Island accommodation owners face bleak future without tax relief
Two years ago, when escalating property taxes threatened to drive a number of "mom-and-pop" motels out of business on Anna Maria Island - and directly into the condominium market - affected residents formed the Citizens Against Runaway Taxation group to literally fight to save the "Old Florida" flavor of the Island.
Meetings were held, committees organized, politicians gave great speeches about "helping the little guy" and action was promised.
Two years later, however, any effective legislation to halt the ever-increasing spiral of Island property values is nowhere on the radar scope.
County Commissioner Jane von Hahmann, whose district includes the Island and Cortez, is introducing local legislation that would put a cap on taxation and roll the millage rate back to a different year, but that effort would only delay payment of the taxes until the property is sold.
Any real change in how Florida property appraisers determine property values, especially waterfront and barrier island real estate, must come from the Florida Legislature.
Although a bi-partisan tax committee of both the Florida House and Senate will discuss all issues of taxation - including property appraisal methods - at the next legislative session, any legislation that could ease the plight of Island motel owners is probably several years away.
It might be too late.
Since 2004, a number of Island accommodations have been converted to condominiums, including the Siam Garden Resort, the Anna Maria Beach Cottages and the former Econolodge Resort in Bradenton Beach.
And more "mom-and-pop" owners are considering such a move after receiving their 2006-07 Truth in Millage notice from Manatee County Property Appraiser Charles Hackney.
Bill Shearon and Tjet Martin opened Linger Longer in Bradenton Beach four years ago for the rental income from the two duplexes and as a retirement home.
Three years ago, Shearon's property value was put at $1.5 million by the Manatee County Property Appraiser's Office. This year, it's valued at $2.9 million, a nearly 200 percent climb in value - and the property taxes have risen accordingly.
"Last year I paid $26,000 in property taxes and that was double what I paid two years ago. This year, my [tax] bill is $39,900 and that doesn't include the $7,200 for insurance."
Shearon calculated that the first $47,100 in income he generates this year will go for taxes and insurance. Then come the utilities, maintenance and mortgage payments.
"I only have four units," he said. "Basically, I have to average $884 in revenue each week just to break even. You've heard of a cash flow, well, this is a ‘cash trickle.'"
With an average annual occupancy of 60 percent for Island accommodations, Shearon said he's now operating a "non-profit business." And August was the slowest month of the year.
"I can't believe my value doubled in one year. I know the county is looking at the duplexes as condominiums, but I would have to get $1.5 million for each duplex under their logic," he observed dryly.
In a down Island real estate market, "No one is going to pay that. So I'm stuck with the place," he concluded.
"It's like an alligator," he maintained. "You have to feed it every day, but you don't get to play with it," he said without laughing.
He dismissed the proposed "cap" by the Manatee County Commission as "little help." It only defers taxes, not lower them. "What about next year? Will assessed values go down and taxes go down?"
The Florida Legislature might eventually take action, but if property taxes were lowered through changes in how county property appraiser's determine taxable value, the politicians would just have to look elsewhere for money.
Shearon's story has a "somewhat" happy ending. After complaining to the PAO about his taxes, he was told they were figured "in error" and his property tax values and the TRIM notice were revised slightly downward, but still up considerably from last year. And he's still looking at money coming "out of pocket" to keep the property operational.
Shearon said he's lucky that he has "alternative" funding sources to keep Linger Longer going, but other accommodation owners on the Island might be facing a difficult future, particularly in a down real estate market.
"Eventually, you'll just have people giving the property back to the bank because they can't make the payments because of the taxes and they can't sell it," he predicted.
While that's a dire forecast, Tom Buehler and Sabina Musel-Buehler at Haley's Motel in Holmes Beach aren't ready to quit - yet.
"What else shall we do?" asked Musel-Buehler.
"We have all our money in this place. We don't want to sell out to the condominium developers, but soon we may have no choice," she said. And that's assuming someone will pay the taxable value for the property.
Four years ago, she and her husband paid $8,000 in property taxes. For 2006-07, her tax bill is $40,000, a 500-percent increase.
"People said we should sell, but we don't want to sell. We want to keep the motel and keep the Island the way it should look. We want to stay as Haley's Motel," said Musel-Buehler.
She's hopeful the proposed rollback to the 2003 or 2004 tax rate will help. "We want to hold on as long as we can."
With taxes expected to climb upward next year, holding on to Haley's Motel as long as they can might not amount to a very long time for the Buehlers.
Agreed, said Ken Gerry of the White Sands Resort in Holmes Beach.
A second-generation owner, Gerry and his family have seen their property taxes climb $60,000 in just five years, eclipsing the $70,000 mark for 2006-07.
The lure of converting the property to condominiums has not escaped Ken and his siblings.
"We want to keep it in our family as long as possible. We wanted to pass it on to our children, but the day is coming when we have to seriously consider condominiums," he said.
Gerry is hoping either the Florida Legislature can take some action or that property values on the Island decline, and soon.
If not, the White Sands Resort may soon join the growing list of new condominiums on Anna Maria Island that are replacing the "Old Florida" look of houses and accommodations that visitors and Islanders have cherished for years.
More condos for the Island
Attorney Robert Hendrickson of Bradenton has informed Anna Maria Mayor SueLynn that the owners of properties at 404 Alamanda Road and 780 Jacaranda Road plan to convert to residential condominiums.
Hendrickson said there will be no change of use, merely ownership, and no improvements are planned.
Deadline for appraisal adjustment this Friday
The deadline for Islanders to file a petition with the value adjustment board to protest their current property valuations as determined by the Manatee County Property Appraiser's Office is Friday, Sept. 8, by 5 p.m.
Ken Jackson of Green Real Estate, the Anna Maria Island Chamber of Commerce and numerous other Island real estate agents are working to encourage property owners with spiraling taxes to submit a petition by the deadline.
"We are in an extremely crucial period right now concerning our property taxes," said Green. With taxes so high - and going upward - rental properties are not producing very good returns on investment and they are not selling well, he noted.
Green said the hope is to flood the appraiser's office with these petitions and "receive a positive response so that our rental and sales markets will soon return to normal."
Persons who wish to file a petition with the VAB may do so in person at the property appraiser's office at 915 Fourth Ave. W. in Bradenton, or online at www.manateepao.com under "forms" and "VAB Petition-Real Property."