Halifax Regional Municipality is suing Joe and Anthony Ramia’s Rank Inc., alleging the developers skirted property taxes in the purchase of the big mall in Dartmouth.
The Ramias’ company bought the mall from Montreal commercial landlord Ivanhoé Cambridge in 2021 for an undisclosed sum. They’ve since submitted development plans for the property. They’re proposing more than a dozen buildings up to 36 storeys tall, comprising more than 2,000 new homes.
Any time a property in HRM changes ownership, the buyer has to pay a 1.5% deed transfer tax. It applies equally to single-family homes, large apartment buildings, and commercial buildings like the mall. Property Valuation Services Corporation assessed the main mall property at almost $90 million for 2023. That’s down from $150 million in 2019. If the mall sold, for example, for $100 million, Rank Inc. would owe HRM $1.5 million.
But the municipality claims in a court filing that the company hasn’t paid.
City lawyer Marty Ward filed an application “for an order seeking declaratory relief” on July 11. The municipality alleged Rank Inc. used the transfer of ownership of a numbered company to avoid paying deed transfer tax.
“Legal title to the shopping centre property is held by 4239474 Canada Inc. The beneficial interest in the property is held by a limited liability partnership ‘Mic Mac Mall Limited Partnership’ pursuant to an agreement between the numbered corporation and the limited partnership,” Ward wrote.
“The units of the limited partnership were held by the numbered corporation as the general partner and lvanhoe Cambridge II Inc. as the limited partner. Ivanhoe was also the sole shareholder of 4239474 Canada Inc. giving it ownership and control over both the legal and beneficial interests in the property.”
Numbered company changed hands
Ivanhoé Cambridge transferred all of its shares to Rank Inc. on Sept. 21, 2021, Ward wrote, “thereby transferring the beneficial property interest in the shopping centre and control of ownership to Rank Incorporated.”
Ward argued that means Rank Inc. owes HRM deed transfer tax.
“The Municipality has requested that Rank Incorporated pay Deed Transfer Tax of one and one-half percent on the value of the property transferred but the Respondent has refused,” Ward wrote.
Municipal treasurer Renee Towns is expected to testify for the municipality on the file, along with other witnesses. In an attached affidavit, Ward wrote, “The list of possible witnesses in the Notice of Application is not complete.”
“I anticipate that there may be a need to discover witnesses,” Ward wrote.
“I estimate that the Application will involve one two-day hearing and that this hearing could occur within one month after the discoveries of any witnesses are completed.”
The municipality’s claims have not been tested in court, and Rank Inc. has filed no response.
The two parties are due in Nova Scotia Supreme Court on Aug. 15 for a motion of direction.
And this should be a surprise to absolutely nobody.