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Appeal No. VA06/3/009
AN BINSE LUACHÁLA Orlego Ltd. APPELLANT RE: Hotel, Grounds at Lot No 4B, Gallowshill, Athy
Rural, Athy 1, Kildare, County Kildare B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By Notice of Appeal dated the 14th day of July, 2006, the appellant appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation of €770.00 on the above described relevant property. The grounds of Appeal as set out in the Notice of Appeal are: "(a) The hotel is situated outside the town of Athy. (b) The hotel does not have a leisure centre." The appeal proceeded by way of an oral hearing, which initially took place in the offices of the Tribunal, Ormond House, Ormond Quay Upper, Dublin 7, on the 17th October, 2006. The Appellant was represented by Mr. Nicholas McAuliffe, ARICS, and the Respondent by Mr. Bríain Ó'Floinn, a District Valuer with 31 years experience in the Valuation Office. At the commencement of the hearing the Appellant's Consultant Valuer informed the Tribunal that he had not seen or received a copy of the précis of evidence or written submission of the Respondent. It then became clear that the Respondent had similarly not seen or received a copy of Mr. McAuliffe's précis of evidence. Following a short debate on the issue, the Tribunal had no choice but to order an adjournment of the hearing to provide for exchange and review of each party's submissions and to agree the floor areas of the subject property, and the hearing was re-scheduled to 2nd November, 2006, at the same location. In accordance with the Rules of the Tribunal, the parties exchanged their respective précis of evidence prior to the commencement of the re-scheduled hearing and had previously submitted same to this Tribunal. At the oral hearing of 2nd November, 2006, both parties, having taken the oath, adopted their précis as being their evidence in chief. This evidence was supplemented by additional evidence given either directly or via cross-examination. From the evidence so tendered, the following emerged as being the facts relevant and material to this appeal. In addition, the Tribunal was provided with supplementary photo images by the Respondent numbered as figures 41 - 47 inclusive, all of various elevations of The Heritage Hotel, Portlaoise, attached to a covering note from the Revision Officer, Mr. Ó'Floinn, addressed to the Registrar, with a copy to the Appellant's Consultant dated 23rd October, 2006, which also included 3 No. corrections to errors in Mr. Ó'Floinn's submission, all of which are copied hereto as Appendix No. 1. As there appeared to be a disparity in the measurement of the floor areas, as outlined in the submissions of both parties noted at the first sitting, the Registrar made contact with the Appeal Officer in the Valuation Office, who in turn replied by e-mail on 31st October, 2006, with a copy again also to the Appellant's Consultant, confirming that the floor areas had been agreed, as follows: Hotel: 3,600 sq. metres The Property The construction cost, excluding site value, was reported at six million Euro. The property is located between 1 and 2 kilometres north of the town of Athy and just off the N78 route to Dublin and enjoys good visibility from the main road. The site comprises of circa 8 acres, part of which abuts the N78. Accommodation includes at ground floor: lobby, administration offices, toilets, bar, cold room and beer store, function room, chair store, kitchen, staff toilets and changing rooms, goods stores, boiler house, 2 no. meeting rooms, restaurant, linen cupboard and 17 no. bedrooms. First floor includes 21 no. bedrooms, laundry and store room. The floor areas were agreed, as noted above. Tenure Valuation History Without a change being effected by the Commissioner of Valuation on the RV figure of €770, the Appellant, again through its Agent, filed a Notice of Appeal to the Valuation Tribunal dated 16th July, 2006, seeking a reduction in the Rateable Value from €770 to €439. Then, as noted above, the Commissioner advised the parties prior to this hearing, that the RV would be further reduced as a result to an adjustment on the floor areas, to a figure of €750. Appellant's Case • The hotel is located approximately 2 kilometres out of town. In referring to his comparison properties identified at Appendix 2 attached
hereto, he noted that all four were located in Co. Kildare, and confirmed
that his primary comparison would be the Liffey Valley House Hotel, located
approximately 12 miles from Dublin city centre, with 27 bedrooms and an
RV (1999) of €380. He also reviewed details of the other three comparison
properties he offered, namely The Ardenode Hotel, being a 17 bedroom facility
in Ballymore Eustace, The Hazel Hotel in Monasterevin, with 24 bedrooms,
and the 43 bedroomed Straffan Court Hotel in Maynooth. Mr. McAuliffe reported that he had calculated the proposed Rateable Valuation figure adopting a comparable method on a square metre basis, determining the Net Annual Value of the hotel to be the gross floor area of the subject property multiplied by €25 per sq. metre and applying the appropriate reduction factor of 0.5% to calculate a projected Rateable Valuation of €439. Cross-examination Addressing the Comparison property no. 2 in the Appellant's submission, being The Hazel Hotel, Mr. Ó'Floinn noted that the quoted B & B rates were similar to those of the subject. Mr. McAuliffe acknowledged that the condition of The Hazel Hotel appeared "a little tired" and would benefit from improvement works, and acknowledged that it is a 2 Star graded hotel. Viewing images 19 - 24 provided by the Respondent, Mr. McAuliffe could not confirm if the Hazel Hotel appeared