The Issue The issue in this case is whether the City of South Daytona Beach plan amendment adopted by Ordinance No. 94-05 on May 24, 1994, is in compliance.
Findings Of Fact Based upon all of the evidence, the following findings of fact have been determined: Background The Parties Respondent, City of South Daytona Beach (City), is a local governmental unit subject to the land use planning requirements of Chapter 163, Florida Statutes. That chapter is administered by respondent, Department of Community Affairs (DCA). The DCA is charged with the responsibility of reviewing comprehensive growth management plans and amendments thereto. Petitioner, Resolution Trust Corporation (RTC), is a federal agency now acting as the receiver for Commonwealth Federal Savings & Loan Association, a banking institution taken over by that agency and which owned the property affected by the City's plan amendment. As the owner of property within the City, RTC is an affected person within the meaning of the law and thus has standing to bring this action. The Nature of the Dispute On October 29, 1993, the City received an oral request, which was later confirmed in writing, from Thomas J. Wetherall on behalf of various residential property owners to make an amendment to the City's comprehensive plan to change certain nearby vacant land owned by RTC from a general commercial designation to residential density 1. Under the request, the City would change the use on the eastern part of RTC's 5.6 acre tract of land from commercial to single-family residential use. The specific amendment involves a change in the Future Land Use Map (FLUM). Rather than treating the change as one initiated by a property owner, the City elected to have its city manager file the application on its own behalf. Public hearings were held on the plan amendment on January 19 and February 16, 1994. A transmittal hearing was then conducted by the City on February 22, 1994, and despite objections by RTC, final adoptive action occurred on May 24, 1994, through the enactment of Ordinance No. 94-05. Thereafter, on July 1, 1994, the DCA issued a notice of intent to find the amendment in compliance. On August 5, 1994, RTC filed a petition for an administrative hearing challenging the plan amendment on the ground it was inconsistent with the law in various respects. As clarified at hearing, petitioner contends the amendment (a) violates certain provisions within Section 163.3177, Florida Statutes, (b) is inconsistent with policies 2-1, 2-4, 2-6 and 7-3 of objective 2 of the Future Land Use Element (FLUE) of the plan, and (c) is not supported by adequate data and analysis. The Plan Amendment Petitioner is the owner of a rectangular shaped tract of vacant land more commonly known as the Halifax Center. The land, which totals approximately 5.6 acres, lies between South Ridgewood Avenue (U. S. 1) to the west, Palmetto Avenue to the north, and Palmetto Circle to the east. The property being redesignated (2.6 acres) is the eastern part of the parcel and measures approximately 105 feet deep by 864 feet long. If found to be in compliance, the plan amendment would change the FLUM to redesignate the 2.6 acres of the property from general commercial to residential density 1. This means that instead of having its entire tract of property with a single designated commercial use, RTC would have a split designation, with roughly the eastern half designated as residential. Therefore, the eastern part of the tract could only be subdivided for a few substandard, medium to lower-end, single-family residential homes on lots 105 feet deep. Even then, the amendment does not give consideration to setback and buffer requirements needed between the newly created residential lots and the commercial land directly abutting their rear. Because of this, and the fact that its remaining commercial property has been reduced to a depth of 170 feet, petitioner complains that the value of its property has been substantially reduced, a concern not relevant here, and that the amendment does not conform to the requirements of the law. To the east of the subject property and across Palmetto Circle lie a string of large, single-family lots with upscale homes fronting on the Halifax River. It is this group of property owners who are responsible for the amendment. To the west of the property and across U. S. 1 is found a tract of vacant land designated for professional office land use. To the north of the property is found a combination of multi-family (8-10 units per acre) and general commercial uses. In crafting the amendment, it may be reasonably inferred that the City simply drew an arbitrary line down the middle of RTC's property, leaving what it believed to be was the bare minimum amount of commercial land necessary to comply with the plan. Although the City contended that one of the purposes of the amendment was to further its goal of increasing the amount of single-family housing in the City, it can be reasonably inferred that the true purpose of the amendment was to protect the value of homes located across Palmetto Circle by placing a buffer between their property and the commercial property to the west. Indeed, a City memorandum sent to the City's Land Development Regulation Board on January 12, 1994, stated that the purpose of the change was to "provide a buffer between (the) Ridgewood Avenue commercial zone and existing housing along Palmetto Circle." Is the Plan Amendment in Compliance? The City's comprehensive plan is broken down into elements which conform to the statutory requirements of Chapter 163, Florida Statutes. Under each element are found goals, objectives and policies. As is relevant here, the goal for the FLUE is to "(p)rovide for a well-rounded community as described in the overarching goal." Objective 2 of the FLUE is to: (l)ocate commercial and industrial land uses where transportation access is adequate and conflicts with other land uses can be minimized. Petitioner contends that the plan amendment conflicts with four of the policies which implement objective 2. These are policies 2-1, 2-4, 2-6 and 7-3, which read as follows: 2-1: Locate major commercial and industrial land uses along primary arterials. 2-4: Commercial districts along principal arterials shall be made deep enough to provide options to typical strip development. 2-6: Provide adequate commercial/industrial land for development or redevelopment which will result in a 15 percent increase in taxable value over the next ten years. 7-3: New development shall be required to be compatible with existing development by the arrangement of land use and/or the provision of adequate buffering. As noted earlier, petitioner's tract of land lies between U. S. 1 to the west and Palmetto Circle to the east. Because the western part of petitioner's property lies along Ridgewood Avenue (U.S. 1), a principal arterial road, and will continue to remain general commercial, the amendment is deemed to be consistent with policy 2-1. In other words, that portion of petitioner's property which retains a general commercial designation will be located "along primary arterials," in conformity with policy 2-1, while the remaining portion of the property which fronts on a local road (Palmetto Circle) will be designated residential. The purpose of policy 2-4 is to ensure that commercial districts along principal arterials such as U. S. 1 are deep enough to provide options to typical strip commercial development patterns. This type of development is defined as one or more buildings that are parallel to and facing the primary street with no circulation around the back. Petitioner contends that the plan amendment violates this policy since the remaining portion of its land designated general commercial will only be 170 feet deep in relation to U. S. 1, thereby severely limiting its development options. By reducing the depth of property, as will be done here by the City, the flexibility and creativity for