Has The Big Fish Flipped & Flopped?

May 5, 2014 — Letter addressed to Mayor Ashton Hayward and the Pensacola City Council from Quint Studer regarding Bruce Beach and The Fish Hatchery…

Click on Letter for Full Size…

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Loss Analysis – Beach Lease Conversions to Fee Simple

No county commissioner has ever asked for an economic impact analysis of fee simple conversion of beach leases. We understand why they have not. The county will lose millions if these leasehold conversions take place.

1. ½ of the residential leases on Pensacola Beach are not considered in perpetuity; meaning the land is not taxed. In many cases the land is as valuable as the structure. These lease holders will not convert to fee simple because it would amount to as much as double the county ad valorem tax

2. The other ½ of residential leases will convert to fee simple title because they will pay no more taxes than they are now being assessed because their leases are taxed as if they own the land. Net annual loss to the county on the loss of those lease fees – $2 million.

3. Condos: The recent decision by the 1st District Court of Appeal exempts condo owners from paying any tax attributable to the land. They will not convert. Estimated annual loss — at least $2 million.

4. Commercial leases. Any commercial lease holders that convert to fee simple will cause those lease fees to be lost and the taxes now assessed will not increase. Unknown loss of revenue, however, revenue will be lost. In addition, the 5% surcharge on beach sales will be lost if leases are converted to fee simple. Current annual revenue — $1 million.

5. Escambia County will lose millions. No public official will dispute this basic truth. Why has Escambia County paid hundreds of thousands of dollars to a federal lobbyist lobbying congress since 2011 for passage of this act?

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Editorial: Senators Nelson & Rubio Should Scrap Beach Bill

Editorial from Pensacola News Journal Editorial Board published Oct. 8, 2017…

navarre-beach-sceneNo matter what side you’re on in the contentious battle over a Senate bill that would allow private ownership on area beaches, one thing is certain. This is federal government action designed to intervene in a local government issue. For that reason alone, Senators Nelson and Rubio should scrap the legislation and allow local citizens to work out issues of taxes, fees and fairness on Santa Rosa Island.

It is unnecessary and inappropriate for federal officials to impose a sweeping major change in the historic status quo of public ownership of a natural treasure like Santa Rosa Island. Especially when the central premise for the bill comes from demands for fairness in county-regulated fees and taxes. We don’t use acts of Congress to solve disputes over parking meter rates. Nor should we look to federal officials to resolve questionable allegations of unfairness in a local tax issue.

Conservative backers of the bill such as Rubio and U.S. Rep. Matt Gaetz ought to explain to voters exactly why a federal government that should butt out of health care ought to be making sweeping land management decisions for citizens of Escambia County. If that’s not “big government,” then what is?

For Nelson’s part, after initially backing the bill, he has since raised doubts and called for revisions that would put preservation restrictions on Navarre Beach similar to what the bill calls for on Pensacola Beach. Specifically, Nelson’s spokesman said, “(He) still supports the overall purpose of the bill, but wants to add some additional assurances that Navarre Pass will stay closed and conservation areas preserved.” Nelson is right to call for increased preservation guarantees, but still misses other troubling questions with this bill.

Currently, Escambia County citizens own the Navarre portion of the island and lease it to Santa Rosa County. The proposed legislation would transfer ownership of that land to Santa Rosa, whose officials have rejected the sort of preservation restrictions that the bill contains for Escambia’s portion.

Therein lies the inherent flaw in treating the island as dual territories subject to different standards and protections. The barrier island is a highly unique and sensitive ecosystem. Tides and winds and forces of nature do not recognize imaginary dotted lines or arbitrary dictates and ambitions of neighboring county governments. Public ownership of the island was intended as a protective measure for a rare natural environment with a larger sense of posterity in mind.

Undoing that historic public ownership should require direct and widespread public input from all the citizens who have a stake in the island. That has not been the case at all with this proposed legislation.

Furthermore, before any such move should be considered, citizen stakeholders ought to be provided with a concrete financial analysis of a transfer to private ownership. Neither county nor federal officials have shown Escambia County citizens any hard numbers of what this legislation would mean for taxpayers’ bottom line. Since when are real estate transactions negotiated without some specific appraisals, assessments and dollar amounts on paper?

How much would be gained or lost in tax and fee collection?

How much is all this publicly owned land worth?

