Smith Family Homes, a 10-year-old builder with projects in eight Tampa Bay area communities, owes the tax collectors of Pasco and Hillsborough counties more than $1.2-million in delinquent property taxes.
Those in the building community say Smith is a reputable builder caught in tough times. The company owes at least $856,995 to Pasco and $421,590 to Hillsborough, according to a review of tax records.
In Pasco, Smith is delinquent on 352 properties from the 2007 tax roll, which means Smith didn't pay taxes on them on April 1 this year, said the county's Tax Collector Mike Olson. He also counted 185 Smith properties that have been delinquent since 2006.
The lots are usually less than an acre, at varying stages of development. The delinquencies are spread across Pasco, in prestigious developments like Connerton and Wilderness Lake Preserve in Land O'Lakes, Seven Oaks in Wesley Chapel, Greyhawk at Lake Polo in Odessa, Suncoast Lakes in Shady Hills and the Greens at Hidden Creek in Zephyrhills.
Founded by Ronald Smith in 1998 as Premier Homes of Southwest Florida, the company changed its name to Smith Family Homes in 2004. Smith, the firm's president, didn't reply to a call for comment from the St. Petersburg Times.
Delinquent taxes don't always signal a company is about to go under, but Olson pointed to signs that suggest Smith Family Homes is facing cash flow problems.
When a taxpayer doesn't pay taxes by April each year, the tax collector sells the property's tax certificate by June. The tax certificate is effectively a loan in exchange for a lien on the property. Whoever buys the certificate pays the outstanding tax, but earns interest when the "loan" is repaid by the property owner. The certificate is cancelled if the taxes are paid.
But if the taxpayer is unable to pay the taxes two years after the property goes delinquent, the tax certificate holder can apply for the deed. The property is then auctioned off to the highest bidder.
Here's the problem for Smith: 12 tax deed applications have been filed this year against their 2005 property tax delinquencies, which indicates Smith was unable to save those properties, Olson said.
"Some people don't pay taxes because you could get a better interest rate from a tax certificate buyer than from a bank," Olson said. "They know how the market works and they run the risk. But the only thing (troubling for Smith) is the fact that there are these parcels that people have filed tax deed applications on recently."
Unless the market recovers quickly enough for the company to regain its cash flow, Smith could lose hundreds of properties in the years ahead.
The Florida Department of Business and Professional Regulation does not list any complaints against the firm. Unlike other builders like Levitt & Sons and Tousa, Smith hasn't filed for bankruptcy, according to court records.
But there are dozens of liens in the last year against Smith for unpaid services, including the installation of insulation and other materials.
Still, some of Smith's lien holders said they've enjoyed good relations with the builder, and that its financial troubles are a result of the market downturn.
"They've got inventory, obviously, and there are a lot of slow payers out there," said Jerome Harrell of Harrells Drywall of Tampa, who has a $8,500 lien against Smith. "It's been okay dealing with them. There are quite a few people that have some difficulties right now. Hopefully, they'll be out of this."
Smith, a Tampa-based firm, concentrates most of its work in Pasco, according to the projects shown on its Web site.
In Hillsborough, where Smith developed Panther Trace in Riverview and SummerGate Townhomes in Brandon, the company is delinquent on 68 properties.
"Once taxes are considered delinquent, tax certificates are sold," said Charlotte Luke, director of processing information for the Hillsborough Tax Collector. "It's no loss to the county."
Most of Smith's unpaid taxes on their Hillsborough properties date back to 2006, but records show the company has paid down 2005 delinquencies, which Luke said indicated the company has so far been successful in staving off tax deed applications to seize those lots.
Smith doesn't have an extensive presence in Florida, but over the years, it has won local accolades, including merit awards for its single-family homes from the Tampa Bay Builders Association last year. Smith has involved itself in community life as well, sending a team of volunteers in January this year to help residents of Connerton build a playground out of donated materials.
"They build a good product," said Dale "Chip" Jones, president of the Pasco Building Association and a top executive at Connerton. "By all indications they have a good reputation. We were aware of liens against their houses, (but) they, like many other regional builders, are feeling the pressures of a really difficult housing market. I have known them to be nothing but above board."
Ronald Smith is listed as the company's president on state filings, with his two sons, Marcus and Scott, as vice presidents.
Times researcher Carolyn Edds contributed to this report. Chuin-Wei Yap can be reached at firstname.lastname@example.org or (813)909-4613.