OCTOBER 1, 1998

The Lake County Value Adjustment Board met in regular session on Thursday, October 1, 1998, 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: G. Richard Swartz, Jr., Chairman; Welton G. Cadwell; and Catherine C. Hanson. School Board members present were: Mary Fletcher. Others present were Sandy Minkoff, County Attorney; Ed Havill, Property Appraiser; Frank Royce, Chief Deputy Property Appraiser; Robbie Ross, Personal Property and Agricultural Operations Director; Frank Driggers, Senior Review Appraiser; Jordan Stuart, Attorney representing the Property Appraiser; and Toni M. Riggs, Deputy Clerk.

Commr. Swartz reconvened the Value Adjustment Board (VAB) meeting and noted that there was a quorum, with three Commissioners being present, and one School Board member. Mr. Sandy Minkoff, County Attorney, explained that, if there was a two to two vote by the VAB, the motion would result in the upholding of the Property Appraiser's recommendation.


Mr. Ed Havill, Property Appraiser, informed the VAB that the Family Bible Church has had total exemption, based on a letter he had received from Reverend Speegle in 1995, for a vacant piece of property on Old Highway 441. The letter indicated that the Property Appraiser's Office was working on the property and preparing for future construction, and they gave him the exemption, because it was questionable. The property was put on the market in August, 1997, and the asking price was $300,000 for ten to 11 acres. The price was reduced in January to $275,000 this year. Mr.Havill received a call in June from one of the deacons of the church, after he received the denial of exemption, and he stated that they have kids fly kites on the property sometimes, and the ownership of the property was enough for the exemption. Mr. Havill asked for a letter with specifics about what they were doing with the property in June, and last week, on September 22, 1998, he received a letter from Rev. Speegle stating that they frequently needed the site to pray, and for the last three years, the members of the church have met on the property for fellowship and prayer, and they do this twice a month on Saturday mornings. The property is for sale for approximately $27,000 per acre. They have bought the old First Baptist Church in Eustis, and Mr. Havill stated that he did not feel they were in the position where they are preparing for future construction, and the realtors' office has advised him that they are contacting them on a weekly basis to find out if the property has been sold. Mr.

Havill stated that he has pictures of the property, which has weeds all over it, and it does not meet the religious requirement of the Florida Statutes in his opinion, and he was recommending denial of the exemption.

Rev. Speegle stated that the church did buy the property in 1994, with the intent to build a new church facility in the future. In April, 1996, they had outgrown the leased facility in Tavares, and they moved to Eustis and leased what used to be the First Baptist Church. After being there one year, in April 1997, they purchased the facility from First Baptist Church and placed their property on the market for sale. In June, 1998, they received a notice of disapproval of application from Mr. Havill's office. Even though he understands the angle taken by Mr. Havill, Rev. Speegle disagrees with the denial. Rev. Speegle stated that he believes there has been some misunderstanding as to usage. He stated that they do meet on the property and one of the church members has some adjoining property where they meet for breakfast. They go out for prayer every other week, and the youth and children have kite days on the property. Rev. Speegle referred to the court cases he had with him and stated that, if and when the sole use of the vacant property is used for exempt purposes, and regardless of how often it is used, if it is used solely for religious purposes, it is exempt. In the North Carolina case, regardless of future intent use, the exemption is solely based on the current usage. Rev. Speegle presented copies of the court cases to the VAB members, and to Mr. Havill.

Mr. Havill stated that he had not received copies of the court cases, but his attorney had advised him that, since it was law, they would not object to the fact that the information was not provided to the Property Appraiser in advance as evidence.

Ms. Jordan Stuart, Attorney, stated that the two ruling cases in Florida were cases that were tried by their office about 15 years ago. She referred to the cases and explained that the property must be used for religious purposes. In discovering this in both cases, the churches attested that they had prayer meetings on the property during the year. She reviewed the issues that were addressed in the court cases, and in both cases, the courts took into consideration that the property was adjacent, and it was slated for church expansion. Ms. Stuart stated that, what the VAB can consider in this case, that could not be considered in the other two cases, is the fact that it has already been admitted that this property is for sale; it is not slated to be used for church purposes anymore; and there is property of a church member adjacent to it that they would probably go to anyway for their church meetings. Ms. Stuart stated that testimony was given by Mr. Havill that the investigation that was done by his office shows that they are anxious to divest themselves of this property.

Mr. Havill pointed out that the First Baptist Church of Eustis, that sold the property to the Family Bible Church, bought the Blue Lake property a number of years ago, and for three or four years, they prayed on the property and cleared the property, and they paid full property taxes on the property, before they moved out of the buildings now being occupied by Rev. Speegle. Mr. Havill gave a brief description of the condition of the property.

Rev. Speegle stated that the sole purpose is to use it, until it is sold, for religious purposes, which stands contrary to their understanding of their rights as a non-profit organization to be taxed on the property.

On a motion by Commr. Cadwell, seconded by Commr. Hanson and carried unanimously by a 4-0 vote, the Board upheld the recommendation of the Property Appraiser and denied the exemption for Petition No. 1998-152, Family Bible Church, based on the petitioner not meeting the guidelines for the ad valorem tax exemption.



Mr. Clarence E. Middlebrooks addressed the Board and requested that his two cases be combined into one hearing noting that one was for the tangible, and one was for the real estate.

Commr. Swartz stated that the VAB would have to hear them separately, since one is tangible and one is real property, but Mr. Middlebrooks could address both of them.

Mr. Middlebrooks stated that he and his wife, Ruby, own the Wekiva Falls Resort property, which is located in Sorrento. He stated that, on the real estate property, he was requesting that the VAB decrease the assessment from $1,479,943 to $203,093, and in the tangible appeal, he was requesting that the VAB decrease the assessment from $506,966 to $83,485. Mr. Middlebrooks was asking that the VAB assign a $2,000 scrap value to the Resort's utility plants and underground collection and distribution lines, and retain the present assessed value of $81,485 for the Resort's miscellaneous equipment and machinery, for a total adjusted personal tangible property value assessment of $83,485. He stated that his property is adjacent to some State owned land, which abuts it on the east, west and south. As part of the Central Florida Beltway Act, Florida Statute 338.520, the St. Johns River Water Management District (SJRWMD) bought this adjacent property, and the Central Florida Beltway provided about $17 million for them to purchase the property and then convert it to wetlands. Mr. Middlebrooks stated that, unfortunately they converted it to swamp land, and his adjacent property was also converted to swamp land. He stated that the actions that they took did not hydro logically stop at the fence line, but it extended over and encroached upon his adjacent properties. He further stated that he fully had no objection and had not appealed any of the property prior assessments before this action was taken by the SJRWMD. Mr. Middlebrooks stated that his request for a reduction is strictly temporary. He stated that last year he was unsuccessful before the VAB, but the Chairman had asked him, if and when he came back this year, that he be prepared with some professional opinions. He further stated that he authorized an engineering study, and when he submitted his petition to the Clerical Support group, a clerk had indicated that, because of the size of the real estate report, she would not be able to reproduce it for all members of the VAB. He hoped that the VAB had the report before them.

Commr. Swartz noted that the VAB members had the summary, as well as the complete report, and they could look at any exhibits that Mr. Middlebrooks wanted the Board to address.

Mr. Middlebrooks read some of the concluding comments in the Wekiva Falls Hydrological Study, which included language from Page 1, Purpose of Study Phase 1, and language from Pages 7- 8, Conclusions & Comments, and Depths to Water Table (Below Land Surface) = BLS (feet). He stated that his property, after any significant rainfall now, becomes a swamp land. He asked the SJRWMD to verify this by study, and to determine whether or not there was any technical basis for his complaint, and that was four years ago, so it was because of the suggestion of the VAB that he hired the engineers.

