposed. 8. Submission 9. Findings 1. The property concerned in this appeal is a large pharmaceutical plant
located in Ringaskiddy, County Cork and is one of several such plants
in the area owned and operated by the Pfizer corporation. 2. This particular plant has changed hands on a number of occasions since
first developed by Angus Fine Chemicals in or about 1986. Since this date
the plant has been extended on a number of occasions and has been the
subject of revisions almost on an annual basis since 1999. 3. From the evidence tendered a major scheme of redevelopment and extension
took place in or about 1998/1999. These works included the complete overhauling
and renewal of an existing manufacturing building known as CB1 and the
construction of a new manufacturing building known as CB2. 4. The most recent addition which gave rise to the 2004 revision is an
extension to the main production building of the plant known as CB1 together
with some minor items with an agreed net annual value of €5000 and
a rateable valuation of €25. 5. It would appear that the practice adopted with each revision has been
to value the most recent extension independently by reference to prevailing
levels of value and to add the valuation so determined onto the existing
valuation of the entire plant. This was the method adopted by both valuers
in this instance. 6. The buildings known as CB1 and CB2 are largely similar in construction,
specification and function with a height of 18 metres. Essentially it
would appear that the buildings are designed around the manufacturing
plant and internally the floors are provided at different levels to enable
access to the plant at various stages in the manufacturing process. In
relation to the most recent extension it is agreed that it has a footprint
area of 302 sq. metres and that it is notionally 3-storey in configuration.
Mr. Dineen calculated the area to be 906 sq. metres whilst Mr. McMillan
measured the area at 754.46 sq. metres i.e. the total area of the actual
floor plates within the structure. 7. Having regard to the nature of the building the Tribunal prefers Mr.
Dineen's area for valuation purposes. Mr. McMillan in arriving at his
opinion of value for the extension valued the new space at €116 per
sq. metre in line with the level of value attributed to existing buildings
CB1 and CB2 at the 1999 and 2000 revisions. Mr. McMillan contended that
to value the new accommodation at a higher level would be perverse since
the 1999 and 2000 revisions effectively established the tone-of-the-list
for buildings of this type at this location. 8. Mr. Dineen in his evidence said that he did not feel himself constrained
by the existing levels of value attributed to the buildings CB1 and CB2
i.e. €116 per sq. metre as determined at the 1999 and 2000revisions.
These valuations he said had been determined without reference to the
capital costs incurred which he contended represented the best evidence
of value. In this instance his opinion of net annual value of the extension
(i.e. €194,790) was if anything in his view reasonable having regard
to the capital costs of €13.1 million. Mr. Dineen said that his opinion
of value was well-supported by his comparisons particularly comparison
No. 5, i.e. the Hydrogenation Plant at Pfizer Ballybricken also occupied
by Pfizer. This valuation which was carried out at the 2003 revision represented
the most recent tone in the area and accordingly could not be ignored.
9. The property concerned in this appeal is the entire complex and not
just the most recent extension. However, in arriving at their respective
opinions of net annual value both of the valuers followed the established
practice of valuing the additional accommodation in isolation and then
bolting on the valuation so determined to the existing assessment, the
only point of divergence being the appropriate rate per sq. metre to be
adopted to the new space. 10. Mr. Dineen's approach in looking at prevailing levels established
in the area and not just within the plant itself is consistent with Section
49. That said, however, it does not mean that the existing levels applicable
to the buildings CB1 and CB2 can or must be disregarded. All evidence
of value is relevant but most weight must be given to that comparison
or comparisons which most closely resemble the property to be valued in
terms of location, nature of construction, design, configuration and use.
It is common case that the most recent extension provided at this plant
is identical to the existing buildings CB1 and CB2 in all respects. Hence
it is fair to say that they are the most relevant comparisons. The Tribunal
notes that the valuation attributable to buildings CB1 and CB2 were agreed
at first appeal stage at the 1999 and 2000 revisions and hence in the
light of the comments of this Tribunal in Ray Murray v The Commissioner
of Valuation (VA96/4/035) this evidence cannot be lightly set aside. In
the circumstances therefore the Tribunal has come to the conclusion that
the most recent extension to the building CB1 should be valued at the
existing rate per sq. metre used at the 1999 and 2000 revisions when buildings
CB1 and CB2 were valued at an agreed rate of €116 per sq. metre.
Such a conclusion is consistent with Sections 48 and 49 of the Valuation
Act, 2001. Determination Previous Net Annual Value as agreed €2,320,000 |
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