South Florida Business Journal - by Mark Szakonyi and Darcie Lunsford
Florida’s maritime industry could get a tax break if a state constitutional amendment that would appraise working waterfront property at its current use, rather than its “highest and best use,” passes.
If it is approved during the Nov. 4 general election, Amendment 6 would help protect the state’s marine industry, which has been increasingly taxed out of business as condominiums and waterfront resorts raise the potential value of waterfront property.
The issue has become urgent in South Florida, as the many of region’s marinas, boatyards and trade terminals have fallen to development or been pushed out in the aftermath of the residential boom.
While the housing slump has lessened the pressure of potential value, some development continues and will eventually increase once the market rights itself, Amendment 6 supporters say.
Housing developers “will be back for sure. Florida is a state that is built on growth industry and the most desirable properties are waterfront,” said Fran Bohnsack, executive director of the Miami River Marine Group, which represents 55 marine companies along the 5.5-mile Miami River. The river’s 100 or so exporters, importers, tug operators and repair firms employ 6,100 people and churn out about $4 billion a year in commerce.
Bohnsack said residential encroachment in recent years has shaved the river’s maritime acreage to 37 acres from 80. It also has the river bleeding jobs and commerce. She said states such as North Carolina are actively trying to recruit struggling South Florida marine businesses to build their economies.
“I hope people will support the amendment. We really need them to.” Bohnsack said. “Everything that makes Florida special comes from the waterfront.”
$13.6 million for the economy
The Marine Industries Association of South Florida (MIASF), which represents businesses servicing the region’s 150,000 recreational boaters, also has pushed for Amendment 6, as well as requirements that the state do more to recruit marine firms, according to Gordon Connell, director of association services. He said boating pours $13.6 billion a year into South Florida’s economy, with Broward County being at the heart of the recreational boating industry.
And these businesses need tax relief, said Frank Herhold, executive director of the 850-member MIASF.
“I think it is important that waterfront facilities be treated as waterfront facilities, not as what they could be,” he said. “The high cost of business starts at the waterfront – and it isn’t just property taxes. It is insurance and regulatory requirements. We can deal with all that, but when your taxes are so far out of line because someday [your property] could be a condo that is simply not fair.”
The valuation issues are worse in Palm Beach County than in Broward or Miami-Dade, he said.
Preserving working waterfronts not only keeps businesses going and improves residents’ quality of life, but is also a boon to tourism, said Susan Grandin, director of the Jacksonville office of the Trust for Public Land.
The land conservation nonprofit is buying property adjacent to the St. Johns River in northeast Florida, which it sells to government agencies or environmental nonprofits.
If Amendment 6 passes, many marine-related businesses will receive much-needed property tax relief.
The current system of “highest and best use” has more than doubled the property taxes owed on Jacksonville Marina in Atlantic Beach, a suburb of Jacksonville, GM Dennis Young said. Paying an additional $32,000 annually hurts, but it is made financially rougher because the marina, like many others, has sold less fuel due to rising fuel costs.
The increased assessed value of the 2-acre marina was driven by Vestcor Cos.’ plan to build condominiums nearby. The developer has since dropped plans, and the property is being reassessed by the Duval County Property Appraiser’s Office.
The amendment “gives us a way to do the right thing, in terms of assessing someone who has an economically underused piece of land,” Duval County Property Appraiser Jim Overton said.
If the amendment does pass, however, many cash-strapped governments could be squeezed even harder by the reduction of marina property values.
mszakonyi@bizjournals.com | (904) 265-2239 dlunsford@bizjournals.com | (954) 949-7523
source: south florida business journal
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