News for the Hospitality Executive
|By Leslie Postal, The Orlando Sentinel, Fla.
Knight Ridder/Tribune Business News
Dec. 15, 2003 - Two hotel chains have lost their bid to claim agricultural exemptions on pricey International Drive property, decisions that will mean about $1.8 million for Orange County's coffers, the county property appraiser said Sunday.
Hilton Hotels Corp. and Hyatt were denied the exemptions Friday when a hearing officer, called a special master, ruled in favor of Bill Donegan, Orange County's property appraiser.
Donegan has been fighting for more than a year the efforts of five major businesses on International Drive to have their property taxed like farms or other "bona fide agriculture" operations.
"It's a good thing," he said in a telephone interview Sunday night.
Representatives for Hilton and Hyatt did not respond to messages left Sunday night seeking comment on the rulings. They have the option of suing in circuit court to try to overturn the rulings.
In the past, officials from both hotel chains have said they followed Florida law when seeking the exemptions, which must be renewed each year.
The exemptions, designed to preserve agriculture in Florida, mean far lower tax bills. Last year, for example, such an exemption dropped Hilton's bill on the disputed land from about $400,000 to $36,000.
Donegan said the valuable property -- Hyatt paid $1 million an acre for its 26-acre parcel near the Orange County Convention Center -- was not agricultural but rather not-yet-developed commercial land.
"When you're preparing land for development, you're in development," Donegan said. "You're not in the ag business. "
Alison Yurko, the special master of Orange County's Value Adjustment Board, agreed after hearings earlier this month.
"The agricultural use is temporary, transient, capable of immediately reinventing itself as a hotel as the market warrants," she wrote in both rulings.
Last year, Orange County's Value Adjustment Board sided with the five companies, granting them a combined $4.4 million worth of exemptions. Donegan then sued to overturn the rulings.
In October, he won the first lawsuit when a circuit judge ruled that RH Resorts, owned by Harris Rosen, could not claim an agricultural exemption simply because it had planted pine trees on its valuable, tourist-area land.
The fact that Rosen's company had paid 25 times the appraised price for the land, the judge ruled, suggested the land wasn't intended primarily for agriculture. Also, Circuit Judge William C. Gridley wrote, the seedlings planted couldn't be harvested for 10 to 25 years, making them "incidental" in Rosen's agriculture claim.
The judge's decision meant Rosen's 2002 tax bill on those 230 acres was $467,000 instead of the $26,812 it would have been, had the exemption stood.
The other lawsuits are pending. The one against Vivendi Universal has a hearing scheduled for Dec. 19, Donegan said Sunday night.
A special master also is expected to rule soon on the efforts of two other companies, Universal and Sierra Florida Properties, to get 2003 agricultural exemptions, he said.
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