Commr. Swartz stated that he did not recall suggesting that he hire engineers. He stated that Mr. Middlebrooks was going to have to provide specific information that could be used to justify overturning the Property Appraiser's presumption of correctness, and this was the only thing that he was suggesting that he or any other applicant would need to do.

Mr. Middlebrooks stated that, during the course of the study, the engineers determined that the SJRWMD had performed significant dredging in the Wekiva River, and the Wekiva River's flood plain, without retaining a permit from the Corp of Engineers, and all of this is attributed to the adverse conditions that he is now suffering. He wrote six letters to the Corp of Engineers and got no response, and he contacted his Congressman for his assistance, and the Corp of Engineers responded that all of the dredging was legal, and that permits had been issued to the Seminole County Stormwater Department, and the dredging was performed legally under those permits. Mr. Middlebrooks stated that it had nothing to do with the Seminole County dredging project on the Little Wekiva River in the Sandlando Subdivision, so after his Congressman pointed out this discrepancy, he asked that the presiding engineer in Jacksonville send staff members to meet with his staff on the site, which took place on September 1, 1998. The correspondence he received was contained in Mr. Middlebrooks' petition as Exhibits A, B, and C, 1998-45. It was indicated to him that they would study it and determine whether there had been any violation and would follow-up with a more comprehensive report, which has not yet taken place. Mr. Middlebrooks stated that last year he had presented an affidavit from Realtor Everett Huskey indicating that he had the property for several years and had not been able to sell it, because of these adversities, and he would not, in his opinion, be able to sell it until some resolution was made. He referred to the Florida Statutes, Chapter 193, and stated that the Property Appraiser has three procedures to follow in determining the valuation of a property, which he reviewed with the VAB, as well as the reasons why he did not feel that his property could qualify under any of the procedures, which included his income losses over the past years. Mr. Middlebrooks stated that his property does not earn any income, and it will not earn any income until these problems are fixed. He stated that the Corp of Engineers may eventually direct the SJRWMD to fix them, and if not, he may file an inverse condemnation suit. Mr. Middlebrooks stated that his property is in the Wekiva River Repair and Habitat zone, and it is in the Wekiva River Protection zones, and from the facts that he just stated, a campground is not a viable use, because of the flooding situation. The realtor had suggested that he convert it to timber production, and the highest and best use would probably be residential, but based on the Lake County Comprehensive Land Use Plan, he could put three houses on the property. Mr. Middlebrooks stated that he determined the amount of $203,093 based on what the STS property sold for adjacent to him, which is basically raw, undeveloped land.

Mr. Robbie Ross, Personal Property and Agricultural Operations Director, stated that, for 1998, the current assessed value of Mr. Middlebrook's property is $1,479,943. Mr. Middlebrooks requested that the Property Appraiser consider the income approach to value for his 1998 assessment. Mr. Ross stated that billboards along Highway 46 and along I-4 list lot rents at $165 per month for one to two persons. He stated that the advertisement does not state that, if you have any additions to the unit, the rent is increased. He further stated that additional income is received from gate fees when the public uses the bathing area, boat/canoe rental, and snack bar, but he did not consider these incomes in his income approach to value. Mr. Ross stated that the potential gross income of the property is $1,629,540. When taking the vacancy, he adjusted it to $814,770, and taking expenses off of that, he reduced it to $407,385. Mr. Ross explained that, one of the other cases, to be heard today on a mobile home park, used a 14% cap rate, which is pretty generous, which would reveal a value of $2,909,893. With the market approach, the sales reflect $4,400 to $12,500 per lot, which would give a value range for the park between $3.6 million to $10,287,500. Mr. Ross stated that last year Mr. Middlebrooks presented some evidence including letters from some brokers, and he contacted one of them last year and was told that parks are being purchased from $8,000 to $9,000 per pad, and a 250 lot park was just purchased in Citrus County for $2,100,000, which would be $8,400 per pad. Mr. Ross referred to the document presented by Mr. Middlebrooks, and a letter to Col. Joe R. Miller, District Engineer, U.S. Army Corp of Engineers, from Mr. Middlebrooks, Page 8 of 10, Paragraph 31, which states that, on October 13, 1993, he had an appraisal done by a prestigious MAI that valued the property at $6 million. Mr. Ross stated that Paragraph 32 goes on and states that the same MAI felt that the property would increase in value by 5% per year, which would put the property value now at over $12 million. Mr. Ross stated that the property is currently assessed at $1,479,943, and Mr. Middlebrooks stated that he was still actively trying to sell the park. Mr. Ross questioned Mr. Middlebrooks about the current selling price of the property.

Mr. Middlebrooks stated that anyone that contacts Huskey Realty is advised of the adverse conditions, which is required by law, and then no one is willing to take the risk. He explained that the price is open, and he is taking all offers into consideration. After addressing the questions about the actual selling price, Mr. Middlebrooks indicated that, if someone offered him the estimated market value, as he indicated on his petition, it would be considered.

Mr. Ross stated that, using the three approaches to value, he came up with the following: income approach - $2,910,000; market approach - $2,900,000; and cost approach - $2,500,000. He stated that the fair market value would be adjusted to $2,750,000, and from that he would remove the tangible personal property, which would reduce the fair market value to $2,245,000. Mr. Ross stated that the assessed value is $1,479,943, or 65.92% of the fair market value of $2,245,000. He stated that, by looking at these figures, it appears that the Property Appraiser's Office is trying to take into consideration the hardships indicated by Mr. Middlebrooks.

Mr. Middlebrooks stated that the Property Appraiser is in error, because he has not considered the current condition of the property. He stated that the property is nearly swamp land, and the prior appraisal plus Mr. Ross' dissertation was based on a high occupancy rate. Mr. Middlebrooks stated that the $6 million appraisal was conditioned upon the park being developed out and being 90% occupied within a certain number of years. He stated that the park operates at 15% to 18% occupancy.

Mr. Havill stated that his office has taken into consideration the current condition of the property, and the current assessed value is less than 15% of the projected MAI appraisal brought forward. He stated that all three approaches to value come up to $2,500,000 or better.

Mr. Middlebrooks stated that he has 823 total permitted sites, and 47 of those do not have sewer.

Commr. Hanson questioned whether Mr. Middlebrooks is vested for units and could his property be developed into a conventional home site, or a subdivision in the Wekiva.

Mr. Sandy Minkoff, County Attorney, stated that this is a non-conforming and/or a vested use as a RV park, and those would translate equally into single family residences. Mr. Minkoff stated that there has been attempts at some time or other to think about selling individual sites, and it could end up with something like a mobile park, but that would not automatically relate to a single family subdivision with 900 homes on 100 acres.

Ms. Stuart stated that, even if that was possible, she did not feel it would be permissible for the Property Appraiser, at this juncture, to consider it, in that the highest and best use of the property right now, in its present condition, is its present use. She stated that, even though he may be vested to change it, there are certain requirements that he would have to meet to do it, and all of that would be too speculative. The problem is that, even if there is an impact, and as long as the Property Appraiser acknowledges it and says he considers it, then it becomes incumbent on the petitioner to show how it specifically impacts value, and this has not happened here. Ms. Stuart stated that there is no evidence as to its impact on value, nor has the Property Appraiser been provided with any information, by way of income or sales, that would indicate anything different.

Commr. Hanson questioned whether Mr. Middlebrooks would have a problem with the use, if the drainage situation was resolved, and he was in the same position that he was in before the State bought the property.

Mr. Middlebrooks stated that he would have no problem, because he felt the assessment was fair at that time. He stated that, if the Property Appraiser has, at some point in time, considered these adverse impacts, he would have expected a lower assessment. He stated that this has not happened, and each year it has increased, which is an indication that he has not considered these adverse conditions.

