The Lake County Value Adjustment Board met in regular session on Thursday, September 28, 2000, at 9:00 a.m., in the Board of County Commissioner's Meeting Room, Lake County Administration Building, Tavares, Florida. Commissioners present at the meeting were: Welton G. Cadwell, Chairman and Catherine C. Hanson, Vice Chairman; and Robert A. Pool. Lake County School Board members present at the meeting were: Phyllis Patten and Gerald Smith. Others present were: Sanford A. Minkoff, 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 Toni M. Riggs, Deputy Clerk.
PETITION NO. 2000-28 - KATHLEEN M. DOUGLAS
PETITION NO. 2000-29 - KATHLEEN M. DOUGLAS
PETITION NO. 2000-30 - KATHLEEN M. DOUGLAS
Commr. Cadwell stated that the Value Adjustment Board (VAB) would reconvene at this time. He stated that the VAB had made a motion, at the meeting yesterday, to rehear the three cases of Kathleen Douglas. He informed the members that he had received a faxed letter from Ms. Douglas this morning saying that she was unable to obtain the information from the doctor, but she was still requesting that the VAB hear the case. Commr. Cadwell explained that, historically, without that documentation, the VAB has not approved to rehear the case. He explained that Ms. Douglas had communicated to him that the dates were wrong and that her husband was sick and diagnosed with his illness during the filing period, but he was now out of town, and the doctor would not release the information to her.
On a motion by Commr. Hanson, seconded by Ms. Patten and carried by a 4-0 vote, the VAB approved to uphold the recommendation of the Property Appraiser and denied the agricultural exemption, based on the March 1st deadline, and the petitioner failing to demonstrate extenuating circumstances.
COMMISSIONERS AND SCHOOL BOARD MEMBERS
It was noted that Mr. Gerald Smith had arrived for the meeting.
PETITION NO. 2000-69 - CLARENCE E. MIDDLEBROOKS
PETITION NO. 2000-70 - CLARENCE E. MIDDLEBROOKS
Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, introduced Ms.Jordan Stuart, Attorney, who would be representing the Property Appraiser. Mr. Royce explained that the petitioner is protesting the real property assessment and the tangible personal property assessment on his Wekiva Falls Resort in East Lake County on the Wekiva River.
Mr. Robbie Ross, Tangible Personal Property and Agricultural Operations Director, Property Appraiser's Office, explained that Mr. Middlebrooks has been before the VAB for the last several years, since 1996, and each time the appraiser's office has requested him to supply them with an appraisal report showing what the value of his property would be. He noted that last year the VAB elected to reduce his assessment to the 1998 value. Mr. Ross stated that the appraiser's office is presenting an assessment for 2000 for the real estate of $1,481,746 and a tangible personal property assessment of $492,778, for a total assessed value of $1,974,524. He stated that Mr. Middlebrooks provided the Board with an appraisal report, for the fair market value of his property, as of August 13, 2000. The final conclusion of fair market value by George R. Little, Appraisal FirstFlorida Inc. was allocated, as follows: Cost Approach - $9,828,000 ( part of that includes the water and sewer system, which is assessed on the tangible personal property tax roll; Market Approach - $9,644,000; and Income Approach - $11,344,000. Mr. Ross stated that Mr. Little's reconciliation of the approaches were as follows: Land - $6,180,000; Improvements - $3,830,000; for a Total Value of $10,010,000. Mr. Ross referred to Page 34 of the appraisal, which stated the following:
Purpose and Intended Use - The purpose of this appraisal report is to estimate the market value of subject property exclusive of the existing regulatory and physical restrictions imposed by governmental actions, estimate the market value of subject property with the full impact of the governmental restrictions, court ordered assessment (fines) for non compliance of consumptive use permits, and damages as the result of these regulations or actions.
The intended use (function) of this "Before Impact and After Impact" appraisal is to assist the property owner in establishing Recommended Compensation for the involuntary take of, or loss in value to Subject Property as the result of governmental actions.
Mr. Ross stated that, in Mr. Little's opinion, he is stating that the St. Johns River Water Management District (SJRWMD) should pay Mr. Middlebrooks for the governmental actions that St. Johns has placed on his property, due to Mr. Middlebrooks alleged noncompliance with the consumptive use permit, and the alleged drain problem caused by the STS project. Mr. Ross stated that the current assessed value is less than 20% of the appraisal commissioned and received by Mr. Middlebrooks. He stated that, based on these facts, he believes that the current assessment, which is less than $2 million, appears to be fair and just.
Ms. Jordan Stuart addressed the VAB and explained that Mr. Middlebrooks has been in court with the Property Appraiser, and he remains in court with the Property Appraiser. Ms. Stuart stated that one case has been the subject of a Voluntary Dismissal; one case last year was brought by the Property Appraiser based on the reduction; the prior year's case, which is very much in process and subject to the appraisal, was brought forth by Mr. Middlebrooks against the Property Appraiser. Ms. Stuart stressed that it was important that the VAB be aware that this was currently in litigation. Ms. Stuart explained that a deposition of a technical expert at the SJRWMD has been taken in the case, and the issue appears to be that the Court has not yet found whether the SJRWMD is liable to Mr. Middlebrooks.
Mr. Middlebrooks noted that the appraisal has been discussed by the Property Appraiser's Office (Petitioner's Exhibit A), and stated that he will present the VAB members with the appraiser's cover letter and certification of value (Petitioner's Exhibit B). Mr. Middlebrooks stated that, in Mr. Ross' presentation, he omitted the fact that the After Impact Valuation of the property was determined to be $151,000. Mr. Middlebrooks presented a brief history of his ownership of Wekiva Falls Resort, which he owns jointly with his wife, Ruby J. Middlebrooks, and noted that they purchased the property undeveloped in 1968. He stated that this is the 25th year of operation, and the business consists of 823 site recreation vehicle campground; a public bathing area; and a marina facility with access to the Wekiva River. Mr. Middlebrooks stated that he would like to direct his presentation to the real property appeal, in conjunction with the tangible property appeal, because of their relationship with one another. He stated that the only problem he has with the tangible assessment is the infrastructure, which is tied to the resort.
Mr. Middlebrooks stated that, pursuant to Chapter 194.03 of the Florida Statutes, he would like to give his testimony under oath.
The Deputy Clerk, Toni M. Riggs, administered the oath at this time.
Mr. Middlebrooks stated that, if there is testimony by Mr. Havill, he would appreciate the testimony being given under oath. He explained that the Florida Statutes allows the Property Appraiser to give his testimony under oath, if he makes the request.
Mr. Middlebrooks stated that his reason for appealing to the VAB is that agencies of the State of Florida and adverse and illegal actions have effectively reserved and taken his property for public purposes without exercising the powers of eminent domain. He explained that Wekiva Falls Resort has been on both the Florida Conservation and Recreation Land List, which is the C.A.R.L. list, and the SJRWMD's Strategic Land Acquisition List, since 1988, because the State has alleged that the resort interferes with migration of black bear and wildlife, due to its location within the Wekiva-Ocala wildlife corridor. He stated that Wekiva Falls Resort was given highest possible acquisition priority on May 20, 1988 by the Wekiva River Task Force. He noted that pertinent portions of that report are contained and marked as Reference "X" in the three volume appraisal that is attached to his two petitions before the VAB. Mr. Middlebrooks stated that environmentalists and SJRWMD's board member, Patricia Hardin, was a member and co-author of the Wekiva River Task Force Report. He stated that, in January and February, 2000, Deborah Shelly, an official with the Florida Department of Environmental Protection (DEP) and manager for the Lower Wekiva State Park Preserve, visited his Wekiva Falls Resort property, and during those visits, advised him that Wekiva Falls Resort was on the C.A.R.L. acquisition list by virtue of being within the highly ranked Wekiva-Ocala Wildlife corridor. She informed him that she was a member of DEP's land acquisition committee, and that DEP was interested in acquiring Wekiva Fall Resort and its associated marina, because they were ideally suited as a base camp and launch facility for an educational eco-tourism project contemplated by the State. Mr. Middlebrooks stated that there are examples throughout other regions of Florida where fanatical environmental extremists have taken control of legitimate regulatory boards and conservation organizations and used their high positions to gain allies and take environmentally sensitive property without paying for it from people they have financially distressed by bogus regulatory and enforcement actions, and who are otherwise too poor to hire attorneys. He urged the VAB members to read Appraisal reference "V", which deals with multiple vested conflicts among SJRWMD board members and Appraisal "X", which is a news article submitted to the New York Times Magazine, which links Ms. Hardin as a director of the Nature Conservancy and Board member of the SJRWMD to an almost identical scheme where owners of numerous parcels of private property in Monroe County were first financially distressed by bogus government regulatory and enforcement action, after which their property was acquired at a fraction of its former fair market value for incorporation in the Florida Keys National Marine Sanctuary. Mr. Middlebrooks stated that there is direct evidence that Ms. Hardin was the driving force behind the illegal dredge and fill operations described in the appraisal, which have crippled Wekiva Falls Resort. The dredge and fill operations were initially undertaken by the Florida Department of Transportation (FDOT) under the guides that field dirt from the railroad trestle embankment was needed for construction of approach ramps to the State Road 46 bear tunnel. He stated that FDOT ordered DOT to stop dredge and fill operations in August, 1994, after he objected, because DOT's construction activity was diverting polluted water onto his Wekiva Falls Resort property and public bathing area. The Lake County Health Department investigated this activity and ordered Wekiva Falls Resort's public bathing area closed and posted as a health hazzard, because it has been determined to be contaminated with polluted water from DOT's unauthorized road and dike construction. Within a year or so after DOT abandoned the dredge and fill project and restored the disturbed wetlands, the SJRWMD resumed and completed the dredge and fill operation without any permits or authorization using funding, district employees, district equipment, or rented equipment that was earmarked and intended for use on the adjacent, well defined and approved STS wetland restoration project, which completely surrounds his property. On Tuesday, November 3, 1998, he met with Richard C. Fower, Senior Environmental Scientist of the Permits Division Environmental Office at DOT's Deland, Florida, facility. The purpose of his visit was to learn just by DOT would become involved with a dredge and fill project that was being implemented in a manner that had nothing to do with this stated purpose of providing field dirt to approach ramps for the SR 46 bear tunnel. During this visit, Mr. Fowler explained the excavation of material from the abandoned railroad trestle was a pet, personal project of Friends of the Wekiva and SJRWMD's board member, Pat Hardin, and Florida Audubon Society's member, Senior Vice President, Charles Lee, and the material was not needed as an adequate volume of fill for the bear tunnel project.