developing petitioner's parcel will be substantially reduced. While respondents' experts opined that the site will be deep enough to accommodate some types of commercial development other than the typical strip pattern, such as freestanding buildings, a restaurant, or even two or three office buildings, the more persuasive evidence shows that anything less than 200 feet in depth eliminates virtually all meaningful development options except a strip shopping center. Since the remaining commercial land along U. S. 1 will not "be made deep enough to provide options to typical strip development," the amendment is inconsistent with policy 2-4. Under policy 2-6, the City's goal is to increase its tax base 15 percent by the year 2000. Since the overall plan went into effect in 1990, the City's tax base has increased approximately 14.5 percent. Petitioner contends that the plan amendment will substantially reduce the value of its property, and the concomitant tax base, and thus the plan amendment is inconsistent with the policy. But even if a reduction in value will occur, there is insufficient evidence to demonstrate that the City's taxable value will not increase by an additional half percent during the next five years. Accordingly, the undersigned finds the amendment to be consistent with policy 2-6. Finally, Policy 7-3 requires that new development be compatible with existing development by the arrangement of land use and/or adequate buffering. Under the proposed plan amendment, the City has created a more integrated residential neighborhood along Palmetto Circle. Also, the redesignated land will serve as a form of buffer between the residential development on the east side of Palmetto Circle and the commercial development on the west side of Palmetto Circle. Although the City asserts that the change in land use should reduce the potential amount of traffic on the local road (Palmetto Circle) that would otherwise increase through commercial development, this assertion is questionable given the fact that no access to the commercial property from Palmetto Circle now exists. Finally, if the amendment becomes operative, the property would be the only single-family residential property on the corridor east of U. S. 1 and west of Palmetto Circle. Collectively, these considerations support a finding that the plan amendment's consistency with policy 7-3 is fairly debatable. Property appraisals are not appropriate data or analysis upon which to base future land use designations. In other words, property values should not control planning decisions. If they did, future land use maps would reflect only high intensity uses, not a balanced community. Except to the limited extent it bears on policy 2-6, evidence presented by petitioner that the plan amendment would decrease the value of the Halifax Center from $610,000.00 to less than $359.000.00 has little, if any, probative value on the other relevant issues. Although petitioner raised other contentions in its initial petition, including one that the plan amendment is not supported by adequate data and analysis, these issues have been deemed to be irrelevant, abandoned, or not supported by sufficient evidence to make a finding in petitioner's favor. In determining whether a plan amendment is in compliance, the DCA looks to consistency with the plan as a whole rather than isolated parts. Therefore, an amendment may be inconsistent with the plan in certain respects, but still be in compliance as a whole unless the inconsistency is determined to be "very important." It may be reasonably inferred from the evidence that the City's policy of discouraging "typical strip development" is an important ingredient in its overall plan. To summarize, the evidence fails to show to the exclusion of fair debate that the plan amendment is inconsistent with policies 2-1, 2-6 and 7-3 of objective 2 of the future land use element of the plan. As to policy 2-4, however, it is found that the City's determination of compliance is not fairly debatable, and thus the amendment is not in compliance in that respect.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Community Affairs enter a final order determining the City of South Daytona Beach comprehensive plan amendment to be not in compliance. DONE AND ENTERED this 19th day of April, 1995, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of April, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-5182GM Petitioner: Partially accepted in finding of fact 3. Partially accepted in finding of fact 7. Partially accepted in finding of fact 4. 4-6. Rejected as being a conclusion of law. 7. Partially accepted in finding of fact 9. 8. Partially accepted in finding of fact 8. 9. Partially accepted in finding of fact 7. 10. Partially accepted in finding of fact 16. 11-12. Rejected as being unnecessary. Rejected as being a conclusion of law. Partially accepted in finding of fact 14. Partially accepted in finding of fact Rejected as being irrelevant since not Rejected as being a conclusion of law. Partially accepted in finding of fact 16. raised as an 13. issue. 19. Partially accepted in finding of fact 14. Partially accepted in finding of fact 15. Rejected as being irrelevant. Partially accepted in finding of fact 17. Rejected as being irrelevant. Respondent (DCA): 1-2. Partially accepted in finding of fact 1. 3. Partially accepted in finding of fact 2. 4. Partially accepted in findings of fact 4, 6 and 7. 5-6. Partially accepted in finding of fact 10. 7-10. Partially accepted in finding of fact 11. 11. Partially accepted in finding of fact 12. 12-13. Partially accepted in finding of fact 13. 14. Partially accepted in finding of fact 14. 15. Partially accepted in finding of fact 15. 16. Partially accepted in finding of fact 17. Respondent (City): 1-2. Partially accepted in finding of fact 1. 3. Partially accepted in finding of fact 2. 4-5. Partially accepted in finding of fact 4. 6-7. Partially accepted in finding of fact 5. 8. Covered in preliminary statement. 9. Partially accepted in finding of fact 12. 10-11. Partially accepted in finding of fact 14. 12. Partially accepted in finding of fact 15. 13-14. Rejected as being irrelevant. 15. Partially accepted in finding of fact 16. 16. Covered in preliminary statement. 17-18. Partially accepted in finding of fact 17. 19. Covered in preliminary statement. 20. Partially accepted in finding of fact 16. 21. Partially accepted in finding of fact 12. 22. Partially accepted in finding of fact 14. 23. Partially accepted in finding of fact 15. 24-26. Partially accepted in finding of fact 16. 27-28. Partially accepted in finding of fact 9. 29. Partially accepted in finding of fact 17. 30. Covered in preliminary statement. 31. Partially accepted in finding of fact 19. 32. Partially accepted in finding of fact 17. 33. Partially accepted in finding of fact 19. Note: Where a proposed finding has been partially accepted, the remainder has been rejected as being unnecessary for a resolution of the issues, irrelevant, not supported by the more credible, persuasive evidence, subordinate, or a conclusion of law. COPIES FURNISHED: Linda Loomis Shelley, Secretary Department of Community Affairs 2740 Centerview Drive Tallahassee, FL 32399-2100 Dan R. Stengle, Esquire General Counsel Department of Community Affairs 2740 Centerview Drive Tallahassee, FL 32399-2100 Maureen A. Arago, Esquire 1411 Edgewater Drive Suite 203 Orlando, FL 32804 Karen A. Brodeen, Esquire Department of Community Affairs 2740 Centerview Drive Tallahassee, FL 32399-2100 Scott E. Simpson, Esquire 595 West Granada Boulevard Suite A Ormond Beach, FL 32174
The Issue The issue is whether Petitioner, Boynton Associates, Ltd., is entitled to receive additional points for Form 5 of its application, related to local government contributions, for the Florida Housing Finance Corporation's 2001 Combined Rental Cycle and, if so, whether Petitioner qualifies for an allocation of federal low-income housing tax credits.
