771614 Alberta Ltd. v.  Lethbridge (City), [2003] A.M.G.B.O. No. 73, MGB 050/03 involved the assessment of an older 105 room full service Travelodge Hotel.  Occupancy levels and net income had been declining over the three years leading to the assessment.  The main issue was the Appellant’s assertion that stabilized actual income and expenses should be used rather than the adjusted typical income and expenses used by the assessor.  The Appellant also argued that the assessor’s use of one cap rate for all hotels in Lethbridge did not taken into account the different risks between properties.  The MGB agreed but said the Appellant had not produced adequate evidence to support a change.  The assessor had applied net proxy rents to service areas and shops.  The Board took no issue with the approach.  However, it was concerned about the comparability of the premises from which rates were taken to the subject.  But given the lack of reliable evidence from the Appellant, the MGB accepted the assessor’s evidence.

Riviera Hotel (1991) Corp. v. Edmonton (City), [2005] A.M.G.B.O No. 157, Board Order MGB 066/05, provides an example of how the MGB varied the capitalization rate used in the assessment in order to reflect the greater level of risk associated with the subject property.