INDIAN SHORES — The Pinellas County property appraiser mistakenly gave nearly $1 million in tax breaks over 22 years to Ralph Heath, founder of the Suncoast Seabird Sanctuary, because of a clerical oversight.
The property appraiser's office had exempted from taxes four parcels where the sanctuary is located because it is a nonprofit organization. But the sanctuary was not the owner; Heath was. Heath had leased the beachfront property to the sanctuary.
The appraiser should have listed the land as taxable.
The error finally was caught because last year Heath transferred those and other parcels to a Texas company created by two of his sons. Property appraiser Pam Dubov saw the change in ownership and noted that the company, Seaside Land Investments LLC, is for-profit. She changed the status of the real estate from exempt to taxable.
Seaside objected to the taxable status a few weeks ago, saying the land had always been exempt. Dubov saw then that her office had mistakenly been giving Heath the exemption since 1989.
The total estimated loss to public coffers: $937,662.
That's including all property taxes, such as county, city and emergency medical services taxes. The figure also assumes that Heath would not have been able to claim any exemptions and so would have paid taxes on the full value of the land.
Before 1988, state law allowed land to be exempt from property taxes if it was used by a nonprofit, even if the owner was a for-profit or an individual. But the Legislature changed the law. Beginning with the 1989 tax year, the nonprofit had to both own and use the land to qualify for the exemption. Property appraisers should have gone through their records then to make sure that only those who qualified under the new law were getting the exemption.
It's unclear whether the then-Pinellas property appraiser failed to go through the records or simply missed the fact that Heath owned the sanctuary property. Either way, Heath continued to benefit from the exemption for the next 22 years.
"I never knew that," Heath said Thursday. "It's always been totally used for the birds."
Heath said his sons paid the mortgage when he signed the property over. They plan to hold the land for the birds and as a wildlife sanctuary, he said.
The sons, Alexander von Gontard and Peter von Gontard, through Seaside, have filed petitions with the county asking that the exemption be restored. They also allege that Dubov overvalued the property and are asking that the taxable value be decreased. Alex von Gontard, who filed the petitions, could not be reached for comment.
Dubov said she is not going to try to collect the back taxes. State law limits back collections to three years — 2009, 2010 and 2011, totalling about $185,853 in this case.
Heath, she said, did nothing wrong and should not be penalized. Had Heath been told about it, he could have fixed the problem by transferring the land to the sanctuary, Dubov said. If he had done that, there would have been no reason for the exemption not to continue.
"I don't really feel like there's been a loss here," Dubov said. "It wasn't anything they did to mislead us."
It's unclear what the town of Indian Shores, where the sanctuary is located, thinks of that. Dubov's decision not to go after the back taxes also means the town will not receive its share of what Heath would have paid for at least the past three years. Indian Shores officials could not be reached for comment.
Dubov said she is unsure whether any other properties in Pinellas are getting charitable exemptions they're not entitled to. Most cases should have been cleared up as property changed hands, she said. But she's examining 900 records with charitable exemptions to make sure no other owners are getting an undeserved break.
"I'm going to be very surprised if we have very many of these," Dubov said.
Anne Lindberg can be reached at [email protected] or (727) 893-8450.