This meeting is a continuance of the Lake County Value Adjustment Board for 1999. The Board met in regular session on Friday, October 1, 1999, at 10:00 a.m., in the Board of County Commissioner's Meeting Room, Lake County Administration Building, Tavares, Florida. Commissioners present at the meeting were: Catherine C. Hanson and Robert A. Pool. Commr. Welton G. Cadwell, Chairman, was not present, due to another commitment. School Board members present were: Mary Fletcher and Phyllis Patten. Others present were: Valerie Fuchs, Assistant County Attorney; Ed Havill, Property Appraiser; Frank Royce, Chief Deputy, Property Appraiser's Office; Robbie Ross, Tangible Personal Property and Agricultural Operations Director, Property Appraiser's Office; and Sandra Carter, Deputy Clerk.
Commr. Hanson, acting as Chairman, opened the meeting.
PETITION NOS. 1999-141 and 1999-142 - CLARENCE MIDDLEBROOKS
WEKIVA FALLS RESORT
Mr. Clarence Middlebrooks, Applicant, addressed the Board and requested that Petition Nos. 1999-141 and 1999-142 be addressed together, because the issues were the same. He stated that Petition No. 1999-141 dealt with Real Property, being the Wekiva Falls Resort, and Petition No. 1999-142 dealt with Tangible Personal Property. He stated that the only issue dealing with Tangible Personal Property had to do with the Property Appraiser's valuation of the infrastructure associated with the resort property, namely the water and sewer plant and associated collection and distribution lines.
Mr. Middlebrooks requested that Mr. Robbie Ross, Tangible Personal Property and Agricultural Operations Director, Property Appraiser's Office, who handled his case, be sworn in, as well as himself.
Mr. Middlebrooks and Mr. Ross were sworn in by the Deputy Clerk, as requested.
Mr. Middlebrooks distributed to the Board, for the record, a handout (Applicant's Exhibit A) containing various photographs of Wekiva Falls Resort; two aerials of same; and a map indicating the Central Florida Beltway Mitigation Activities Annual Report for October 1, 1996 - September 30, 1997, prepared by the Division of Land Management, St. Johns River Water Management District. He also distributed, for the record, a plat of the Wekiva Falls Resort (Applicant's Exhibit B). He requested the Board to decrease his real estate assessment from $1,614,862.00 to $203,093.00, under Petition No. 1999-141, and to reduce his Personal Tangible Property assessment from $503,299.00 to $83,485.00, under Petition No. 1999-142.
Mr. Middlebrooks informed the Board that the reason he was requesting them to approve said reductions was due to the fact that agencies of the State of Florida, by their adverse and illegal actions, had effectively taken his property for a public purpose, without exercising their power of eminent domain. He stated that, for the past several years, he had attempted to preserve and care for Wekiva Falls Resort, as best he could, as an unpaid custodian for the State of Florida. He stated that, if the Board and the Property Appraiser were not swayed by his testimony this date, he would have to sell other property that has nothing to do with the Wekiva Falls Resort, in order to pay a fire tax assessment of $22,887.00 (not contesting); a real estate tax of $25,632.00 (contesting); and a personal tangible property tax of $7,987.00 (contesting portion of). He stated that the total tax that he would be required to pay, unless the Board gave him some relief, would be $56,507.00, for a piece of property that has not generated $1.00 of profit in the last six years. He stated that it was not practical, or possible, to continue to operate his resort as a recreational vehicle park, nor had it been for the past six years, since it was impacted by the State. He stated that he was personally responsible for the mortgage on the property, which he noted was $677,000.00, and it was much easier for him to pay the $55,000.00 a year loss, than to declare bankruptcy and have the mortgage holder demand the $677,000.00, which he noted he did not have.
