Monday, April 28, 2008

Island Deeds-for-Taxes Resolution

Tomorrow morning at 8:30 a.m. (April 29, 2008), the elected commissioners governing both Santa Rosa and Escambia counties will meet in the county commissioners' meeting room in Pensacola "to discuss title issues on Santa Rosa Island and the Regional Transportation Finance Authority." It could be more than a "discussion." If the commissioners act sensibly, it might lead to a revived and expanding beach economy.

Jamie Page succinctly describes the background above the fold in today's PNJ Local News section.
All the land on Pensacola Beach is the property of the federal government, but Escambia County government holds the master lease. Residents with homes and commercial buildings on Pensacola Beach pay lease fees on the land. They have a 99-year lease, with various options for renewing, on the land.

It's a similar situation on Navarre Beach, except all leases have a continuous 99-year renewable lease.

These Santa Rosa Island residents also pay property taxes to their respective counties, and that doesn't sit well with many.

By "master lease" reporter Page no doubt has reference to the loose legal threads arising from the original titling of Santa Rosa Island to "Escambia County" rather than to the "State of Florida" and the subsequent sublease of the Navarre Beach portion of the island to Santa Rosa County.

Neither Escambia nor Santa Rosa are charter counties with an independent existence under the Florida Constitution. Both counties, therefore, effectively are administrative subunits of the state. Consequently, however the federal deed may read, it's the State of Florida that has the ultimate ownership power over the island, although in practice the state legislature often, though not invariably, routinely approves county actions.

The big thing Page's article fails to mention is that a specific resolution will be up for consideration at this rare joint meeting of both county commissioner boards. The detailed agenda includes a resolution, presumably to be voted upon separately by both county bodies:


WHEREAS, on January 15, 1947, the United States of America conveyed to Escambia County, Florida, a portion of Santa Rosa Island, more particularly described in that deed recorded in Deed Book 248 at page 161 of the public records of Escambia County, Florida; and
WHEREAS, the deed recites that the property shall “always be subject to regulation by said County whether leased or not leased but never to be otherwise disposed of or conveyed”; and
WHEREAS, Santa Rosa County has an interest in the easternmost four miles of the property conveyed to Escambia County (Navarre Beach) pursuant to that certain Lease Agreement between the Santa Rosa Island Authority, an agency of Escambia County, Florida, and Santa Rosa County, Florida, dated February 11, 1956; and
WHEREAS, the Lease Agreement contemplates that Escambia County will convey Navarre Beach to Santa Rosa County and that the parties will cooperate “in obtaining such conveyance and congressional and legislative approval therefore”; and
WHEREAS, Escambia County and Santa Rosa County agree that it would be in the interests of both counties to release the restrictions on conveyance to facilitate transfer of Escambia County’s interest to Santa Rosa County and other persons and entities having leasehold interests on Santa Rosa Island; and
WHEREAS, the counties wish to express their intent to cooperate in drafting proposed legislation to release the restriction on conveyances and developing a process to convey Escambia County’s interest to Santa Rosa County and persons and entities with a leasehold interest on Santa Rosa Island, and to request the support of Congressman Jeff Miller to sponsor federal legislation to release the restrictions on conveyance; and
WHEREAS, the counties will direct their respective staffs and attorneys to cooperate in drafting proposed language for the legislation; and
WHEREAS, each County, through its Board of County Commissioners, has considered this Resolution at public meetings of their respective Boards.


1. The above recitals are true and correct and incorporated herein by reference in the body of this Resolution.
2. Escambia County and Santa Rosa County hereby request the support of Congressman Jeff Miller to sponsor legislation to release the restriction on conveyances for property on Santa Rosa Island, which shall be mutually agreed upon and drafted by the counties.
3. Each County’s staff and attorneys shall cooperate in drafting the legislation, which will be approved by each of the Boards at future public meetings and subsequently forwarded to Congressman Jeff Miller for consideration.
4. The Clerk of the Board of the Escambia County Board of County Commissioners shall furnish a certified copy of this Resolution to Congressman Jeff Miller immediately upon its adoption and execution by both counties.
5. This Resolution shall become effective upon the date last adopted by each of the Boards of County Commissioners.
Why this resolution? And why now? Reporter Page doesn't address that, either.