Do our commissioners, representatives or senators even have any idea?

We spend thousands on economic impact studies for everything from hockey to road closures in this county. So where’s the science-based economic report to justify the transfer of ownership that this legislation proposes? Show citizens the numbers that deserve their support.

Additionally, Gulf Islands National Seashore has historically been a leading voice for stewardship and a watchman over the entire island. In the past, Seashore officials have rightly opposed a Navarre pass, private ownership and increased development due to the fact that on such a sensitive sliver of sand, changes on one end of the island will inevitably alter the other end. Cut a pass in Navarre and you’ll feel it in Fort Pickens.

Senator Nelson and Rubio should look back at Gulf Island’s historic positions on the issue and seek direct, candid input from National Park leaders and rangers who have become deeply acquainted with these issues over the years. Their opinions are significant and they know the island better than most.

But in the end, the hundreds of thousands of Escambia citizens who own the island ought to decide this issue. The island is their treasure and heritage. And with all due respect to our federal officials, Escambia citizens know the beach better than senators from South Florida or a congressman from Fort Walton.

The beach belongs to locals. And with this overreaching legislation, our federal officials are trespassing.

Link to the original editorial here: PNJ Editorial 10-08-2017

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The Law of Unintended Consequences

Proponents of the beach bill claim that nothing in the bill itself has any negative impact on the beaches of Santa Rosa Island. That statement is not only false on its face, but it neglects to take into account what sociologists, legal scholars, philosophers, and software engineers recognize as inherent when dealing with complex systems. The law of unintended consequences serves as a warning that any intervention in a complex system tends to create unanticipated and often undesirable outcomes.

The intended benefit of S. 1073 is not solely to grant fee simple title to leaseholders in Escambia County but also to protect the public, recreation, conservation, and preservation land in and around Pensacola Beach. However, those conservation protections are not guaranteed in the ways outlined by the Department of the Interior in its recommendations on previous versions of the bill. The issues DOI found with the bills are described in this 2013 testimony:

“Our primary concerns lie with the lands within Navarre Beach and Pensacola Beach that remain natural, in a pristine condition, and that provide vital wildlife habitat and have outstanding opportunities for public recreation. As written, this bill does not adequately define those areas to ensure they remain in public ownership, protected from development, and available for public use and enjoyment, as intended by the Act of July 30, 1946. Specifically, the county resolutions referenced by the bill do not identify current planning documents by date for both counties, leaving land use zones subject to change, rezoning, and redefinition of management prescriptions and permitted uses. Further, if rezoned, nothing in this bill would prevent the sale of these lands for private ownership and development.”

Supporters of the current legislation point to this preservation section of the bill as evidence that these conservation/preservation areas will be held in perpetuity. The Department of the Interior, much more accustomed to dealing with land use legislation, obviously felt that the wording of the bill was insufficient to achieve the stated goal. This bill’s wording duplicates that of the 2013 and 2015 bills and is, once again, insufficient. And DOI made 4 recommendations which have not been incorporated:

  1. To assure public beach access in perpetuity, public parking and beach access corridors identified within the Escambia County and Santa Rosa County planning and land use documents as of August 1, 2013 (other than parking and beach facilities), should remain publicly owned and undeveloped.  This could be accomplished by retaining the applicability of the reversionary clause from the Act of July 30, 1946, for those lands, and by specifically referencing in the bill the county planning and land use documents as they existed on the date the bills were introduced.
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  3. Lands zoned “preservation” or “conservation/recreation” within the Escambia County and Santa Rosa County planning and land use documents as of August 1, 2013, should remain in public ownership and in preservation or conservation/recreation status in perpetuity.  This, too, could be accomplished by retaining the applicability of the reversionary clause from the Act of July 30, 1946, for those lands, and by specifically referencing in the bill the county planning and land use documents as they existed on August 1, 2013.  The language should include the definitions, management prescriptions and permitted activities for “preservation” and “conservation/recreation” zones in the county planning and land use documents as they existed on the date the bills were introduced, so that the terms cannot be redefined or reinterpreted at a later date. Further, the term “recreation” should be clarified to refer to passive recreation only for these lands.
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  5. Authority should be provided for Gulf Island National Seashore to accept by donation conservation easements for the lands zoned preservation or conservation/recreation within Navarre Beach and Pensacola Beach on Santa Rosa Island.
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  7. There should be a prohibition on any dredge and fill permits that would allow for the construction of a channel through Santa Rosa Island, and the construction of associated jetties, groins, bulkheads or revetments, and the dredging or filling of any wetlands, estuaries, or embayments.

