Bay Indies is located in Venice.

HERALD-TRIBUNE ARCHIVE

It pits an industry giant against the Sarasota County property appraiser, with mobile home park residents along for the uncomfortable ride.

The issue is all about trying to decide the value, for tax purposes, of Bay Indies in Venice, the county’s largest park, and Lake Village in Nokomis.

In August, Property Appraiser Bill Furst established the value of Bay Indies at $47.3 million, a 23 percent increase over last year’s $38.5 million. At Lake Village in Nokomis, the figure was $19.5 million, a 72 percent increase over the $11.4 million value established for the 2012 tax bill.

On Friday, as it did last year, the owner of both parks again filed a petition with the Value Adjustment Board to challenge those numbers.

Because property taxes are based on value and the higher the value, the higher the taxes, more than $200,000 worth of property taxes are at stake between the two parks.

The challenge notice filed Friday provides no detail, but the National Manufactured Home Owners Association has probably laid out the gist of the protest.

In a letter dated Sept. 9, NMHOA asked the Florida Department of Revenue to investigate Furst’s methodology. It listed seven items of contention, including inconsistency from one park to another countywide and the use of an inaccurate formula for rate of return.

Unlike single-family homes or resident-owned parks, the value of commercial parks is established not only by comparable sales but also by income.

Many of the NMHOA issues were presumably settled for last year’s tax bill. At that time, the owner of the parks, Chicago-based Equity LifeStyle Properties, which trades on the New York Stock Exchange, appealed Furst’s computation before a hearing officer hired by the county’s VAB.

The board later ruled against Furst, lowering Bay Indies’ value from $46.6 million to $38.5 million and Lake Villages’ from $19.2 million to $11.4 million.

This year, the property appraiser used essentially the same methodology to come up with essentially the same values, sparking essentially the same appeal.

Commercial mobile home parks generally, by contract, pass along taxes to their tenants, so the outcome of the disagreement between ELS and Furst directly affects those who rent the 1,309 lots at Bay Indies and the 391 lots at Lake Village.

However, because they do not own the land under their homes, they have no standing to challenge the valuations.

That reality encouraged Venice City Councilman Jim Bennett to join the NMHOA in protesting the latest valuations on behalf of his constituents in Bay Indies, which he characterized as “one of the larger sources of true affordable and senior housing in the City of Venice.”

Meanwhile, Furst has taken the offensive. In April, he sued both parks in circuit court in an attempt to compel ELS to provide its leases, financial statements, sales records, appraisals and rent rolls from 2010-12.

Property appraisers request that type of information each year, but commercial parks rarely provide it, and there’s nothing in statutory law that would force them to do so.

Without those records, Furst’s office has had to concoct value based on advertisements, educated guesses and formulas that might not be valid for this market.

If ELS disputes the numbers, then the company should have to show why they’re wrong, Furst says.

“The whole thing is based on equity and fair share,” he says. “They shouldn’t be paying any more or any less.”

The court filing appeals the VAB decision for the 2012 tax bill, and if Furst prevails, park residents might have to pay the back taxes, 12 percent interest and the cost of Furst’s attorney, J. Geoffrey Pflugner of Icard Merrill.

Referring to ELS’s contention that the parks were overvalued, Pflugner says, “They’re telling us it’s one thing, but they’re not producing any documents to show it. Give us the proper information and we’ll come up with values consistent with that information.”

Tony Pinzone, president of the Bay Indies Homeowners Association, says, “I certainly don’t want the increase to go through, because it’s passed on directly to us. But I can’t support what’s not right. Whatever’s right is what should go through,” he says.

On one side: The government. On the other: A huge corporation. Stuck in the middle: The ones paying the bill, no matter what happens.

Eric Ernst’s column runs Wednesdays, Fridays and Sundays. Contact him at eric.ernst@heraldtribune.com or (941) 486-3073.

Bay Indies mobile home park

ARCHIVE PHOTO

That’s a big deal, because Bay Indies’ value determines how much the occupants of its 1,309 lots pay in taxes. In this case, when an administrative hearing officer ruled in the park’s favor before the county’s Value Adjustment Board, Bay Indies residents saved about $96,000 in taxes.

Nearby Lake Village mobile home park in Nokomis won a similar challenge, saving $105,000 in taxes.

In both instances, the hearing officer stated that Sarasota County Property Appraiser Bill Furst had used faulty methodology in setting the value of the parks.

So imagine the surprise of residents this month when the latest values came out and the property appraiser had used essentially the original methodology to deduce values for the two parks, values even greater than the ones the magistrate struck down in March.

At Bay Indies, taxable value has risen from $38.5 million to $47.5 million, or about a 23.5 percent increase. At Lake Village, the value has supposedly increased from $11.4 million to $19.5 million, or 71.5 percent.

Even with the real estate market on an upswing, both figures stretch credulity. They also raise the question of why go to all the trouble of hiring an attorney and appearing at an administrative hearing if it all can be ignored the following year.

Maybe residents shouldn’t have been so surprised. Although Furst did not appeal the decision against him, in a twist on the adage that you can’t fight city hall, he noted at the time that the hearing officer’s recommendations might not hold for the following year. Hint, hint, hint.

Furst was out of town this week at a conference and did not respond to a request for an interview. Bay Indies homeowners association president Tony Pinzone also awaits a response to questions he posed by email. “I may absolutely disagree with the answers, but I’ll get them anyway,” he says.

In Furst’s defense, his office cannot approach Bay Indies and Lake Village as it does single-family homes or mobile home parks in which the residents own the land.

The two parks are owned by the corporate giant, Equity LifeStyle Properties, based in Chicago. So, according to state regulations, Furst has to treat them as businesses, just as he does all 60 such commercial parks in Sarasota County. That brings income and return on investment into the equation.

In turn, residents of commercial parks have no standing to contest the property appraiser’s conclusions. Although most own the mobile homes in which they live, they do not own the land or the business. That leaves it up to ELS and other owners to appeal the valuations. Last year, the company did appeal, but its incentive to do so is not that strong because it can, by contract, simply pass along to its tenants the cost of tax increases.

“The homeowner loses out every time,” says Ishbel Dickens, executive director of the National Manufactured Home Owners Association, based in Seattle. When owners pass along the taxes, rents go up, creating the illusion that income and the value of the park has gone up, she says.

“It creates its own dilemma. Their homes aren’t increasing in value. They’re decreasing more in value as the rent goes up. The homeowner is trapped,” Dickens says.

The national association has requested records from Furst’s office. And, on Thursday, its executive committee authorized Dickens to send a package of materials to the Florida Department of Revenue, asking it to look into the appraiser’s process.

“His knuckles were rapped, yet he continues to use the same bad procedures,” she says. “There’s a problem there with the regulatory system.”

Dickens would get no argument from Jim Bennett, an attorney and Venice city councilman who has followed the case because Bay Indies lies within the city. “I don’t know what the answer is — maybe legislation to change the way corporate mobile home parks are treated by the appraiser,” Bennett says.

He raises a good point. Mobile home parks are a bastion of affordable housing, which we say we want to encourage. Yet here we have a tax policy that seems to work against that goal.