Saturday, December 16, 2006

Port LaBelle May Get Lowered Taxes?

LABELLE, FLORIDA (Dec. 14, 2006) -- In what may turn out to be an embarrassing situation for long-time Hendry Tax Appraiser Kristina Kulpa, this week's tax assessment hearings continued with evidence that sky-high property tax assessment values might have been a tad too high in Port LaBelle.

Special Master Dan Stevens, for the Hendry Value Adjustment Board, continued hearings Wednesday afternoon and Thursday morning on petitioner CHL Holdings, Inc. and CHL Home Builders, Inc. try at reducing tax assessments values on their extensive holdings of vacant lots in the remote dozen square mile Banyan Village subdivision east of LaBelle and also those owned in Units 1 through 9, just east of LaBelle. Stevens found that CHL has overcome the presumption of correctness that county tax appraisers are given under Florida law. Tax Appraiser Kristina Kulpa's office says the lots are worth $26,500 in Banyan Village and about $34,000 in the other closer-to-town units. CHL's owner Charles Svirk says he's today paying not more than $5000 to buy lots in Banyan Village, but maybe they are worth $6000 to $8000. Stevens is now giving CHL the apportunity to prove the lots are worth less than the tax appraiser says.

(Photo: left, appraiser's attorney Jay Wood; right, county appraiser chief Cliff Wood)

Some Embarrassing Letters

Charles Svirk, Jr. as 100% stockholder of the two real estate companies testified Wednesday that he had letters sent out to all 2005 buyers of the four Banyan Village Port LaBelle Units10 through 13 a few months ago asking if those buyers knew that building homes on their lots is illegal at this time. The letter also asked if the vacant lot owners knew when water would be available giving choices to check on the letter survey. 13% said they didn't know water was not available, 10% said they thought water would be installed in 2005, 39% said in 2006, and 30% didn't know. The Svirk letter, written by former company attorney Mark Lapp, now attorney for Hendry county, and the letter signed by Svirk also suggested that because Svirk's company planned to fight the higher property assessments, Banyan Village property owners property taxes would be lowered if his "legal actions" were successful.

But Special Master Stevens became visibly upset by the letter, pointing out that the letter was untrue, and that no property owner's taxes would be lowered, because Svirk's petitions would have no effect on any other lot owner. Stevens also pointed out that the survey asking lot buyer's knowledge of water lines in the subdivision was misleading at best. Stevens said that none of the answer choices given on Svirk's survey were correct answers. Water is not expected to be available in Banyon Village until 2007 or 2008 said Stevens, but the questions in the survey presumed water availability in 2005 and 2006. Stevens told Svirk that the letter was flawed in that it was promising things that were not true. County tax appraisal staff said they had received lot owners' phone calls asking when their "new" lower tax bill would be coming, because they thought CHL was handling their cases with the Value Adjustment Board, only to be told that's not going to happen.

Banyan Village was platted about 1972 and has laid vacant for 35 years because no water or sewer lines have been installed even though money has been available for years. Water lines were first promised by the county back in 2002, and then again in 2005. The county went to bids in June 2006 for the work. Svirk's companies have for many years sent out postcards to all Port LaBelle lot owners offering to buy lots, and if contacted sellers were offered as low as $100 per lot. CHL got thousands of responses from owner's tired of waiting for the land to be developable but still owed property taxes year after year. Svirk also bought hundreds of tax certificates from the county when taxes were not paid on the vacant lots, and eventually had the lots sold for taxes at public auction and ended up as the eventual buyer of significant numbers of Port LaBelle lots over the years.

CHL Overcomes Presumption of Correctness

After ten hours of testimony this week, Special Master Stevens announced CHL and Svirk had overcome the "presumption of correctness" that Hendry Tax Appraiser Kristina Kulpa's staff have by law in setting values for these Port LaBelle lots. Stevens found that 51 acres of commercial land in Banyan Village was highly overvalued by the county appraisal and set the new number at $15,000 per acre. For all the Banyan Village residential lots, Stevens found that the tax appraiser failed to include in their calculations hundreds of sales.

The tax appraisers left out "group" sales where one deed contained many lots sold or bought by one owner, and left out many purchases by CHL itself, a major purchaser of lots. Of the 500 lots sold in the Village in 2005, the appraiser only used 144 in calculation of the assessed value. Stevens said that the group sales "most closely approximate the situation" of all the lots. "How much, I'm not sure," he said. Stevens additionally found that during the last six months of 2005 there was a downward trend in prices that the tax appraiser did not considered, and presumably he was inferring that they should have. The tax assessment value is mandated by law to be the property value as of January 1st of each year. Stevens also indicated the uncertainty of the available date of water lines completions would effect lot value.

Stevens said he may give consideration to CHL for a possible downward adjustment in their tax assessment value because they were not legally able to sell lots in Banyan Village in 2005. CHL is not registered with the Florida Department of Land Sales to be enabled to sell lots that do not have utility infrastructure like water lines. Registration with the state to sell such undeveloped lots is required of anyone selling 25 or more lots a year. Speaking for the tax appraiser's office, east coast attorney Jay Wood, objected to Steven's premise and said he would provide the Special Master with law cases why this type of deduction is not proper. The law allows a deduction if a government prevents a use or sale of land, but in this case it would seem CHL is only prevented from selling because they chose not to register with the State for this type of undeveloped land sales.

Decision Likely In January

In order to determine a new tax appraisal value, Stevens gave CHL and the appraiser's staff 10 days to exchange their sales data with what they considered relevant sales in the last six months of 2005, and then both were given until January 12 to send Stevens their critiques of the data and a written argument as to their opinion of correct value. Stevens said he would then adjust downward by 15% the numbers that he determines to be the correct price in order to account for "cost" of selling by a land owner. This deduction is standard by the tax appraiser to determine the tax assessed value, i.e. the tax appraised value is about 15% less than the median sales price in the neighborhood to be.

Stevens ruled also that he was not going to hear petitions filed late. The Florida Statutes mandate filing deadlines for petitions to the Value Adjustment Board, but this year because of over 1,000 petitions being filed, mainly by CHL, the Clerk of Court decided to publicize and allow late filings. Stevens said he would allow CHL's late petitions for good cause as they had been originally timely filed but were returned to them by the Clerk's office for minor filing errors, at which time they were corrected and re-filed.

A final decision by Special Master Stevens on any changes to CHL's Port LaBelle property valuations won't be made until after January 15. Then his recommendation will be forwarded to the Value Adjustment Board, composed of two county commissioners and a school board member, who will make the final decision at a public meeting on all petitions Stevens has heard during the last two weeks of hearings.

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