Mr. Ross stated that last year it was determined that, after research, the asking price was approximately $10,000 per lot, which based on 823 lots, it would be an $8.2 million asking price.

Commr. Hanson stated that she has a lot sympathy for the adverse actions of government, and if she can help in any way to get more attention drawn to the activities that took place, she would do so.

On a motion by Commr. Hanson, seconded by Ms. Fletcher, and carried unanimously by a 4-0 vote, the VAB upheld the recommendation of the Property Appraiser and approved a market value of $1,479,943 for Clarence E. Middlebrooks, Petition No. 1998-45, based on the Petitioner failing to furnish sufficient evidence to overturn the Property Appraiser's recommendation, and after taking into consideration all factors in deriving just valuation, as provided by State law.

Discussion occurred regarding Petition 1998-44 relating to Mr. Middlebrooks intangible property.

Mr. Middlebrooks explained that the utility system is essential to a viable park, and he does not have a viable park, so the value of the utilities is strictly salvage.

Mr. Ross stated that Mr. Middlebrooks does have a water and sewer system on his property, and, if he did sell the park, he would have the option of retaining the water and sewer system. Mr. Ross stated that he compared all of the companies, that have to do an annual report to the Florida Public Service Commission (PSC), and the average price per connection is $1,539. He stated that the number he is using has both water and sewer, so he used an adjusted 790 connections. On the average PSC reporting, it would give a value of $1,215,810; a median on the 790 would be $1,569 per connection; or a value of $1,239,510. He stated that there have been sales that have occurred around the State.

Commr. Hanson questioned how viable the sewer system would be in the Wekiva Basin, when there is no potential for development around it, and if that park was to fail, the only potential you would have would be what you could get if it was a viable system where the whole system could be sold and moved, and no one is going to pay more than scrap value to move it.

Mr. Ross stated that this plant is still in operation. He stated that the assessment for the water and sewer system is $415,520. He has an additional value of $92,446 for tangible personal property equipment. This is no where near the $1,500 per connection that is seen in the market. Mr. Ross stated that they have considered everything they can in determining the assessment.

Mr. Middlebrooks stated that he paid between $20,000 and $30,000 for the sewer system, and the amount of $345,868 would include the refurbishment of the equipment.

On a motion by Commr. Hanson, seconded by Ms. Fletcher and carried unanimously by a 4-0 vote, the VAB upheld the recommendation of the Property Appraiser and approved a market value (tangible) of $506,966 for Clarence E. Middlebrooks, Petition No. 1998-44, based on the Petitioner failing to furnish sufficient evidence to overturn the Property Appraiser's recommendation, and after taking into consideration all factors in deriving just valuation, as provided by State law.




The Property Appraiser's staff noted that they had not heard from Deloitte & Touche; they did hear from Property Tax Consultants, Ltd. and they would not be present; and Property Tax Control Co. would not be able to attend the hearings.

It was the consensus of the VAB that they would not take action on those petitions until the end of the scheduled agenda.


On a motion by Commr. Hanson, seconded by Commr. Cadwell and carried unanimously by a 4-0 vote, the VAB approved the Minutes of August 13, 1998, as presented.


At 10:30 a.m., the Chairman announced that the VAB would take a ten minute recess.


Mr. Frank C. Montisano addressed the Board and stated that he was appealing the assessment on his home.

Mr. Frank Royce, Chief Deputy Property Appraiser, stated that Mr. Montisano's property is located in the Cricket Lake Village subdivision.

Mr. Montisano stated that the party that evaluated his property did not take into consideration the area deteriorating in the past few years. He stated that Charlie Johnson built the home for him in March, 1997, and he was never told where it was being built. He further stated that the property has downgraded in the past few years, and the property that his house is built on has a water retaining ditch, which he was never told about, and he has water two to three feet deep in his backyard. Mr. Montisano stated that there are bugs and a bad smell from it. He talked to three different taxpayers who lived here before him, and they are interested in the information that he gets here today, because they feel the same way about the property. He stated that Charlie Johnson would not answer his telephone calls, and he is very disappointed in the treatment that he has received from the officials, and the Recreation Department in the City of Eustis. He stated that he is 82 years old and retired from the State of Ohio, and it costs him twice as much to live here than in Ohio.

Commr. Swartz explained that the VAB needs to have some evidence from Mr. Montisano, in order to determine that the Property Appraiser's assessment is not fair and just.

Mr. Montisano stated that there are "for sale" signs on five pieces of property in Cricket Lake Village, as follows: 501 Crooked Lake Hollow - $63,000; 306 Cricket Lake Hollow - could not find selling price; and 408 Cricket Lake Hollow - $77,000. He stated that there was another one listed in the 70s, but sold for $59,000 in Cricket Lake Village. Mr. Montisano stated that the SR 44 entrance to the subdivision, as well as the neighborhood, is downgrading, and he feels the property values should be going down.

Mr. Royce stated that the assessment on Mr. Montisano's property is $57,623, and on the last page of his petition, Mr. Montisano stated that he paid $70,600 for the property. He stated that Mr. Montisano currently has his property listed with Matsche Real Estate for $69,900. Mr. Royce stated that he chose three comparables, and he feels that any subdivision of this size with only four real estate signs does not show that there is a drastic problem with the subdivision as a whole. Mr. Royce presented the following comparables for consideration: 405 Dorothy Circle - sold in 1996 for $76,500; 606 Cricket Hollow Lane - sold in1994 for $67,000 and sold again in 1997 for $74,000; 501 Cricket Hollow Lane - sold last month for $63,000. Mr. Royce stated that their assessment of $57,623, considering the purchase price paid and market of the area and what the homes are being sold for, is fair and just.

Mr. Montisano stated that the individual from the Property Appraiser's Office did not come into his house, and he did not look at the outside property when there was standing water. He has had his house on the market for five months, and he has been offered $59,000.

On a motion by Commr. Hanson, seconded by Ms. Fletcher and carried unanimously by a 4-0 vote, the VAB upheld the recommendation of the Property Appraiser and approved the assessment of value in the amount of $57,623, based on the Petitioner failing to furnish sufficient evidence to overturn the Property Appraiser's recommendation, and after taking into consideration information on comparable properties provided by the Property Appraiser's Office.


Mr. Ed Havill, Property Appraiser, informed the VAB that Mr. George King, Petition 1998-64, called and said he would not be present for the hearing.

Commr. Cadwell asked that the County Attorney investigate another procedure to handle the tax services that file so many petitions and never appear for the hearings.

Mr. Sandy Minkoff, County Attorney, stated that they debate this every year between the Clerk and the Appraiser's Office, and the concern that they have is with the law that says they can make people wait up to four hours for their case.

Discussion occurred regarding the contact that the Property Appraiser's Office has with these services, which is minimal, and the possibility of requiring a filing fee from such companies, with the possibility of a refund being available, if they appear for the hearing.


At 11:05 a.m., the Chairman announced that the VAB would recess for lunch and reconvene at 1:30 p.m.



Mr. Ed Havill, Property Appraiser, stated that the petition filed in the name of Kelly J. Pettijohn is for the tax exemption for Florida Hospital Waterman, Inc. Mr. Havill stated that, after the negotiations on the privatization for fire assessment program in Lake County became public this past spring, after receiving many phone calls, he started looking at the ambulance portion and its private management company. He stated that his office got some of the information from the hospital, and their exemption application was reviewed. Mr. Havill stated that, after receiving the information from the hospital, his office had some more questions, so he passed that onto his attorney, and she asked for more information. He stated that they were looking at about $34.5 million worth of assessed values that Waterman has in this county, but he was not sure it was all taxable. Mr. Havill stated that he has denied the exemption on every parcel owned by the hospital, in order to bring it before the VAB.