Mr. Middlebrooks gave a detailed account of what had transpired, up to this point in time, with regard to actions that the St. Johns River Water Management District took, causing his property to be flooded and no longer be operated as a resort. He stated that he hoped the SJRWMD would eventually understand that they severely trampled his constitutional rights, by taking his property, without paying compensation. He stated that he was informed that he was being caused undue hardship, because the State wanted his property. He stated that the SJRWMD had and continues to act in bad faith, indicating that they had informed him that he would have to plug his artesian wells, which he noted was critical to his operation. He stated that, in 1993, he was informed that Wekiva Falls Resort was worth $5.3 million, as a rental park, and $6 million, if converted to condominium campsites, by a very prestigious appraisal firm in Orlando. He distributed to the Board, for the record, a copy of Chapter 193 of the Florida Statutes, 1995 Edition (Applicant's Exhibit C); as well as the Wekiva River Task Force Report (Applicant's Exhibit D), that was presented to the then Governor Bob Martinez, dated May 20, 1988, noting that one only had to look at said report to see that the State had a motive to intentionally devalue and destroy Wekiva Falls Resort. He also distributed, for the record, a newspaper article from The Orlando Sentinel, dated Thursday, September 23, 1999 (Applicant's Exhibit E), indicating that expressway officials had agreed to consider changing the route for the northern section of the Western Beltway, requiring that it cross the Wekiva River at the existing SR 46 bridge, as well as other requirements; and a copy of the Joint Application for Environmental Resource Permit/Authorization to use State Owned Submerged Lands/Federal Dredge and Fill Permit, from the Florida Department of Environmental Protection, Water Management Districts/U.S. Army Corps of Engineers (Applicant's Exhibit F).
Mr. Middlebrooks informed the Board that, based on the information he presented to them this date, he had clearly demonstrated that Wekiva Falls Resort was no longer a viable entity and that the Property Appraiser's Office should consider the devastating effects that the dredge and fill operation had caused his operation, pursuant to the explicit mandate of Chapter 193.015 of the Florida Statutes, and consider the highest and best use of the property, which he felt was to convert it to the highest residential density allowed by the Lake County Land Development Regulations, which it was noted is one dwelling unit per 40 acres. He stated that the resort acreage consisted of 100.73 acres, therefore, would be allowed to have two 50.36 acre residential homesites on the property, which he felt could sell for $2,016.00 per acre, based on a market value of approximately $101,000.00 for each of the homesites. He stated that that was the basis he used to come up with a proposed reevaluation, based on the land's highest and best use, amounting to $203,093.00.
Mr. Middlebrooks stated that his tangible personal property assessment, under Petition No. 1999-142, was linked to the Property Appraiser's evaluation of the non-viable resort's dedicated infrastructure, namely the water and sewer treatment plant and associated collection and distribution lines. He stated that a determination that the resort's property was no longer viable should support a like determination that the resort's dedicated infrastructure was not viable, particularly since there were no alternative uses for these systems in the Wekiva River Protection Area and salvaged value from the mostly subterranean systems was practically zero. He stated that he felt the market value for his tangible personal property should be reduced to $83,485.00.
Mr. Middlebrooks answered questions from the Board regarding his petitions, at which time he noted that the last appraisal that was done on his property was in 1992, by his mortgage banker. He then questioned Mr. Ross, Director of Tangible Personal Property/Agricultural Classification, Property Appraiser's Office, about his qualifications, what he had requested from Mr. Middlebrooks, in order to assess the resort, and various aspects of this case and how it was handled.
Mr. Ross informed the Board that the last information received from Mr. Middlebrooks was for the year 1996, noting that he had not received any information that was requested for the year 1998. He noted that a local bank did an appraisal of the resort in 1993 and, at that point in time, came up with an assessed value $3,875,000.00, which was after the 1989 court order that the SJRWMD had given to Mr. Middlebrooks, dealing with one of the problems at the resort, however, noted that the Property Appraiser's Office had it assessed at $1,614,867.00. He stated that the SJRWMD did not start the dredge and fill operation until August of 1994, however, other documentation that was submitted to the Property Appraiser's Office by Mr. Middlebrooks indicated that he was given an offer of $5 million for the park in June of 1995, after the illegal activities of the SJRWMD. He stated that the property was currently up for sale by a local realtor for $8 million.
Mr. Middlebrooks stated that he had not yet filed a tax return for 1998, therefore, did not have said information to give to Mr. Ross.
Commr. Hanson informed Mr. Middlebrooks that he could submit his Profit and Loss Statement for the resort, at which time she questioned how long it would be before H & R Block could have his income tax return completed for 1998 and was informed that it would be approximately two weeks.
Mr. Ed Havill, Property Appraiser, informed the Board that his office had the resort under assessed, at $1,614,862.00, therefore, requested them to uphold the assessment.