Findings Of Fact Petitioner, Boynton Associates Ltd., a Florida Limited Partnership, is the Applicant and owner of property know as Boynton Terrace Apartments located in Boynton Beach, Palm Beach County, Florida ("City" or "City of Boynton Beach"). To encourage the development of low-income housing for families, in 1987, Congress created the federal Low-Income Housing Tax Credit Program that is allotted to each state, including Florida Tax Credits, each year. The low-income housing credits equate to a dollar-for-dollar reduction of the holder's federal tax liability. This reduction can be taken for up to ten years if the project satisfies the Internal Revenue Code's requirements each year. Each state receives an annual allotment of housing credits, primarily on a per capita basis. For the year 2001, Florida's allotment of low-income housing credits is $23,973,567, of which $20,695,689 is available for allocation. The Florida Housing Finance Corporation is the "housing credit agency" responsible for the allocation and distribution of Florida's low-income housing tax housing credits to applicants for the development and/or substantial rehabilitation of low-income housing. See Subsection 420.5099(1), Florida Statutes. Pursuant to state and federal mandates, the Florida Housing Finance Corporation has established a competitive application process for the award of low-income housing credits. Rule 67-48.004, Florida Administrative Code, as adopted on February 22, 2001, established the process by which the Florida Housing Finance Corporation evaluates, scores, and competitively ranks the applicants for the award of funds and the allocation of housing credits. Under the review and application process, staff of the Florida Housing Finance Corporation first conducts a preliminary review of the applications. Based on that review, a preliminary score is assigned to each application. After the Florida Housing Finance Corporation's preliminary review and scoring, all applicants may review the applications and challenge what they believe to be scoring errors made by the Florida Housing Finance Corporation. Any applicant alleging scoring errors must make such challenges, in writing, on a Notice of Possible Scoring Error Form (NOPSE) within ten days of the applicant's receiving the preliminary score. This form is an official form developed and provided by the Florida Housing Finance Corporation. The Florida Housing Finance Corporation then reviews each timely filed NOPSE, adjusts scores where applicable, and issues a position paper to the affected applicants informing them of the decision relative to the NOPSE. Affected applicants are then given an opportunity to submit supplemental information, documentation, or revised documents that might address challenges made in any NOPSE. Any such submission by an applicant whose scores have been challenged is called a "Cure." The Florida Housing Finance Corporation provides a Cure Form on which the challenged applicant may submit its statement of explanation addressing the issues raised in the NOPSEs. Following the submission of a Cure by an applicant whose application has been challenged, competitors are allowed to review the supplemental or corrective information which comprises the Cure. After reviewing the Cure, competitors may point out what they perceive to be errors or deficiencies on the challenged applicant's Cure. These perceived errors or deficiencies are then submitted to the Florida Housing Finance Corporation, in writing, on a form entitled, Notice of Alleged Deficiency (NOAD), that was developed and provided by the Florida Housing Finance Corporation. The Florida Housing Finance Corporation reviews the Cure submitted by the applicant whose application has been challenged and the NOADs submitted by competing applicants. Following this review, the Florida Housing Finance Corporation assigns each application a pre-appeal score. Boynton submitted an application to Florida Housing Finance Corporation for the 2001 Combined Rental Cycle ("2001 Combined Cycle") to receive annually $559,025.14 in tax credits for the rehabilitation of Boynton Terrace, a multifamily housing property. The application was submitted on February 26, 2001, the deadline for submitting applications for the 2001 Combined Cycle. Pursuant to the review and scoring procedures set forth in the 2001 Combined Cycle Application Form and Rule 67- 48.004, Florida Administrative Code, as adopted February 22, 2001, described in paragraphs 7 through 12 above, the Florida Housing Finance Corporation scored the application of Boynton. The application for the allocation of housing credits consists of several forms. However, the only form at issue in this case is Form 5, entitled "Local Government Contributions." Form 5 indicates a local government's support of the affordable housing project for which tax credits are being sought. In scoring Form 5, Florida Housing Finance Corporation awards points based on the amount of "tangible, economic benefit that results in a quantifiable cost reduction and are development specific." The maximum number of points that can be awarded on Form 5 is 20 points. To obtain the maximum number of points for Form 5, the applicant must provide evidence of a local government contribution for which the dollar amount is equal to or greater than one of the following: (1) a specified amount according to the county in which the proposed project is located, or (2) ten percent (10%) of the total development costs of the project listed in Form 4 of the application. In this case, Boynton's application indicated that the local government contribution was 10 percent of its total development costs of $5,096,789, or $509,678.90. At or near the time Boynton's application was submitted, the Florida Housing Finance Corporation determined that the application was complete and, thereafter, conducted a preliminary review of the application. Based on its preliminary review of Boynton's application, the Florida Housing Finance Corporation awarded a total of 618 points to Boynton. Of this preliminary score, the Florida Housing Finance Corporation awarded Boynton 20 points, the maximum allowed, for Form 5. The Florida Housing Finance Corporation's preliminary award of 20 points to Boynton for its Form 5 was based on local government contributions listed on the application as follows: donation of landscaping materials valued at $50,000 and donation of dumpsters during the rehabilitation of Boynton Terrace valued at $19,845; (2) waiver of tipping fees at the local landfill of $25,500 and waiver of building permit fees of $61,609; and (3) $353,196 for waiver of the requirement to construct 58 parking spaces at $6,089.60 per space. Form 5 provides that a local government contribution for a waiver of parking space requirements will not be recognized except in certain circumstances. Among the circumstances in which a waiver of parking space requirements is expressly recognized as a local government contribution are rehabilitation developments located in areas targeted for neighborhood revitalization by local governments. Once this threshold requirement is established, the local government must also verify that the existing local government code would require the additional parking, and that the parking requirements are waived specifically for the subject development. As part of the information required by Form 5, Boynton provided a letter from Mr. Michael Rumph, the Director of Planning and Zoning for the City of Boynton Beach, verifying that Boynton Terrace is a rehabilitation development located in an area targeted for revitalization by the local government. Additionally, the letter stated in part the following: In support of the [Boynton Terrace Apartments] housing development, the City of Boynton Beach has accepted and processed an application for a variance to provide relief from the City of Boynton Beach Land Development Regulations, Chapter 2, Zoning, Section 11 Supplemental Regulations, H. 16. a.(2)., requiring a minimum parking space ratio of 2 spaces per unit, to allow a reduction of 58 spaces or a 1.3 space per unit variance. The Boynton Terrace Apartments rehabilitation development is located in an area targeted for neighborhood revitalization by the local government. As such, if parking requirements are waived for the project, such waiver or variance is recognized as a local contribution. Boynton Terrace is comprised of 84 multi-family residential units. For each unit in the development, the City of Boynton Beach Land Development Regulations requires two parking spaces. Accordingly, based on the City's regulations, 168 parking spaces would be required for the Boynton Terrace development. Boynton applied for a variance to be able to construct fewer parking spaces than the 168 spaces, since much of the area currently occupied by existing parking would be encroached upon by the construction of the new clubhouse/community center, the new landscaping, and other amenities. The City Commission for the City of Boynton Beach, after a full hearing on Boynton's request, granted the variance, which obligated Boynton to provide 1.3 parking spaces for every multi-family residential unit at the property rather than two parking spaces for every such unit. As a result of the City Commission's decision, the Boynton Terrace development was required to have 110 parking spaces instead of the 168 spaces required by the City of