Ms. Stuart explained that Florida law requires that all property is presumed to be taxable. In this circumstance, beginning back on April 14, 1998, and from that time on, they have made very specific requests for data from either the hospital, or from the profit making ambulance service, which is the management company operating the service for the hospital. She stated that, in each and every case, they felt that, up until last week, they had been "stonewalled". Ms. Stuart stated that they got a response from an attorney out of Tallahassee, who represents the profit making management company that manages the ambulance service, refusing to provide any information and making an inaccurate claim that the Property Appraiser cannot retroactively deny the exemption. Ms. Stuart stated that she did receive some information from the hospital, and on May 19, 1998 they requested income and expense data for the hospital, and they requested information on the transfer of the assets that went to the profit making management company. Ms. Stuart stated that she met with Mr. Walter McLin, Attorney, and Mr. Seth Ellis of the management company, and they refused to provide sales data concerning the transfer of the property.

Commr. Swartz explained that the case before the Board involves Florida Hospital Waterman, Inc., and he was not clear on the relevance of the ambulance management company. He stated that there has never been any doubt that the management company was a for-profit service.

Ms. Stuart stated that Florida Statute 192.192 sets forth the criteria for determining whether or not an exemption applies. One of those criteria is that the Property Appraiser is bound to consider the economic use of the property. She explained that, when an otherwise exempt entity contracts with a profit making entity, the contract must be arms length, it must be reasonable, and it must not feed funds from the non-profit entity unreasonably into a profit making entity. Ms. Stuart stated that Mr. Havill was aware that some people that were part of the management company left their jobs at the hospital and formed the management company, and he wanted to know if this was still arms length. He wanted to know the arrangements that were made between the two entities, how much the hospital was paying the management company, was it reasonable, and was it funneling profits into an organization that otherwise should not be exempted. All of these are the basis for removal of an exemption. Ms. Stuart explained that, if the Property Appraiser exempts a hospital that is funneling profits through to a profit making entity, then the County is misusing public funds. At this time, Ms. Stuart reviewed a case from Henry County.

Commr. Swartz questioned whether the Property Appraiser has requested the same type of information from South Lake Hospital and Leesburg Regional Hospital, and any other not-for-profit entity.

Mr. Havill stated that they ask for the same type of information from all not-for-profit entities, and the privatization issue brought up an issue about the private management company that he was not aware of, and the more information he received, the more questions he had about the operation.

Ms. Stuart stated that Orlando Regional Health Services and Leesburg Medical Center have been investigated in the past, and normally when an exemption like this is granted, unless there is some major change, a transfer of the property, or there is something that comes to light, the exemption is granted again. It is incumbent on the taxpayer to let the Property Appraiser know if there is a change. In this case, it came to light that there may have been a set of unreasonable transfers, or contracts, with regard to this particular entity.

Commr. Swartz questioned whether it was Ms. Stuart's position now that the Property Appraiser's Office is going to deny the exemption on all of the parcels of the hospital, based on the information that she has at this point.

Mr. Havill stated that, because of the time frame, he denied the request and sent a letter of denial to the hospital, with hopes of getting additional information before the hearing, but the information he has received has raised other questions, and he has not seen the current information.

Commr. Swartz stated that, as they sit here today before the VAB, it is their understanding that the Property Appraiser has denied the tax exemption for Florida Hospital Waterman, Inc., and that is still the position of the Property Appraiser, and he was asking Ms. Stuart to provide the basis for the denial.

Ms. Stuart explained that, where an exemption is called into question, there are certain criteria that must be met by the organization, in order to overcome the presumption that the Property Appraiser is correct and to show the exemption should be granted. The first criteria is ownership of the property by a non-profit organization, and in the case of a hospital, an organization that qualifies under 501(c)(3) of the Internal Revenue Service Code and holds a license under Chapter 395 Florida Statutes as a hospital, and this organization is qualified under Section 501(c)(3). She stated that, it is their opinion, as of this moment, based on the information they have been able to garner, that considering that all property is presumed to be taxable unless otherwise shown to be exempt, and questions have been raised as to the exemption, these people should not, under law, be granted an exemption at this time. Ms. Stuart stated that, in this case, the nature of the ownership of this property has been called into question, and they question whether Florida Hospital Waterman, Inc. is truly a non-profit organization in its economic dealings. She stated that it is Florida Hospital Waterman, Inc. that is requesting the exemption, and if they are unqualified, then any entity under them is also unqualified, but that does not include the entire Adventist Hospital system. Ms. Stuart stated that one thing they discovered is that the ownership includes profit making entities. Ms. Stuart explained that Mr. McLin has agreed to let them meet with him and look at the documents, but not keep them, but he is out of the country at this time. She further explained that she needs information regarding the lease amount for the ambulance facility, because the information she received includes comparable uses in Winter Park for automobile showrooms. She needs information concerning the payment amount from management to the ambulance management service, and they have not seen this information, even though they know it is a contracted amount. She stated that they need to know what the contract amount was for the sale of the assets of the ambulance service. She noted that they got the contract, but the amounts were blacked out.

Mr. Minkoff read the following to the VAB:

Florida Statute 196.195 (4)

Notwithstanding the provisions of subsections (2) and (3), a corporation organized as nonprofit under chapter 617 which has a valid consumer certificate of exemption pursuant to s. 212.08(7)(o) and which has a valid exemption from federal income tax under s. 501(c)(3) of the Internal Revenue Code is nonprofit. Proof provided by a corporation of its status as described in this subsection shall be sufficient to establish the organization's nonprofit status, and any corporation providing such proof is not required to provide any other information in order to establish its nonprofit status.

Ms. Stuart explained the Presumption of Correctness Bill and stated that, if you can consider a consumer certificate of exemption to be use, you still must consider all other evidence of use as well, and her recommendation to any Property Appraiser would be that a consumer certificate of exemption would be highly relevant, otherwise the Property Appraiser merely becomes a ministerial officer who has no decision making power as to what the credentials of the entity are.

Mr. Minkoff read to the VAB Florida Statute 196.195, Sections (1), (2) (3) and (4), and stated that, even though he has not researched it, he believes that, if you provide these things, you are not required to provide any additional proof as to the nonprofit section of the corporation.

Mr. Minkoff stated that, in 1992, he was on the Board of Directors of Waterman Hospital Inc., which is the predecessor to all of this, which he wanted to disclose, and at this point, he has not given the VAB an opinion, but he has just read the Statute to the Board and asked Ms. Stuart a couple of questions about the Statute. He stated that he would be prepared to give the VAB an opinion later, if the VAB asks for it.

Ms. Stuart stated that 501(c)(3) has always been required of all hospitals, and so has the license under Chapter 395. They would suggest that, because there is a special exemption Statute for hospitals, this provision that Mr. Minkoff raised does not even apply to them, because they do not need a consumer certificate of exemption, and they get a hospital exemption under Chapter 395. She stated that Florida Emergency Medical Services is the organization that Florida Hospital Waterman, Inc. contracts with and it looks superficially as if that contract may mean that they are paying out as much as 80% of what they get in, on that management service contract and adjacent items, and 80% is not reasonable under F.S. 196.195.

Commr. Swartz clarified that 80% of all revenues are not being paid for the management service. He noted that the Board has been contracting for ten years for the ambulance contract in a three party arrangement, and he has been following their profit and loss statements for ten years, and he was not sure that, in Ms. Stuart's analysis of the information, she understands the relationship, and that might be the basis upon which she is advising her client.