Commr. Hanson questioned whether all of the fill that DOT removed from the property was used in Lake County on those roads, and whether any was taken outside of the County, because it would be in violation of the Wekiva Amendment, if any of those soils were taken outside of the County. She stated that it would be interesting to know if the Friends of the Wekiva were actually encouraging a violation of their own regulations.
Mr. Middlebrooks explained that he personally observed and photographed the dirt being removed from the wetlands and transported. All of the deposits that he observed were in Lake County, however, the STS project does penetrate into Orange County, and it is possible they could have hauled some of the dirt into Orange County. He stated that, at this point in time, and for the past several years, he has been a reluctant Wekiva River landowner who has been manipulated and forced into a position requiring him to pay unfair property tax each year in care for this invalid, terminally ill property for the rest of his natural life, because the property has been impacted to the point where there are absolutely no arms-length buyers available. Mr. Middlebrooks stated that, according to the notice mailed to him by the VAB on October 15, 1999, and signed by the Chairman of the 1999 VAB, the VAB reached the following decision and finding of fact: "Value Adjustment Board did not feel petitioner's property had increased in value from last year to this year due to devastating effects of dredge and fill operations by the Water Management District causing petitioner's property to be flooded and no longer operable as a resort." He stated that this finding of fact is incorporated and marked Reference "C" in the new appraisal. Mr. Middlebrooks stated that adverse conditions at Wekiva Falls Resort have not improved since this board rendered its decision. He noted that Pages 79-96 of George Little's appraisal contains multiple photographs of the resort before it was impacted by the SJRWMD. He further noted that Pages 64 through 78.6 of the appraisal contains photographs depicting unauthorized construction activity by the SJRWMD, and the results that continue to plague the resort. Near the end of the petition hearing before the October 1, 1999 VAB, Commr. Hanson entered into the official record a formal request that "Next year, if you still own the park, please provide us with an updated appraisal. Put that on the record, we have asked, so we will remember." This is located on Page 69 of the transcript, Reference "B" of the appraisal. Mr. Middlebrooks stated that he has complied with Commr. Hanson's request, and on October 8, 1999, authorized appraisal FirstFlorida Inc. of Lakeland, Florida to perform a new appraisal consistent with the before and after impact requirements set forth in Chapter 70.001(4)(a) of the Bert J. Harris, Jr. Private Property Rights Protection Act, which requires a demonstration of the loss in fair market value to the real property. He stated that Appraisal FirstFlorida Inc. hand delivered their three volume Wekiva Falls Resort appraisal to him on August 27, 2000, and he timely provided the Property Appraiser and the VAB with copies. A review of the FirstFlorida appraisal establishes the VAB's 1999 dredge and fill impact findings were modest and conservative, and that the appraisal demonstrated gross overkill on the part of the SJRWMD, and the studies conclude the resort was also fatally impacted by the SJRWMD's improper flow regulatory activities, which contaminated the surficial aquifer, and also by unauthorized consumption activity from the new Rock Springs Riding Stables. In his previous petition hearing before the VAB, the Property Appraiser stated that he was aware of and did not contest the impacts that Wekiva Falls Resort had suffered, and that his assessments took these physical and environmental impacts into consideration. For the past 32 years, the river front tax has increased each and every year, and he has been unable to identify any year where the tax assessor has decreased his assessment, as he claims, because of these impacts. For several years, he has tried to obtain a copy of Property Appraiser's appraisal demonstrating the precise method that he used in arriving at his assessment including the amount of deduction in value, which he claims to have made at various times for each of the impacts the resort has suffered. Mr. Middlebrooks stated that the Property Appraiser has refused to produce any appraisal, document, or other evidence to support his past or present assessments of Wekiva Falls Resort. On October 13, 1999, he engaged in discovery with respect to Tax Case 98-2943 in an effort to compel the Property Appraiser to disclose the missing answers and appraisal reports alleged to have been generated by his office. Mr. Middlebrooks stated that he would like the VAB to see Mr. Havill's response to his discovery effort, by submitting his Request to Produce, Case No. 98-2943-CA. ( Petitioner's Exhibit C - marked for identification).
Ms. Stuart stated that, if the Property Appraiser was not advised that they would be presented to this panel, then they probably should not be. She stated that they are part of the court case that is not relevant to this as of January 1, 2000, and they would object to their presentation.
Mr. Middlebrooks explained that the whole issue has to do with the appraisal and this is the Property Appraiser's response to his request for appraisal information, so he feels it is highly pertinent, because even if it was last year, it is common practice for anyone interested in the property to look at several years of financial performance.
Ms. Stuart stated that they are limited within the constraints of a court case, and there are specific questions that Mr. Middlebrooks asked, and if he wishes to ask relevant questions to the Property Appraiser's people that relate to January 1, 2000, and the appraisal for that time, they would have no objection to those questions. She reminded the VAB that each year stands on its own for valuation purposes. She stated that, to present to the VAB responses within the constraints of a court case for another year is clearly not relevant in circumstance.
Mr. Middlebrooks stated that it was highly relevant for the reasons he stated. He stated that any buyer will insist on having financial history of a property for at least five to seven years, and this is even required by Statute.
Ms. Stuart clarified that the information that Mr. Middlebrooks was wanting to submit (Petitioner's Exhibit C - marked for identification) had not been submitted for this VAB hearing, and if he had done so, there would have been an objection.
Commr. Cadwell asked Mr. Middlebrooks if he had submitted Exhibit C to the Property Appraiser's Office for this hearing, which he responded that he had not done so. Commr. Cadwell stressed that the VAB has historically followed the policy that whatever the applicant presents to the VAB, it must be submitted to the Property Appraiser's Office, so that they can respond to it.
Commr. Hanson stated that, since this is all related, and the Property Appraiser's Office has had a copy of the document (Petitioner's Exhibit C - marked for identification), it is not exactly new information, or foreign information to either party.
Ms. Stuart stated that the Property Appraiser may not have the same responses based on January 1, 2000. Mr. Middlebrooks has not presented them with any questions concerning this year's appraisal. She explained that, since the time of those interrogatories, there have been depositions taken in this case, which have indicated that Mr. Middlebrooks' opinion of the impact of his property is not that of the SJRWMD.
Commr. Cadwell stressed that the VAB has adhered to this policy throughout these hearings, and he was not going to accept this today. The VAB can overrule him, if they so desired, but as Chairman, they have followed the policy that the Property Appraiser have the packet ahead of time, so they can respond to it, and this evidence was not submitted, and he will not accept it.
Commr. Pool questioned whether, if the VAB does not allow Mr. Middlebrooks to submit this particular document, he can still give the VAB information that is pertinent to this case, whether it is supportive or not supportive.
Mr. Minkoff clarified that the limitations of the Statutes are only to written material.
Ms. Stuart stated that, if Mr. Middlebrooks reads the answers to the interrogatories into the record, she would object to them as irrelevant to the year 2000. If he wishes to question the Property Appraiser's representative, he may do so. For the record, Ms. Stuart declared that she was objecting to him reading responses to interrogatories that are not relevant to this year's assessment.
Mr. Middlebrooks stated that, if he is not allowed to continue with the reading of responses, then he would have no option but to have Mr. Havill placed under oath, so he can question him as to what his response is to his attempts to obtain his appraisal information.
Ms. Stuart stated that, with all due respect to Mr. Minkoff, verbal testimony, when it is requested, cannot be used to overcome the rule that you cannot submit written testimony. Verbal testimony that is not submitted when requested is also prohibited. She stated that, for Mr. Middlebrooks to read the responses into the record destroys the effect of the rule, as written.