different or similar to the subject, at which Mr. Ó'Floinn queried Mr. McAuliffe's knowledge of the false roof at the front elevation, which gave the appearance of a pitched roof to The Hazel Hotel. Mr. Ó'Floinn asked if the subject hotel was designed and built to 4 Star standard, to which the Consultant Valuer replied that the aspiration of the owners was to achieve a 4 Star classification, but due to circumstances earlier noted, does not now merit same. In reply to a further query from Mr. Ó'Floinn, the Consultant Valuer acknowledged that his Comparison property No. 3, being The Straffan Court Hotel was classified as a 2 Star Hotel, and located outside the village of Maynooth, but he was not aware of its history or that it was apparently formerly part of a Stud Farm operation, or that the hotel floor area had its NAV determined at a rate of €42.91 per sq. metre. At the conclusion of his cross-examination, Mr. McAuliffe confirmed that he had never seen The Liffey Valley House Hotel, being Comparison No. 4, but assumed that it was built within the last twenty years. He confirmed to Mr. Ó'Floinn that he was not aware that this property was a Georgian house, dating back to 1770, and acknowledged that it was not in the heart of Leixlip village as outlined in his submission, but on the outskirts of Leixlip. Having regard to the agreed gross floor area measurement of the hotel, Mr. McAuliffe then confirmed that his client would adjust the RV being sought, from a figure of €435 in his written submission, to €450. Respondent's Case The Tribunal was informed of the following 2002 census of population statistics for a number of Kildare towns. Newbridge 16,739 However, Mr. McAuliffe contended that the rate of growth in population in Athy from 2002 to 2005 was only 18%, whereas the relative increase in population in the other Kildare towns noted above, was much greater. Cross-examination He then went on to quote in full section 49(2)(b) of the Valuation Act and the interpretation of "existing valuation list" and of "valuation list" from section 3 of the Act. He said that he understood all of the foregoing - i.e. the Orange Tree Ltd determination and the cited sections of the Act - to mean that, in terms of arriving at a NAV for the subject property, he was not confined to comparisons from the rating authority area in which the subject was situated but that he was so confined in arriving at its rateable valuation. Mr. McAuliffe then contended that he could not accept Mr. Ó'Floinn's views on Net Annual Values, albeit on similar comparison properties, from beyond the Kildare Co. Council Local Authority area. He put it to Mr. Ó'Floinn that The Keadeen Hotel was long established, enjoying significant trade with the horse racing community which Mr. Ó'Floinn confirmed in the affirmative and provided a similar reply to a request for confirmation by Mr. McAuliffe that The Heritage Hotel in Portlaoise is at a town centre location, which offers significant benefits to its trading performance. The Consultant Valuer then queried the relative level of use of the car park at the subject, in reply to which Mr. Ó'Floinn stated that on both of his visits there, the car park was quite busy and he viewed it as not merely a necessity to the hotel operation, but an enhancement feature. Mr. McAuliffe questioned Mr. O'Fhloinn on the location of The Seven Oaks Hotel in Carlow, The Dolmen Hotel and The Johnstown Hotel, to which Mr. Ó'Floinn replied that the former and the latter were within urban conurbations and The Dolmen Hotel was sited approximately two miles from Carlow on the Kilkenny Road. Mr. Ó'Floinn, also in response to a query by Mr. McAuliffe, replied that he could not accept evidence that the projected turnover figure at the subject property had not been achieved unless same was confirmed by an Auditor. Mr. Ó'Floinn also would not agree that The Clanard Court Hotel operation was overly reliant on wedding business, a matter contended for by the Appellant Consultant. Mr. McAuliffe put it to Mr. Ó'Floinn that the cost of building the structure had little to do with the value of the property, to which Mr. Ó'Floinn replied that he did not equate cost to value, in this exercise. Queried by a Tribunal member, Mr. Ó'Floinn declined to specify any of his five comparison properties as being most appropriate for the purpose, indicating that in his view as a Valuer, the exercise of valuing a hotel is a "synthesis of experience". In reply to a further query from a Tribunal member on the attributes of Athy as a trading centre, Mr. Ó'Floinn expressed the view that, scenically, the town is very attractive, with a river running through the centre and noted that the town is registered as a Heritage town. He also acknowledged that The Heritage and Keadeen hotels are 4 Star hotels and that the subject is a 3 Star hotel, though he had earlier said that it was registered as a 4 Star property. Findings & Determination 3. The hotel part of the subject property was rated on the basis of an NAV calculated at €37.58 per sq. metre. 4. The Tribunal notes the agreement between the parties on the area of the hotel calculated at 3,600 sq. metres. 5. As there was not a challenge to the rate per sq. metre calculated by the Commissioner on the courtyard, bottle store and enclosed yard, the RV of €5.60 remains. 6. Trade at the subject property is heavily dependent on securing wedding receptions and group business, in part due to the absence of a modern Leisure Centre. 7. The stand-alone location of the subject property poses real challenges to the successful operation of the hotel, in its present form. Determination NAV And the Tribunal so determines.
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