Boynton Beach Land Development Regulations. On Form 5 of its application, Boynton indicated that the City reduced the required number parking spaces from 168 to 110. Form 5 of the application also indicated that by the City's reducing the required number of parking spaces by 58 spaces, the local government contribution with regard to parking spaces was the cost of constructing 58 parking spaces at a cost of $6,089.60 per space, or $353,196.80. An attachment to the City's "contribution letter" referred to in paragraph 21, and part of Boynton's application, indicated that as a result of the City's reducing the number of parking spaces required at Boynton Terrace, the City's contribution to the Boynton Terrace development was $353,196.80. According to the aforementioned attachment, this amount represented the cost of constructing 58 parking spaces at a cost of $6,089.60 per space. After the Florida Housing Finance Corporation issued it preliminary scores, three competing applicants submitted NOPSEs, challenging Boynton's Form 5 score of 20. According to the NOPSEs, the competing applicants believed that Boynton was not entitled to be awarded points based on a local contribution of $353,196 for a waiver or variance of the number of parking spaces required for the development. According to the NOPSEs, Boynton was only receiving a cost savings from not having to construct 11 parking spaces because 157 parking spaces already existed at Boynton Terrace. Based on these challenges, the competing applicants indicated that the local government contribution for a waiver of the City's parking space requirement should be reduced from $353,196 to $66,985.60, the cost of Boynton's constructing 11 parking spaces at $6,089.60 per space. The Florida Housing Finance Corporation reviewed and considered the NOPSEs filed by competing applicants that challenged the local government contribution of $353,196 listed on Form 5 of Boynton's application. Following its review, the Florida Housing Finance Corporation reduced Boynton's preliminary score on Form 5 from 20 points to 8.79 points. This reduction in points represented a pro rata reduction based on the Florida Housing Finance Corporation's decision that the local government contribution, with regard to parking spaces, was $66,985.60 instead of $353,196, the amount stated on Form 5 of Boynton's application. As previously noted in paragraph 10, applicants whose applications have been challenged are permitted to submit a Cure in response to NOPSES filed by competing applicants. The Florida Housing Finance Corporation's Cure Form consists, in part, of a page entitled "Brief Statement of Explanation for Revision/Addition for Application 2001- ." In addition to submitting a Cure Form, pursuant to Rule 67.48.004 (11), Florida Administrative Code, as adopted February 22, 2001, Boynton was allowed to submit additional documentation, revised forms, and other information that it deemed appropriate to address the issues raised in the NOPSEs and to any score reductions imposed by the Florida Housing Finance Corporation. In response to the NOPSEs filed by the competing applicants and the Florida Housing Finance Corporation's reduction in Boynton's Form 5 score, Boynton submitted an explanation on a Cure Form, which stated in relevant part the following: [T]he application involves substantial rehabilitation with new amenity areas, a clubhouse/community center and dumpsters. To meet the demands called for under the proposed renovation, many of the parking spaces are lost to provide for the rehabilitation and other features called for within the application. As such, because of these significant changes, the applicant would have had have [sic] new parking areas and the incurred costs in providing for the new parking. In cooperation and conjunction with the City, the applicant was able to obtain specific cost savings for the parking and has evidenced same within the application as called for. The applicant is saving the stated number of spaces and the costs associated with otherwise having to build them. According to the Cure submitted by Boynton, the application "involves substantial rehabilitation with new amenity areas, a clubhouse/community center and dumpsters." Boynton also stated that "to meet the demands called for under the proposed renovation, many of the parking spaces are lost to provide for the rehabilitation and other features called for within the application." While the Cure submitted by Boynton referred generally to "amenity areas" and a "clubhouse/community and dumpsters," Form 7 of Boynton's application noted the specific features that would be included in the Boynton Terrace rehabilitation project. Form 7 of the application listed several features that could be included in the rehabilitation project. From this list, applicants were to mark the boxes, indicating the particular features that would be included in their respective developments. Form 7 including the category, "Quality of Design," includes Sections A, B, and C. Each section lists features which the applicant may provide as part of the rehabilitation project. At the end of the "Quality of Design" category" is the following pre-printed language: IMPORTANT! CHECKING ITEMS IN SECTIONS A, B, AND C OF QUALITY DESIGN COMMITS THE APPLICANT TO PROVIDE THEM. . . . On Form 7, Section B of the "Quality of Design" category, Boynton indicated that it would provide eight of the listed features. These features included the following: an exercise room, a community center or clubhouse, a playground/tot lot, a covered picnic area, an outside recreation facility for older children, and a library. After Boynton submitted its Cure Form, competing applicants filed (NOADs) with the Florida Housing Finance Corporation pursuant to Rule 67-48.004(12), Florida Administrative Code, as adopted on February 22, 2001. One NOAD indicated that no documents were submitted by Boynton to show the number of spaces that would have to be eliminated or demolished as part of the rehabilitation or how many spaces would have to be constructed as part of the rehabilitation process. Another NOAD stated that the Cure submitted by Boynton amounted to a "de facto appeal," because the initial application did not indicate that the renovation would involve the loss of parking spaces. The NOADs relied on a 1980 as-built survey to argue that Boynton Terrace already contained a parking lot with 157 spaces. Based on its review of Boynton's Cure Form and the NOADs submitted in response thereto, the Florida Housing Finance Corporation determined that Boynton should be awarded 8.79 points for Form 5. The Florida Housing Finance Corporation believes that the 8.79 points awarded to Boynton for Form 5 are appropriate based on its determination of the local government contribution listed on and substantiated by the application and the information provided on Boynton's Cure Form. In reducing Boynton's preliminary award for Form 5 from 20 points to 8.79, the Florida Housing Finance Corporation accepted and concurred with the statements expressed in the NOPSEs. According to those statements, described in paragraph 28, Boynton should receive credit for a local contribution of $66,985, the cost of building 11 parking spaces. The Florida Housing Finance Corporation does not accept that the proposed cost of constructing each new parking space is $6,089, as noted in Boynton's application, is the actual cost. Rather, it considers the proposed cost of $6,089 to be questionable. The reason the Housing Corporation questioned the proposed cost of $6,089 to construct each new parking space was that documentation reflected that during a period of less than three months, the projected cost went from $4,017.19 per space as of December 6, 2000, to $5,821 as of February 12, 2001, and finally to $6,089 as of February 23, 2001. During the time Boynton's application was being reviewed, Mr. Christopher Bushwell, a former construction manager with the Corps of Engineers and an auditor with the Florida Housing Finance Corporation, questioned the increased cost of the construction of each parking space from $4000 to $6000. Despite Mr. Bushwell's concern about the accuracy of the projected cost of construction of each parking space, no staff member of the Florida Housing Finance Corporation called to verify the figure with the City of Boynton Beach. The Florida Housing Finance Corporation produced no evidence to support its contention that the projected or estimated cost for construction of each parking space was not accurate. Yet it persisted in its belief that Boynton "back[ed] into" the parking space estimates solely for the purpose of presenting to the Florida Housing Finance Corporation a local government contribution equal to or near $353,196, a figure that would result in Boynton's being awarded the maximum of 20 points for Form 5. The projected cost of $4,017 for construction of a parking space was included on the City's Variance Review Report dated December 6, 2000. That report analyzed Boynton's request that a variance be granted that allowed one parking space per unit, or a total of only 84 parking spaces. It is unknown who arrived at this figure or how it was derived. On January 16, 2001, the City agreed to grant Boynton a variance to reduce the number of parking space by 58, thereby reducing the number of required parking spaces from two spaces per unit to 1.3 spaces per unit. After the variance