Mr. Middlebrooks explained that he attempted to discover from Mr. Havill's office the method of appraisal that he used to arrive at his valuation for Wekiva Falls Resort, and he has indicated to him that he has never used the income capitalization approach, and also that he has never used the cost approach. He stated that the testimony given by Mr. Ross, as noted in Reference B of the appraisal, conflicts with statements given to him by Mr. Havill.
Mr. Ross explained that this year they stated that they looked at the market to see what sales had occurred for recreational vehicle parks. For the real estate, they had an assessed value of $1,481,746. He explained that he considers the three approaches to value, but then he looks at what best reflects the fair market value of the property. Mr. Ross stated that counsel has been asking Mr. Middlebrooks for an appraisal, and the Property Appraiser's Office received it in August, 2000, which shows that the Fee Simple fair market value of the property is $10 million. He noted that both valuations determined by the Property Appraiser's Office was under $2 million.
Commr. Cadwell stated that he was of the understanding that the real appraisal is not the problem, but it is the difference between what everybody thinks it is worth, and what the Property Appraiser is discounting for the problems.
Mr. Middlebrooks stated that, when he was questioning Mr. Havill, he did indicate that he used the market approach, and he provided him with a list of comparable properties, but he had problems with that list. The list had 44 properties, and only six of them were RV parks. The remainder of the 44 were mobile home parks. Mr. Middlebrooks stated that none of the six parks were comparable.
Mr. Ross reminded the VAB that Mr. Middlebrooks has a water amusement park on the property.
Commr. Hanson stated that she had several concerns. She stated that, one, we have a State agency that has literally destroyed what used to be there, and it is nothing like it used to be. She stated that it used to be a thriving, beautiful park, and she knows that you can see grass growing where the river used to be. She does not know how much of that is due to the low watertable, but there are a lot of springs in that area. Commr Hanson stated that, from the pictures, and from things that she has seen and what people have told her, we have used a governmental agency not involved here at all to destroy a business, or at least reduce the income from that business. She stated that they did not have the income figures, because the Property Appraiser's Office is not using the income, but she know they cannot be what they were 15 years ago. She knows that the river quality is not what it was 15 years ago, and she knows it is not what it used to be. Commr. Hanson stated that it would be helpful if they had the income.
Mr. Middlebrooks noted that he gave everything to the appraiser, and he has made reference to it and used it in the report.
Ms. Stuart stated that they have no argument with Mr. Middlebrooks disagreement with the SJRWMD. She stated that they believe he has an argument with the SJRWMD. Ms. Stuart stated that Mr. Middlebrooks had an appraiser who could not come lower than a $10 million market value for this property. The Property Appraiser has it, including tangible personal property, for less than $2 million. Ms. Stuart stated that it is operating, it is earning income, and it is still there. It may not be as charming, or attractive, but their argument is the value of the property.
Commr. Hanson stated that her frustration is what government is doing to an individual, and it is not just those things that the SJRWMD has done, but also the things that the County has done, and the State, in further regulating that property. She stated that they have taken that property, so he is not free to sell that land to anyone out in the community that might have the money, because nobody will pay for it. The only possible buyer for that property is the State, and the State is not going to pay anything for it. They are going to continue to try to devalue the property and basically force him out of business.
Commr. Cadwell stated that he is taking into account the value in the appraisal that was presented to Mr Middlebrooks, and in knowing Mr. Havill's philosophy, with regards to governmental interference and property rights, he sees that Mr. Havill has discounted this amount by 80%. He stated that, in making sure that Mr. Havill does his job that the Statute requires him to do, the 80% discount is what he feels is fair after taking into account everything, and not disputing anything that Mr. Middlebrooks has said that has happened to him. Mr. Havill feels that the 80% reduction is fair and what he should do according to the Statutes as the Property Appraiser.
Ms. Stuart stated that the compelling issues, from an appraisal standpoint, is that Mr. Middlebrooks has not yet been forced out of business, and the property is still operating, and it is still earning money, and the only thing that Mr. Havill can consider is the value.
Mr. Middlebrooks referred to the question of whether the 44 mobile home parks were comparable and stated that he called about 25% of them and asked them if, at the time of sale, the property was flood prone, because of any recent rehydration efforts on adjacent land by the SJRWMD. He stated that all of them said no, and that all of it was high and dry property. He also asked them if they were experiencing groundwater contamination at the time of the sale, and each of them told him that they were not. He asked them if there was any pending litigation where the current owner, or the seller, was under threat of a multi-million dollar fine for not having complied with some regulations, and again the answer was no. Mr. Middlebrooks stated that, on that basis, and not only were they mobile home parks, but they were high and dry with no problems. He noted that they all varied in size, from smaller than his park to larger than his park, and none of them were in the Wekiva Basin.
Ms. Patten questioned whether the petition last year was further complicated, because of liens, or litigation, as it relates to the petitioner's property.
Mr. Middlebrooks explained that there is a pending lawsuit, and the SJRWMD will not drop it, or move forward with it, and it clouds the title to his property, and if it did not go in his favor, it could amount to $60 million or more in fines at this point in time. He explained that the crux of the lawsuit is that he is using water illegally for recreational purposes, and they have not allowed it, and there are provisions in the Statutes to impose punitive penalties. He explained that the $151,000 After Impact Valuation is not including the approximate amount of penalties. He stated that last year, during his petition hearing, the VAB indicated that it did not feel that the market, or cost approach, was appropriate for determining the value of his distressed property and suggested that there was greater merit to utilize the capitalization of income approach. Mr. Middlebrooks referred to Page 97 of the appraisal and stated that Mr. Little points out that there are many situations where a business has significant income stream, but no market value, and noted the following in the appraisal: "Historically service stations produced an income but the marketability became negative when they were required to clean up sites which were often contaminated. These stations can be seen throughout the state and will be developed when the land value exceeds the cost to clean up the contaminated site." Mr. Middlebrooks stated that according to DEP, Wekiva Falls groundwater has been contaminated by unacceptable levels of chloride and TDS. He stated that his expert consultants forewarned the SJRWMD of this possibility, if the District interfered with spring flow (Reference Q of the appraisal). He further stated that the SJRWMD ignored the warnings of his experts and compelled him to severely restrict the spring flow where upon relic sea water was forced upward and the surficial aquifer became contaminated as predicted. On May 6, 1998, DEP issued a letter to him demanding that a plan be formulated to reduce the chloride and TDS contamination levels below secondary standards (Reference J-13 of the appraisal). He stated that firms that specialize in decontaminating groundwater have advised him that it could cost billions of dollars and perhaps take hundreds of years to reduce the chloride and TDS levels in the subject's surficial aquifer below secondary standards using state of the art decontamination technology. Mr. Middlebrooks stated that, as Mr. Little's appraisal confirms, Wekiva Falls Resort is no different to the multiple contaminated site examples that he just recited, and at this point in time, a cleanup and restoration is impractical, because of government interference and because the cleanup costs and restoration costs are near, in excess, of its $10 million pre-impact, fee simple market value. Mr. Middlebrooks respectfully requested the following, as submitted to the VAB:
With respect to Petition No. 2000-69: I respectfully request the board reject the Property Appraiser's real estate assessment of $1,481,746 and substitute in its place State Certified Real Estate Appraiser George R. Little's $151,000.00 "After Impact Valuation".
With respect to Petition No. 2000-70: I respectfully request the board reject the Property Appraiser's tangible property assessment of $492,778 and instead adopt State Certified Real Estate Appraiser George R. Little's conclusion that "Existing Improvements have a negative value, which is the cost to raze" (Page 98 of Appraisal).
Adopting this conclusion will result in a corrected fair market value of $46,185 for tangible personal property, which results from deleting the inflated value which the Property Appraiser has attributed to the following infrastructure:
(a) The Resort's custom designed wastewater collection and treatment system ($195,296 about $250/Site).
(b) The Resort's custom designed potable water treatment plant and distribution system ($195,296 about $250/Site).
(c) Twenty (20) permanently installed RV utility structures $2,000).
(d) Nineteen (19) permanently installed picnic shelters ($9,500).
(e) One (1) flume tunnel swimming pool slide assembly ($25,000).
(f) One hundred fifty (150) small picnic shelters ($19,500).
Commr. Hanson questioned whether Mr. Middlebrooks' RV income had been affected by these adverse actions and whether he was still getting the numbers coming in the gate.
Mr. Middlebrooks explained that he was getting a fraction of the numbers in the gate, and he really cannot maintain it and stay in existence, and he spends the minimum amount of money to keep it open. He explained that he does have a considerable mortgage on the property, and it is far in excess of its after impact appraised value. Even if he could get $151,000 for it, he would still owe the bank about $600,000 to pay off the mortgage.
Mr. Smith noted that, from the information in the appraisal, it shows an operating income of $900,000.
Mr. Middlebrooks explained that his latest tax return showed an income of about $53,000, and if he had addressed some badly needed repairs in drainage systems and roads, it would have been highly negative.
Ms. Stuart objected to the testimony just given by Mr. Middlebrooks and stated that they have consistently been refused actual income figures. Mr. Middlebrooks files a personal income tax return with this property, and his income may well have been $53,000, but his Schedule C, if he filed one, will show the income and expenses attributable to the property and not his other income and expenses, and unless he can present the VAB with a report that shows that income, what the VAB is seeing here is not Mr. Middlebrooks' income, but the potential income base from the property based on comparables and adjustments for the differences between his property and the properties that were used as comparable rentals.
