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District Court Rules That Long-term Leases Not Necessarily Subject to Property Taxes

  • District Court Rules That Long-term Leases Not Necessarily Subject to Property Taxes

    District Court Rules That Long-term Leases Not Necessarily Subject to Property Taxes

    A Miami development group with a long-term lease may not be liable for property taxes, according to the Third District Court of Appeal. The case was brought up by Miami-Dade County following a 2014 Florida Supreme Court ruling.

    The issue stemmed from a 90-year agreement between the company known as Dadeland Station Associates Ltd. and Miami-Dade County. Dadeland Station Associates entered into the 90-year lease in 1994 for land that eventually housed the retail center named Dadeland Station, a 330,000 square-foot retail center and a landmark building for the Kendall area. Since 1994, Dadeland Station Associates paid over $1M annually in taxes on the building itself, but none on the property. During that time, county staff assessed the site in its own name and excluded it from ad valorem taxes.

    However, a Florida Supreme Court case in 2014, Accardo v. Brown, ruled against the tenant of the land, saying that a long-term, “perpetually renewable” lease granted to the tenant makes them subject to an intangible personal property tax rather than an ad valorem real property tax. This ruling led a number of appraisers throughout the state to issue bills seeking payment to tenants with long-term leases involving public land. However, in the case involving Dadeland Station Associates, the Third District Court of Appeals stated that the lack of a purchase option or right to a perpetual renewal differentiated the purchase from the case handled by the Florida Supreme Court. It upheld the judgment originally given out by a Miami-Dade Circuit Judge and stated that the county’s interpretation of the Supreme Court case was flawed in this particular case.