Navarre Beach Against Illegal Taxation Committee

A Committee of the Navarre Beach Leaseholders and Residents Association

 

 

 

 

The Unprincipled History of Navarre Beach Leases

 

 

The initial impetus of the current Navarre Beach lawsuits was Greg Brown’s February 15, 2001 letter to the Attorney General Robert Butterworth which states, “It has been brought to the attention of my office that some leases on Navarre Beach contain different language in regard to ownership of improvements than contained in the leases addressed in Bryan.” Brown reminded the AG that in Bell v Bryan (1987), the court ruled in favor of the leaseholders because “In this case the court held that due to the wording of the subject leases that the improvements were deemed not to be owned by the lessee and therefore were not subject to taxation pursuant to F. S 196.199(2)(b)” because those leases state “Title to any building or other improvements of a permanent character that shall be erected or placed upon the demised premises by the lessee shall forthwith vest in said Escambia County...” 

 

Brown explained the “different language” states that title to improvements “shall upon termination of this Lease vest in said Santa Rosa County subject, however, to each and every provision of this Lease. Lessee acknowledges that it shall have no right to remove such fixed permanent improvements from the leased property.” Brown’s basic question to the AG was- since the leaseholder owns the structure during his period of leasing, can the structure be taxed?

 

The Attorney General Butterworth answered it depends who owns the improvements, the lessee or the county.

 

This means, of course, that the wording of the leases is of great importance. The question then arises, “Where did this “different language” of wording in the leases come from?

 

This takes us back to the February 11, 1956 master lease between Escambia County and Santa Rosa County for the leasing of Navarre Beach. The most important provision of the master lease states that Santa Rosa County “leases shall be substantially upon the same terms, considerations and conditions as like leases in use by the lesser.” The lesser is Escambia County, and the owner of Navarre Beach.

 

During the drafting of the first residential lease form by Santa Rosa, County Attorney Robertson was reminded on November 12, 1958 by General Manager Cowley, of the Island Authority on Pensacola Beach that, “The lease agreement between Santa Rosa County and the Island Authority for the portion of Santa Rosa Island to be developed by the Beach Administration provides, among other things, that the development shall be on a basis comparable to that in the developed areas at Pensacola Beach and that the covenants and restrictions of our Authority shall also apply to yours.”

 

The first created Navarre residential lease form (1959) did copy Pensacola Beach’s lease form. It contained the two important provisions, here in question. The first provision states that title to improvements “shall forthwith vest in said Santa Rosa County...” The second important provision states that lease renewal must be done in writing “at least 6 months” prior to the termination of the lease.

 

A problem arises because these two original provisions have since been altered by Santa Rosa County causing them to become the subject of present court cases. The provisions of the Navarre Beach leases are no longer “substantially upon the same terms...” as required by the master lease. These same provisions in the Pensacola Beach leases have never been altered.

 

This raises questions of when and to what purpose were these two provisions altered. The changes surely were not for mere simplicity.

 

The first altered provision

We find in 1970, eleven years after the creation of the first lease form, the provisions remain unaltered. However, with the first taxation lawsuit, Camp v Jones (1971), the Court and all interested parties recognized that the lease wording “improvements erected or placed upon the premises by the lessee shall forthwith vest in Escambia County” was an issue. An archival search finds the first altered provision appears to be used in 1974, by which time that case made it to the upper court. By 1985 the alterations appear with regularity in “Restated and Amended Lease” forms prepared by the then County Attorney Morton. County officials unilaterally adopted the altered provision placing “ownership” of the structure on the leaseholder.

 

When the county altered the provision which now states title to improvements “shall upon termination of this Lease vest in said Santa Rosa County,” the county also inserted the additional sentence, “Lessee acknowledges that it shall have no right to remove such fixed permanent improvements from the leased property.”  This is a slight of hand by the county of giving ownership, but not giving it- since the leaseholder cannot chainsaw the structure off its pilings and take it with him.