Ms. Stuart wanted the VAB to know that Mr. Pettijohn, from the moment she had her first contact with him, has been forthcoming. She wanted the VAB to also know that the apparent problem prior to this time has been with the management company, and she and Mr. Pettijohn have had communication as late as yesterday, and if there was more time, she would expect that she would get the documents that she had requested.

Mr. Ken Mattison, President, Florida Hospital Waterman, Inc., addressed the Board and stated that Adventist Health Systems is a not-for-profit 501(c)(3) company, and Florida Hospital Waterman, Inc. is also a 501(c)(3) not-for-profit company. Mr. Mattison stated that there was a merger that occurred in 1992 between Florida Hospital Waterman, which was Waterman Medical Center at that time, with Adventist Health Systems. He stated that they have attempted to not stonewall, and Ms. Maggie Evans and Mr. Kelly Pettijohn will be discussing some of the time lines with the letters of communication they have received and the requests for information and when they responded to those requests. Mr. Mattison noted that the 80% figure is not a figure that is being paid for management.

Mr. Kelly Pettijohn stated that this is a situation where, if he were to have time to spend with Ms. Stuart, they could probably come to some clear understanding of these things, because he believes that she has had very little time to digest it. Mr. Pettijohn stated that he had hoped to have had the opportunity to sit down with Mr. Havill and Ms. Stuart and go through these documents to help them understand the details.

Commr. Hanson questioned whether it would be appropriate to ask that the parties sit down together and to postpone the hearing, so that they had time to go through the documents.

Mr. Pettijohn stated that he was struggling the most with the complexity of the transaction and the drawing of conclusions on perception and then automatically giving them a blanket denial of their tax exempt status. His preference would be to allow that status to continue and give them time to sit down to work face to face and make sure that there is a very clear understanding of the issues. Mr. Pettijohn stated that one of the arms of their company is Lake Medical Services Inc., which is a for-profit company, and they do pay property taxes on the properties that they own. He stated that they pay property taxes on properties that are a part of Florida Hospital Waterman Inc. that do not serve an exempt purpose, but the blanket denial of exemption troubles them.

Ms. Stuart explained that, as to exemption, when Mr. Havill's office is apprized of a situation like this, after the tax roll is certified, Mr. Havill has no ability to change it, and that would put the presumption in favor of exemption rather than the presumption in favor of taxation. She stated that they did not deny it, because they are convinced that every bit of it should be denied, but because there is evidence indicating that it was called into question, and when it is called into question, it has to be under law presumed to be taxable, not presumed to be exempt.

Commr. Swartz stated that, despite the fact that he has asked several times, Mr. Havill and his attorney are standing on a position that they believe it should be denied, and they are recommending that is be denied, and they are denying it, but he believes it is based on perceptions and inaccurate perceptions and not a complete understanding of it, in issuing a blanket denial based on those things, which he feels are inappropriate, and to make a blanket denial of the exemption he feels is a travesty, and he does not feel is appropriate. He would like to hear the points that Ms. Stuart would like to address to representatives from Florida Hospital Waterman Inc., and then the VAB can try and decide whether or not it is proper to uphold and to issue a blanket denial, or it is proper to overturn it, and if there are still questions that linger that are based on whatever has generated this, then maybe they can be asked and answered.

Ms. Stuart addressed the issue of presumption of correctness and stated that there is no way to grant an exemption absent concrete evidence that the exemption should lie, and there is concrete evidence that the exemption may not lie, and in fact should not lie to certain property, but you cannot identify where it should or should not lie, so the property of necessity has to be presumed to be taxable, and that constitutes a blanket denial.

Commr. Hanson stated that she was concerned that, no matter what is presented by Mr. Pettijohn, he cannot really argue the specifics of the documents, and even after his presentation, she will not be prepared to make a decision based on his presentation versus Ms. Stuart's presentation. She stated that she will not make a decision today without the two of them getting together and going over the documents in private and coming back to the VAB with some sort of recommendation. She further stated that she was not going to sit in this position and make a determination that is being asked for at this time.

Ms. Stuart stated that there is no solution beyond November 1 for the Property Appraiser, and if the denial is upheld based on what they have at this point in time, there is a mandate on the part of hospital and Mr. Havill to get together and to provide what is there and what is not there. Ms. Stuart stated that the hospital has 60 days from the time that Mr. Havill certifies the tax roll, to file suit. They can preserve their right to file suit, and the VAB can uphold the law and the presumption of correctness, and the VAB can mandate both parties to be totally forthcoming with their documents.

Mr. Pettijohn stated that he agreed with Commr. Hanson and that any points that he was going to make were going to be basically a direct rebuttal of what Ms. Stuart was going to present, so it was probably not going to serve a lot of benefit to them today. The initial request for data was primarily related to the ambulance management contract that the hospital has with Florida Regional Emergency Services (FRES). He stated that they have a contract with those individuals, and as much as they would like to disclose it, they have issue with that, so they have to be cognizant of the desires of their contracting party, as they need to get their permission, and this is what Ms. Stuart perceives to be the stonewalling. Mr. Pettijohn stated that the minute that they got involved, she had a very lengthy letter from him in a weeks time saying that they obviously believe that they are deserving of their status and want to provide all of the information.

Commr. Cadwell referred to the position that Mr. Havill had taken regarding the issue of privatization, and his concern with Mr. Havill issuing a blanket denial on all parcels for the hospital and stated that, based on Mr. Minkoff's reading of the Statute, not his opinion, but the reading, he has a comfort level that Florida Hospital Waterman, Inc. is tax exempt, and he would be willing to approve the request today, because there are other avenues for both parties.

Commr. Hanson stated that she would prefer that the VAB did not lock themselves into this decision, if they have 28 days to work it out before they get to that position.

Commr. Swartz explained that the VAB only has 28 days, if it votes to uphold the Property Appraiser's recommendation of denial of Florida Hospital Waterman's tax exemption. He felt that, because of several of the statements made by Ms. Stuart, it indicates that she does not understand the relationship between Florida Hospital Waterman, Florida Regional EMS, and Regional Emergency Services. He stated that he believes she has made a determination based on incorrect information, and that she made a statement that is based on her reading of the information that is wholly wrong.

Ms. Maggie Evans, Attorney, stated that she understands the procedural issues that have arisen, and in order to preserve this issue to even investigate it, Mr. Havill did have to issue a letter of denial, and they are in favor of this decision, in the sense that it gives them the opportunity to come before the VAB and resolve any questions or issues that might have been raised during the privatization. Ms. Evans stated that what has been requested has to do with the other entity, but the questions raised are certainly valid for his inquiry, and the hospital is more than happy to answer them. She stated that the problem they ran into was the shortness of time. She explained that the request from Ms. Stuart arrived in her office September 14, 1998, for the bulk of the information that she requested, and it was provided on September 21, 1998 by Fed Ex to her on September 22, 1998, but she has not had time to go through all of it. Ms. Evans stated that she feels it would be appropriate at this juncture, before they convene to go into a private session, to address some of the comments that were made here today.

