Di Primo v The Valuer-General [1990] QLC 266

• Re: Determination of unimproved value:- City of Townsville. AV90-247 G, Di Primo -v- The Valuer-General DECISION LAND COURT, BRISBANE. 18th October, 1990. This is an appeal against the determination by the Valuer-General of an unimproved value of $176,000 for Lot 3 on RP 701624 and Lots 1 and 4 on RP 716252, Parish of Coonambelah, containing an area of 764 square metres. This land is situated at 175 Flinders Street East. It has a frontage of 8.2 metres to Flinders Street East, and a depth of 50.3 metres where it abuts and has a frontage of 20 metres to Melton Terrace. Good vehicular and pedestrian access is available from Flinders Street East with difficult pedestrian access from Melton Terrace. The land is zoned "Tourist Facilities" under the provisions of the City of Townsville Town Planning Scheme, and is developed with a shop building to the Flinders Street East frontage. The appellant contends within the Notice of Appeal for an unimproved value of $162,000 but led evidence through Registered Valuer Geoffrey William Eales to an unimproved value of $115,000. [1990] QLC 266 -- 1 of 7 -- - Page 2 - Now this is a difficult topographical site. Registered Valuer John Franklin James, who made the valuation assessment on behalf of the respondent Valuer-General, describes the nature of the land as having a steep rise to Melton Terrace with the Flinders Street East frontage being excavated for the shop and the rear of the site being terraced. Mr Bales says the site is level at the Flinders Street East frontage to a point 17 metres from the front alignment where the shop building ends. The building platform has been excavated with an estimated 80 cubic metres of rock having been removed. Mr Bales describes the balance of the site as rising steeply approximately 20 metres in height to the rear boundary. The rear area has been terraced by the construction of reinforced concrete retaining walls. Mr Bales values the land as follows:- 8.2 m frontage@ $18,000/metre Less shallow depth 35% Less Retaining Wall Less Excavation Add 560 m2 steep rear land @$50/m 2 $4,500 ~ $147,600 $ 51,660 $95,940 $ 8,900 $87,040 $28,000 $115,040 Adopt $115,000 It transpires in evidence that the balance area of the steep land should have been 624 square metres. Mr Bales' valuation then adjusts to $118,240. Mr James' valuation reads:- 8.1 m frontage @ $21, ooo Less 20% shallow depth (to 25 metres) $170,100 $ 34.020 $136,080 -- 2 of 7 -- ( - Page 3 - Carried Forward Less costs of excavation to 25 metres and retaining of rock wall ? Plus balance - 560 m- @ $100 Adopt $176,000 Mr Eales relies mainly upon the following sale:- $136,080 $15,600 $120,480 $ 56.000 $176,480 Sale No. 1 - Allotment 7 Section 36 and Lot 1 on RP 37869, Parish of Coonambelah, containing an area of 1952 square metres on 23rd December, 1988 from Townsville Transport and Services Pty Ltd to Rental Investments and Hair 2000 Pty Ltd for $750,000 - zoning "Commercial". Situation corner Denham (113 to 115) and Hamilton and Walker Streets. Mr Eales says this sale shows a rate of $16,854 per metre frontage to Denham Street after allowing 30% for corner influence and rear access. It also shows $296 per square metre. Mr Eales calculates the frontage of 34.23 metres to Denham Street after allowing for a rather large truncation on the corner of Denham and Walker Streets. Although Mr Eales cites three other sales in his tendered valuation document, he claims this sale is the most relevant in the area. It is on the fringe of the Central Business District and was structurally vacant at sale date. By way of comparison he sees the subject land also as being on the fringe of the main business area and away from the general office area in Flinders Street East. He sees the subject land as having more value due to its retail potential. Mr Eales relies basically upon his experience and opinion in valuing the balance area. Mr Eales has had regard to the relatively shallow depth of the available land and claims it would be uneconomic to develop the site past the existing developed depth of 17 metres due to the cost of rock excavation. Mr Eales contends that there was, just before relevant date, a maJor econormc downturn in Tourism in the subject area. The Magnetic Marine Ferry Terminal was closed just prior to relevant date (this is situated opposite the subject land). The ferry service was by then already operating from a new facility downstream, and as I understand the evidence, the ferry facility opposite the subject land has since -- 3 of 7 -- - Page 4 - been reopened following public pressure. Brief evidence was called from the appellant Guistino Di Primo. He says business at the site has been very bad for the last three years. He blames the Brisbane Exposition for the problems in 1988, then the pilot strike, after which he says the situation in the Tourism industry has become even worse. He points to the closure of the Greyhound bus terminal further down Flinders Street East as also causing a drop in the number of pedestrians in the area. The terminal is now located in a transit centre to the south of Ross Creek. Now Mr James also relies on the sale of 113 - 115 Denham Street, on 23rd December, 1988 as his principle basis of valuation for the Flinders Street East frontage of the subject site. He says it shows approximately $16,400 per metre frontage standard rate over the actual 40.23 metre frontage to Denham Street (without the truncations). He has allowed 15% for corner influence and rear access to arrive at his standard value rate. Mr James informed the Court that all of the sites in the subject part of Flinders Street East have been valued to a standard depth of 25 metres. He is aware that the existing development does not extend back that far, but has used an old Townsville City Council Sewerage Plan to provide him with some idea as to spot levels along that part of the street and this indicates that, for the most part, 25 metres back