Submitted by Suanne Z. Thamm
Reporter – News Analyst
July 14, 2021
In a letter to the Ocean Highway and Port Authority (OHPA) dated June 20, 2021, the Nassau County Property Appraiser’s Office has denied 2021 property tax exemptions for 27 parcels that represent the Port of Fernandina.
In explaining the denial, Chief Deputy Property Appraiser Kevin Lilly cited a lack of evidence that the parcels meet the Government property exemption per Florida Statute 196.199(2)(a) and (4). OHPA has a right to an informal conference with the Property Appraiser if it disagrees with the determination. OHPA may also file an appeal with the County’s Value Adjustment Board.
Although OHPA is a public entity, the property under review “was being used by a private, for-profit entity (Nassau Terminals LLC) for the purposes of generating business profits through its operation of the port facilities pursuant to the Operating Agreement dated October 19. 2018.”
The letter goes on to state:
Florida Statutes provide that property owned by certain governmental units — including authorities — but used by nongovernmental lessees are exempt only when the lessee performs governmental, municipal or public purpose.Such purposes are limited to the administration of some phase of government as discussed in Sebring Airport Auth. v. McIntyre 783 So.2nd 338 (Fla. 2001) and Sebring Airport Auth. v. McIntyre 642 So.2nd 1072 (Fla. 1994). The Florida Constitution requires ad valorem taxation of property owned by certain governmental entities — including authorities — when it is not used exclusively by the entity itself but, instead, by a private for-profit corporation using the property for proprietary purposes.Art. VII S.3(a), Fla. Const.
In addition, ad valorem taxation is required pursuant to Art. VII S. 10(c) Fla. Const. because the Ocean Highway and Port Authority has issued revenue bonds to finance or refinance the cost of capital projects for its port facilities. “If any project so financed or any part thereof, is occupied or operated by any private corporation, association, partnership or person pursuant to contract or lease with the issuing body, the property interest created by such contract or lease shall be subject to taxation to the same extent as other privately owned property.” The private, for-profit entity (Nassau Terminals LLC) occupies and operates the port facilities pursuant to the Operating Agreement dated October 19, 2018. Such facilities are therefore subject to ad valorem taxation.
It is unknown at this time what action OHPA will take to address this decision.