was granted on January 16, 2001, on February 12, 2001, the City of Boynton Beach submitted a letter to the Florida Housing Finance Corporation stating that the variance had been granted reducing the required number of parking spaces from two spaces per unit to 1.3 spaces per unit. The letter stated that the cost for each parking space was $5,821, which would result in a local government contribution of $337,630. On February 23, 2001, the City of Boynton Beach submitted another letter to the Florida Housing Finance Corporation identical to the February 12, 2001, letter except that the attachment to the former letter indicated that the construction cost for each parking space was $6.089.60. This projected cost would result in the local government contribution of $353,196.80 for the reduction in required parking spaces. The estimates for the cost of constructing each parking space stated in the February 12 and February 23, 2001, letters were made by Jeffrey Kammerude and approved by the City's Engineering Department. Mr. Kammerude is a licensed contractor and the construction manager of Heritage Construction Company, the company that would be responsible for the renovation of Boynton Terrace. Mr. Kammerude changed the estimated cost of each parking space from $5,821 to $6,089 because at the time of the former estimate, it was his belief that the local building code required a 20-foot minimum driveway or aisle-way. However, after meeting with City officials, Mr. Kammerude was told that the 20-foot aisle-way that he had used in making the February 12, 2001, estimate was incorrect and that with the back-to-back parking that existed at Boynton Terrace, the aisle-way had to be 27 feet wide. The increased size of the aisle-way would require a corresponding increase in the required pavement and, thus, an increase in the cost of constructing each parking space. The reason given by Mr. Kammerude for increasing the estimated cost of each parking space was uncontroverted. Moreover, the greater weight of the evidence established that the estimated cost of $6,089 per parking space was not only reasonable, but was likely lower than the actual per space construction cost because it did not include the cost of curbing. In view of the credible testimony of Mr. Kammerude, the cost estimate of $6,089.60 for constructing a parking space at Boynton Terrace is reasonable. In February 2001, at or near the time Boynton submitted its application to the Florida Housing Finance Corporation, the parking lot at Boynton Terrace was in poor condition and had many potholes and cracks in the pavement. Given the condition of the parking lot, the rehabilitation of Boynton Terrace would require repaving of at least part of the parking lot. On October 31, 2001, about eight months after Boynton submitted its application, Mr. Bushnell went to Boynton Terrace to count the parking spaces and look at the parking lot. From his cursory observation, it appeared that the parking lot had been recently resurfaced and was in "excellent shape. However, Mr. Bushnell did not conduct a comprehensive inspection of the parking lot and was unable to determine the quality of the work done on the parking lot or whether the work complied with the requirements of the applicable provisions of the City of Boynton Beach Land Development Code. The City of Boynton Beach requires a permit for the repaving and/or repair of parking lots at developments such as Boynton Terrace. However, no permit was issued for the repaving and/or repair of the parking lot at Boynton Terrace referenced in the preceding paragraph. Consequently, the City never conducted an inspection of the parking lot to determine if the parking lot repairs and/or repaving at Boynton Terrace met the applicable City Code requirements. Based on the number of parking spaces that he counted while at Boynton Terrace, Mr. Bushnell questioned the cost reduction of eliminating spaces. Moreover, because Mr. Bushnell saw concrete pads in place for dumpsters, he did not believe that parking spaces needed to be eliminated in order to place dumpsters on the property. Finally, in reaching the conclusion that there would be no reduction in parking spaces, Mr. Bushnell did not consider the number of spaces that would be eliminated as a result of the addition of any of the new amenities to the property such as the clubhouse/community center, picnic areas, and mailbox kiosks, and the landscaping required under the City Code. Boynton had a site plan prepared on or near December 2000, which showed the placement of many of the new amenities to be included as a part of the rehabilitation of the Boynton Terrace development. The site plan was used as part of Boynton's submission and presentation to the City when it was seeking a parking space variance. According to the site plan, the clubhouse/community center would consume 25 to 30 parking spaces, the landscaping of the development would consume about 15 parking spaces, and the picnic area would consume about two to four parking spaces. The Florida Housing Finance Corporation did not consider that the addition of the new amenities would reduce the number of parking spaces at the property and result in the need to construct new parking spaces unless the City of Boynton Beach granted a variance to Boynton. Boynton did not include the December 2000 site plan as part of its application or Cure submitted to the Florida Housing Corporation. Moreover, Boynton did not provide information in its application or Cure regarding how many spaces would be eliminated as a result of construction of a clubhouse community center. At hearing, Boynton presented credible evidence that the clubhouse/community center would be constructed over existing parking spaces and that without a variance from the City of Boynton Beach, it would have to construct new spaces to replace those spaces lost to construction as well as to other features related to the rehabilitation of the development. Boynton also presented credible evidence that additional parking spaces at Boynton Terrace would be eliminated due to the City's landscaping requirements, the construction of a picnic area, a tot lot, and mail box kiosks. The City's Code requires 20 feet of landscaping for each parking space. However, this information was not included in the Cure submitted by Boynton to the Florida Housing Finance Corporation. The variance granted by the City of Boynton Beach amounted to a waiver of the parking space requirements applicable to the Boynton Terrace rehabilitation project which provided a tangible economic benefit that resulted in a quantifiable cost reduction that is specific to the development.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Florida Housing Finance Corporation award to Petitioner, Boynton Associates, Ltd., the maximum number of 20 points for Form 5 of the 2001 Combined Cycle, and enter a Final Order awarding Boynton Associates, Ltd., a total of 622 points for it Combined Cycle Application. DONE AND ENTERED this 17th day of April, 2002, in Tallahassee, Leon County, Florida, CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of April, 2002. COPIES FURNISHED: Mark Kaplan, Executive Director Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 Elizabeth G. Arthur, Esquire Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 Jon C. Moyle, Jr., Esquire Moyle, Flanigan, Katz, Kollins, Raymond & Sheehan, P.A. 118 North Gadsden Street Tallahassee, Florida 32301
Findings Of Fact At all times relevant hereto Susanne Bennington was licensed as a real estate broker and active firm member of Bennington & Associates, Inc., a corporate real estate broker; and Kathleen P. Archangeli was licensed as a real estate salesman in this firm. Susanne Bennington, while working as a broker/salesman for another real estate broker in 1979, sold Margaret S. Purvance a condominium at La Concha Condominium. She also negotiated the sale of land on which Beach Cottage Condominiums were subsequently built, and thereafter opened her own office of Bennington & Associates, Inc., the corporate respondent herein. Bennington & Associates became the sales agents for Beach Cottage Condominiums. Following the sale of the condominium to Purvance in 1979, Bennington and Purvance saw each other frequently, as Bennington owned the condominium next to the one she had sold to Purvance. When the sale of Reservations to Purchase Beach Cottage Condominiums was commenced, Bennington told Purvance about the project and that she thought it would be one of the better condominium projects on the Gulf Coast. During the summer of 1930 Purvance worked at the Bennington office for one week as a receptionist. She met the developer of Beach Cottage Condominiums and became aware of the enthusiasm displayed in the Bennington real estate office regarding this project. She also became aware that Bennington and Archangeli were sufficiently impressed with the potential of Beach Cottage Codominiums as an investment that both bought reservations and expected to make a profit before the time came to complete the transaction by going through the closing. On November 1, 1980, Purvance executed a Reservation Deposit (Exhibit 1) to reserve Unit 1109 A for purchase upon completion at a purchase price of $191,900 and gave Respondent Archangeli $5,000 to deposit in escrow. This contract provided that the $5,000 deposit would be applied to the purchase price at closing, that upon receipt