Commr. Hanson informed Mr. Middlebrooks that, with the Board not having a recent appraisal of the resort, or any information on income received from the resort for the past two years, put them at a real disadvantage. She stated, however, that she felt Mr. Middlebrooks had been a victim of government and that she felt the Property Appraiser's Office recognized that fact. She stated that the Board needed those figures, in order to assess the resort by income, otherwise, it would be forced to assess it by cost, or market value. She stated that market value was not going to work, nor was cost value, therefore, felt that income value would be the logical way to go, but, if they did not have that information, they could not properly assess it.
Mr. Ross stated that, if the Board was requesting Mr. Middlebrooks to submit his income tax return for 1998, to be used to evaluate the resort, he wanted it to be an audited report.
Commr. Pool stated that he did not feel the resort property had increased in value from last year to this year, because it was a distressed property and had been adversely effected by government. He stated that he felt, if the Board could not give the applicant any relief, he should be allowed to have the assessed value remain the same as last year.
A motion was made by Commr. Pool and seconded by Ms. Patten, to overturn the recommendation of the Property Appraiser and allow the applicant's real estate value, for Wekiva Falls Resort, to be assessed at last year's assessment ($1,479,502.00), but that the tangible personal property remain as it was currently assessed ($503,229.00).
Under discussion, Commr. Hanson noted that Mr. Middlebrooks was to submit a current appraisal of his resort, as well as an audited income tax return, for any future petitions to be filed with the Value Adjustment Board and that she would like that to be stated in the Minutes, for the record.
Commr. Hanson, acting as Chairman, called for a vote on the motion, which was carried unanimously, by a 4-0 vote.
Commr. Cadwell was not present at this meeting.
PETITION NOS. 1999-101 THRU 1999-124 - DAVID ZACHEM
FIRST AMERICAN TAX VALUATION, INC.
Mr. David Zachem, Applicant, addressed the Board, stating that he was an appraiser and designated licensed broker in the State of Florida, representing DirecTV, the taxpayer being represented by Petition Nos. 1999-101 through 1999-124, who purchased the former taxpayer, PrimeStar, on April 29, 1999. He stated that DirecTV was a satellite dish personal property enterprise. He stated that PrimeStar was one of the original dish corporations, noting that it was a conglomeration of former cable companies in North America that formed a syndication and got into the satellite business very early in the industry. He stated that DirecTV was late to the industry, with their primary focus being the syndication of signals for sports venues, most of them being baseball, football, and golf. He stated that the purchase of PrimeStar allows DirecTV, which has approximately 2.4 million households in North America, to access the 5.7 million households that PrimeStar has in North America. He stated that there are three types of satellite dishes, being the large dish that is seen in the back of people's yards; a medium powered dish, which is a 36 inch dish that is affixed to the roof and sometimes in the yard; and the new dishes, which are 18 inches in diameter. He stated that there are two problems with a 36 inch medium powered dish, one being that the signal from that particular satellite is not high enough off the globe, over the ocean, to place a silhouette over the entire continent; therefore, the market is limited to a portion of the North American continent, not all the continent. He stated that the second major problem is that the medium powered signal can only place 127 channels in a house, not the 500 plus channels that the high powered signal can place in a house. He stated that the Property Appraiser's Office has the personal property for DirecTV appraised at $43.00 per household unit.
Mr. Zachem stated that, when his client filed this year, they asked the Property Appraiser's Office to consider a five year remaining life for the personal property, the reason being that the medium powered satellite will cease to provide a medium powered signal in two to three years; however, the Property Appraiser's Office is using a ten year life on the personal property. He requested the Board to approve going with the seven year life, rather than the ten year life, noting that, in the year 2006, everything that is analog will be of no value in this country, because not only will there not be an analog television signal, there will, in fact, not be the ability to receive an analog signal anywhere on the globe. He stated that, by regulation, the Federal Communications Corporation (FCC) has ordered the television broadcast industry out of the analog signal business and into the digital business.
Mr. Zachem requested the Board to support a seven year life for the properties being represented, rather than 10 years, because, by regulation, they cannot possibly have a life beyond seven years. He stated that television sets in houses today will have no value by the year 2006, unless they are high-density sets. He stated that he was asking the Board to give those homeowners in Lake County, who have satellite equipment, exactly the same benefit that they would ask for themselves.
