Our View

 

Our View

 

Date: August 13, 2009
by: The Observer Staff

 
 

Sarasota city commissioners, beware.

For the past eight years, the St. Armands Circle property owners, merchants and residents have co-existed peacefully, or as well as they ever have in the past two decades. It’s no coincidence that this détente and general like-mindedness has occurred simultaneously with the formation in 2001 of the St. Armands Business Improvement District.

The “BID,” as it is commonly called, is a taxing district that St. Armands Circle property owners voted to create to help finance physical improvements that would insure St. Armands Circle’s pre-eminence as Sarasota’s leading retail/tourism attraction.

The way it operates, the BID imposes a 2-mill tax on nearly 80 properties and then disburses its funds according to a formula — about 40% for capital improvements, 40% for marketing and promotions, 10% for enhanced maintenance (above what the city provides) and the remainder for operating expenses.

Overseeing the BID is a board of directors of three St. Armands Circle property owners, the most prominent of which is Marty Rappaport, an 18-year St. Armands property owner and the BID’s leading organizer, godfather and chairman. The other two are Vicki Frye and Michael Valentino.

As Rappaport sees it, the BID has worked well with the three-member board of property owners. He has context for that judgment, too. Rappaport remembers the discord that existed 18 years ago among the three constituents groups most interested in St. Armands Circle — the Circle property owners, the merchants and the residents who live nearby. Rappaport says the BID board members recognize that, for St. Armands Circle to progress, all three constituents must be together. One cannot move forward without the other.

But as politics, taxation and property rights go, dissent is inevitable. Two merchants, Jack Pefley, owner of Taffy’s Menswear, and Scott MacDonald, want merchants to have a seat on the BID board. And to the BID board members’ surprise last month, they learned that Pefley and MacDonald, with the help of the St. Armands Circle Association executive director, arranged a meeting with Sarasota city officials — without notifying BID board members — to inquire whether the City Commission could broaden the interpretation of who could serve on the board.

As it stands, the state statute governing board members says they shall be “residents of the proposed area and who are subject to the ad valorem taxation in the district.”

Heretofore, the city attorney has interpreted that to mean property owners are eligible for the board.

But now Pefley and MacDonald say they are “subject to” property taxes in their leases and therefore should be eligible for the BID board.

What’s more, Assistant City Attorney Michael Connolly told The Sarasota Observer he has broadened his interpretation of the law, too. He told City Editor Robin Roy (see page 3): “I said in 2001 that (the statute) could be reasonably interpreted as the property owner (is subject to taxation). What I’m saying now is that it can also be reasonably interpreted the other way.”

This is a stretch. Yes, many tenant leases require tenants to pay taxes. But those leases are contractual agreements between the property owner and the tenant. If the tenant moved out or went out of business, regardless of the lease, we know whom the Tax Man would hunt down if the property taxes were not paid.
The property owner is always ultimately responsible.

We can see how St. Armands merchants would like a seat and a voice on the BID board. Of course they would. But the danger in broadening board membership should be obvious: What happens if merchants become the majority? As a property owner in that instance, you could make a strong argument that the BID board would then become a form of taxation without representation.

Perhaps there’s a compromise at least worth a discussion — to enlarge the BID board membership from three to five, with three seats and a majority always guaranteed to the property owners and two seats guaranteed to a combination of merchants and St. Armands residents.

City commissioners, beware. This situation is a reminder of the old saw: If it’s not broke, don’t fix it.
When this subject comes up at Monday’s City Commission meeting, you would serve the involved parties well to:

1) Remember that you are dealing with people’s property. Tread carefully.

2) Determine whether the BID board is broken.

The record will show that for eight years it has been working well.

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