Navarrre Beach Leaseholders Lease Credit on Tax

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Navarrebeacher
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Sat Sep 19, 2009 12:05 pm

Monday 9-21-2009 BOCC has Navarre Beach Leasholders Credit on the agenda for discussion as follows:
The issues are:
1. Can the County authorize a lease credit policy?
2. Is the current policy equitable.

Santa Rosa County has given this credit back for selected leaseholders since Nov 1, 2001. After eight years it is time that this issue finally gets BOCC attention.

According to the Attorney General Opinion of Aug. 8,2008, AGO2008-43, Escambia County cannot credit leasehold fees back to offset ad valorem taxes for commercial leaseholders. IT IS UNCONSTITUTIONAL

Also according to AGO of Feb. 12, 2007. AGO2007-20, The City of Port Richey cannot rebate ad valorem taxes to the purchaser of new residential property to stimulate sales of property. IT IS UNCONSTITUTIONAL.

In both the Escambia and Port Richey cases there is no provisions in the Constitution to give credit back or offset propety taxes according to Florida Supreme Court Case law as of 1978 in Archer v. Marshall.

Santa Rosa County has been crediting back lease fees to selected perferred leaseholders since property taxes were assessed on NB in 2001. Almost all residential houses and townhouses have not received this credit back against their paid taxes but condominium units get credit back. Under present county tax rules single family residents and most townhouse leaseholders are required to pay tax on rented lots, tax on rented houses and in addition pay leasefees.

As a residentidential leaseholder that pays taxes and lease fees on NB, I am very much concerned about the legality of this SRC tax policy.
I am sure this will be matter of futher court action if it is not resolved in accordance with the State Statutes and Case Law on Monday.

It should be an interesting BOCC meeting Monday.
Last edited by Navarrebeacher on Sat Nov 22, 2014 1:39 pm, edited 1 time in total.
Navarrebeacher
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Mon Sep 21, 2009 3:42 pm

Very little was accomplished at the BOCC meeting today except to possibly raise leasehold rates against Summerwinds Condo's to the highest lease rate. SRC County Attorney wrote the contract and the Summerwinds attorney seemed to think it was OK.

The legal issue of giving back lease credits against property taxes was not spoken to. All decisions were put off for further discussion.

What else would you expect since the State law has been ignored for eigtht years? It was a given that the recommendations would not be in the leaseholders favor.

SRC has their own rules and does not have much regard for contracts or compliance with State Law.
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Navarrian
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Mon Sep 21, 2009 4:58 pm

Navarrebeacher,

Seems to me you would want to write the County Attorney and ask his legal opinion of your two questions, then proceed. Did you really expect a legal answer from the BOCC? Who do you think they go to for a legal opinion? I think you are in the right church...but wrong pew.

Navarrian :D
Navarrebeacher
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Mon Sep 21, 2009 8:13 pm

Good comment and suggestion Navarrian. I am about eight months down the road after the letter writing action. I think I am in the wrong church with possibly no pew. I did get a response from the County Attornery on June 1, 2009.

Mr. Dannheisser disagrees with the Attorney General Opinion because the AGO 2008-43 was written to the Attorney for SRIA on PNS Beach in Aug. 08. Mr. Dannheisseer states in his letter to me that SRIA has limited power and that SRC has home rule power. Apparently Home Rule authority gives SRC the power to thumb their noses at the Supreme Court Case law and the State Constitution. IE. it is legal to give tax credits on NB but illegal to do so for leaseholders on Pensacola Beach and elsewhere.

Other home rule authorities are not allow these tax exceptions to offset property taxes. In AGO 2007-10 to the Attorney for the city of Port Richey, which has home rule authority, the City Attorney was told that such action of giving credits back against ad valorem taxes was unconstitutional. Both these AGO's were based on the Supreme Court Decision of 1978. Archer v Marshall.

I and many others disagree with the County Attorney's opinion. He states that only a court could determine the matter. The solution offered by the County Attorney today was to increase the leasehold for Summerwinds to .4% of 1% of the appraised value which are the highest lease rates on the island. That way everyone would have to pay something!
My main question is: Is SRC being fair and following the state law?

Raising the lease rate on Summerwinds does not answer the leagal question and having everyone pay something is not equitable or fair taxation.

We may have to wait and wait and wait as no resolution action was taken today.
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Navarrian
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Mon Sep 21, 2009 9:59 pm

Sounds like the county attorney framed the legal issue for you.
Does Home Rule Authority give Santa Rosa County the right to subjugate case law contained in St Supreme Court decision Archer v. Marshall 1978, and applicable AGOs/ State Constitution?

Unfortunately, I agree with Mr Dannheisser. The courts are the right venue to resolve the issue. As a citizen I agree with your assertion of an equitable lease credit policy; however, case law is established everyday in the courts around the state. That is what attorneys are bred for :lol:

Perhaps a middle road solution would be to save the taxpayers of the county (Mr County Attorney)a long court battle via ...mediation on the issue. Perhaps Mr Dannheiser would be agreeable? The BOCC might even listen.

