Our immediate past President of PBA, Terry Preston, will take over from Jim Cox as the chair for the Government Affairs Committee. They attend many of the local government meetings and provide input on issues of interest to the PBA membership. This committee has very important work in the next 12 months as we work with other stakeholders on the beach to determine the future of the island and SRIA after lease fees are eliminated. If you would like to be a member of the Government Affairs Committee please send an email to email@example.com.
As we talk to beach residents and leaseholders, we find that there is still much confusion on the situation with taxation and lease fees on the beach and what our path forward looks like. We hope this article clarifies the issues for you.
ALL Pensacola Beach leaseholders lost the lawsuit against taxes on IMPROVEMENTS in the Florida Supreme Court and were notified of taxes due in June. Navarre Beach residents lost both lawsuits on the improvements and the land.
Based upon the advice of the attorneys after the Supreme Court decision, most of the Pensacola Beach leaseholders chose to ask their attorneys to dismiss the lawsuit on the land taxes as well, and began paying those taxes. Two entities, Portofino and Beach Club, with their associated leaseholders, have elected to continue the lawsuits on the land taxes. Any other lawsuits on the land taxes are being continued on a case by case basis. Over the past ten years, the County has collected $59 million in ad valorem taxes (excluding school taxes) from Pensacola Beach leaseholders. Very little of this has been used to support beach operations.
Fee Simple Title and Lease Fee Reductions
Fee Simple Title would give current leaseholds title to their property. Fee-simple legislation was introduced to the U.S. House of Representatives and passed in 2014. It has not been introduced in the U.S. Senate as of this date. PBA sent letters to both Senators before the summer recess requesting that they introduce the bill. We have not received a response to date. We sent a newsletter to our members asking you to contact your Florida Senators encouraging them to sponsor such a bill.
Escambia County Board of Commissioners claims to be waiting on resolution of the remaining land tax lawsuits before reducing or eliminating lease fees on Pensacola Beach. However they are holding land taxes in escrow to either repay lease fees or collected taxes depending on the outcome of the land lawsuits. The PBA Board does not feel that the County is escrowing enough dollars for condos - the calculation they use for the land portion of condo taxes (15%) does not reflect the percentages established in 2012 by a Portofino lawsuit.
The Santa Rosa Island Authority is waiting for fee simple legislation before reducing or eliminating lease fees. They are actively seeking ways to continue operations with the existing organization intact regardless of fee-simple legislation.
The Santa Rosa County County Commissioners are actively looking for legal ways to eliminate lease fees for Navarre Beach leaseholders, but they do not have a large bureaucracy like the SRIA to support with tax dollars.
Planning for the Future
Escambia County and Pensacola Beach will have to come up with a plan on how to run and manage the island without lease fees. It’s a complicated issue because we have a combination of commercial leases where businesses pay a percentage of their gross revenues in lease fees, residential lease fees that range from $100 per year to $3000 per year and sub-leases where a master leaseholder pays the lease fees and charge a marked up rate to sub-leaseholders (in condos and some neighborhood associations). Adding to the complexity is that many of us feel that SRIA provides oversight and services that have helped to make Pensacola Beach a unique place where businesses and residents co-exist in a resort community.
Some of the issues that the stakeholders on Pensacola Beach will need to address are:
- Will we keep an active SRIA with a smaller footprint?
- What services will a smaller SRIA provide?
- What services on Pensacola Beach will Escambia County pay for with our tax dollars?
- How soon can all this happen?
- How would a smaller SRIA be funded?
- How will reduction in lease-fees be passed along to sub-leaseholders?
- If the County prevails in the land tax lawsuits, how will they determine the amount of $ to refund to residential and business leaseholders?
Pensacola Beach Advocates believes that we can and should start funding certain services through the County, and savings should be passed on IMMEDIATELY to leaseholders in reduced lease fees. We also need to ensure that where a Master Leaseholder is receiving the benefit of reduced lease fees, it passes that savings along to the Sub-lessees. At PBA's urging, the SRIA sent out a letter to all Master Leaseholders requesting information on the relationship between them and their sub lessees.
Our Government Affairs Committee is already collecting data and examining these issues. We will be working with the business community on Pensacola Beach to make sure all of our needs are heard. If you would like to contribute your time and talent to this important committee, please contact us. Also visit the News & Issues page on our website (www.pbadvocates.org) for more information on all of these taxation issues.