Mr. Smith addressed the determined income figure of approximately $900,000 in the appraisal and stated that, whatever happens in that process with the SJRWMD and whoever else, the value of a property, based on this income, indicates a value. Mr. Smith stated that he would be interested in knowing how the appraiser's office developed the figure of $1.4 million, but from the information before him, the actual income over and above all of the impacts is still $900,000 in operating income.
Ms. Patten stated that she remembers this case from last year, however, she feels it is very unrealistic for Mr. Middlebrooks to say that the property is only worth $151,000. She stated that she knows there is an impact, yet the VAB knows that he has income, and it, in fact, does have value.
Commr. Cadwell reiterated that he feels that, after looking at the appraisal that Mr. Havill has presented and discounting Mr. Middlebrooks own appraisal by 80%, it is a fair valuation, and the VAB should uphold the appraiser.
Commr. Hanson stated that, if the State was to buy Mr. Middlebrooks out, they would have to look at the income approach. She stated that, without figures that show something different from the $899,755 operating income, as noted in the appraisal, it looks like the Property Appraiser has been very fair. She still feels that Mr. Middlebrooks is caught in a situation, and she hopes the outcome of his lawsuit is successful. Commr. Hanson stated that she knows that none of the sales are comparable, because they do not have those same constraints, and she knows exactly what is happening by the State, and the County is caught in it, with the Wekiva Amendment, and she knows they are trying to press down the value of it, to be able to buy it cheaper, because ultimately their goal is to have ownership. Commr. Hanson stated that the only use he is going to have for the land is to continue with an RV park, because everything else is going to be non-conforming, other than residential.
Commr. Pool stated that he was appalled that the State has put Mr. Middlebrooks in this predicament, and it concerns him what the end results will be, but he questioned whether this property was advertised for sale, and if the County came to him today to buy it for a park, what the amount would be.
Mr. Middlebrooks stated that he has had letters of intent for $8.2 million, but as he has indicated, once they do due diligence, they are not interested at any price, because they do not want to buy unresolved lawsuits.
Commr. Hanson stated that Mr. Middlebrooks' land has been stripped of what it could have been, but with 100 acres on the river, the price of $10,000 an acre for residential would be what it is going to be worth, and then you are going to have to do something with the structures that are there, so he is locked in.
Commr. Pool questioned whether Mr. Middlebrooks has tried legislatively to get people in leadership positions to help him with the SJRWMD situation.
Commr. Hanson noted that it was not a politically popular position to take.
Mr. Middlebrooks stated that next step is to go for compensation through the Bert J. Harris, Jr. Private Property Rights Protection Act, with the appraisal being one of the requirements.
Commr. Hanson made a motion, which was seconded by Commr. Pool, for the VAB to upheld the assessment of the Property Appraiser, Petition No. 2000-69 and Petition No. 2000-70, based on the taxpayer failing to furnish evidence required to derive at a reduction in just value, and on the taxpayer failing to show evidence to overturn the Property Appraiser's presumption of correctness.
Under discussion, Commr. Pool stated that he wanted Mr. Middlebrooks to know that anything that he can do to help with some agency, he would like to be there on his side.
Commr. Hanson noted that last year she had letters sent, to try and help in this situation.
The Chairman called for a vote on the motion, which was carried unanimously by a 5-0 vote.
PETITION NO. 2000-77 - DARRIN L. MITCHELL - FLORIDA PROPERTY TAX PROFESSIONALS
PETITION NO. 2000-146 - DARRIN L. MITCHELL - FLORIDA PROPERTY TAX PROFESSIONALS
PETITION NO. 2000-148 - DARRIN L. MITCHELL - FLORIDA PROPERTY TAX PROFESSIONALS
Commr. Cadwell informed the VAB that a letter had been received from Florida Property Tax Professionals making a formal request to read in a "no change" to the values for the above referenced petition numbers at the VAB hearing, so as to keep their appeal rights open for the 2000 Tax Year.
Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, noted that their office has not received any information pertaining to these petitions.
Commr. Cadwell noted that the VAB would address these petitions at the end of the day.
PETITION NO. 2000-87 - JENNIFER KUREEN
Mr. Kureen, husband of petitioner, appeared before the VAB and stated that he would be presenting pictures today of the canal. He stated that it was his understanding that the appraiser was not on site to survey the situation, and he basically just took comparables on paper to evaluate property value. Mr. Kureen stated that he wanted to bring to the attention of the VAB the actual problems that are developing in the chain of lakes. Mr. Kureen showed a picture that was taken by the former owner of the property when they listed the property for sale. Until about a year ago, they had increased their property values by building docks and a boathouse. Mr. Kureen showed a recent picture taken two days ago, which shows that there is no more water. He stated that the water levels are down over four feet in less than two years. He explained that his boat dock is not usable (as shown in a picture), as well as his dock. Mr. Kureen stated that he bases waterfront property on the value of what is there and how you can use waterfront property. He does not base value on what he has to do and what he has to add to correct a situation that gets worse every day and every week. He explained that he has had to move his irrigation systems on a regular basis, and he's added about 30 feet of pipe over the course of the summer, so he can have water to irrigate his property. He stated that he checked with the U.S. Weather Bureau and over the course of the last two years, the County is down 16 inches on rain.
Commr. Pool corrected Mr. Kureen by informing him that he talked to the Lake County Water Authority two days ago, and they expressed to him that the County is down 44 inches of rainfall in the last two years specific to this site.
Mr. Kureen explained that there is no way that he can recoup his money, with the property being in the condition it is today. He stated that everyone has acknowledged that waterfront property is expensive, but he is under a hardship because of the water situation. He could not sell that property for what he paid for it today, or in three to five years. Mr. Kureen asked the VAB to consider the hardships that the waterfront communities have today, and rollback his assessment to what it was when he bought the property, because it has decreased in value. He stated that, at some point, when they can sell the property for what they paid for it, they will gladly invite the Property Appraiser to take a look at the real estate market and see what value waterfront property has on it at that time. Mr. Kureen noted that he paid $355,000 for the property, and the assessment has increased from $276,964 to $312,197.
Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, stated that the property sold last year, and the previous owner was under the Save Our Homes cap, and they had a loss of $24,670. Mr. Royce stated that the Statute says that the appraiser has to assess property at market value. He explained that the property is not exactly on the water, and they have to look at the previous year's sales, and the value of the property as of January 1st. He explained that, if the sales show a reduction in the market this year, then next year this will have to be reflected on the tax roll.
Mr. Kureen explained that there has been a $60,000 increase, or a 25% increase.
Mr. Royce explained that Mr. Kureen was talking about taxable value last year, after homestead, after the Save Our Homes loss, with the assessed value this year. The assessed value last year was $276,000 and has gone up to $312,000 based on the purchase, and other purchases in Margorie Gardens and along the lake last year.
Commr. Hanson stated that unfortunately the lakes in Florida are shallow lakes, and even though the lakes will come back up, Mr. Kureen still has lakefront property. She assured him that his value has not gone down, and there is still a demand for lakefront property, but the drought has contributed to part of the problem.
Commr. Pool clarified that the 44 inches of rainfall was in 29 months, not 24 months. He stated that the property owned by the petitioner is beautiful property, and the property will be back to its highest and best use in a matter of time. He believes that the property is still worth what the petitioner paid for it, and by law, the appraiser has to assess it at a certain value.
Mr. Smith stated that lakefront property on the Clermont chain has gone down, but he does not feel the underlying value has gone down.
On a motion by Mr. Smith, seconded by Ms. Patten and carried unanimously by a 5-0 vote, the VAB upheld the assessment of the Property Appraiser, Petition No. 2000-87 - Jennifer Kureen, based on the petitioner's failure to show evidence to overturn the Property Appraiser's presumption of correctness.
At 10:30 a.m., it was noted that Commr. Cadwell turned the Chairmanship over to Commr. Hanson, Vice Chairman.
PETITION NO. 2000-88 - DOROTHY R. HUDSON
Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, explained that the petitioner was protesting the value of her home in South Shores of Lake Eustis, in Tavares.
Ms. Dorothy Hudson appeared before the VAB and stated that she was contesting the assessed value of her home. Ms. Hudson explained that she bought this home when her husband passed away, because she had to move in a hurry, and she liked everything about it, except there is a retention pond behind her house that has not been maintained. She read a letter that she had written, which stated that she was not here complaining that she was paying more in taxes than her neighbors. She was here because she feels that the tax appraisal of her home exceeds the market value in comparison to the surrounding area. She explained the location of two other retention ponds in Tavares that are similar and stated that they are neat and clean and have no weeds. She presented the VAB with pictures of her property, which showed a hedge that was approximately eight feet tall that conceals the unsightly view. Ms. Hudson showed a plat of the surrounding properties and stated that her neighbors only have the edge of the retention pond. She noted that her appraisal is $137,000 and her neighbor's appraisals range from $92,000 to $114,000. Ms. Hudson stated that she has called the City several times, and they do come out once in awhile, but the pond is very neglected.