Mr. Robbie Ross, Tangible Personal Property and Agricultural Operations Director, Property Appraiser's Office, informed the Board that, according to DirecTV's website, it purchased approximately 2.3 million of PrimeStar's customers, however, noted that Mr. Zachem had stated that they purchased 5.7 million customers. He stated that, if the real number was only 2.3 million and Mr. Zachem was basing it on $43.00 per household, as he alluded to, the Property Appraiser's Office was going to have to adjust that $43.00 up to what it actually should be, which could be closer to $100.00 per household. He stated that September 1, 1999, the Property Appraiser's Office requested Mr. Jerry Barley, Senior Tax Analyst, with PrimeStar, to send them a detailed listing of the number of satellite dishes located in Lake County, as well as amounts, installation costs, etc., so that they could make an adjustment to DirecTV's assessment; however, they never received said information. He stated that they once again requested said information, after the deadline date for filing, however, were informed that Mr. Zachem could not get the information they needed to them.
Mr. Zachem interjected that there were three approaches to value - income, market, and cost. He stated that he was not present this date to ask the Board to reduce the assessment to $43.00 per household, as assessed; nor to ask for the five year life that his client had on his return, when it was submitted in April of this year; or to discuss whether there was less than a seven year life, but to ask for one thing and one thing only, being a seven year life, which recognizes the year 2006 as the drop-dead date for all analog equipment.
Commr. Pool questioned whether Mr. Zachem could furnish the Board, this date, with documentation indicating FCC's regulation from analog to digital.
Mr. Zachem stated that he did not have a copy of the regulation with him, however, noted that he could provide the Property Appraiser's Office with said documentation. He stated that, for the Property Appraiser's Office to place a tax past the seven year life on the personal property would be the same as taxing a dead person.
Commr. Pool stated that he was going to make a motion based on the FCC regulation, if it was, in fact, a regulation, however, would like to see documentation to that fact. He stated that, if said information was not provided to the Property Appraiser's Office in a timely manner, the motion would be that it revert back to the ten year life expectancy.
On a motion by Commr. Pool, seconded by Ms. Patten and carried unanimously, by a 4-0 vote, the Board overturned the recommendation of the Property Appraiser's Office and approved an assessment for the personal property of DirecTV, based on a drop-dead date of seven years (2006) for analog reception, rather than an assessment based on a ten year life expectancy, with the stipulation that Mr. Zachem provide the Property Appraiser's Office with the FCC regulation indicating the drop-dead date of 2006, for analog reception, by 5:00 p.m., Tuesday, October 5, 1999, or the assessment would go back to the ten year life expectancy, as currently assessed..
Commr. Cadwell was not present at this meeting.
On a motion by Commr. Pool, seconded by Ms. Patten and carried unanimously, by a 4-0 vote, the Board upheld the Property Appraiser's recommendation of denial for the following petitions, due to the fact that no one appeared before the Board to discuss the cases and/or present evidence to overturn the recommendation of denial:
Petition No. 1999-45 Gordon Hardaway, Jr., Pleasant Oaks Trailer Park
Petition No. 1999-49 Jean M. Lindsey
Petition No. 1999-76 Sun Communities - Leesburg Landing
Petition No. 1999-77 Extendicare Health Services, Inc.
Petition No. 1999-78 Sun Communities - Water Oak
Petition No. 1999-79 Sun Communities - Leesburg Landing
Petition No. 1999-80 Sun Communities - Water Oak
Petition No. 1999-81 Sun Communities - Water Oak
Petition No. 1999-91 Shasta Beverages, Inc.,c/o KPMG, LLP
Petition No. 1999-63 Wal-Mart Stores, Inc. - #800
Petition No. 1999-64 Wal-Mart Stores, Inc. - #705
Petition No. 1999-65 K-Mart Corporation - #7231
Petition No. 1999-66 K-Mart Corporation - #4870
Petition No. 1999-67 K-Mart Corporation - #3657
Petition No. 1999-75 Target Store - #691
Petition No. 1999-89 Page Net, Inc., c/o R.E. McElroy, LLC
Petition No. 1999-90 Page Net, Inc., c/o R.E. McElroy, LLC
Petition No. 1999-192L Tommy L. Martin
Commr. Cadwell was not present at this meeting.
There being no further business to be brought to the attention of the Board, the meeting was recessed at 11:45 a.m., until further notice.
__________________________________ WELTON G. CADWELL, CHAIRMAN
JAMES C. WATKINS, CLERK