Mr. Pettijohn stated that, in regard to the lease amount on Kirt Street, he explained that FRES owns the facility on Kirt Street, and they, as the operating entity, lease from them. They lease somewhere between three and four dollars per square foot. He was approached by Mr. Bill Compton about a concern he had that they may not be paying them enough to induce them to provide them with other services, so maybe this should be evaluated. Mr. Pettijohn stated that he had an appraisal done of that lease, with a copy being provided to Ms. Stuart, and the appraiser had to find like comparables, and he came to the conclusion that their rent was appropriate. So given the issue that they are concerned about, that was a direct indication that it becomes a non-issue. Mr. Pettijohn stated that, in 1991, which was over a year before the merger with Adventist Health System, Florida Regional Emergency Services Inc. (FRES) was created as a not-for-profit company, which served as the managerial arm of the ambulance service, with services being provided to Lake County by Waterman Medical Center. The hospital paid management fees to FRES, the not-for-profit, up until the point of the merger, at which point, the principals that were mentioned earlier formed a new company also by the same name Florida Regional Emergency Services (FRES) as a for-profit company that purchased the assets of the first FRES Inc. He noted that there was a report dated some time in 1992 about an appraisal that was done on the assets that served as the basis and the foundation for the purchase price that was paid. He stated that, in 1995, Seth Ellis wanted to make sure that he was comfortable that the transaction was above board and at arms length, so he provided him with all of the information and the appraisal reports and notes that were taken out that were used to acquire the funds to buy the assets. Mr. Pettijohn stated that a question was raised as to why there were not any competitive bids done on the management company at the point of the merger. He stated that Adventist Health System, prior to the merger into Waterman, did not have experience in running the ambulance service, so they felt it appropriate to extend the same managerial process at that point in time, because they wanted to maintain that positive relationship with the community.

Commr. Swartz stated that there was a three party agreement, because the County was a party to that contract as well, and for the hospital to go out and change the management company would have required the County to approve of that as well.

Mr. Pettijohn explained that the County had to approve the assignment to the new company. He referred to the document referred to by Ms. Stuart, which was the management agreement with Florida Regional Emergency Services (FRES), which had information blacked out, and stated that, to his recollection, in her lengthy request for information, she wanted the 1997 Form 990 for Florida Hospital Waterman Inc., which has not been prepared yet, which is due on November 15, 1998, and at that time, it will become a public document.

Ms. Stuart stated that she did not feel this would be a stopping point considering that she did have the 1996 information, and it was not terribly informative, but she did have continuing questions regarding the profit and loss items that were sent to them regarding the corporate hierarchy and what the nature of the profit and non-profit organization is and how they are interconnected, and how economics flow between the two of them. She wanted the VAB to know that they requested this information as early as June, and the documents they are referring to (the contract with blackened out language) are not documents with which the County was a party.

Commr. Swartz stated that the reports that are required of Florida Regional and Florida Hospital Waterman to present to the County are in the County records.

Mr. Pettijohn explained that the folks at FRES have been willing to make that entire document available in the presence of their attorney, and they are free to go and look at it any time.

Commr. Hanson stated that she feels there are questions that the Property Appraiser's Office has raised, and she thinks that Florida Hospital Waterman can answer those questions in a reasonable time period. She stated that those questions need to be answered both for Florida Waterman Hospital's perspective and for the taxpayers perspective.

Commr. Swartz stated that he agrees with Commr. Hanson, but he believes that the setting under which those questions should be asked and the answers should be provided are not the hostile environment that has existed all the way back since early in the year when the issue of the fire privatization came up, and that has driven this entire reason to deny. He does not think that it is right, or fair to an entity, that has been justifiably been granted the exemption for these many years, to deny them their exemption on what is really just some "maybes" that are out there. Commr. Swartz stated that he understands what the County Attorney has read, which raises questions in his mind as to whether or not some of that is appropriate information for them. He feels it is fine for the Property Appraiser to question those issues that he believes are reasonable, and he is confident that Florida Hospital Waterman will provide the information to the best of their ability. Commr. Swartz stated that they are restricted in some on the information they can provide as a result of their contractual obligations, and he did not believe it was appropriate to vote to deny their exemption and then have that discussion go on.

Ms. Stuart stated that the Property Appraiser has called the bonafides for the exemption into question, and he has reasonably and timely requested information from the taxpayer. The taxpayer has declined, for whatever reason, to provide that information and has blacked out information called the proprietary while still claiming to be an exempt organization, and in the absence of them providing that information they requested on a timely basis, the Property Appraiser had no choice but to deny the exemption under those circumstances.

Mr. Minkoff stated that he believes the Statute is pretty clear that, if they comply with the other three requirements, the additional information is not necessary.

Ms. Stuart stated that they have not met these requirements, because they have not provided a consumer certificate of exemption from the hospital organization at this point in time. Ms. Stuart suggested that, if the Property Appraiser is the individual charged with investigating the bonafides of an exemption, if privatization becomes an issue, and documents that are withheld based on the fact that they are considered to be proprietary, which should not be the case where an exempt entity is concerned, and the Statute is interpreted such that the Property Appraiser cannot even look at the bonafides of the exemption, then his job has been turned into a mere rubber stamp for the Department of Revenue and the Internal Revenue Service.

Commr. Hanson stated that she has all confidence that the Florida Hospital Waterman can provide the information necessary to satisfy the Property Appraiser's concerns and questions.

Commr. Hanson made a motion to postpone Petition No. 1998-87, Kelly J. Pettijohn, and that the VAB reconvene on Tuesday, if a School Board member can meet that day, to hear the outcome, and if Florida Hospital Waterman does not provide the information satisfactory to the Property Appraiser, the VAB will make that determination at that time.

The motion died for the lack of a second.

Commr. Swartz stated that he was not confident that there will be necessarily anything that will be satisfactory within the time frames that are being talked about today. He stated that he is not going to vote to remove the tax exempt status of an organization that has had it, and he will support overturning the Property Appraiser and offering the same thing to him in this same time frame, to get what may be legitimate questions answered, but not to remove the tax exempt status based on what appeared to him to be mere supposition and perceptions of things that may or may not be true, and information that was stated that is simply incorrect information based on whatever reading was provided. Commr. Swartz stated that he would support overturning the Property Appraiser's recommendation of denial, because he cannot find that, in his presumption of correctness, there is a basis for that, and he believes that the County Attorney has provided the VAB with additional language in the Statutes that probably supports the position that is totally different than the one the Property Appraiser and his counsel are taking.

Commr. Cadwell made a motion, which was seconded by Commr. Hanson, to overturn the Property Appraiser's recommendation of denial in Case No. 1998-87, Kelly J. Pettijohn.

Under discussion, Ms. Stuart commented for the record that, if the motion survives, and becomes the basis for a vote, that there will be no dialogue other than litigation between the parties, because the Property Appraiser does not have the discretion to take it back after the VAB overturns it.

Commr. Swartz stated that the Property Appraiser has the opportunity to sit down and to discuss these things for the upcoming tax year, and he is confident that they will provide information. He stated that Florida Hospital Waterman does not want to be here every year with a recommendation from the Property Appraiser to deny their exemption, and he is confident that, if they do not sit down with him in an honest way and provide legitimate information that the Statutes would require, then he would be here next year recommending denial again.

Mr. Minkoff asked the Property Appraiser whether, other than this reason of the not-for-profit status, all of these parcels would otherwise be entitled to exemption, and whether there are no non-exempt parcels based on use in the list provided.

Mr. Havill stated that the VAB is subjecting the taxpayers of Lake County to a lawsuit, and the hospital. He stated that they were stonewalled by the outside management company, and the hospital has been working with them since they got involved, and the outside company is still stonewalling them to a point. This has to get resolved one way or the other, and he was not sure what the $33,477,583 includes, whether it is tax exempt property, or non-exempt property.

Mr. Minkoff explained that, if the motion was changed to overturn on those parcels that were exempt last year, then it would clarify this issue.

