TOP STORY, FEB.: City dragged into Marina Jack tax case

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ORIGINALLY PUBLISHED FEB. 3, 2011

How large a role the City of Sarasota will play in the 12th Judicial Circuit Court property tax lawsuit between Sarasota County Property Appraiser Bill Furst and Marina Jack has yet to be determined, but it has been reluctantly dragged into the fight.

“I didn’t want the city to get sucked into this case,” City Attorney Bob

Fournier conceded. “It’s unlikely to be settled outside a courtroom, and I’ll be surprised if this comes to trial before the end of this year. It all depends on the court calendar.”

In the back-and-forth exchange of claims, counter-claims, motions for discovery and other pre-trial skirmishes that routinely precede a trial, Furst’s legal team decided the city had to be included as a co-defendant because it owns the Sarasota bayfront parcels leased to Marina Jack.

On or before Feb. 8, Fournier must file a response to the circuit court that lays out the city’s legal position with respect to the property tax exemption granted Marina Jack in 1988, a gift upheld a year later when former Property Appraiser John Mikos’ appeal of the decision was denied.

In effect, the court granted tax-exempt status to a privately owned, for-profit marina and restaurant business that has operated since 1964 on city-owned property. Marina Jack was created by the late Jack Graham and is owned by his successor, Bob Soran.

At question is whether a renegotiated 2006 lease agreement between the city (landlord) and Marina Jack (tenant) voided the tax exemption, and possibly whether the 1988 tax waiver was a one-year free ride that should have been reapplied for annually. What Furst wants paid is about $1.3 million in current and back taxes plus interest retroactive to 2006, which he determined became due when the new lease agreement was approved. It remains to be seen whether any other legal issues associated with the case will be addressed.

Bradenton attorney John Harllee, who is defending Marina Jack and Soran, said Florida Statute 196.199 broadly addresses the subject of leases on government-owned land and lays out the framework for a court to grant tax exemptions.

“In 2006, the city wanted to pull everything together in a lease that recites all the different arrangements back to 1964,” he said. “There is language that states it supercedes the old leases. That’s true. But this is more complex than the property appraiser has portrayed it.”

With respect to the notion that Marina Jack should have to reapply annually for the tax exemption, Harllee emphatically said, “That’s wrong. If a judge granted the exemption, there is no need to reapply for it.”
The unique exemption has been controversial since it was granted. It started with an apparent clerical mix-up in the late Mikos’ office that resulted in his failure to file a critical court document. It’s a matter of record that he appealed the adverse 1989 ruling and lost again.

Furst was initially introduced to the Marina Jack property tax case during his successful 2008 campaign to unseat predecessor Jim Todora. After taking office, Furst took a look at the history of events and court rulings, then notified Marina Jack it owed back taxes. He concluded language in the 2006 lease between the city and Marina Jack requires the property appraiser to assess the business operations for the years 2007, 2008 and 2009 and remove the enterprise’s tax-exempt status for the year 2010.

UPDATE: The city of Sarasota has maintained that Marina Jack is exempt from paying property taxes. The case has yet to come to trial.