Ms. Darlene Jackson, daughter of Ms. Hudson, addressed the VAB and explained the location of the retention pond, in relation to their home, and stated that it is very difficult for the City to come in there and cut the weeds. Ms. Jackson stated that they have lived at this location since December 19, 1999.
Mr. Royce explained that, since the retention area was dedicated to the City of Tavares, it seems that the City needs to be maintaining this area. The petitioner paid $155,000 for the property, and the appraiser is assessing it at $137,000. Mr. Royce explained that the parcel in question has 1,997 square footage of living area, and 2,916 square feet overall. He stated that the homes Ms. Hudson was using as comparables range from 1,500 to 1,900 square feet, and one of them sold for $127,000.
Ms. Jackson explained that the house next door owned by the Fitzpatricks will be the most comparable to their house.
Mr. Royce explained that the appraiser's office has been to the petitioner's home, and the retention pond has not been maintained.
Commr. Hanson stated that the petitioner has called the City about maintaining the pond, and she bought the land knowing that the retention pond was there, so she felt that $155,000 was a fair price.
Mr. Royce explained that Lot 21 was 400 square feet smaller than the property in question. He felt that the value was there, and he would think that the City should clean up the retention area.
Mr. Smith stated that the assessment on the house next door may be lower, but they may have owned it for a longer period of time, and because of the Save Our Homes legislation, their assessment may be lower.
Commr. Pool explained that, whenever someone purchases a piece of property, the sale gives the appraiser the opportunity to re-assess the home. Once you purchase a home, you attach a value to it, and the appraiser has to attach a fair market value, by law, and if they paid $155,000 and are being assessed at $137,000, the appraiser has gone below fair market value and kept them in line with where it needs to be, and it is a fair assessment.
Mr. Royce explained that the sale really did not have a lot to do with the change in the assessment, because the assessment went from $135,600 to $137,300, due to a base increase for the whole County, so there was not really any new appraisal done.
On a motion by Mr. Smith, seconded by Commr. Pool and carried by a 4-0 vote, the VAB upheld the assessment of the Property Appraiser, Petition No. 2000-88, Dorothy R. Hudson, based on the petitioner's failure to show evidence to overturn the Property Appraiser's presumption of correctness.
Commr. Cadwell was not present for the vote.
At 10:50 a.m., Commr. Hanson returned the Chairmanship to Commr. Cadwell.
PETITION NO. 2000-180 SENECA SITEWORK, INC.
PETITION NO. 2000-181 SENECA SITEWORK, INC.
Mr. Bob Shaker, representing Jaymark Builders and Developers, Inc. appeared before the Board and stated that he was not contesting the valuation in Petition No. 2000-180, and Petition No. 2000-181.
PETITION NO. 2000-182 JAYMARK BUILDERS AND DEVELOPERS, INC.
Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, explained that this petition is the whole Skyview Subdivision, and all of the lots are assessed at $21,600 each. The petitioner is asking that they be assessed at $17,000 per lot.
Mr. Bob Shaker representing Jaymark Builders and Developers, Inc., stated that, as of January 1st, there were 110 lots. To date, there have been 53 lots sold, to two builders, Meronda and HJB Builders. The average price for the 53 lots is $19,660 and they are under contract in the amount of $19,500. Mr. Shaker noted that the first lots were not sold until February at $19,500 to Meronda. He noted that, over time they have a slight escalation as they continue to purchase lots. Within the last two weeks, they sold five lots to HJB Builders for $19,500 each. There are 15 lots not under contract, but HJB Builders will have first priority at the same price. Mr. Shaker stated that the key is that there may be other subdivisions that sell for more or less, but within this subdivision, you need to take into consideration the terrain and the size of the lots, and they have definitely been arms length transactions. He discussed bulk sales and explained that he is requesting a value of $17,000 per lot.
Commr. Hanson noted that, since the petitioner has the lots listed at $19,500, this is the difference between this case and the one heard yesterday.
Mr. Shaker stated that no lots have been sold to individuals, and as a developer, you are really not allowed to sell them to individuals, by law, unless you register as a security to sell to individuals. He stated that they are only allowed to sell in bulk capacity to builders.
Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, explained that comparable properties across the street from the Skyline Subdivision were selling between $28,000 to $33,000 per lot to individuals. He explained that they have to look at what similar lots are selling for on the open market, and they do not take a discount into consideration.
Ms. Jordan Stuart, Attorney representing the Property Appraiser, addressed the Board and stated that the Supreme Court has spoken on this matter, in Palm Beach Development and Sales Corporation v. Walker, 478ss1122, a 1984 case, which states that, even if the lots are not platted yet, if they are being marketed as individual lots, and in this case, the developer had deposits on individual lots, then the fact that the builder buys them in bulk and gets a discount for doing so does not enter into the assessment.
Commr. Pool stated that he respectfully disagrees with Ms. Stuart, because Mr. Shaker is stating that he sells his lots in bulk for $19,500, and his value is no more than $19,600. For the appraiser's office to put a different value and say it is worth more, it may be worth more as an end product, but in bulk sales, it is $19,500.
Ms. Stuart stated that, the fact that the bulk sale does not enter into it, once the lots are legally individual lots, they may be sold as individual lots, and they must be assessed as individual lots.
Mr. Smith stated that he disagreed with the discussion yesterday and that, if you look at market value, and the reasonable time for market exposure, then having 50 or 100 lots affects market value. He stated that, with the property on the market at $19,500 less closing costs, then the market is lower than the $21,600.
Mr. Smith made a motion, which was seconded by Commr. Hanson, to overturn the assessment of the Property Appraiser, Petition No. 2000-182, Jaymark Builders and Developers, Inc., and approve an amount of $17,000 per lot, based on the taxpayer furnishing evidence required to derive at a reduction in just value, and based on the petitioner showing evidence to overturn the Property Appraiser's presumption of correctness.
Under discussion, Commr. Hanson explained that what makes this one different than the case yesterday is that you cannot sell the lots individually, and if you could sell individually, to be consistent, then the VAB would assess them like all other similar lots.
Mr. Shaker explained that, if they develop more than 50 lots and try to sell them to individuals, you would have to register at a different level, and in this case, there are 110, and they would not, by law, be able to sell those to individuals, unless they registered as something special at the State level. He stated that it is bulk by contract, but it is purchased over a period of time, and in this case, it is over nearly two years.
Ms. Stuart stated that the appraisal does not look towards the owner of the property, or the intent of the owner, but it looks toward the legalities of the property itself. The Property Appraiser assesses the land, not the owner of the land, and if these lots can legally be sold as individual lots, that is the way they have to be assessed, no matter what the decisions of the owner are.
Ms. Patten stated that she finds it ludicrous that they would say they were going to uphold $17,000, when in fact he is selling them for $19,600, so if they are going to lower it, then it needs to be lowered to the selling price of the lots.
Commr. Hanson stated that, even though she seconded the motion, she agrees with Ms. Patten, to the amount of $19,500.
The Chairman called for a vote on the motion, which failed by a 1-4 vote.
Commrs. Hanson, Cadwell, and Pool and Ms. Patten voted "no".
On a motion by Commr. Hanson, seconded by Commr. Pool and carried by a 5-0 vote, the VAB overturned the assessment of the Property Appraiser, Petition No. 2000-182, Jaymark Builders and Developers, Inc., and approved an amount of $19,500 per lot, based on the taxpayer furnishing evidence required to derive at a reduction in just value, and based on the petitioner showing evidence to overturn the Property Appraiser's presumption of correctness.
Mr. Royce stated that he did not agree with the VAB's decision, but he would like to request that they change the value from $19,500 to $19,440.
On a motion by Commr. Hanson, seconded by Commr. Pool and carried unanimously by a 5-0 vote, the VAB approved to re-address Petition No. 2000-182, Jaymark Builders and Developers, Inc.
Commr. Hanson made a motion, which was seconded by Commr. Pool, to readjust the figure of $19,500 to $19,440, as requested by the Property Appraiser's Office, Petition No. 2000-182.
Under discussion, Ms. Stuart stated that there is a specific prohibition against what is called "sale chasing", and that would mean valuing something irregardless of comparable sales and valuing it at the price it sold for. The Property Appraiser does not have any problem with the VAB setting the value, even though technically they are supposed to demand him to re-value the property, however, if you value it at exactly the price it sold for, the Department of Revenue is required to come in and investigate the circumstances.
Commr. Cadwell stated that this would be duly noted.
The Chairman called for a vote on the motion, which was carried unanimously by a 5-0 vote.
At 11:05 a.m., Commr. Cadwell turned the Chairmanship over to Commr. Hanson. It was noted that Mr. Smith had left the meeting.
PETITION NO. 2000-151 WILLIAM G. GERBER, ECOBANK - DACAPO CO. LTD.
PETITION NO. 2000-152 WILLIAM G. GERBER, ECOBANK - DACAPO CO. LTD.
PETITION NO. 2000-153 WILLIAM G. GERBER, ECOBANK - DACAPO CO. LTD.
PETITION NO. 2000-154 WILLIAM G. GERBER, ECOBANK - DACAPO CO. LTD.