If mediation were to fail, court would still be available, but what if an agreeable solution could be obtained? Just food for thought....

Navarrian :wink:
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Pete
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Tue Sep 22, 2009 7:06 am

This issue in particular, and the taxing of leasehold island land in general - has been a long time in the making - will take awhile to sort out.

There does need to be an equitable way to set things up so that everyone is has equivalent "liability" (based on "value" of the property) for payment to county - taxes, leases, fees combined (not counting "site-specific" services/MSBUs, etc.).
That way if you own a $250K "value" (market comps) dwelling on the "mainland", or condo on the "beach", or indivudual house on the "beach" - the combined total to the county should be equivilant for all three.
If that takes changes in county, state, or federal law - then should be persued.
Last edited by Pete on Sat Sep 26, 2009 8:46 am, edited 1 time in total.
Cheers, Pete
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Navarrebeacher
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Tue Sep 22, 2009 11:16 am

Perhaps I have found a new church but I am still looking for a pew.

I love this island and lived on PNS Beach as a student in the early 60's. I have been a regular on NB since 91 and a leaseholders since 93.
Based on the above you see that I am not young enough to fight this tax/ leasehold thing much longer. The leasehold tax situation has been on and off in the local and state courts for the last 37 years on Santa Rosa Island and 8 years on NB.

I agree with Navarrian and Mr. Dannheisser that only the courts can make a decision on the leasehold tax credit situation. :( I do not think Mediation would be possible as the only solution suggested at the meeting would increase lease revenue for the county. The taxpayers of SRC however do not need another lawsuit. A half milllion was recently spent on the prayer in school thing. Team Santa Rosa just hired the Andrews firm to save their behinds from violating the sunshine law and the Tax Appraiser has spent over a milllion dollars of our money on the leasehold tax issue. Most of us leaseholders cannot affored to file and persue legal action against SRC on this new legal tax issue. The County Attorney and Tax Officials know that. They have deep pockets thanks to the taxpayer.

As it has been for the last eight years no one can afford to fight County Government except through class action and funds are being bleed dry as we speak on the overall tax legal issue. Lawyering by SRC is wearing the leaseholders down and for them that is a good strategy.

Most of us did not know that this inequity on lease credits existed until we got a letter from the Finance department in 2008 informing us that we might be elgible for a rebate against property taxes paid. Mr. Dannheisser informed me that my lease does not qualify. My lease is the highest lease rate of .4 of 1% of the assessed value. I think there are about 818 of us with the new and amended leases of 1974. Now Summerwinds will be joining our ranks if the BOCC approves what was discussed on 9/21/09.

Perhaps some State or Federal court could step up and resolve this issue. Perhaps some good legal mind on this great forum could speak up and give me/us some more suggestions for equitable solution to this issue.
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Navarrian
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Tue Sep 22, 2009 1:39 pm

Navarrebeacher,

Here is a site that explains the ADR/Mediation program available in the State Court system.
http://www.flcourts.org/gen_public/adr/index.shtml

In general a neutral third party is appointed to help both parties close the gap on the dispute.
IMHO this process is in the best interest of judicial econony and is highly supported by most the legal community.

Navarrian 8)
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Wed Sep 23, 2009 11:17 am

If the resolution would hold up, you would think it would have to be the same for ALL beach owners. This means every lease would have to be amended to reflect a standard fee. The dealings from one property to the next would have to be corrected. This would involve every property, every condo.

I see a lot of attorneys getting rich from this one.
Navarrebeacher
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Wed Sep 30, 2009 9:16 am

Good Morning :lol:
Hey, I did not mean to create a imperfect storm in Paradise.

My goal is and has been to have Santa Rosa County honor the implied and expressed contract that I signed in 1993 and abide by the law. I was told I would pay lease fees only by my trusted realtor, the local banker at Sunshine Bank, Jim Parish, the mortgage lender, Glenda Delaney of Regions Bank and the county tax officials at the south end office that I paid a lease fees on Santa Rosa Island property and that I did not have true ownership.

I was told I would pay a yearly fee on the lot and when I built my house that the leasehold would go up to .4of 1% of the appraised value of the lot and house when completed. These folks were trusted professionals and had been active in the community a long time. Glenda even lived on PNS Beach and knew both NB and PNS contracts well.

I also was well aware of the promise that I would pay no ad valorem taxes for life on a 99 year lease. Such as; " A special 99-year lease plan enables posession of waterfront lots for as little as $337 a year with no property taxes"and "imagine NO advalorem TAXES for LIFE"
I lived on PNS beach in the 60's. I have copies of the Santa Rosa County Beach Administration advertisements.

I signed my lease with Santa Rosa County in good faith and I expected them to honor their end of the contact.

My issue is not to penalize leaseholders that have legal contracts different from mine. My issue is to see truth and justice after 8 years of economic disruption on this matter.

