City says MLSE is more than $1 million behind on taxes, company disputes charge

One of the city’s oldest, best-known sports corporations has found itself on a dubious list.

Maple Leafs Sports and Entertainment — owner of the Toronto Maple Leafs and the Toronto Raptors, among other pro sports franchises — has been named one of Toronto’s largest property tax debtors, with an unpaid bill of roughly $1.18 million, dating back to the 2019 tax year.

That number came to light at April’s meeting of the city’s general government committee, when the annual list  of largest property tax debtors with tax arrears greater than $500,000 was made public.

MLSE disputes that charge and says it’s in discussions with the city to resolve the issue.

Regardless of what’s going on behind the scenes in terms of appeals or negotiations, one city councillor and former Exhibition Place board member says MLSE should pay the bill now and try to recoup the money later if  it feels it’s being taxed unfairly.

“I can’t imagine what it would be like for our city’s administration if the tax money stopped flowing every time somebody raised a concern or an appeal,” Coun. Stephen Holyday said. “That’s why people are still expected to remit their taxes, and then the process will unfold in a very organized way and the accounting will be done at the end of that process to straighten it all out.

“But in the meantime, the taxes still have to be paid to the city.”

MLSE says it’s neither owner nor tenant of BMO Field

The disagreement is over BMO Field at the city-owned Exhibition Place. Traditionally, organizations that rent at Exhibition place pay property taxes to the city as a portion of their lease payments.

MLSE’s Toronto FC and the Toronto Argonauts both play out of the stadium. But MLSE said in a statement to CBC Toronto, it operates at BMO Field under a “management agreement” with the city, and the teams pay the city a “user fee” — not rent. As a result, they shouldn’t be tagged with a property tax fee as traditional tenants at Exhibition Place like Medieval Times or the Liberty Grand, the company argues.

“The ultimate responsibility for the payment of realty taxes rests with the owner,” the MLSE statement reads. “And MLSE is neither the owner of the property nor a tenant.”

The company says there’s a difference between its agreement with the city on BMO Field and the other two Exhibition Place properties it leases for the Leaf’s minor league team, the Marlies, and for the Raptors’ practice facility.

“As is publicly known, MLSE leases two properties on the Exhibition Place grounds, OVO Athletic Centre and Coca-Cola Coliseum, where all rents and taxes for which it is responsible have been duly and punctually paid,” the MSLE statement reads.

MPAC says it determined field is taxable

The controversy over BMO Field appears to have begun in 2016 as MLSE finished enlarging and upgrading the facility. Those renovations caught the eye of the Municipal Property Assessment Corporation (MPAC), the agency that’s tasked with deciding the value of every property in the province and passing that information on to municipalities so they can determine how much the owners should pay in property tax.

“BMO Field was previously exempt from taxation,” MPAC said in a an email to CBC Toronto. “There were renovations and additions to BMO Field in or around 2016 that caused MPAC to review the entire property. In addition, in 2014, MLSE entered into a new Management Agreement for BMO Field, which was not provided to MPAC until in 2018.”

The statement goes on to say MPAC analyzed that agreement along with various other documents and relevant case law, and determined that BMO field should be “liable to taxation.” Citing statutory obligations, MPAC says it was required to make the property taxable back to 2018.

That decision was issued in 2020 and MLSE appealed, but those appeals have been resolved and MPAC’s ruling that the field is taxable stands, it says.

“If MLSE wants to have BMO Field made exempt from taxation, it would have to serve MPAC and the City of Toronto with an application under Section 46 of the Assessment Act for an order declaring BMO Field exempt from taxation.  The application would be heard in the Superior Court of Justice,” the MPAC statement reads.

MPAC says it has not been served with such an application.

Exhibition Place CEO hopes for resolution by fall

City staff appear to be washing their hands of the controversy, directing inquiries to the board of Exhibition Place, the city agency that manages the property and collects taxes on behalf of Toronto.

Exhibition Place CEO Don Boyle wouldn’t name the company that was in arrears.

He told CBC Toronto he’s confident an agreement will be reached. But until that happens, “we would prefer our one tenant who right now is not paying their taxes — and don’t believe they should be taxed — we think they should be paying their taxes and then seeing what the results of the appeal are at the end of the day.

“Currently they get charged 1.25 per cent per month interest on the outstanding tax balance, so that will increase over time. It’s always better to pay your taxes while appealing it.”

“They’re an excellent tenant,” he added. “They’re a great partner in so many ways here on our grounds, we just hope to get it resolved as soon as possible.”

Boyle said he anticipates the disagreement will be resolved by the fall.

MLSE says it’s confident the issue will be settled fairly at the end of the day.

“We continue to work with the City and Exhibition Place to find a fair and equitable solution to address this change in position by MPAC, which does not reflect the intentions all parties had for BMO Field and how it had been treated up until 2016.”