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Date of Issue: April 27, 2006

Longboat owner won't roll over, fights high taxes

The owner of the Rolling Waves Beachfront Cottages on Longboat Key has filed a suit against Manatee County Property Appraiser Charles Hackney over the method used by Hackney to determine the appraised value of the property. Islander Photo: Rick Catlin

Stung by the spiraling tax assessments for Island and Longboat Key accommodation properties, at least one owner has had enough.

Ed Woodland, owner of the eight-unit Rolling Waves Beachfront Cottages at 6351 Gulf of Mexico Drive on Longboat Key, has filed a suit against Manatee County Property Appraiser Charles Hackney, alleging that Hackney has "failed to consider the income produced by the property when assessing the value of the property."

That’s been the main bone of contention among many accommodation owners with Hackney’s office - that appraisers use the "highest and best use" or "sales" method of appraisal instead of the income approach in determining appraised value.

What that means, according to the Citizens Against Rising Taxation organization, is that appraisers consider the value of an accommodation property as if it were condominiums and compare "sales" of "similar condominiums" to determine the appraised value.

The appraised value is used by the Manatee County Tax Collector to determine annual property taxes. For Island and Longboat Key accommodations, those taxes have skyrocketed the past five years.

In his lawsuit Woodland, represented by attorney Chuck Webb, a former Anna Maria city commissioner, says that in 1993 the property was assessed at $523,460 for ad valorem taxes of $10,921.

Twelve years later, however, the PAO came back with an appraised value of $2.626 million - a more than 400 percent increase - and slapped him with taxes of $48,741.27, a near 346 percent jump.

Woodland said that at the time he purchased the property in 1989, "there were structures on the property that had been used for operating (a) motel" by his predecessors and he has "continued to use the property as a motel without a significant increase in income."

The suit asks a judge to declare the current property assessment as "void and of no course and effect" and asked for a "permanent injunction" that would require Hackney to "reassess the property" at its "proper and true value."

Hackney responded to the suit by claiming he had "no knowledge" that the property operated as a motel since 1989 without a significant increase in income and denied that his office has failed to consider the income produced by the property when it assessed the value of Rolling Waves Beach Cottages.

No trial date has yet been set, but CART members and other Island accommodation and business property owners are likely to be watching the case with interest.

CART was formed in October 2004 to protest the rising property taxes for accommodations and business property on the Island and Longboat Key.

At that time, CART noted that since the 1992 Save Our Homes referendum capped homesteaded properties at a maximum of 3 percent increase in taxable value annually, tax collectors around Florida have had to look elsewhere for revenue, particularly non-homesteaded properties.

The SOH referendum has removed some $3 billion in property values in Manatee County from increasing assessments, shifting the burden of taxation to meet the county budget onto commercial and non-homesteaded property owners, CART official Don Schroder said then.

Property appraisers can use one of three methods to determine assessed value: sales, income or cost, Schroder previously noted, but the "sales" method generally produces the highest assessed value on an Island business or accommodation property because it compares that property to what a condominium property would bring in sales.

On Anna Maria Island, condominium prices have soared the past three years, climbing about 500 percent in average sale price, a local real estate agent said.

CART has claimed the PAO is not even considering the cost or income approach when determining assessed value on accommodation and business properties, although Florida law requires a PAO to look at all methods when determining taxable value.