of condominium documents, purchase agreements, and other papers, the buyer had fifteen (15) days to review the condominium documents and accept or the option to cancel the Reservation Agreement and get the full deposit returned. Construction on Beach Cottage Condominiums was commenced after the developer arranged his financing. Thereafter, Purvance, on August 31, 1981, executed a contract dated August 8, 1981, to purchase Condominium 1109 A in the Beach Cottage Condominiums for the total purchase price of $191,900 (Exhibit 4) and made an additional deposit of $14,190 which was to be held in escrow until closing at which time the balance of $172,7l0 was due from buyer. This contract provided the contract was voidable by buyer giving seller written notice to cancel within 15 days of signing the contract or receipt of all condominium documents. Upon cancellation all deposits were refundable to buyer. Purvance is a widow whose husband died in 1968 leaving her a home in Countryside free and clear, bank accounts, and a widow's portion of his pension from U.S. Steel Corporation. Although not wealthy by many standards, Purvance has sufficient income (approximately $1 ,800 per month) to live comfortably. The condominium she purchased at La Concha at a price of $135,000 with $80,000 down had obviously turned out to be a good investment and a tax shelter prior to the signing of the contract to purchase Condominium 1109 A, Beach Cottage Condominiums. Purvance read all of the documents she signed, employed an accountant to prepare her taxes, had purchased the La Concha condominium from information received from her attorney, saw this attorney socially and took him to an open house at Beach Cottage Condominiums, executed the contract to purchase in her broker's office where the contract was witnessed and the $14,190 check was written, was told by her broker that the condominium was not a wise investment; but now contends that she relied on the representations of the Respondents that the Beach Cottage Condominiums was a good investment, that she could double her money, that she would not have to close, but could sell her contract before closing, and that she believed the statements rather than the written contract provisions. Ms. Purvance actually believed the Beach Cottage Condominiums development was a good investment and that she was privileged to be in on this condominium project. She was fully aware of her option to cancel the contract to purchase within 15 days after she executed the contract. Before executing the contract, she discussed the purchase with her accountant and showed him the financing figures she had received. Her accountant inquired of her about taxes and advertising costs to operate the condominium as rental property. Purvance was aware in April, 1982, before the final contract was executed, that she could lease the condominium to the developer as a model for $1,500 pear month. She was also aware, before she executed the contract on August 31, 1933, that she could not qualify for conventional financing. This contract had been forwarded to Purvance in mid-July, 1982, with instructions that she had only 15 days in which to execute or reject the contract. She did not execute the contract at the end of that 15-day period but waited until August 31, 1982. To keep within this 15-day period she dated the contract August 8, 1982. In her testimony Purvance acknowledged that her purchase was motivated by the fact that she expected to make a lot of money out of her Beach Cottage condominium. When she ended up losing money, she complained to the Real Estate Commission and brought civil suit against the developer and the Respondents herein. She characterized her complaint as she lost a lost of money relying on Respondents' false representations that Beach Cottage Condominiums could be sold before closing, that she did not feel Respondents should make false promises, and that Respondents had a duty to keep a buyer away from a improvident investment. Respondents never saw a financial statement on Purvance. They only knew that she owned a home in a well-to-do neighborhood, that she had purchased a condominium at La Concha, that she had been audited by the IRS, that she was interested in acquiring another condominium, and that she appeared financially capable of purchasing the Beach Cottage condominium. Both of these Respondents purchased a Reservation to Buy a condominium at Beach Cottage Condominium, neither could qualify for financing, one executed a contract and lost her additional deposit of $15,000, one never got to the contract stage and had to wait until the unit sold before her initial deposit was refunded. Both categorically denied they ever told Purvance that she could make $20,000 in one year on the project, that either told her that she would never have to close, or that under no circumstances would she ever lose her deposit. Neither Respondent had any reason to believe that Purvance did not know what she was doing when she signed the reservation form and when she signed the contract to purchase.
Findings Of Fact The Problem: A Seawall In Danger of Collapse Applicant is an incorporated condominium association which owns the Gulf front property of Bonita Beach Club, a residential condominium located on the northern portion of a barrier island known as Little Hickory Island. The island is south of Fort Myers and part of Lee County. (Testimony of Truitt, Tackney; R-1.) Applicant's Gulf front property is protected by a 600-foot seawall; that seawall, exposed to wave and storm attack, is now in the beginning stages of failure. Applicant seeks a permit to place a revetment along the entire seaward face of the seawall "to help strengthen the seawall and stop the erosion at [its] . . . base . . . ." (R-1.) (Testimony of Truitt, Tackney, Sharma; R-1) The seawall shows evidence of profile lowering; sand has been scoured from its face, exposing 6 to 7 feet of wall above the sand line. Its face shows abrasions from buffeting by sand and sediment; its joints have begun to separate, allowing sand from behind the wall to leak through the cracks. Under high tide conditions, the seaward portions of the seawall are under water; under other tidal conditions there is no more than 6 to 7 feet of wetsand area between the base of the wall and the waterline. (Testimony of Truitt.) The present condition of the seawall is mainly due to two processes: the long-term shoreline migration of Little Hickory Island, and (2) profile steepening, scouring, and accelerated sand loss in the immediate vicinity of Applicant's seawall. There is a south-to-north longshore or littoral sand transport in the area off Little Hickory Island, a northward flowing "river of sand." This phenomenon has caused sand loss to beaches in front of and south of Applicant's property and sand accretion to the undeveloped northern beaches north of the island. The localized profile steepening and accelerating sand loss at Applicant's seawall is caused by waves hitting the vertical seawall, then rebounding-- causing removal of sand at the foot of the wall and steepening of the offshore profile. This localized sand loss and erosion has been aggravated by the original placement and alignment of Applicant's seawall. 7/ The seawall protrudes further seaward than adjacent seawalls or bulkheads. 8/ This protrusion, together with the wall's irregular shape, disrupts the otherwise straight shoreline and acts as a headland: an abutment which concentrates wave energy and longshore currents and causes accelerated erosion and sand loss in the immediate area. The effects of the northerly longshore drift and the localized sand loss have been dramatic: between 1974 and 1980 the sandy beach in front of Applicant's seawall has receded landward 50-60 feet. (Testimony of Truitt, Tackney, Sharma; P-1, P-2, P-3, P-4, 1-2, R-3, R-4, R-5, R-6, R-7.) In addition, the shoreline of Little Hickory Island is gradually and inexorably eroding. This is due to long-term backyard erosion, a natural )process by which barrier islands gradually migrate landward. (Testimony of Sharma, Tackney, Truitt.) II. Applicant's Solution: Place a Rock Revetment in Front of the Seawall In October, 1980, Applicant applied for a DNR permit to place a rock revetment along the existing seawall. By January, 1981, DNR's Bureau of Beaches and Shores determined that all of the documentation required by its rules 9/ had been submitted and the application was complete. Subsequently, the Applicant agreed to several design changes suggested by DNR and agreed to a permit condition requiring it to dedicate a travel easement to assure continued public access to beaches north of its property. As so modified, DNR proposes to issue the requested permit. (Testimony of Truitt; R-1, -R-11, R-12.) The proposed permit, with conditions, is contained in Respondent's Exhibits R-1, R-11, and R-12. 