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Aviation Authority sues Hillsborough Value Adjustment Board for tax exemptions

The lawsuit is the latest in a long-standing dispute over whether businesses leasing property from airports and deep-water ports like Port Tampa Bay should be exempt from paying local property taxes.
Tampa International Airport, [SCOTT KEELER | Times (2017)]

TAMPA — The Hillsborough County Aviation Authority has filed suit against the county’s Value Adjustment Board in hopes of reclaiming property tax exemptions for the businesses leasing its land and facilities.

At stake are hundreds of thousands of dollars those companies could be required to pay out in local property taxes for the first time — an unanticipated bill that could be big enough to kill off many of those businesses if the courts agree with Hillsborough County’s Property Appraiser.

It’s not the property appraiser’s office, though, but the county’s Value Adjustment Board named in the complaint filed in civil court late last month. And while the legal challenge is a first for the quasi-judicial board, it’s only the latest lawsuit in a long and tortured dispute over whether businesses leasing property from airports and deep-water ports like Port Tampa Bay should be exempt from paying local property taxes.

Those tenants, and their landlords, have long argued that Florida law extends property tax exemptions to any company leasing that government-owned land — so long as said company performs an aviation or maritime function that “serves the public or a governmental purpose.”

Because they were located on land owned by a government agency, the businesses operating on the multiple parcels of land owned by the Aviation Authority have historically been exempt from paying any local property taxes. The Aviation Authority oversees the daily operations, maintenance and administration of Tampa International Airport, and is governed by a five-member board including Tampa Mayor Jane Castor, Hillsborough County Commission Chairman Les Miller and three gubernatorial appointees.

But that changed in June 2019, when the Hillsborough County Property Appraiser sent a letter to the Aviation Authority stating his intent to deny that exemption to 16 of the agency’s tenants deemed “unqualified” because they fall short of the requirements to “serve a government purpose.”

Related: Millions at stake in tax fight involving Tampa port and airport tenants

The Aviation Authority argued that none of the businesses’ operations had changed from one year to the next, and filed a complaint with the Value Adjustment Board — a five-member board created by the state Legislature to “provide citizens a forum to address complaints when they believe the property appraiser has over assessed their property or improperly denied an exemption or classification.”

But the lawsuit claims that instead of issuing an independent determination on the Aviation Authority’s case, the Value Adjustment Board “failed to follow its statutory duties” by merely deferring to the Property Appraiser’s judgement and asks a judge to order the board to fully investigate the complaint.

Lawyers for the Value Adjustment Board say a special magistrate reviewed the Aviation Authority’s case. They have asked the courts to dismiss the lawsuit completely. They argue that, as a tribunal body tasked with settling property tax disputes, the board enjoys qualified immunity from lawsuits and isn’t the “proper party to a suit to reduce the assessed value of a property.”

Yet Property Appraiser Bob Henriquez was also granted a “motion to intervene” in the case on the board’s behalf.

In his motion, Henriquez argued that the “action seeks to strip the Property Appraiser of his long-established statutory duty to administrative property tax exemptions and determine the validity of those exemptions.”

The Value Adjustment Board, which includes Hillsborough County commissioners Pat Kemp and Sandy Murman as members, isn’t the Aviation Authority’s only hope for recourse. State law allows agencies to appeal the board’s rulings in circuit court, an avenue many of the airport’s tenants have traveled before.

In 2012, FedEx won a Hillsborough County case challenging the property appraiser’s attempts to revoke tax exemptions for property the company had leased at Tampa International Airport since 2003. Another longtime tenant, Sheltair Aviation Tampa, sued the property appraiser’s office in 2019 when the full property tax exemption they had previously received for more than 200,000 square feet of hangar buildings was reduced to only a 75 percent exemption.

The businesses in the current lawsuit include: Sheltair Aviation Tampa, Southwest Provisioning, United Airlines, Volt Aviation, Air General, Ground Services International Inc., Atlas Aviation, SMT Technical MGMT and Logistics, Global Aviation, Southwest Cargo, Pemco World Air Services Inc., and Sky Chef.