British firm could get early victory in legal fight with Monroe County if Scott signs property tax bill

A bill on Gov. Rick Scott’s desk could save a British company millions of dollars, while stymieing the Monroe County Property Appraiser’s office and setting a new precedent for calculating property taxes at privatize military housing. 

SB 354, which passed the Legislature with bipartisan support last month, clarifies key provisions in Florida’s tax code, determining who is--and who isn't--eligible for property tax exemptions. 

Those provisions are at the heart of a pending lawsuit between the Monroe County Property Appraiser and Southeast Housing, the subsidiary of UK-based Balfour Beatty Communities. 

Monroe County sent Southeast Housing a bill for more than $11 million in back property taxes last year, after discovering that the company was renting units to civilians instead of exclusively to the military. Southeast took ownership of 890 Key West housing units from the U.S. Navy in 2007, under a deal inked through the U.S. Military Housing Privatization Initiative. 

Southeast had been operating free of property taxes for several years, before Monroe County said the exemption was not appropriate. The property appraiser says Southeast should not get a government exemption since it is operating units for civilians.

Southeast has filed a lawsuit challenging the $11.3 million tax bill, and seeking permanent exemption.

Southeast Housing's attorney, David Paul Horan, did not immediately return a phone call requesting comment, and an assistant said he was in a meeting Friday afternoon.

If Scott signs the bill, the lawsuit could be impacted. SB 354 states that all governmental and “quasi-governmental” properties operating under the U.S. Military Housing Privatization Initiative are tax-exempt. However, taxes can be charged on the portion of units rented to civilians, under an amendment filed before the bill passed.

Rep. Holly Raschein, R-Key Largo, said she that amendment was crucial. She voted against the bill in one committee, but voted for it once it was changed to ensure that only units rented to military families would be tax exempt.

“At the end of the day, a bill was going to pass and I’m glad this was the version that passed,” she said. 

It’s unclear how many of the 890 Key West units owned by Southeast have been occupied by civilians, though reported estimates range from 30 percent to 74 percent. 

Scott’s office said the governor is “reviewing” the bill. He has until Wednesday to sign or veto it. 

Scott Russell, the Monroe County Property Appraiser, did not immediately return a call to his office. 

While Monroe is the first Florida county to charge taxes on privatized military housing, the outcome of the bill and the lawsuit could set an important precedent. Similar privatized military housing facilities exist in Pensacola, Jacksonville, Panama City, Escambia County and elsewhere.

Southeast has filed a lawsuit challenging the $11.3 million tax bill, and seeking permanent exemption.

Southeast Housing's attorney, David Paul Horan, did not immediately return a phone call requesting comment, and an assistant said he was in a meeting Friday afternoon.

If Scott signs the bill, the lawsuit could be impacted. SB 354 states that all governmental and “quasi-governmental” properties operating under the U.S. Military Housing Privatization Initiative are tax-exempt. However, taxes can be charged on the portion of units rented to civilians, under an amendment filed before the bill passed.

Rep. Holly Raschein, R-Key Largo, said she that amendment was crucial. She voted against the bill in one committee, but voted for it once it was changed to ensure that only units rented to military families would be tax exempt.

“At the end of the day, a bill was going to pass and I’m glad this was the version that passed,” she said. 

It’s unclear how many of the 890 Key West units owned by Southeast have been occupied by civilians, though reported estimates range from 30 percent to 74 percent. 

Scott’s office said the governor is “reviewing” the bill. He has until Wednesday to sign or veto it. 

Scott Russell, the Monroe County Property Appraiser, did not immediately return a call to his office. 

While Monroe is the first Florida county to charge taxes on privatized military housing, the outcome of the bill and the lawsuit could set an important precedent. Similar privatized military housing facilities exist in Pensacola, Jacksonville, Panama City, Escambia County and elsewhere.