As Sarasota County Property Appraiser Bill Furst seeks a second term in November, he remains in the middle of legal action over whether the Marina Jack complex, owned by Bob Soran through his company, Jack Graham Inc., owes $1.5 million in back taxes.
Jack Graham Inc. has challenged the property appraiser’s August 2010 decision to collect $300,000 in property taxes for that year and $1.2 million for unpaid taxes dating back a number of years.
The city owns the land and the building, but Jack Graham Inc. leases them both for 3% of its annual revenues, which totaled about $300,000 in 2010.
Furst says the lingering lawsuit, which could be heard by the end of the year, is not an issue for him or his re-election.
“It’s simply a court case working its way through the system,” Furst said. “Nothing, more, nothing less … It’s up to a judge to decide at the end of the day.”
A 12th Judicial Circuit Court filing Aug. 15 showed Soran and his legal counsel continuing to debate Furst’s right to nullify a 1989 court decision that granted the for-profit business a favorable tax exemption because it leases publicly owned land.
That 22-year-old decision was based partly on the failure of John Mikos, the late Sarasota County property appraiser, to present evidence in the 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 the default ruling for Marina Jack that Furst disputes.
Jack Graham Inc.’s Aug. 15 filing stated the final judgment in the 1989 case never was appealed, so no basis exists for overturning the ruling.
Late Marina Jack owner Jack Graham paid property taxes on the Sarasota bayfront parcels in the late 1970s, but stopped in 1980, when the Legislature determined leasehold 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 was used for government purposes. Two years later, Graham sued successfully to have the earlier exemption restored.
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. But Furst cites other lessees of public land that do pay property taxes, such as O’Leary’s Tiki Bar and Grill at Bayfront Park, which Jack Graham Inc. also operates.
The Baltimore Orioles organization is the only other local business that leases public land without paying taxes.
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 tried to stay out of the lawsuit, but it had no choice other than to enter it, according to Furst’s attorney, J. Geoffry Pflugner of Sarasota.
“The city is a necessary party in this case,” Pflugner said in October.
“At the end of the day,” Pflugner said, “this case is about the value of the property and whether an exemption should be permitted.”
Pflugner is not hopeful the case will come to trial soon, but he believes some action could be scheduled as early as February.
Bradenton attorney John Harllee, who is defending Jack Graham Inc., said the case “is slowly percolating its way through the system.”
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