For two years, the Tampa Sports Authority argued it shouldn't have to pay property taxes on the arenas it owns and leases to pro teams because it is a branch of government.
On Wednesday, a Hillsborough circuit judge said the authority must pay interest on taxes that went unpaid while it unsuccessfully made that case.
The result is that taxpayers will pay $1.02-million in interest accrued while the authority fought its assessment for Raymond James Stadium and a baseball practice field. The 12 percent interest penalty falls on top of the $10.26-million owed in taxes for Raymond James and the practice field used by the New York Yankees.
In court Wednesday, Judge Robert Simms chastised the Sports Authority, saying taxpayers would lose no matter how he ruled. Taxpayers wouldn't have gotten the benefits of money owed if he sided with the authority, and now they will be forced to pay off the taxes and interest because the authority doesn't have enough money in the bank to cover what is due.
"Either way, the taxpayers of Hillsborough County are going to pay," Simms said.
The judge also rebutted the Sports Authority's contention that the interest assessment would create a hardship. Simms said the authority should have made good-faith payments toward the tax bill it was challenging in court, or made contingency plans.
Failing to due so "was not a wise move," Simms said.
Hillsborough Tax Collector Doug Belden said the ruling upheld the principle that government and other powerful entities shouldn't be treated differently than average taxpayers. And the average person has to pay interest on delinquent taxes, he said.
"No. 1, it's a fairness issue," Belden said. "No. 2., they had no basis in law" to avoid paying the interest.
But Sports Authority executive director Henry Saavedra said his board was playing champion for taxpayers by trying to get them off the hook for the interest. He expressed disappointment over the ruling.
"I'm sad for taxpayers," he said. "We were actually fighting for the taxpayers on this one."
Nevertheless, he said he likely will recommend that the Sports Authority board of directors not appeal the decision when it meets July 30. In the meantime, interest payments will continue to climb at a rate of about $3,100 a day.
The average annual property tax bill for a Hillsborough homeowner is $2,300.
Wednesday's hearing follows the April 5 Florida Supreme Court decision in a case out of Highlands County involving the Sebring International Raceway. In that case, the court found that sports arenas owned by some governmental bodies and leased to private groups are not exempt from property taxes.
Hillsborough Property Appraiser Rob Turner used an earlier ruling in the case to tell the Tampa Sports Authority it can't use the tax exemption that applies to state, county and school governments. He told the authority to pay its property taxes.
The Sports Authority sued, but later put the case on hold while it waited for the Supreme Court to make a final ruling in the Sebring case. The taxes are mainly owed for 1999 and 2000.
Under an interlocal agreement, Hillsborough County must pay two-thirds of any financial shortfall of the Sports Authority, and the city of Tampa must pay the other third. The Sports Authority has only $5.1-million.
While both governments are partly paying themselves, much of the money owed will go to the Hillsborough County school district and other governments with local taxing authority. In the case of schools, the money will get caught up in the state funding formula and the Hillsborough school district likely will see little benefit.
County commissioners and city council members are scheduled to meet jointly Aug. 22 to discuss how to deal with the Sports Authority tax bill.
Wednesday's ruling does not apply to the tax assessment for Legends Field, the sports complex used for spring training by the Yankees. The Sports Authority is still challenging a tax assessment on that property.
_ Bill Varian can be reached at (813) 226-3387 or at variansptimes.com