PETITION NO. 2000-155 WILLIAM G. GERBER, ECOBANK - DACAPO CO. LTD.
PETITION NO. 2000-156 WILLIAM G. GERBER, ECOBANK - DACAPO CO. LTD.
PETITION NO. 2000-157 WILLIAM G. GERBER, ECOBANK - DACAPO CO. LTD.
PETITION NO. 2000-158 WILLIAM G. GERBER, ECOBANK - DACAPO CO. LTD.
PETITION NO. 2000-159 WILLIAM G. GERBER, ECOBANK - DACAPO CO. LTD.
PETITION NO. 2000-160 WILLIAM G. GERBER, ECOBANK - DACAPO CO. LTD.
Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, explained that the property is approximately 1,016 acres in the Green Swamp Area. There were two deeds recorded in July, 1996, for a total of $1,850,000. In October, 1996, a Conservation Easement was given on the property, and the petitioner is asking that the VAB take into consideration the Conservation Easement, even though there has been nothing approved by the County, or the Taxing Authority in Lake County, to allow a reduction for a classification, such as agricultural.
Mr. Bill Gerber appeared before the VAB and stated that a Conservation Easement was done for 264 acres in October, 1996, and the balance was done in November, 1999, and he would like to see the Property Appraiser reflect the Conservation Easements on the value of the property. Mr. Gerber stated that the property cannot be sold at market value, when you have Conservation Easements on it. He noted that the Conservation Easements were to the St. Johns River Water Management District (SJRWMD) and the Department of Environmental Protection (DEP). He believes that the property would be agricultural value or less, because it is being considered in perpetuity, because it was a producing citrus grove, and they have removed all of the trees and they are replacing the trees with vegetation and trees, and doing work on the wetlands that are on the property. All of this is taking place through the mitigation process.
Mr. Royce explained that the there were two deeds recorded, each in the amount of $925,000, for a total of $1,850,000 and the appraiser is currently assessing it at $1,298,113. He stated that this would be $1,277 per acre, and if you look at pasture land, the value is $1,300 to $1,500 an acre. In that respect, he feels that they are appraising it as at the value for agricultural land, but it does not have the classification anymore, because it used to be citrus, and now it is gone.
Mr. Gerber noted that the taxes on the property are about $20,000, and if it had the agricultural classification, he did not know what the taxes would be. He further noted that the property would have to be sold with the Conservation Easements.
Mr. Sandy Minkoff, County Attorney, explained that someone would have to look at the easement to determine whether or not it can be developed, because a lot of Conservation Easements allow agricultural activities and are developments, and if this is an area where the Comprehensive Plan would only allow agriculture and those types of uses, the easement may not effect the value very much.
Mr. Gerber explained that the easement speaks about agriculture, but it also is granted specifically for the mitigation permit they have from the SJRWMD, which encapsulates their restoration program, and as part of the restoration program, they must remove all citrus trees and all agriculture.
Mr. Smith explained that you have to look at it as a business of conservation, and he feels the appraiser's office is being reasonable, if the taxes are $20,000. The value of the conservation is substantially more than $1.2 million. There is an intrinsic value of the conservation area as a business.
Mr. Bill Hobeck, partner of EcoBank, explained that they get paid for the environmental improvement, but they do not get paid for the land. There is no transfer of land, no transfer of deed, no survey, or anything that designates any portion of real estate that goes along with the credit. He explained that credit is a piece of paper that the regulatory agencies agree that the delta of environmental quality get accomplished on the land, and it is not a real estate value.
Mr. Smith explained that the land has real estate value based on their ability to sell those credits, because they cannot sell those credits without the land.
Mr. Hobeck explained that there is no future productivity to the land. Once those credits are sold, then the land is only a liability. Their only remedy for what they do here today is that their Charter and the State law allows them, at their discretion, once they are certified as a bank, they can donate the land to the Board of Trustees of the State of Florida.
Ms. Stuart stated that, if they do donate the land, as stated, the value changes, or they can choose to execute another easement under Section 193.501, which would limit the use of the land totally, and then they would be assessed at wilderness value, until such time something changed.
Mr. Hobeck stated that they can now transfer the underlying fee value of the land, at their discretion, to the State of Florida, and the credits can remain with them, and this is clear in the banking law. In the past, the SJRWMD has used $50 an acre. They have not done this as a business in Florida, because to be an appropriate citizen of the County and State, they feel it is appropriate that there should be some fair amount of taxes paid on that land. Mr. Hobeck stated that they would not quarrel with the agricultural assessment, even though he believes personally and philosophically that this would be more than what is absolutely fair, because an agricultural assessment anticipates that you have some way of making money off of that land.
Mr. Ross explained that the appraiser's office cannot classify it as agricultural property.
Ms. Stuart explained that this needs to go to the legislature, because someone needs to say that, for the good that they are doing, they should have a special classification that would allow them to be assessed at a lower value.
Mr. Hobeck explained that they have discussed this issue with some of the legislators, but as far as they are concerned, there is a remedy and that is to give it to the State. At this time, he showed the location of the property on a map, in relation to the surrounding area, and explained that their land cannot be developed, or farmed, ever. Mr. Hobeck stated that this was one of their arguments, as environmentalists, that with the kind of easement they had placed on it, if they keep it in private hands and have a community relationship and pay a fair amount of taxes for the fire service, etc. it would be better, because the forever is virtually guaranteed by the nature of the easement. However, if this goes under the control of the Board of Trustees, FDOT, State of Florida, they can through legislation and the DOT take it and do whatever they want to with it. Mr. Hobeck explained that their philosophy for private conservation does not allow the power of the State to reverse it, as long as it stays in the hands of the private party.
Mr. Minkoff clarified that the State can release the easement, and they have done that in other areas, so they still have the ability, in any time, to release the easement, at which time it would revert back to property with no restrictions on it at all.
Mr. Hobeck stated that, in regards to the comment made by Mr. Minkoff, their attorneys tell them that this is not the case, because it was designed to be an irreversible easement, and it cannot be broken.
Mr. Minkoff explained that, when an easement is given to the State, you have conveyed them an interest in your property, and they can give that interest back to you, at which time they would not have it anymore.
Mr. Hobeck stated that the attorney have explained to him that they can release that easement, and it does not go to them any longer, however, the fact that those prohibitions are on that property still stay.
Mr. Royce explained that there are a lot things that cannot be done with the property, but the problem that the appraiser's office has is that one thing that can be done with it, and that is create an income, until they sell it out. He stated that there are counties that have ordinances that have been passed that are similar to agriculture, which sets up a classification value. They are currently assessing it basically like pasture land, at $1,200 an acre, and if they had a classification, which acts like an exemption, then it would take that $1,200 an acre down to a taxable value that represents the type of pasture that it is and there is a means that can be instigated in the County to set up the schedule just like agriculture.
Commr. Hanson stated that the VAB has to make a decision today, and she agrees that this issue needs to be brought forward through the County Attorney's Office.
Mr. Gerber stated that this started out as a five year project, but it is now going to be 12 years before it is completed. He noted that they paid $1,850,000 for the property, and it was bought as a grove.
Mr. Smith stated that the remedy would be to bring the classification to the County Commission for next year.
Commr. Pool stated that he would like to have this done as soon as possible, because they ought to have a very low classification and allow them to pay taxes, but the demand for services are nil.
Commr. Hanson questioned Mr. Minkoff whether it would be possible to bring this forward to the County Commission, and to come back to the VAB to hear it.
Mr. Minkoff clarified that normally you could not go back in taxes.
Ms. Stuart explained that the County could not do a resolution, or an ordinance, unless their conservation easement permits it, and she has not looked at the documents closely enough to know, but her sense is that, where land banking is concerned, they are treated as if they are earning income on the land and land is being valued accordingly.
Commr. Pool stated that a wilderness conservation area should be very low in value, and he feels this should be a wilderness type assessment where they still pay taxes.
Mr. Hobeck stated that some years ago, when they considered doing this, he spoke to Mr. Havill, and he gave him great hope that there would be some conservation district, or classification, created, but they have not followed up on it. He questioned whether it was possible to have a one year temporary classification.
Commr. Pool stated that he wants them to pay taxes, but he does not want it to be a higher tax than what it needs to be on that piece of property especially considering it will be in perpetuity a wilderness area. He stated that he would like to find that solution, but he did not know if he had that support.
Mr. Minkoff explained that they have the ability to have it be tax exempt by conveying it to the State. They could also sell the property to anyone else who could then take the property and sell these credits. The issue is whether they would sell the property for $1,200,000 with the credits going with it, and they are basically telling the VAB that the property is worth more than this amount, because they will not sell it in its current state for that price.
Mr. Hobeck stated that they can sell the property without the credits.
Ms. Stuart explained that the very fact that the property has a limitation on it that gets the credits is what creates the value. If it went to the State, the value would be the same, but it would be immune from assessment and taxation. This would not change its value, it just would not be subject to tax.
Commr. Hanson stated that she agrees that they should pay taxes, and questioned whether they could pick an arbitrary number knowing that the rights are severely limited, as far as long term value to the land.