Our guess is that it has a lot to do with the still-pending cases challenging the 2004 tax assessments issued against residential beach property lessees. Cross motions for summary judgment are scheduled for three hours of argument before Judge Michael Jones on May 2 beginning at 9:00 o'clock. If the above resolution passes, it could be the basis for settling all of the outstanding tax and lease fee issues.

This would be a just and fitting end to the tangled history that has plagued Island and county politics for decades. Equally important, it would at last provide a foundation for a prosperous island economy comparable to other Florida beach communities, for the reasons we described in a parable we authored some time ago.

As we pointed out there, via a series of links to contemporary economic land tenure studies, deeding the land outright to present-day island leaseholders in exchange for their assent to pay ad valorem real estate taxes would rescue Pensacola Beach and Navarre Beach from a stultifying, repressive, and counter-productive economic morass that is almost identical to the way rural land is leased in the People's Republic of China.

Yes, the People's Republic of China has a booming economy, overall. But as anyone who has visited there for any time can attest, and as the economic studies we cited in the parable convincingly show, the rural economy in China is in shambles, largely because the land there is owned by the government and leased to occupants on terms strikingly similar to those on Santa Rosa Island.

Before the 1920's, Santa Rosa Island was owned outright by Escambia County. When the then-mosquito infested swampland with a newly-abandoned 19th century cannon fortress was deemed a financial burden to maintain, the county gave it away to the U.S. War Department. After World War II, stewardship of the island passed to the Interior Department.

Jane Johnson picks the story up at that point in her excellent history of the island (pdf warning):
The Department of Interior reverted the portion of Santa Rosa Island (from Fort Pickens to Navarre Beach) back to Escambia County, in 1947. The Deed of Conveyance specified: “...that the above described land shall be retained by the said Escambia County and be used by it for such purposes as it shall deem to be in the public interest or be leased by it from time to time in whole or in part or parts to such persons and for such purposes as it shall deem to be in the public interest and upon such terms and conditions as it shall fix and always be subject to regulation by said county whether leased or not leased, but never to be otherwise disposed of or conveyed by it… .”

In Escambia County the Santa Rosa Island Authority was formed in 1947, an outgrowth of the island advisory board formed in 1946.

On February 11, 1956 Santa Rosa County began leasing Navarre Beach from Escambia County. The lease was for 99 years at the rate of $100 per year... .

To populate the island and promote the tourist trade throughout the ensuing decades Escambia County promised, in written advertisements in national newspapers and magazines and in promotional literature distributed locally, "tax free" leaseholds on the newly named Pensacola Beach. Archives held by the Santa Rosa Island Authority include hundreds of examples of these newspaper ads and brochures. Some in private hands have even made their way to Ebay as collector items.

As we have pointed out before, "some of this history was later memorialized by the state legislature in the preamble to House Bill No. 3913, 1976 Laws of Florida, chap. 76-361." Overall, it can be said that as long as the county kept its word Pensacola Beach and Navarre Beach prospered. The tax-free promotions worked, to a degree that Pensacola Beach eventually -- after half a century -- reached the maximum sustainable population of 4,128 units allowed by a state-approved building cap.

Thus, all was well enough until the late 1990's when county commissioners, spearheaded by Mike ("Deer Slaughterer") Whitehead , began agitating to impose ad valorem taxes on beach leaseholds in addition to the annual leasehold fees they pay. Then, lawsuits were filed. Some of those suits, including one over the issue of beach business leases and another over Navarre Beach condominium leases, were lost in front of appeal courts who issued one-word opinions.

But the granddaddy of them all, the Pensacola Beach residential leaseholders class action, has always presented the most compelling claim. History, facts, legal precedent, economic reality, and common sense are all on the residents' side.

Maybe, just maybe, this has at last sunk in with county commissioners. If so, the resolution being proposed tomorrow should pass unanimously. Most island residents are willing to exchange their leases for a deed and to pay real estate taxes like beach residents on other beaches, including nearby Fort Walton Beach. All sides benefit. County government gets the tax income. Beach residents get a deed absolute. Everyone in Northwest Florida profits by having, at long last, a truly free market in land tenure.

The People's Republic of China, communist as it may be, has come to realize that individual deeds to land holdings is good for everyone. Let's hope our county commissioners are at least as smart as the Chinese.


1 comment:

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