Commr. Cadwell changed his motion to clarify that the motion would be to overturn the denial of exemption on those parcels that were exempt last year, as follows, and Commr. Hanson changed her second to the motion:





1925 13 0003 000 17800 $38,880.00

1925 23 0002 000 00500 $567,685.00 (taxable)

1926 02 0100 005 00000 $361,125.00

1926 02 0100 010 00001 $594,306.00 (taxable)

1926 02 0300 003 00401 $141,246.00

1926 11 0100 015 00100 $44,337.00

1926 11 0100 015 01300 $20,586.00

1926 11 0100 015 01500 $19,269.00

1926 11 0100 028 00400 $12,064.00

1926 11 0100 028 00600 $58,716.00

1926 11 0100 028 01100 $27,412.00

1926 11 0100 029 00100 $34,759.00

1926 11 0100 029 00500 $173,126.00

1926 11 0100 029 00900 $72,491.00

1926 11 0100 029 00901 $103,636.00

1926 11 0100 029 01300 $19,048.00

1926 11 0100 030 00000 $16,721,284.00

1926 11 0100 031 00101 $400,679.00

1926 11 0100 031 01600 $18,109.00

1926 11 0100 036 00100 $37,120.00

1926 11 0100 036 00500 $240,132.00 (partial)

$98,082.00 (taxable)

1926 11 0100 036 00900 $212,368.00 (taxable)

1926 11 0100 036 01300 $27,127.00

1926 11 0100 036 01500 $20,004.00

1926 21 0001 000 00200 $12,201,885.00 (taxable)

1926 21 0400 000 00000 $8,000.00 (partial)

$1,138,647.00 (taxable)

2226 19 0004 000 00101 $65,460.00

Under discussion, Commr. Hanson stated that she still wanted to raise issue as to why the VAB needs to make that decision today and why they cannot wait a week or less.

The Chairman called for a vote on the motion, which was carried unanimously by a 4-0 vote.

Mr. Frank Royce informed the Board that Mr. Jadov, who had an appointment yesterday, was confused with the date, and he is present now and has requested that the VAB hear his case. PETITION NO. 1998-75 - EAST LAKE APARTMENTS LTD.


Mr. Frank Royce stated that the East Lake Apartments Ltd. are located in Umatilla, and there are seven buildings with six apartments for a total of 42 units. Mr. Royce stated that they were built in 1986, and the current taxable assessed value is $956,957.

Mr. Chris Hines explained that the two properties that he is going to speak about are under the low income housing tax credit program, and that is significant, because there has been a change in the law regarding these properties. Mr. Hines stated that it was his contention that the Property Appraiser should recognize the actual income generated by these properties, which is based on a change in the law as of 1997. Mr. Hines noted that he had a Department of Revenue tax bulletin, dated June 3, 1998, which he would share with the VAB. He stated that this involves the current program that is being used for low income housing. The owners of these programs banned together and lobbied to have the law changed, because there has always been problem with the way the original law was stated, as far as how the Property Appraiser's Office was to look at these properties for assessment purposes. The language is now stronger than the eight criteria, which the Property Appraiser is supposed to consider. Mr. Hines discussed the bulletin, which reflected Chapter 97-167, Section 19, Florida Laws, 1997, (Florida Statute 420.509 (9) Subsection 5), and noted that it states "For purposes of implementing this program in Florida and in assessing the property for ad valorem taxation under Section 193.011, neither tax credits no financing generated by the tax credits shall be considered as income to the property, and the rental income from a rent restricted unit in the low income tax credit development shall be recognized by the Property Appraiser." Mr. Hines stated that he has supplied income and expense information and also a rent roll on this project, for the past three years, and it was his understanding that they are not taking into consideration, or recognizing these rents.

Mr. Royce stated that the VAB had received a handout from the Property Appraiser's Office, which was also presented to Mr. Hines, which provides information regarding the approach that the Property Appraiser takes when making apartment appraisals. Mr. Royce noted that the Lake County Property Appraiser, in assessing Apartment Complexes, has, by law, considered all three (3) approaches to value, cost, market and income. He stated that, if the change in the Statute means that, if they are choosing to use the income approach, the true income of the complex is the only income they can use. They also believe that, in choosing any one of the three approaches, if one approach does not give a true representation of market value of the property, this would not be the approach to use, and the Property Appraiser's Office has chosen not to use the income approach. Mr. Royce referred to the information that had been provided, which reflects a unit cost, and stated that the cost to build these units has been reported to be between $41,000 and $43,000 per unit, and from local standards, this appears to be high and unrealistic compared to the local market. The accompanying sheet shows seven complexes, and all but the two the VAB was seeing today have failed to either give them the income information, or have failed to appear today. At the top of the sheet, the information reflects sales that have occurred. The average amount per square foot is $33.95, and the average amount per sale unit is $26,219. The per unit assessment for East Lake Apartments Ltd. is $22,802, and per square foot is $28.12. Mr. Royce stated that, in using the market approach, and considering it to be the most accurate in this case, it shows the true market value of the property in Lake County for apartment complexes, and the assessment is within the range, and it is fair. It was noted that the assessed value is $956,957.

Mr. Hines stated that he was not familiar with the comparable sales, and he would not argue that the cost of these units exceed what they are able to generate as far as the actual income by the property, which is the reason the law was changed in the first place. Many of the Property Appraisers statewide use the law on all of the rent restricted properties. It was noted that he used an approach, not using those incomes, in order to get the estimate of market value, which results in a cost for each of the units of about $9,500.

Mr. Sandy Minkoff, County Attorney, stated that he cannot read the Statute to require that the income approach be used, even though that may have been the intent of the Legislature, but it was certainly not written that way.

Ms. Stuart stated that they did not indicate that the property should be assessed at less than just a market value, and that being the case, the Property Appraiser is still mandated to find a market valuation. Sometimes in these cases the income approach has set a higher standard in value than has either costs or comparable sales, and when that is the case, the Property Appraiser would reject the income approach in favor of another approach, if he used a market income.

Mr. Royce explained the Lake County Apartment Sales Comparison, which was provided to the VAB, and noted that, when someone puts an apartment building on the market, they generally go by the income approach, but they also have to take into consideration the marketing and rental history, and whether they have anything to do with location, or management, so sometimes the income may or may not represent true market value.

Mr. Minkoff explained that sometimes there are tax incentives that are built into these projects that enhance the liability for an investor over and above the income approach.

Mr. Royce explained that what Mr. Minkoff just presented was what the law says the Property Appraiser cannot use, because they cannot take those incentives or tax credits and add it to his approach.

Mr. Hines stated that he was here last year on these same properties with these same arguments, and he was told that, when the law changes, it would be recognized, but the law changed, and it has not been recognized. He noted that Lake County's neighbors to the south all use actual rents for low income housing.

Commr. Hanson felt that the issue brought forth by Mr. Hines needed to be reviewed for next year.

Ms. Stuart stated that a distinction has got to made between different kinds of low income housing, which she explained at this time.

Mr. Hines explained that this was why it was very specific to the low income housing tax credit program, because it only relates to one specific type of subsidized property.

On a motion by Commr. Cadwell, seconded by Commr. Hanson and carried unanimously by a 4-0 vote, the VAB upheld the recommendation of the Property Appraiser and approved the assessed value in the amount of $956,957, for Petition 1998-75, East Lake Apartments Ltd., based on the Petitioner failing to furnish sufficient evidence to overturn the Property Appraiser's recommendation.

It was noted that Mr. Hine's arguments would be the same for Petition 1998-76, Ridge at Mount Dora.

On a motion by Commr. Cadwell, seconded by Ms. Fletcher and carried unanimously by a 4-0 vote, the Board upheld the recommendation of the Property Appraiser and approved the assessed value in the amount of $913,409, for Petition 1998-76, Ridge at Mount Dora, based on the Petitioner failing to furnish sufficient evidence to overturn the Property Appraiser's recommendation.

