August 8, 2017
VIA OVERNIGHT DELIVERY
Senator Bill Nelson
United States Senate
716 Senate Hart Office Building
Washington, DC 20510
Re: Proposed legislation regarding Santa Rosa Island
Dear Senator Nelson:
The legislation to give fee simple title to businesses and individuals is likely unconstitutional for many reasons. The federal government can’t interfere with a contract right by unilaterally canceling that contract and offering the lame excuse “you will like what we give you better” to say nothing of the representations to the public that these leases by their very nature could never be taxed. Individuals relying on those representations entered into lease agreements with the county. The 99 year lease was designed to induce people and businesses to enter into agreements with the county that if they built homes or businesses there would never be taxation of those properties. That was fairly basic. No lawyer could anticipate that the county would be upheld when they unilaterally reneged on the lease arrangement, and no lawyer or judge could have envisioned how the courts in Florida have allowed it to be done. The argument that these people should now pay taxes to shoulder their fair share sounds fine except their fair share was investing in building in the first place which generated lease revenues for many years.
This is a massive land grab from the public. When the island was given to Escambia County it was with the clear restriction it could not be sold. It was always to be held for the public. Escambia County created the Santa Rosa Island Authority and, through it, came up with a plan to lease the land to individuals and businesses. When the Florida courts ruled that these leases were, in fact, conveyance of fee simple title, the courts never considered that this was designed by Escambia County to nullify the restrictive language of the original conveyance from the Federal Government.
This fictional lease plan was used to generate revenue for the county. As the land became more valuable and nicer homes and hotels were built, the Tax Appraiser for the county
implemented a plan conceived by the county commission of Escambia County to tax the improvements. That decision was litigated and the county prevailed. Next came the decision to tax the land itself on the theory the leases were tantamount to fee simple conveyances. Indeed they were, but the scheme to create them was created by Escambia County.
Florida courts have upheld the 99 year leases with the 99 year renewal as equivalent to and for all purposes the same as conveyance of fee simple title. The fly in the ointment, however, is many leases are not automatically renewing and the courts have held these are not tantamount to fee simple conveyances – this despite the vigorous protestations by Escambia County that they were. The irony is the intentional plan to circumvent the restriction of fee simple conveyance created by local government is now the basis of legislation you are reviewing that rewards Escambia County for ignoring the original restriction on the sale of land.
Not in our lifetimes, but as theses leases expire, the land will revert to the public good. That was what was intended when the Federal Government conveyed the land to Escambia County.
This legislation will rob the people of something that belongs to them. Our new Congressman does not have a clue how these individual leases will be impacted. There has been no analysis of who will financially benefit by having a commercial lease with a shorter duration converted to fee simple title. The reason for this legislation is to correct a problem created by Escambia County where leases are subject to an annual lease payment because it is a lease, yet also taxed as fee simple ownership.
This is not a problem the Federal Government should fix, nor should the Federal Government be complicit in helping resolve this situation which was intentionally created by Escambia County. If passed, Escambia County will financially benefit from a scheme it created to get land into private hands permanently.
This legislation was hastily drafted to rescue politicians who have created an effective double taxation of leased land on Santa Rosa Island.
For over a decade I represented Citizens To Save Our Beach. We litigated many issues on the Island. I will be happy to answer any questions your staff may have.
Very truly yours,
Robert G. Kerrigan
cc: Congressman Matt Gaetz
Chairman, Escambia County Commission