Marina Jack trial could be a year away

An Aug. 15 Sarasota 12th Circuit Court filing in the 10-month-old Marina Jack property tax case reveals that restaurant owner Jack Soran and his legal counsel continue to debate Sarasota County Property Appraiser Bill Furst’s right to nullify a 1989 court decision that grants the for-profit business a favorable tax exemption because it leases publicly-owned land.

In the filing, Jack Graham Inc., the company that leases Marina Jack, replied to Furst’s affirmative defenses by stating that Furst “is not delegated with any statutory authority to invalidate” the 1989 court ruling.

That ruling has exempted Marina Jack from paying property taxes for the past 22 years. The decision, however, was also based on the failure of late Sarasota County Property Appraiser John Mikos to present evidence in the 1989 case.

“No defenses were pled, no evidence presented,” lawyers representing Furst stated in an April 20 court filing before 12th Circuit Court Judge Charles E. Roberts. The absence of Mikos’ testimony resulted in a default ruling for Marina Jack that Furst now disputes.

Jack Graham Inc. is challenging the property appraiser’s August 2010 decision to collect $1.5 million in taxes on the property — $300,000 for 2010 and $1.2 million for unpaid back taxes.

The city owns the land and the building, but Jack Graham Inc. leases them both for 3% of its annual revenues, which amounted to about $300,000 in 2010.

Jack Graham Inc. received permission from the city in November 2010 to sue the Sarasota County property appraiser.

And in an Aug. 8 court filing, Jack Graham Inc. added the city of Sarasota as a counterclaim defendant to its case.

The city had no choice but to enter the lawsuit, according to Furst’s Sarasota attorney, J. Geoffry Pflugner.

“The city is a necessary party in this case,” Pflugner said.

The company’s Aug. 15 filing states the final judgment in the 1989 case was never appealed and there is no basis for overturning the ruling now.

“Appraiser (Furst) is a ministerial officer and has no authority to impose additional conditions or restrictions beyond the plain language of the statute to terminate such an exemption,” the Aug. 15 filing states.

Pflugner, however, said the statement and the latest filing are nothing new.

“That’s what they have maintained all along and we disagree,” Pflugner said. “At the end of the day, this case is about the value of the property and whether an exemption should be permitted.”

Pflugner said he does not think the case will go to trial soon because both sides are still requesting documents to be submitted into the record. The case could take another year from now to go to trial because several motions for summary judgment are expected to be requested and appealed.

Furst declined comment, saying only the lawsuit “is working its way through the court system as we anticipated.”

Bradenton attorney John Harllee, who is defending Jack Graham Inc., said the case “is slowly percolating its way through the system.”

Jack Graham Inc. and the city continue to argue that Marina Jack serves a public purpose and, therefore, should be exempt from paying property taxes.

Late Marina Jack owner Jack Graham paid property taxes on the Sarasota bayfront parcels his company leased from the city in the late 1970s, but stopped in 1980 when the Legislature determined lease-hold interests were not subject to ad valorem taxation. Graham resumed paying in 1986 when an appellate court ruled that government-owned property leased to a private entity was exempt from paying taxes only if the property were used for government purposes. Two years later, Graham sued to have the exemption restored successfully.

The city’s lease with the company states it is responsible for any property taxes, but the company and city have argued that Marina Jack serves a public purpose and, therefore, should be exempt from paying property taxes.

But Furst cites other lessees of public land that pay property taxes, such as O’Leary’s Tiki Bar and Grill at Bayfront Park, which Jack Graham Inc. also operates.

The Baltimore Orioles is the only other business that leases public land and does not pay taxes.