Using those recommendations as a guideline, this bill is worse for the island. Allowing Santa Rosa County the opportunity to remove all conservation/preservation protections is also an intended outcome, a benefit for which Santa Rosa County Commissioner Sam Parker voiced his appreciation on a morning radio show. Santa Rosa County, according to Parker, wants to be able to utilize all of their resources on the island. Apparently, he does not consider conservation, preservation, wildlife habitats, and maintaining a healthy island adequate utilization of the mile closest to Eglin AFB.

It’s difficult to discern if cutting off public access to the beaches is intended or unintended. As Commissioner Robinson pointed out recently, most lot lines stop behind the dune line, but there are several (as yet, there is no clear number) that extend to the water line. Given the contentious argument in Destin about hotels, condos, private residences, “private beaches,” and mean high water lines, I think many here would be averse to opening up a brand new legal can of worms.

Arguably, unintended consequences got us to the place where we are now. When the county advertised tax-free leases on the island in the middle of the last century, no one could have foreseen that the Florida legislature would pass a law opening the door to taxes on 99-year leases. But, they did. And no one could have foreseen that the Florida Supreme Court would issue multiple rulings upholding that law and declaring the responsibility of the equity-owner of the leasehold to pay them. But it did.

Escambia County has full responsibility for the entire island, whether it’s fully exercised or partially ceded to Santa Rosa County. We hold the legal title and we cannot wash our hands of the consequences, intended or unintended, of decisions that impact the whole island. Leaving open the possibility of another cut in the island would be irresponsible—environmentally, ecologically, and geologically. As Dr. James Morgan, a coastal geologist who extensively studied the island wrote in 1988 about a proposal to recreate Navarre Pass, “Santa Rosa Island is one of the few barrier islands that is not on the endangered list –let us not deliberately institute a project that might put it there.”

In the event that the current legislation fails, we respectfully ask that you place a referendum on the 2018 ballot and allow the 318,000 Congressionally-appointed stewards of Santa Rosa Island the opportunity to have their voices heard in this matter.

Blog Attributed to Vicki Neapolitan as addressed to Escambia County Commissioners

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A Beach Lease

In the public discussions one woman has been an outspoken advocate for exchanging her lease for fee simple title. We decided to analyze her lease. We suspect she does not realize the effect of losing the tax exempt status of her land if she exchanges her lease for a fee simple title.

1. Her total assessed value for land and house for 2016 was $208,423 (which seems extraordinarily low)

2. She has $100,000 in exemptions for senior homestead

3. Because her lease is for a fixed term SHE PAYS NO TAXES ON THE LAND which is assessed at $ 84,187

4. $208,423 – $184,187 equals a county taxable amount of $24,236 or a tax of $160.36 based on millage of 6.6165

5. Had she been taxed on the non-homestead assessed value it would have been – $717.00 (6.6165 x $108,423)

6. Had she lived anywhere else in the county the land would be taxed.

7. Her lease fee is approximately $360.00 per year

8. Her total lease fee and county ad valorem tax would be $520.36

9. She has paid $196.64 less in county taxes ($717.00 – $520.36). She does not pay taxes based on the land value because her lease is for 99 years or until 2180. This fixed term lease is true of most residential leases on the beach.

10. So much for the double taxation argument.

This can be verified by checking the foregoing for 1008 Via Deluna Drive. This calculation ignores school and other taxes that do not credit for the non-taxed land. Only the county tax allows exemption for non-taxed land.

Related Documents (PDF):

Property Appraiser (1008 Via Deluna Drive)

Real Estate Tax (1008 Via Deluna Drive)

Assignment of Leasehold Interest

Residential Lease

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Questions Sent to Grover Robinson

How could Escambia initially pledge Navarre Beach bed tax revenue for Escambia bonds? I thought you said it was as if Escambia deeded Navarre to Santa Rosa in 1956?

What is your position on the status of sub leases? If the master lease holder refuses to accept fee simple title can the sub lease holders demand it nevertheless?

If the master lease holder wants fee simple title, will that nullify his lease with the sub lease holder?

