It’s a ‘wrong number’
Owners of Alexander Graham Bell’s estate disagree with property valuation of $885,200
Descendants of telephone inventor Alexander Graham Bell are saying “wrong number” and appealing the assessment value of his famous Baddeck estate known as Beinn Bhreagh.
Owners of the mansion and property located on a wooded peninsula on Bras d’Or Lake — and given the Gaelic name for beautiful mountain — say not only is the assessed value of $885,200 used for determining property taxes too high, but the adjudicator of a provincial assessment appeal tribunal was biased against Bell and his legacy.
Their next appeal is scheduled to be heard by the Nova Scotia Utility and Review Board in a public hearing May 8 at 9 a.m. in the Royal Canadian Legion in Baddeck.
The owners of Beinn Bhreagh Hall Corp. originally appealed the 2016 tax assessment to the Nova Scotia Assessment Appeal Tribunal, saying the property has been unoccupied since 2006 and a heritage conservation easement and the cost of annual maintenance should have reduced the property’s value.
The owners provided an independent appraisal valuing the property at $475,000 as of Jan. 1, 2016, the midpoint between the cost and comparable methods of valuation, which set the property’s worth at $480,000 and $470,000, respectively.
The appraisal also said the property would need $500,000 a year for two years just for basic maintenance. Bias on appeal
In a written decision dated May 3, 2017, tribunal member Raffi Balmanoukian said the appellants’ arguments have “considerable merit,” but they hadn’t provided evidence to prove the valuation applied by the assessor was incorrect or by how much.
He also said the evidence presented for upkeep costs wasn’t connected to market values.
“This is not to say that for the appellant all is lost for all time,” Balmanoukian said. “I indulge myself by saying, ‘Please hang up and try your call again.’”
But his opening remarks, in which he denigrates the telephone but praises Bell’s contributions to National Geographic magazine, also provided what the property owners said was an additional basis for appeal.
“If Antonio Meucci had renewed his patent office caveat for his ‘sound telegraph’ this appeal may not have been before me today,” Balmanoukian said in last year’s decision.
“Instead, the name Dr. Alexander Graham Bell is forever associated with the telephone, making everything ever connected — if I may be forgiven the use of ‘connection’ — with his name sacred writ to historians and aficionados.
“I confess I am not a fan of his claim to fame. I do however give him his full due to that great contribution to global communication and understanding, a small magazine of magnificent photography and an iconic yellow border — National Geographic.
“I understand the . . . family still holds property in the region. If I remember my high school escapades into Trivial Pursuit correctly, Baddeck at one time was the smallest town depicted on NatGeo’s global maps.”
In addition to confirming an overly high assessment value, the appellant “further alleges bias on the part of the adjudicator, as evidenced in his personal opinions with respect to Mr. Alexander Graham Bell in the opening three paragraphs of this decision,” Bell’s descendants said in their appeal to the UARB.
Onerous easement Balmanoukian dismissed the first appeal, saying history made it interesting but if not for the property’s past and beauty, it likely would have been subdivided and carved up long ago.
“Instead, the property is burdened by an onerous conservation easement, among other restrictions (heritage property designation and access roads),” he said.
“The conservation easement contains positive covenants to maintain and keep the property, apparently at significant cost; provide limited public access; and effectively capture the property as frozen in time. It even requires the owner to disgorge any profit on sale.”
Balmanoukian said despite a discrepancy in the base date used for the owners’ independent appraisal, the comparison method can’t be used on the Beinn Bhreagh property.
“It is one of a kind,” he said. The same argument applied to the provincial assessor, he also said.
“The (Property Valuation Services Corp.) tendered evidence of what it considers comparable properties in the area, and was questioned briefly by PVSC’s counsel, Robert Andrews (by teleconference, an irony not lost on the tribunal),” Balmanoukian said.
Still, the provincial assessor didn’t provide compelling evidence for setting the value of the property, Balmanoukian said.
“I am not certain I accept his opinion that the conservation easement would not affect single-family dwelling value; the flip side of my finding above that the property may not fairly have a half-million-dollar maintenance budget every single year is that it does come with the baggage of a century-old mansion and a legal prohibition against knocking it down and starting over in most reasonable scenarios. As I discuss above, however, that was not further quantified in any satisfactory way to me.”
The adjudicator said he could have accepted the appellant’s independent appraisal of the land valued at $220,000, but decided to side with the initial appraisal that valued the land at $151,000.
The appellant and respondent differed on depreciation rates to be applied to what is an approximately 100-year-old mansion, but Balmanoukian said the rates made little difference in the end value of the building.
And the conservation easement wouldn’t necessarily amount to a barrier to the property ever being sold, he said.
“The lack of marketability … does not in and of itself mean there is no market, or to what if any level it impacts value,” Balmanoukian said.