Mr. Smith stated that he felt there are other solutions that they have to investigate, and he did not see, in this year, that the VAB has any leeway of changing the value.
Commr. Hanson stated that the VAB could limit the value based on less rights, but they cannot change the classification.
Mr. Hobeck stated that they would agree, if this could be done for one year and then re-evaluated next year, which would give the County time to see if it wanted to come up with a different classification. He explained that they could give the land to the State and/or County and still maintain those credits, then they would pay no taxes.
On a motion by Commr. Pool, seconded by Ms. Patten and carried by a 4-0 vote, the VAB upheld the assessment of the Property Appraiser, Petition Nos. 2000-151 through 2000-160, William G. Gerber, EcoBank, DaCapo Company, Ltd., based on the taxpayer failing to furnish evidence required to derive at a reduction in just value, and on the petitioner's failure to show evidence to overturn the Property Appraiser's presumption of correctness, with the opportunity for the County Commission this year to review how they can best put this in a wilderness situation for tax purposes in the future.
Commr. Cadwell was not present for the discussion or vote.
PETITION NO. 2000-124 - LUCAS CLERMONT LIMITED
Mr. Clark Mann addressed the Board and noted that initially he had filed Petitions 2000-121 through 2000-131just to review the properties, but he would only be addressing Petition 2000-124 today, with the others being withdrawn.
COMMISSIONER AND SCHOOL BOARD MEMBERS
At 11:45 a.m., it was noted that Mr. Smith left the meeting.
PETITION NO. 2000-124 - LUCAS CLERMONT LIMITED (CONTINUED)
Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, presented the Board with information pertaining to Petitions 2000-121 through 2000-131, but noted that he would only be discussing Petition 2000-124.
Mr. Mann stated that he would be discussing the Clermont Towne Center, which was partially completed as of January 1, 2000.
Mr. Royce stated that Certificate of Occupancies (COs) were issued from January 1st through June, and there are still a couple of stores not rented. He explained that some value is lost when a store is not rented. The appraiser has assessed the land under all of the buildings, the paving, and the Kash & Carry store as being complete, and they have giving 27% and 26% functional obsolescence to those buildings that were not completed as of January 1st. The Kash & Carry building is being assessed at $44.80 a square foot; the smaller wing of the shopping center is being assessed at $37.22 a square foot; and a larger wing is being assessed at $35.25 a square foot. The building is being assessed as substantially complete, with most of the value being there waiting for interior finishing and tenants.
Mr. Mann stated that he appreciated the appraiser's office recognizing that there is a distinction between what is built and what is not ready for taxation. Mr. Mann stated that he wanted to hand out information, which he already has presented to the Property Appraiser, that primarily shows the certificate of occupancies, and a brief definition of what they represent, and the time frame they were issued.
Mr. Royce stated that their office just received the information the other day, and the VAB has not allowed it in the past, if they had not received it in a timely manner. He stated that he has no dispute that those buildings were issued certificate of occupancies after the first of the year. He noted that the Statute talks about substantial completion of property, and it is being assessed as substantially complete.
Ms. Stuart explained that basically the law says that substantial completion is complete so that it can be used for its intended purpose, and the appraiser has to allow that some of the amenities may not be in a shopping center, but it does go on the tax roll. She cited a case, which will likely find the substantial completion law unconstitutional. If it does, then whatever is there at any stage of construction, will go on the tax roll. With a shopping center, when the shell is complete, even if it has not been finished out for the shops, it will go on the tax roll at the value of the shell.
Mr. Mann explained that a fax was sent on September 21, 2000 to Mr. Frank Royce stating that the certificate of occupancies were issued between January 24th and May, 2000, and the information was provided yesterday. He pointed out that, on top of the certificate of occupancy, it states "Board of County Commissioners". Therefore, the Property Appraiser should have these records, and it is public information, and he is basically saying that he does not disagree with them. He also sent in the rent roll, which shows that they only had 7,500 square feet of extra space available for lease as of January 1, 2000.
Mr. Royce stated that he would have no problem with the information, if the Board wants to accept it. He stated that, in regards to the rent roll that was submitted, the petitioner fails to show the real estate office, the gift store, the chiropractor, and many others, so he does have a problem with that information.
Mr. Mann explained that the offices noted by Mr. Royce were not on the information, because they did not lease out until as late as mid-year. He further explained that approximately 85% of the shopping center is ready for taxation this year, and he is recommending that the assessment be reduced to about $1 million. Mr. Mann stated that, when you have a certificate of occupancy in January, that is debatable, because that property is almost complete and is ready to go, but if you have them as late as April, and May, those, in his opinion, should not be taxed.
Commr. Pool stated that the definition being given to the VAB by the appraiser's office for substantial completion was clear to him.
Commr. Hanson stated that the assessment is consistent with how the appraiser deals with all of the other new commercial constructions in the County.
On a motion by Commr. Pool, seconded by Ms. Patten and carried by a 3-0 vote, VAB
upheld the assessment of the Property Appraiser, Petition No. 2000-124, Lucas Clermont Limited, based on the taxpayer failing to furnish evidence required to derive at a reduction in just value, and on the petitioner's failure to show evidence to overturn the Property Appraiser's presumption of correctness.
Commr. Cadwell and Mr. Smith were not present for the discussion or vote.
PETITION NO. 2000-150 - NEAL MCCULLOH & JANET E. MCCULLOH, TRUST
Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, explained that the petitioner is protesting the assessment on the lot he owns in Deer Island Club. He noted that the appraiser's office received information yesterday and today, and he suggested that the VAB not accept it today.
Mr. Neal McCulloh appeared before the Board and stated that he was trying to get the best qualified individual to comment on the value of the property, who he believes is the developer. Mr. McCulloh asked for an extension, so he could get an affidavit from him. He stated that there were two things that were submitted today, which he did not get until this morning, and he immediately faxed them. The other item they received yesterday was a recitation from the developer of the debt service on the lots at Deer Island. Mr. McCulloh explained that the lot has been assessed at $170,204. He purchased the lot for $115,000, and it was an arms-length transaction where he never met the developer, or the principles before commencing to buy this lot. He feels that the VAB should consider the uniqueness of Deer Island, and he understands that, from a property appraisal standpoint, it is a difficult job when you are trying to do comparables. He reviewed the history of Deer Island and stated that it is a relatively older project, which went through bankruptcy, and they actually auctioned off some of the lots. The auction prices were around $75,000, and some of them are superior to his lot. The current developer should have the best idea of what the values are for those lots. Mr. McCulloh understood, at the time he purchased his lot, that he could pick lakefront lots and pay the debt service.
Mr. Royce noted that Mr. McCulloh purchased his lot on June 21, 2000, which is after the date of assessment, January 1st, and therefore, the lot was assessed before it was sold.
Mr. McCulloh explained that the number of lot sales in this area have been minimal for the time period the developers owned the property. He felt that the property was decreasing in value, not only in terms of what is happening with the lake, but also in terms of the golf course. He did understand that this was after the fact, but he felt that it was important that the VAB know the history of Deer Island. He stated that the property is subject to a Community Development District (CDD), which is important, because in this particular case, not only do you have the homeowner's association potential assessment, but you have a CDD assessment that goes on top of it, which has a tendency to hurt the value of the property. Mr. McCulloh stated that his lot has a conservation easement on it, which severely limits the use of the lot, especially in the rear of the lot i.e. the lakefront portion. He stated that he does not have full and complete access to the lot and use of the lot at the lakefront portion, as shown by the easement on the survey. He further stated that he was not trying to contest this fact, but he was only making a demarcation between the two types of lakefront lots that exist. The affidavit from Mr. Chip Webb was signed this morning, and it merely states that he and his wife sold the lot to him, and the price was $115,000, which constitutes the fair market price of the lot. It also states that he is not related to him, and it was an arms-length transaction. It points out that he is one of the principals of the current developer, and the number of lot sales at Deer Island have not met their expectations. The lot sales have been slow for the years that the current developer has owned the various lots at Deer Island. It further states that certain Deer Island lakefront lots owned and/or controlled by the developer of Deer Island were offered for sale not only to Neal McCulloh, but others as well, for the debt service on the lots. Ultimately the price paid by Neal McCulloh approximated the outstanding debt service of similar lakefront lots. The original executed Sales Contract for the sale of Lot 6 actually listed the developer as the seller, however, upon review of records, it was determined that Lot 6 was titled to his wife, and his name was noted as developer. None of the remaining lots including both the lakefront and golf course lots owned by the developer have a debt service equal to, or greater than, $170,000. Mr. McCulloh felt that this was important, because none of the lots are at the $170,000 valuation, or even close to it. He stated that several of the remaining lots owned by the developer, in his opinion, are more valuable and should have an appraised value when sold in excess of the value of Lot 6 ($115,000). He stated that there was another lot sale that was slightly higher than his, and it was Lot C-16, and Mr. Webb commented that Lot C-16 is considered to be both lakefront and golf front, and therefore, it is more valuable than his lot. He further commented that, unlike some of the other lakefront lots, Lot 6 does not have the preferred premium western exposure. Mr. McCulloh stated that he was not saying that there is not a way to pick comparables, but he does not think it is comparable to any other lots, and he feels that valuing his lot at $170,000 when he purchased it for the debt service of $115,000, and someone can purchase other lakefront lots for the debt service, is not fair.