How can federal legislation interfere with the contractual relationship between the lessor and the sub leasing party? Isn’t that prohibited by the U.S. Constitution?

Do you agree that there will be many lawsuits filed because of this legislation?

Do you agree that there are literally hundreds and hundreds of leases that are different from one another? If so how will this legislation affect each lease?

Were minutes taken of your meeting with Matt Gaetz?

How is this proposed legislation different from what has been previously introduced in the U.S. Congress?

You have said all leases up for renewal are renewed. What then is the justification for the current legislation?

Now that it is well known that these lease fees are nominal and that the Fla Supreme Ct has rejected the double taxation argument in the Accardo case do you still maintain it is double taxation?

You have said that waiving lease fees will “raise taxes” but if the leases are eliminated won’t that produce the exact same result?

In addition when leases are converted to fee simple the 5% added charge for retail sales on the beach will be lost. You have said it was one million, how much was it last year? How will this be made up?

In your meetings with Matt Gaetz was the issue of the Air Force interests discussed? If so what was discussed? Shouldn’t we be concerned about anything that harms the military mission at Navarre?

You have said that Santa Rosa can do what they want with Navarre Beach now and Escambia can’t do anything about it? Where in the 1956 lease can authority for that position be found?

Will you support a binding referendum for all voters in Escambia County regarding supporting or opposing federal legislation changes on Santa Rosa Island?

The Escambia County Commission has been trying to tax structures and land on Pensacola beach since at least 1990. What have you done to oppose the imposition of these taxes in the past?

Why has no economic analysis been done of the effects of this legislation?

Do you see a conflict between Escambia County and Santa Rosa County if they elect to dig a pass at Navarre?

Shouldn’t Escambia exercise its control over Navarre Beach to prevent this from happening?

You have said that this legislation allows Santa Rosa County to do what it wants with Navarre Beach. Other than one guy from Santa Rosa County that met with you and Matt Gaetz when has there ever been a statement by elected officials in Santa Risa County that they favor doing away with protected conservation and public access land which this bill effectively does?

This is perhaps the shortest act ever enacted into law. Do you think you understand all consequences of this legislation? Why wasn’t this proposed language offered to the public at any time in the last year for public comment?

Do you agree that if fee simple title is granted to the owner of Flounders for example he can build a condo hotel on the property where now the SRIA has preserved designated uses through these leases?

Will you tell the county to produce all the leases that extend beyond the dune line?

You have said something about beach land filling changing the gulf side property line – what is the authority for this statement?

Do you foresee any issue with the incorporation of Pensacola beach as a city? Why was this specific authorization to do so included in the legislation?

You have repeatedly said that we need this legislation so we can then address all the many problems that exist. Will you state clearly each problem you envision that either will be created by this legislation or will need to be addressed that cannot be addressed without the legislation?

Do you agree that this legislation will financially enrich some lease holders on the beach? Have you identified who those are?

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Air Force says Reopening Navarre Pass would Interfere with Missions

United States Senate, WASHINGTON, D.C. – U.S. Sen. Bill Nelson (D-FL) has received written confirmation from the U.S. Air Force that reopening Navarre Pass in Santa Rosa County would directly interfere with the Air Force’s ability to conduct future testing and training missions at Eglin Air Force base.

“Reopening Navarre Pass … would interfere with current and future Air Force and DOD missions,” Gen. David Goldfein, the chief of staff of the U.S. Air Force, wrote in a letter to Nelson.

Nelson, who has always opposed reopening Navarre Pass, says legislation he sponsored earlier this year with Sen. Marco Rubio (R-FL) doesn’t go far enough to prevent future cutting of the pass, which was opened only a few months before Hurricane Betsy closed it in 1965.

Nelson says he sponsored the bill with Rubio to give those holding a 99-year lease on Santa Rosa Island full ownership rights of the property, while also preserving the current land conservation areas and public access to the beach.

He says while Escambia County has agreed to keep the current conservation areas in place, the current legislation, as written, doesn’t go far enough to prevent Santa Rosa County from developing the conservation areas or reopening the pass.

“The Air Force has made it clear that reopening Navarre Pass would interfere with its testing and training missions,” Nelson said. “The legislation filed earlier this year doesn’t go far enough to prevent future cutting of the pass and needs to be changed in order to protect our national security interests.”

(A copy of the Air Force’s Sept. 27 letter to Nelson is available to read here.)

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