I appreciate those that have made comments and suggestions.
Thanks
Navarrebeacher
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Wed Sep 30, 2009 5:25 pm

I think every beach resident agrees with your statements. That is why there is beach litigation. Although it seems to have stalled. It also seems this si a way to try to kick start it. I think there is a better avenue for this.
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Pete
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Thu Oct 01, 2009 8:02 am

Yea, there has to be a better way.
And getting rid of the whole "lease-hold" thing and giving full title would be my preference - but, as all know, that would literally require "an act of congress", as well as sorting out the entanglement with Escambia county - (and does the state have an "entanglement" too?)

To me - folks who live in the county - whether beach or not - should be treated the same - the basic property taxes/fees/lease payments paid to the county and schools for the same value dwelling should be essentially equal.

It was my understanding that under just "leasehold" (w/o "ad valorum" property taxes) the beach was paying a lot less for the same value property. Now, it appears, that the beach would/could/does pay more for the same property value (lease plus ad valorium).

Maybe the "lease" payment needs to be linked - and equivialent - to ad valorium.
As long as lease-holders can buy/sell the leased property, etc. - and keep any "profit" (or suffer the loss) - then having only lease payments (unless they equal what ad valorum would be) do not make sense (to me).
But if, like "mainland' property, the "landlord/owner" (county) would get to keep any "profit" (or suffer the "loss") in property value when the lease changes hands - then just lease payments (that are less than ad valroium) do make some sense (to me).

But as long as the leaseholder gets almost all the advantages (and disadvantages) of effective ownership - then their county/school taxes/fees/lease payments should be the same as those on the "mainland".
Last edited by Pete on Fri Oct 02, 2009 6:59 am, edited 2 times in total.
Cheers, Pete
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Navarrebeacher
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Thu Oct 01, 2009 5:40 pm

Agreed Pete and Beach girl :) . There must be a better way!

In 1971 this issue could have been solved very easily if both Santa Rosa County and Escambia County worked together to get Fee Simple title on sale of all beach property. That was the years 71-73 that Escambia Co. tried to tax all of Santa Rosa Island and failed in the courts.

With fee simple on sale every property that changed owneship would have came under fair advalorem taxation. Historically recreational property changes ownership in 7 years. By now almost everyone would have had title and paid taxes equitably like eveyone on the mainland.

Okalossa County got fee simple title to their island in the 90's and it went pretty well. In 2001 the Okalossa Property Appraiser told me. "Why don't those folks in SRC give me a call, it wasn't that complicated.

Unfortunately the boom days are over on NB. This short sighted economic limbo created by SRC officials has hampered tourism, nearly killed beach residential and commercial development and added to the present catastrophic property value decline on NB. :(
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Pete
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Fri Oct 02, 2009 7:19 am

Yea, as before - conversion to fee simple title is the "cleanest" path to equibility - IMHO.

As for "catastrophic decline" in NB property values - interested in more info. Yes, I know it has been so since the "artificial" highs of 2005-06 or so. (ditto on the mainland - have a neighbor that bought in summer of 2005 - the very peak, I think - and is down in value/comps by at least 30% - outch! Hope he doesn't have to move/sell soon. (And who he bought from, an AF officer, who had bought in 2003, did VERY well - got "lucky"?)

But is the beach below the values it had in 2002-2003?

I bought in 2002 - and my comps/value today is still up by maybe 20-25% from then. Positive +3% per year is not all bad.
Yea, I maybe was up - on paper - by 80+% in 2005-06 - but that was "artificial" bubble. Most "sensible" folks should have figured that out. Yea, there were some "flippers" who hoped for someone to come along (ever hear of the "greater fool theory"? - it is a bit like musical chairs) - and if a "flipper" got caught - I have little sympathy, as they helped drive up the artificial price bubble.
Cheers, Pete
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Navarrebeacher
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Fri Oct 02, 2009 2:28 pm

I am no realtor, flipper or economist. I am a retiree.

Perhaps my word catastorphic was harsh. For all those that bought lots or singlefamily houses in 2003 thru 2005 on NB the term probably fits :cry: .

On December 8, 2008 Albert Burney Auctioneers held an auction on the island. 30 lots and an expensive Gulf front house were on the block. Only two bidders showed up to bid and chose not to meet the reserve. Most property was advertised at about half of appraised value. The auction was canceled and no lots or houses sold. In December I could look out my window and see seven foreclosed houses. Today I can see only two but they are not the same houses. The bailed out banks are presently selling the properties at about 40% of the county recorded values.

This auction and the present foreclosures on the island apparently cought the attention of the County Property Appraiser, Greg Brown. My tax appraised value on the county owned lot went down over 53%. My rented house and lot value went down $90,000 and a neighbors went down $125,000.

I still was required to pay my lease fee by tomorrow but some perferred leaseholders did not. They got the lease fee credited back under SRC unconstitutional tax fairness doctrine. :(
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