from the street alignment is available without excessive rock excavation. In addition 25 metres seems to be the average depth of all the buildings in that area. He values the rock excavation at $11,000 and the retaining wall at $4,500 with some added value for minor drainage costs. This allowance was made by Mr James for a notional wall across the 8 metre block to a height of 2 metres. He says if excavation proceeds back past 25 metres, then the development would be too costly and uneconomic. -- 4 of 7 -- - Page 5 - Mr James also believes the Flinders Street East portion of the subject land is more valuable than the sale land at 113 - 115 Denham Street due to its situation being in a more tourist orientated retail area whereas 113 - 115 Denham Street is more in a commercial area. The appellant led some evidence as to the cost of rock excavation for the whole site and for that necessary to excavate the site to 25 metres depth. I am not influenced by this evidence since it was in the form of tendered letters, the authors of which were not called. In addition, it seems that the Valuers are only slightly apart in their respective estimate of costs for excavating rock ($50/cubic metre and $55/cubic metre). Mr James relies on a sale of Lot 3 on RP 727098, parish of Coonambelah, containing an area of 756 square metres on 10th January, 1989 for $85,000 ($111/m2) to value the rear land. This site is a "Residential D" zoned block at 131 Blackwood Street West. Vehicular access is steep and narrow to the frontage of the property which has a very steep and rocky slope with excellent bay views. It seems to me that as a site, this sale land should fetch more per square metre than the balance area of the subject land since it is capable of being built upon (single dwelling) and has access albeit quite difficult. The subject rear land has no vehicular access from Melton Terrace and the Valuers agree that its value really is as a holding proposition pending road re- construction one day in Melton Terrace after which the access situation may be improved. I must say here that Mr James freely acknowledges that he does not place much weight on the sale in Blackwood Street West Mr James is in agreement that if the subject site could only be valued to a depth of 17 metres, then an appropriate shallow depth factor would be 35 %. He bases this opinion upon his research into old departmental valuation records. There is no -- 5 of 7 -- ( - Page 6 - doubt that this is a difficult site and it follows that it is a difficult valuation. But before proceeding to determination, I should comment that I prefer the analysis of Mr James of the sale of 113 - 115 Denham Street. His allowance for 20% for corner influence and rear access is, I think, more appropriate than the much higher allowance of 30% made by Mr Eales. An allowance of 20% would seem to increase Mr Eales' standard value to $18,258 per metre for the 34.23 metres effective frontage to Denham Street and to $15,625 per metre frontage for the 40.23 metres actual frontage. It transpired in evidence that the subject land has been valued in recent years by another Officer of the Lands Department at the rate of $21,000 per metre frontage. It follows then that I have to be persuaded that the evidence in this case is sufficiently convincing for me to set aside this level of frontage value determination. I am satisfied that the subject land has an advantage over the Denham Street sale land in terms of its additional retail influence. In addition each Valuer agrees that the subject land should be valued at a higher rate per metre frontage than the Denham Street land. On the whole of the evidence, I cannot hold that the Valuer-General has erred in applying a value of $21,000 per metre frontage as a standard rate to the Flinders Street East frontage of the subject land in recent years, and for the purposes of this decision I adopt that rate. I am however not convinced that the land should be valued to a standard depth of 25 metres. At the request of the parties I took a view to the land in their company and there is no doubt the excavation of it from 17 metres to 25 metres would involve huge expense in the removal of a natural rock wall. I adopt the submission by the appellant that this would prove uneconomic, and hold that due regard should be had to the limited depth available. A factor of 35% will be used by me in this decision. I now turn to the value to the balance area. Really the evidence as to its -- 6 of 7 -- - Page 7 - value has to be inconclusive, but for the moment its value is as extra land for future development after the reconstruction of Melton Terrace. If the site was vacant and unimproved at relevant date, (and this must be assumed), then no doubt vehicular access to the rear of the land could be provided from the Flinders Street East frontage but this, of course, would mean the sacrifice of say 3 metres of frontage for retail purposes at the rate of $21,000 per metre (discounted for shallow depth), or about $40,000 worth of land. This seems to me to be too much value to sacrifice to provide access to the rear of the site. Doing the best I can, and hastening to comment that I am equally influenced by the evidence of the Valuers on the point, I find the value of $75 per square metre for the additional land appropriate. I proceed to determination as follows:- 8.2 m frontage to Flinders St@ $21,000/m Less allowance for shallow depth 35% Less .cost of excavation of developed site and retaining wall (as per Mr Eales' valuation) Add 624 m2 steep rear land@ $75/m2 I adopt an unimproved value of $150,000. $172,200 $60,270 $111,930 $ 8,900 $103,030 $46,800 $149,830 ===== Accordingly the appeal is allowed, the determination of the Valuer- General is set aside, and the unimproved value of Lot 3 on RP 701624 and Lots 1 and 4 on RP 716252, parish of Coonambelah is determined in the sum of one hundred and fifty thousand dollars ($150,000). C.H. Carter. Member of the Land Court. -- 7 of 7 --