 

Both Santa Rosa and Escambia Counties have unabashedly claimed that it is their ownership which made it possible to offer tax-free 99 year leases. On May 13, 1962 the Santa Rosa Beach Administration said, “No ad valorem taxes because Navarre Beach is a county development.” And “Build a tax-free home...” Escambia County said, “Title to the land is held by Escambia County, so the property and building thereon are tax-free from county and state Ad Valorem taxes” and “You pay no county or state taxes on our land or home.” And “Title to the land is held by Escambia County and taxes are not levied by the county against itself.”

 

The County’s ownership was accepted by the Florida Supreme Court for the 1951 bond validation issue. The Court accepted that the Santa Rosa Island development was a “public purpose.” In seeking the bond validation, Escambia County officials depended on the County’s ownership of Santa Rosa Island, not ownership by the leaseholder, to convince the Court.

 

The second altered provision

The second provision in question, in its original form, requires written notification “6 months prior to” expiration of the lease in order to renew the lease. The altered provision offers “automatic renewal” of the lease.

 

In the Navarre Beach lawsuit of Ward v Brown (2005) the court said the plaintiff-leaseholders there had “automatic renewals” and therefore had a perpetual lease. The court said, “Appellants argue that they are not equitable owners because they are required to maintain and rebuild the improvements, and the improvements are required to be conveyed to Santa Rosa County at the termination of the lease. We are not persuaded because there is no end of the lease.”

 

The County’s alteration of the renewal clause caused the court to identify the lease as perpetual. The alteration violates the master lease provision that states Santa Rosa County’s leases must be “substantially upon the same terms...” as those of Escambia County- which has never altered this provision. Historical records show Escambia County never intended to offer perpetual residential or commercial leases and did not want Santa Rosa County to do so either. In light of the court’s declaration of lease perpetuity, will the Santa Rosa County Attorney now amend lease wording to state the lease is perpetual, leaseholders might ask.

 

In addition, Santa Rosa County may have violated the Island’s Deed of Conveyance from the Federal Government to Escambia County. The deed states the land is “to be retained by it and to be used by it for such purposes as it shall deem to be in the public interest or to be leased by it from time to time... but never to be otherwise disposed of or conveyed by it...” If the court views Santa Rosa Island leases as perpetual, and if perpetuity is tantamount to ownership, then a case might be made that officials have violated the Deed which prohibits the lands’ conveyance.

 

The clean hands doctrine also applies to the County. The clean hands doctrine states that those seeking "equity must come with clean hands." It was the County Attorney’s office that altered the two provisions, and then amazingly, the county officials based their complaint on the alterations. The Property Appraisers office said, “It has been brought to the attention of my office that some leases on Navarre Beach contain different language...” Who better knew of the altered language than County officials, who wrote it? It was not the leaseholders who altered the provisions in the County’s lease form. 

 

The history of Santa Rosa Island leasehold development is a sorry one.  Santa Rosa County, the Escambia County and, ultimately, even the state courts have ignored or applied contract language, and used or discarded legal principles, at whim. The only constant has been not principle, but favoritism; always in favor of local government power, always to the disadvantage of island leaseholders’ interests.

 

William L. Post

January 30, 2009

 

Mr. Post is the author of the book "Deceit Beach"

 

Was there deception by Florida's Escambia County government, and their agent, the Santa Rosa Island Authority (SRIA) when they contracted an ad valorem tax exemption with leaseholders on Pensacola Beach?

A major university study called the subsequent revocation of the ad valorem tax exemption as "a breach of faith." A major city newspaper called it "a breach of contract." Many citizens still feel it was "land fraud, plain and simple."

 

Deceit Beach reveals disturbing information about both Pensacola Beach's deceitful development and the Florida Supreme Court's justice. Instead of protecting the victims from a "breach of contract," the Florida Supreme Court's ruling in Straughn v. Camp has caused 37 years of continuous litigation.

 

Will the newly discovered facts, presented in Deceit Beach, lead to the overturning of the Florida Supreme Court's standing ruling in Straughn v. Camp? Will the Pensacola Beach victims find their long sought justice?

 

For more information on this book or to order a copy, please click the following link:  http://trentsprints.com/deceitbeach.htm

 

Click the following link for a review of "Deceit Beach" featured in the Gulf Breeze News:

http://www.gulfbreezenews.com/news/2008/0515/island_news/057.html