The current legal dispute between Victoria University and GE Canada Real Estate Equity is regarding the university-owned land currently occupied by the Colonnade building on Bloor Street West. The appeal by Victoria University involves the meaning of the “fair market value of the demised lands,” referring to the land on Bloor Street West. Victoria University reportedly continues to raise the amount of rent for said building.
The issue of focus is concerning whether or not the value of the “demised lands” should take into account a potential use (e.g. condominium development) that is currently impossible due to the fact that the land is subject to a lease.
The court held that, although rent under the 100-year lease at issue resets every 20 or 30 years, this should not be interpreted as permitting the parties to continually dispute the interpretation of the lease, as well as the principles to be applied in setting the rent. Unlike a large portion of universities in Ontario, Victoria University is exempt from paying taxes on leased properties regardless of whether or not they are being used for educational purposes.
Additionally, Victoria University has been planning on giving this highly sought after piece of land to developers, in return for leasing fees of a great enough magnitude such that the costly rental fees would be covered. The university has also considered renting out the leased property on an hourly basis to increase profits. Although there has been sparse news regarding this potential development, it was revealed this past June in The Varsity that Victoria University had allegedly avoided paying millions of dollars in property taxes on these lands. This is attributed to an oversight in the Victoria University Act; which, as mentioned, exempts the university from paying taxes on leased properties.
Although I am a Victoria University student, I was never informed of the existence of this dispute until the composition of this article. Many undergraduate students, primarily in first or second year, have also never heard of this case. In addition, several were shocked to hear that Victoria University owned property on Bloor Street West.
Furthermore, this dispute is unlikely to ever completely be resolved, as the terms of the rental agreement are constantly being debated, and fluctuate depending on the individuals engaging in the discussions. Whether this land will one day be transformed into high-rise condominiums, or remain mostly vacant student residences, every 30 years new terms of the rental agreement must be discussed and reconsidered from the perspective of both parties involved.
Editor’s Note: Malcolm Musgrove, Chair of the Property Comittee on Victoria University’s Board of Regents states “Victoria is not “planning on giving this highly sought after piece of land to developers”. and has never considered doing so. The land and the rent it can generate are seen as a permanent source of valuable funding to support the university’s academic mission.” Also, Victoria has never considered renting out the leased property on an hourly basis.
Musgrove says that the rent is set and is constant until it resets (usually every 20 years).It is not Victoria that sets the rate, but an arbitration process. Musgrove states, “All property
taxes on these properties are being paid, and Victoria University is fully compliant with
all taxation legislation.”
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