Mr. Royce explained that debt service is kind of what you owe on the property. The problem that the appraiser's office has is that the sale was after January 1st, the date of assessment, and it is the only sale that has been lower. The property sold in 1997 for $200,000 and a deed was recorded. There are deeds recorded on other lots, in the amount of $205,000 to $215,000, in 1997 and 1998. Mr. Royce stated that there has not been a lot of action out there, and there have been problems, but until something else happens, the price of the lots are not coming down.
Commr. Pool stated that, as far as he was concerned, debt service does not really enter into the picture for him as far as the value of the property. He questioned whether the taxes could go down next year, since Mr. McCulloh paid $115,000 and it has been recorded for that amount.
Mr. Royce stated that the sale is unqualified, and it will always be unqualified, in the appraiser's view, as a sale for that date. If there are other sales two or three years down the road, it is certainly going to affect the value of those lots. He stated that next year the whole subdivision will probably be lower than it is today.
Mr. McCulloh interjected that one of the things the VAB is discussing is the debt service not really being related. He was suggesting that, during the time period when the appraiser is considering the value of the lot, someone could buy the lakefront lots for their debt service. He stated that it was not fair to penalize individual citizens at $170,000 when the value is $115,000. He stated that it was not $115,000 when he bought it, because there were no sales transpiring at that time, and because there will not be any sales, he is going to be penalized year after year.
Mr. Royce explained that the sales in Deer Island happened in 1997 and 1998, and 1999 was a slow year, and 1999 is the year that started the downfall. If it continues, it is going to be reduced next year. He stated that, with the information that they have today, that someone can buy the property for debt service, tells them that people can come in there and buy lower. He stated that, after one year of no sales, that tells him that the appraiser's office needs to look at it, and he can tell the VAB that those lots will be lower next year.
Mr. McCulloh explained that the lots are not selling, and if you consider the number of lots that sold in 1997 and 1998, there were only a handful outside of the developer. He stated that he did not know the assessment of the property, and he bought the property, because he knew he wanted to live on a lake in five years, and he knew it would not take off for five or ten years, but he did not expect to get penalized tax wise.
Commr. Pool stated that obviously everyone agrees that Mr. McCulloh got a good deal, and Mr. Royce did exactly what he was supposed to do in taking old transactions at $200,000 and $205,000 and assessing at $170,000, and he does not disagree with what he has done. Commr. Pool stated that he would like to see the appraiser's office reassess the property in one year, and he has to uphold what it is today, in hopes that next year it will have a different value.
Mr. McCulloh questioned whether the VAB has the latitude to look at this and say that they know the property, from a fairness standpoint. He pointed out that he was not saying that the Property Appraiser did anything wrong, and he understands the position that they are taking, but he was saying that it is within the VAB's purview to look at the information and the testimony that has been given, and to look at the valuation of the lot based upon that information, and they have an affidavit of the developer substantiating the value of that lot at the time the appraisal was done.
Commr. Pool stated that Mr. McCulloh has stated that he would be willing to have any compromise, and after hearing what the appraiser's office has heard today, and knowing what they know today, he questioned whether there was anything that the appraiser's office may want to do, or anything that they could do.
Mr. Royce explained that the petitioner and VAB keeps eluding to the affidavit, but it does not say anything in the affidavit about January 1st, but it does talk about the date of the sale.
Mr. Ed Havill, Property Appraiser, stated that he will need to look at that subdivision next year, and this is a 2000 sale and they cannot consider it.
Mr. Royce noted that he was not willing to make any adjustments at this point.
On a motion by Commr. Pool, seconded by Ms. Patten and carried by a 3-0 vote, the
VAB upheld the assessment of the Property Appraiser, Petition No. 2000-150, Neal McCulloh and Janet E. McCulloh, Trust, based on the taxpayer failing to furnish evidence required to derive at a reduction in just value, and on the petitioner's failure to show evidence to overturn the Property Appraiser's presumption of correctness.
Commr. Cadwell and Mr. Smith were not present for the discussion or vote.
PETITION NO. 2000-58L - STEVE A. BIKO
PETITION NO. 2000-59L - STEVE A. BIKO
Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, explained that Mr. Biko was not able to appear yesterday, because he was ill. Mr. Royce explained that the VAB will have to decide whether it will hear the cases, because they were both late applications.
Mr. Steve Biko appeared before the VAB and apologized for not being present yesterday, because of his illness. Mr. Biko explained that the closing on the property was supposed to be in January, 2000, and the property was zoned agriculture and has always been agriculture. At the last minute, the closing was moved to the end of December, 1999. He had been told and perhaps he misunderstood that, if the property is purchased during the year, the zoning will not change until the following year, so you just reapply for the agriculture zoning, and it is granted if it is truly being used for agricultural purposes, which in this case, there is no dispute about that issue. Mr. Biko stated that it was a misunderstanding, because the date of the closing had been changed from December to January. He has fenced the property, and he has cows, and there is no income derived from the property. He bought the property because the taxes were low, it is agriculture, and it will remain agriculture. Since he has bought the property, there has never been a study done on it for wetlands, and now it appears quite a bit of the property is wetlands.
Mr. Sandy Minkoff, County Attorney, stated that what Mr. Biko has described may or may not be a bona fide agricultural pursuit to get the classification, but he must apply between January 1st and March 1st every year for agriculture, even if it is just a renewal card, but the first time he has to fill out a long form application.
Mr. Royce suggested that Mr. Biko call Mr. Robbie Ross and talk about the qualifications for agriculture.
On a motion by Commr. Pool, seconded by Ms. Patten and carried by a 3-0 vote, the VAB approved not to hear Petition No. 2000-58L and Petition No. 2000-59L, Steve A. Biko, based on the petitioner not presenting extenuating circumstances for the VAB to hear the case.
Commr. Cadwell and Mr. Smith were not present for the discussion or vote.
On a motion by Commr. Pool, seconded by Ms. Patten and carried by a 3-0 vote, the VAB approved to deny all of those petitions where people failed to appear, as follows, with Commr. Cadwell and Mr. Smith not being present for the discussion or vote:
2000-73 Katharina Grujanac
2000-75L Bank of America, NA, Harold Froehlich, Trust Officer
2000-76 Russell Cordero
2000-95 Lake View Villas Ltd.
2000-191 Carven D. Angel
2000-91 William McCabe
2000-92 William McCabe
2000-113 Blueberry Hill Apartments
2000-132 Lennar Homes, Inc.
2000-133 Lennar Homes, Inc.
2000-134 Lennar Homes, Inc.
2000-135 Lennar Homes, Inc.
2000-136 Lennar Homes, Inc.
2000-137 Lennar Homes, Inc.
2000-138 Lennar Homes, Inc.
2000-139 Lennar Homes, Inc.
2000-140 Lennar Land Partners
2000-141 Lennar Land Partners
2000-142 Lennar Land Partners
2000-143 Lennar Homes, Inc.
2000-198L Woodland Heritage/Mora, Tax Adjustment Experts of Florida
2000-200L Hardee's, Christopher D. Richter, Agent
2000-41 Community Opportunities, Inc.
2000-77 Darrin L. Mitchell, Florida Property Tax Professionals
2000-146 Darrin L.,Mitchell, Florida Property Tax Professionals
2000-148 Darrin L. Mitchell, Florida Property Tax Professionals
2000-86 HI-C Investments, Ltd.
2000-145 Gordon Sunderman
2000-96 K-Mart Corp.
2000-97 K-Mart Corp. (Property Tax Control, Inc.)
2000-98 K-Mart Corp. (Property Tax Control, Inc.)
2000-99 Wal-Mart Stores, Inc. (Property Tax Control, Inc.)
2000-100 Wal-Mart Stores, Inc. (Property Tax Control, Inc.)
2000-101 Beall's Outlet Stores, Inc. (Property Tax Control, Inc.)
2000-102 Sears, Roebuck & Company (Property Tax Control, Inc.)
2000-103 Target Corporation (Property Tax Control, Inc.)
2000-106 Discount Auto Parts, Inc. (First American Tax Valuation, Inc.)
2000-107 Discount Auto Parts, Inc. (First American Tax Valuation, Inc.)
2000-108 Discount Auto Parts, Inc. (First American Tax Valuation, Inc.)
2000-109 Discount Auto Parts, Inc. (First American Tax Valuation, Inc.)
2000-110 Discount Auto Parts, inc. (First American Tax Valuation, Inc.)
2000-111 Discount Auto Parts, Inc. (First American Tax Valuation, Inc.)
2000-164 Circle K Stores, Inc. (Kristie Moore)
2000-165 Doris Woodside
2000-197 Donald C. and Earla Heinrich
Commr. Cadwell and Mr. Smith were not present for the vote.
Mr. Minkoff noted that the VAB will have one more meeting to certify the roll.
At 12:32 p.m., Commr. Hanson stated that the VAB will recess until October 10, 2000, at 8:45 a.m.
WELTON G. CADWELL, CHAIRMAN
JAMES C. WATKINS, CLERK