Marie Selby Botanical Gardens is preparing for a legal battle over its tax-exempt status in the beginning of the new year.
After years of being exempt from local property taxes, Marie Selby Botanical Gardens is facing nearly $1 million in taxes and assessments on its bayfront campus near downtown Sarasota.
Selby Gardens officials said the Sarasota County Property Appraiser’s decision to deny the nonprofit its tax-exempt status represents a change that jeopardizes the organization’s financial outlook. Selby has successfully claimed a tax exemption for decades, avoiding tax payments associated with the property at 1534 Mound St. — valued at more than $60 million since 2016.
In 2020, the property appraiser determined the entirety of the site’s $61.8 million assessed value is taxable.
“The bill we’ve been issued … is absolutely crippling to this organization and is something that would greatly affect our long-term sustainability,” Selby President and CEO Jennifer Rominiecki said.
The property appraiser’s office said the challenge to Selby’s tax exemption — an effort that dates back more than a year — was a response to business activity that did not adhere to state standards for tax-exempt property, citing Selby’s partnership with a for-profit food service provider. After notifying Selby Gardens about the determination, Property Appraiser Bill Furst said the botanical garden had failed to provide information justifying its tax-exempt status.
“The burden is on the applicant to prove that they are qualified to receive an exemption,” Furst said. “When that is not done, no exemption is granted in the interest of fairness to all others.”
At the center of the dispute is a section of the Florida Statutes pertaining to the tax-exempt status of such properties as Selby Gardens.
“Only those portions of property used predominantly for charitable, religious, scientific or literary purposes shall be exempt,” the statute states. “In no event shall an incidental use of property either qualify such property for an exemption or impair the exemption of an otherwise exempt property.”
Furst’s office has contended that Selby’s exclusive catering agreement with Michael’s On East for the site’s event spaces represents a nonexempt, nonincidental use. Selby Gardens argued that events and other disputed activity on the site are a small fraction of the income the nonprofit generates.
Furst pointed to a section of the Michael’s On East website advertising event sites on the Selby property, including Michael’s on the Bay at Selby Gardens, a 4,800-square-foot venue described as “Sarasota’s premier waterfront indoor event facility.”
In an Oct. 9 letter to the property appraiser’s office, attorney Morgan Bentley disputed the notion that the partnership with Michael’s represented a change in operations at Selby or a violation of tax-exempt eligibility. Bentley said that Selby Gardens has ultimate authority over which events are allowed to occur on its property, adding that less than 2.5% of the organization’s revenue comes from commissions derived from the agreement with Michael’s On East.
In an interview with the Sarasota Observer, Bentley said third-party vendors have always provided food service for events at Selby Gardens. The 2015 partnership with Michael’s On East just ensured Selby Gardens got a cut of the catering income, money that gets funneled toward Selby’s plant research mission, Bentley and Rominiecki said.
“There’s been no change in activity that would have changed the underlying analysis that’s been written in stone for decades,” Bentley said. “It’s a little baffling why this change of course is happening.”
Although Furst said Selby has failed to provide sufficient information to justify exemption of the property, Selby representatives said they’ve shared substantial documentation. Asked whether Selby Gardens would be entitled to its tax exemption if the partnership with Michael’s On East were terminated, Bentley said it’s unclear whether that’s the entirety of the property appraiser’s objection.
“It’s a little bit like whack-a-mole,” Bentley said. “Every time you go back and try to address an individual issue, another one pops up.”
Selby Gardens is appealing the property appraiser’s determination. The dispute is scheduled to head to the Value Adjustment Board for a hearing in front of a magistrate Jan. 22, according to the Clerk of the Circuit Court’s office.