Mr. Hines stated that he would like to withdraw the following petitions:

1998-121 Peregrine Properties, Inc. (Deloitte & Touche Property Tax Service)

1998-122 Peregrine Properties, Inc. (Deloitte & Touche Property Tax Service)

1998-123 Peregrine Properties, Inc. (Deloitte & Touche Property Tax Service)

1998-124 Peregrine Properties, Inc. (Deloitte & Touche Property Tax Service)

1998-125 Peregrine Properties, Inc. (Deloitte & Touche Property Tax Service)


Mr. Robbie Ross explained that the petitioner was requesting that the VAB grant a pollution control exemption to equipment used by Cutrale Citrus Juices in their citrus processing plant. Mr. Ross stated that Florida Statute 193.621 governs the assessment of pollution control devices, which he explained at this time. The entire plant is assessed for $41,704,024, and on the petition, the petitioner has written "less pollution control", and did not actually write an estimate of fair market value for the property.

Mr. Richard Patterson addressed the VAB and stated that he presented the Property Appraiser with a list of the actual equipment, which was assessed at fair market value, in the amount of $6,707,957.58.

Mr. Ross explained that Mr. Patterson would like the pollution control equipment to be assessed at salvage value. He stated that there is a court case out of the Fifth Judicial Circuit in and for Citrus County between Florida Power Corporation and Seminole Electric Cooperative, Inc. vs. Ronald J. Schultz, Property Appraiser of Citrus County. He stated that this lawsuit challenged the constitutionality of Florida Statute 193.621, which says that the Property Appraiser has to assess this property, or this class of property, at less than fair market value. The court ruled in favor of the Property Appraiser, in the fact that this Statute classified one property and elected to take that class of property and assess it differently than all property, and the Florida Constitution states that the Property Appraiser has to assess all property at fair market value. The VAB was presented with a copy of Case Number 97-3383-CA for review.

Ms. Stuart explained that there were two issues before the court, one was the constitutionality of the pollution control Statute, and the other was, if it is constitutional, what is the value of the property. Ms. Stuart stated that they found the Statute to be unconstitutional, however, that was a partial Summary Judgment. She stated that the same issue was raised in St. Lucie County, and the opposite result was reached in the trial court as to the constitutionality, and they went forward on value, and the court found in favor of the Property Appraiser, as to the value issues. The issues on value were substantially different, and this has not gone before the Appellate Courts at this time.

Mr. Minkoff explained that Lake County is in the Fifth Circuit, and it would follow this ruling, so even though this is not a final judgment, it is certainly a court decision indicating that a portion of the Statute is not constitutional, and it would be the law in Lake, Sumter, Citrus, Marion, and Hernando Counties. After further discussion, it was noted that, if this was the basis for the petitioner's request to change it, then the law is on Mr. Havill's side.

Mr. Minkoff stated that generally the law of the Circuit would be Circuit wide, if the Circuit Judge has issued the opinion. He clarified that it did not mean that it could not be challenged in front of another Circuit Judge and the County would get conflicting opinions, which would go on appeal.

Mr. Patterson stated that he had asked the Property Appraiser to consider this property as non-revenue producing property and give it some economic obsolescence. The Property Appraiser asked for an income statement, and the company is a privately owned company, and they are not going to give their income statement to anyone. He stated that the income statement that they would give, if they did give it, would be worthless, because they changed their production lines so much in the past year and a half that they have owned the company that the cash flow would be totally worthless in predicting future cash flows, which is what would need to be done to arrive at a value from the income approach. He questioned how the Property Appraiser can arrive at economic obsolescence through the income approach on such a complex plant as Cutrale Citrus. Mr. Patterson stated that he provided the Property Appraiser with an industry average income statement that could be used to predict future cash flows, and he has continued to request the actual income statement, which he cannot get for him. He would like the Property Appraiser to consider economic obsolescence based on the industry average income statement.

Mr. Ross stated that the income statement that was provided to him by Mr. Patterson was industry standard, and he was attempting to satisfy the pollution control issue. He did not realize that there was an obsolescence issue, because the only thing indicated on the petition was "less pollution control."

Commr. Swartz felt that someone needed to get a further ruling on this issue, and it sounded like something Mr. Patterson would have to put back through the court to get that determination.

On a motion by Commr. Cadwell, seconded by Commr. Hanson and carried unanimously by a 4-0 vote, the Board upheld the recommendation of the Property Appraiser and approved the assessed value in the amount of $41,704,024, for Petition 1998-151, Cutrale Citrus Juices, USA, Inc., based on the Petitioner failing to furnish sufficient evidence to overturn the Property Appraiser's recommendation.


Mr. Frank Royce stated that Mr. Pete Peebles, Property Appraiser's office, has been working with Mr. Jadav and had come to an agreement on value. Mr. Royce stated that he understood that Mr. Jadav was looking for relief in the past three years, and he was here today to request a refund in value.

Mr. Sandy Minkoff, County Attorney, explained that, on behalf of the Tax Collector in this County, he litigated this issue when the VAB attempted to go back and change a prior year's assessment, and the court ruled that the only authority he had was for this year's assessment roll, or any changes that the Property Appraiser may make affecting a prior year's tax roll. So the VAB does not have that authority to act on the request.

Commr. Swartz explained to Mr. Jadav that the VAB does not have the authority to take action on his request, so there would be no reason for the VAB to rehear the case from yesterday.

Mr. Manhar Jadav apologized for not being present yesterday.

Commr. Swartz stated that, without getting into the merits of Mr. Jadav's argument, the County Attorney has indicated that this VAB does not have the authority to go back and instruct the Tax Collector to refund any prior years, based on the changes that occurred this year.


On a motion by Commr. Hanson, seconded by Commr. Cadwell and carried unanimously by a 4-0 vote, the Board upheld the recommendation of the Property Appraiser and approved the assessed value on the balance of the cases where the petitioners did not appear, as follows:

Petition No. Petitioner Assessed Value

1998-52 Nextel South Corp. $ 23,772

1998-53 Nextel South Corp. $ 53,660

1998-54 Nextel South Corp. $ 29.719

1998-55 Nextel South Corp. $ 40,333

1998-56 Nextel South Corp. $ 273,836

1998-57 Nextel South Corp. $ 434,239

1998-58 Nextel South Corp. $ 418,309

1998-59 Nextel South Corp. $ 244,069

1998-60 Nextel South Corp. $ 206,302

1998-61 Nextel South Corp. $ 97,063

1998-79 Worldcom Network Services $ 223,225

1998-107 First Union Corp. #1223 $ 112,492

1998-108 First Union Corp. #1321 $ 174,113

1998-109 First Union Corp. #1825 $ 101,249

1998-110 First Union Corp. #1320 $ 121,412

1998-111 First Union Corp. #1324 $ 120,277

1998-112 First Union Corp. #1323 $ 104,852

1998-113 First Union Corp. #1212 $ 189,383

1998-117 Walmart Stores Inc. #705 $1,971,379

1998-118 Walmart Stores Inc. #800 $ 786,032

1998-127 Christopher D. Richter $ 71,292

1998-128 Christopher D. Richter $ 71,988

1998-129 Christopher D. Richter $ 62,298

1998-71 Barnett Bank of Lake County $ 759,184

1998-72 Barnett Bank of Lake County $1,097,959

1998-73 Barnett Bank of Eustis $ 500,679

1998-74 Barnett Bank of Lake County $ 680,206

1998-114 K-Mart Corp. #3657 $1,244,762

1998-115 K-Mart Corp. #4870 $1,347,762

1998-116 K-Mart Corp. #7231 $1,026,999

1998-32 Sun Communities, Water Oak $5,958,313

1998-33 Sun Communities, Chain O'Lakes $3,477,361

1998-34 Sun Communities, Inc. - Leesburg

Landing $ 700,000

1998-90 Jeffrey Mandler, Esq. $1,277,000

Mr. Minkoff noted that the VAB will have to meet again for a short period of time to approve the final certification of the roll.

There being no further business to be brought to the attention of the VAB, the meeting recessed at 3:50 p.m.