Tuesday, May 09, 2006

Tax Suit Memory Jogger

Derek Pivnick of the Pensacola News Journal has a memory-jogger about the pending Pensacola Beach tax suit in today's PNJ. The point seems to be 'Hey, don't forget this juicy little item we still have on the back burner.'

It's like a medical alert. The PNJ doesn't want subscribers, having forgotten all about the litigation, opening up their newspaper one morning and having a heart attack over some big black headline announcing a tax decision.

Pivnick writes:
The legal fight about whether millions of dollars in property taxes should be paid on Pensacola Beach homes, condominiums and businesses continues unabated by the Navarre Beach leaseholders' recent court loss.

Six lawsuits are pending in Escambia County, and it could be only a matter of weeks before the first one gets a trial date... .
In over 450 words, Pivnick manages to avoid reporting one new fact about the lawsuits. But he does grab a telling quote from the attorney representing some of the litigating leaseholders:
"The leases at Portofino do not have that 99-year perpetual renewal language," said Ed Fleming, a lawyer for Portofino's homeowners associations.
That's not exactly a Robert Luskin press leak. What Fleming is saying is well known, too. As we've said before, not all leases Pensacola Beach leases are the same. It stands to reason not all leaseholder tax suit arguments will be the same, either.

Some residential and commercial leases on Pensacola Beach are for a period of 99 years with an automatic right of renewal for an additional 99 years on "like" terms. Others - like the Portofino leases -- are for 99 years with a right to renew, but the terms are left open to negotiation. That leaves nothing but a generalized obligation of "good faith" in coming to terms over any renewal.

A few leases we've seen have garbled renewal language specifying only a right to renew without more and in key sentences seem to be missing a few subjects and verbs. Among residential as well as commercial leases, there are some for a shorter duration and others that flatly terminate after a set term of years, usually less than 50.

If all of this illustrates anything, it's that when the Island Authority wrote individual leases it was perfectly capable of specifying terms that did, or did not, convey the kind of "equitable ownership" that was decisive in last year's Navarre Beach tax ruling. That the SRIA did not always do so seemingly supports Fleming's argument.

The real lesson is for anyone contemplating a purchase on Pensacola Beach: read the lease before you buy. Every word of it.

For more about the beach leaseholders' tax lawsuits, check the Pensacola Beach Tax Suit web site.

Background Links
Beach Tax Litigation
Nov. 10, 2004
Beach Leaseholders' Lawsuit Filed
Dec. 21, 2004
Beach Tax Update
Feb. 12, 2005
Navarre Beach Tax Ruling
June 18, 2005
For Sale: Beach Evidence!
January 27, 2006
Beach Tax Settlement In The Wind?
Feb. 6, 2006
Hey Y'all
Feb. 19, 2006
An Airline
Mar. 3, 2006
Island Parable
March 12, 2006

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