10/ The proposed shore protection structure is described as a rock toe-scour revetment to be placed along the seaward face of Applicant's existing seawall. The revetment extends 7 feet in the shore-normal direction and approximately 600 linear feet in the shore-parallel direction. It will consist of lime-rock boulders of various sizes stacked on top of each other. The top layer of rocks will be the largest, 75 percent of them weighing greater than 500 pounds. The rock revetment will rest on a layer of Filter-X mat to help stabilize the underlying sand. The revetment's elevation will range from 0.0 feet (NGVD) 11/ at the toe of the seawall to -0.5 feet (NGVD) at 7 feet seaward. Its slope will be no greater than 3 horizontal units to 1 vertical unit. The mean high waterline will intercept the revetment-seawall interface at a maximum elevation of approximately +1.5 feet (NGVD). (R-1, R-11, R-12.) III. The Effects of the Proposed Revetment The proposed revetment will fulfill its primary purpose: it will protect the Applicant's seawall by reducing the amount of sand that is scoured and removed from its face and it will add significant structural stability to the wall. It will provide these benefits because its sloping surface will intercept and dissipate waves which would otherwise hit and rebound off the vertical seawall. Because wave deflection energy will be lessened, steepening of the offshore profile will be reduced and accelerating longshore currents will be slowed. It will also protect the seawall against storm, but not hurricane, damage. (Testimony of Truitt, Tackney.) However, the proposed rock revetment will not stop the migration of sands from the southern to the northern reaches of Little Hickory Island; the northward flowing longshore currents will continue. Neither will the revetment protect Applicant's property against long-term background erosion; the entire island will continue its steady easterly retreat to the mainland. Scouring at the ends of the existing seawall will be reduced, but not eliminated. Eddy currents at the ends of the revetment will cause some localized scouring to take place. Wave and water action will take its toll on the revetment; it will require periodic repair and rebuilding in the years ahead. (Testimony of Sharma, Tackney, Truitt.) Although the testimony is conflicting, the weight of the evidence is that the proposed revetment will not adversely affect adjacent beaches and the offshore profile. 12/ While localized scouring will not be eliminated, the evidence indicates that the rates will be lessened--that the existing erosion problems will be mitigated, not aggravated. With reduced localized scouring, longshore currents will not accelerate, and the offshore profile will not deepen at increasing rates. The expert witnesses agreed that, at least for the short term, the proposed revetment will protect the existing seawall against at least three-year storm conditions. (Testimony of Tackney, Truitt, Sharma.) While the revetment will not accelerate or contribute to the erosion of adjacent lands, it will impair the public's use of the beaches in front of and to the north of the Applicant's seawall. Because the revetment will protrude 6 to 7 feet seaward from the seawall--intercepting the mean high waterline--the public will be precluded from traversing the beaches in front of Applicant's property. That narrow corridor of wet-sand beach now permits dry passage only during low tide. With placement of the rock revetment on that passageway, it will become impassable to most people who use the Little Hickory Island beaches. 13/ (Testimony of Sharma, Member of the Public.) Generally, rip-rap revetments, such as that proposed by Applicant, do not eliminate erosion or cause sand to accrete. Rather, they tend to increase erosion and escarping beyond that which would occur if a shoreline is left in its natural, unaltered condition. (Testimony of Sharma, Truitt, Tackney.) IV. DNR Coastal Construction Permits: Practice and Policy There may be alternatives to the proposed revetment which will not endanger the Applicant's upland structure or block the public's access to beaches in front of and north of Applicant's property. 14/ DNR does not require the consideration of shore protection alternatives when it processes coastal construction permit applications. Neither, in its view, is public access to adjacent beaches a matter of regulatory concern in this licensing process. 15/ At the staff level of DNR, the sole consideration is engineering design of the proposed structure: At the level of staff of the Bureau of Beaches and Shores there are no other con- siderations other than simply engineering judgments on the appropriateness or other considerations of the design. I have no idea what the governor and cabinet or exec- utive director may consider. (Tr. 170.) This view of the agency's duty helps explain why DNR has never denied an application to construct a shore protection revetment, although it has suggested design modifications, as was done in this case. (Testimony of Truitt.) V. Interests of Objectors to Proposed Revetment Project DNR requires applicants for coastal construction permits to provide a map showing the location of the proposed erosion control structure and the shoreline for at least 1,000 feet on each side. Applicants are also required to provide a list of the names and addresses from the latest county tax role of all riparian property owners within 1,000 feet. It is DNR practice, in accordance with its rule, Section 165-24.07, Florida Administrative Code, to mail notice of a proposed project to those riparian property owners. By rule, such interested persons or objectors to a proposed project have the right to appear and make their positions known to the Governor and Cabinet at the time the agency decision is made. Id. (Testimony of Truitt; R-1.) Petitioners, Casa Bonita I and II Condominium Associations, Inc., and Seascape Condominium I and II Associations, Inc., assert that the proposed revetment will adversely affect their rights as riparian owners, that it will cause erosion of their shorelines; they also allege that it will prejudice their recreational use of sovereignty lands--the public's beaches lying below the line of mean high water. Relative to the site of the proposed revetment, Casa Bonita I Condominium Association, Inc., lies 1,350 to 1,400 feet south; Casa Bonita II Condominium Association, Inc., 670 feet south; Seascape Condominium I and II Associations, Inc., lie immediately adjacent to the site. (Testimony of Tackney; R-1, R-14.) No evidence was presented to establish that intervenor Lee County is a riparian property owner within 1,000 feet of the proposed revetment. The Lee County Board of County Commissioners were, however, notified of the instant application and given an opportunity to object. The parties have submitted proposed findings of fact; to the extent such findings are incorporated in this Recommended order, they are adopted; otherwise they are rejected as irrelevant to the issues presented or unsupported by the preponderance of evidence.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the application of Bonita Beach Club Condominium Association, Inc., for a coastal construction permit be GRANTED, subject to the agreed-upon conditions described above, including the dedication of a travel easement allowing the public to circumvent the 600-foot rock revetment. 21/ DONE AND RECOMMENDED this 16th day of October, 1981, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 Telephone: (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of October, 1981.
The Issue The issues to be determined in this appeal are whether the decision of the Community Development Board (Board) to approve Flexible Development Application FLD2017-07012 filed by Gulfview Lodging, LLP (Gulfview), cannot be sustained by substantial competent evidence before the Board, or that the decision of the Board departs from the essential requirements of law.
Findings Of Fact The 0.59-acre project site is located at the northeast corner of South Gulfview Boulevard and Fifth Street and wraps around the McDonald’s parking lot and Frenchy’s Beach Café (Frenchy’s) to the west. The project site includes two parcels owned by Gulfview, and 2,195.09 square feet of the South Gulfview Boulevard right-of-way, which will need to be vacated by the City. Gulfview’s proposal is to demolish all structures currently on the project site and build a seven-floor hotel with 150 units per acre, which would be 88 rooms if the City vacates the 2,195.09 feet of right-of-way. Gulfview’s application for development approval was filed with the City on July 28, 2017, including design plans. The subject property is zoned Tourist (T) District with an underlying Future Land Use Plan (FLUP) category of Resort Facilities High (RFH). The subject site is located in the Beach Walk district of Beach by Design.2/ The maximum permitted density for the site pursuant to Beach by Design is 150 units per acre. The application contemplates a subsequent vacation process for the 2,195.09 square feet of City right-of-way. On July 20, 2017, the City Council approved the allocation of up to 59 units from the Hotel Density Reserve under Beach by Design (Case No. HDA2017-04001) and adopted a resolution to the same effect (Res. No. 17-19). Preston’s attorney admitted that he attended the July 20, 2017, City Council hearing that resulted in the July 28, 2017, Hotel Density Reserve Development Agreement (Development Agreement) between Gulfview and the City. Preston’s attorney attended the July 20 City Council hearing on behalf of Frenchy’s, but conceded to the Board and at oral argument that Frenchy’s is located on the land owned by Preston, as trustee, and Preston is the sole shareholder of Frenchy’s. The Development Agreement was recorded in Book 19727, Page 2465-2503 of the Public Records of Pinellas County, Florida, on August 2, 2017. The Development Agreement includes Exhibit “B”-- the same set of design plans that were filed with Gulfview’s July 28, 2017, application for development approval. Section 6.2.4 of the Development Agreement specifically states: The overall number of proposed units density provided for by this Agreement (88 units) is contingent upon the proposed vacation of the 2,195.09 square feet of South Gulfview Boulevard right-of-way within the Beach Walk district. The City shall process a right-of- way vacation ordinance to vacate the 2,195.09 square feet of South Gulfview Blvd. right of way within the Beach Walk district conditioned upon submission of a complete set of building plans for construction of the improvements shown on Exhibit “B”. Regardless of whether or not the vacation is granted the maximum permitted density of the property may not exceed 150 units per acre. Gulfview’s application requires a Level Two approval. Under Section 4-206 of the Community Development Code, a Level Two approval requires mailing of a notice of application to owners of properties “within a 200-foot radius of the perimeter boundaries of the subject property.” The notice mailed by the City identifies both the north parcel and the south parcel by address and parcel number. The notice also describes the quasi-judicial public hearing process before the Board and ends with an invitation “to discuss any questions or concerns about the project and/or to better understand the proposal and review the site plan” with the assigned planner. The City Clerk mailed notice of Gulfview’s application to owners of parcels located within 200 feet of the two parcels identified in the notice, including Preston. Preston does not dispute receiving the notice. Section 4-206 of the Community Development Code also requires the posting of a sign on the “parcel proposed for development.” Preston does not dispute that the sign was posted. Preston objected that the mailed and posted notices did not reference the proposal to vacate 2,195.09 square feet of right-of-way. He argued that if he had known more than “a few days ago” when he received the Staff Report ahead of the October 17, 2017, Board meeting that the right-of-way was proposed to be vacated, he would have had expert witnesses at the hearing to give “an equal presentation” in response to Gulfview’s presentation. Preston requested a continuance citing lack of proper notice and insufficient time to prepare for the public hearing. Preston did not introduce any testimony or other evidence regarding the application. Preston’s primary objection to the project was vacation of the right-of-way and he wanted the opportunity to present witnesses regarding that issue. Vacating the right-of-way is a separate process and the hearing before the Board is not the proceeding in which the right-of-way vacation is decided. However, the substantial competent record evidence shows that Preston had actual notice as early as July 20, 2017, that the proposed project contemplated vacating 2,195.09 square feet of right-of-way. Preston’s other objection was that Gulfview’s design plans did not meet the requirements of Beach by Design’s Beach Walk District overlay. Preston argued to the Board that the hotel’s proposed design did not meet the redevelopment goals for addition of facilities and amenities generally described as areas for outdoor dining, outside cafes, and other seaside amenities.3/ However, although Preston had actual notice of the hotel design plans as early as July 20, 2017, he did not introduce any expert testimony or other evidence to support those objections. The Staff Report states that Beach by Design proposed to create a great beach front, known as “Beach Walk,” by relocating South Gulfview Boulevard from the existing right of way. Beach by Design recognized that the redevelopment and revitalization of the properties that front on South Gulfview were and, to a certain extent, still are generally constrained by several factors including small parcel sizes and the Coastal Construction Control Line. As a result, most of the motels and hotels which existed along the east side of South Gulfview would have limited opportunities for redevelopment even if Clearwater Beach were repositioned in the tourism market place. Beach by Design proposed to relocate South Gulfview to the west of its current alignment in order to achieve multiple purposes. First, it would create a drive with a real view of the Beach and the Gulf of Mexico. Second, it would allow the City to vacate the east 35 feet of the existing right of way in favor of the properties along the eastern frontage of existing South Gulfview as an incentive for appropriate redevelopment. Many of those existing properties would substantially benefit from an additional 35 feet of depth which could be used for the addition of facilities and amenities such as safe and comfortable areas for outdoor dining. The creation of Beach Walk and the realignment of South Gulfview Boulevard have all been realized. Several segments of the South Gulfview Boulevard have already been vacated and many of the properties along South Gulfview Boulevard have, in the years since the initial adoption of Beach by Design, been redeveloped with hotels. As noted, this proposal also includes a vacation of a portion of the South Gulfview Boulevard right-of-way which will facilitate the redevelopment of the subject site with a new hotel playing an important role in the ongoing renewal and revitalization of the Beach. Specifically, the vacation will allow for the location of an outdoor seating area providing a strong link between Beach Walk and the proposed hotel as supported by Beach by Design. Therefore, the proposal is consistent with this provision. (Emphasis added). The Staff Report concluded that the proposed project is consistent with applicable provisions of the Community Development Code, applicable components of the City’s Comprehensive Plan, the Beach Walk District of Beach by Design, and the Design Guidelines of Beach by Design. Mark Parry, Senior Planner with the City, testified that “the proposed number of units, 88, is contingent on vacation of that right-of- way,” and if the right-of-way is not later vacated, it “would knock out about eight units.” Mr. Parry also testified that the proposed project provides amenities and an outdoor seating area as specified by Beach by Design. Preston only conducted a very short cross-examination of Mr. Parry, despite having party status to do so. Sue Ann Murphy, an experienced land use planner, also testified that the proposed development complied with all applicable Community Development Code, Comprehensive Plan and Beach by Design requirements. The project architect, Istvan Peteranecz, AIA, was accepted by the Board as an expert. Mr. Peteranecz answered questions from Board members regarding the design of the proposed hotel’s main entrance, including the porte cochere and public seating area adjacent to the Beach Walk and immediately south of Frenchy’s. Preston did not cross- examine Ms. Murphy or Mr. Peteranecz, despite having party status to do so. Substantial competent evidence in the record supports the conclusion that the proposed project is consistent with applicable provisions of the Community Development Code, applicable components of the City’s Comprehensive Plan, the Beach Walk District of Beach by Design, and the Design Guidelines of Beach by Design. At the conclusion of the public hearing, the Board acknowledged Preston’s pending request for continuance and proceeded with discussion. After extensive discussion among the Board members, a motion was made and seconded for the Board “to approve case number FLD2017-07012 based on the evidence, the testimony presented, and the application, the staff report, and at today’s hearing, and to adopt the findings of fact and conclusions of law stated in the staff report with all of the conditions of approval, as listed.” The motion carried. On October 19, 2017, the City entered a Development Order memorializing the Board’s decision. The Development Order includes a Finding of Fact that “[t]he total lot area includes 2,195 square feet of the South Gulfview Boulevard right-of-way which would need to be vacated by the City,” and includes a Condition of Approval that “application for a building permit be submitted no later than October 17, 2019, unless time extensions are granted.” The City represented at oral argument that if the proposed development is not consistent with the Development Order (e.g., if the approximately 2,195 square feet of the South Gulfview Boulevard right-of-way is not vacated), Gulfview will not be able to get a building permit without going through a minor amendment process for a less intense project.
Conclusions An Administrative Law Judge of the Division of Administrative Hearings has entered an Order Closing File in this proceeding. A copy of the Order is attached to this Final Order as Exhibit A.
Other Judicial Opinions REVIEW OF THIS FINAL ORDER PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND FLORIDA RULES OF APPELLATE PROCEDURE 9.030 (b) (1) (C) AND 9.110. TO INITIATE AN APPEAL OF THIS ORDER, A NOTICE OF APPEAL MUST BE FILED WITH THE DEPARTMENT’S AGENCY CLERK, 2555 SHUMARD OAK BOULEVARD, TALLAHASSEE, FLORIDA 32399-2100, WITHIN 30 DAYS OF THE DAY THIS ORDER IS FILED WITH THE AGENCY CLERK. THE NOTICE OF APPEAL MUST BE SUBSTANTIALLY IN THE FORM PRESCRIBED BY FLORIDA RULE OF APPELLATE PROCEDURE 9.900(a). A COPY OF THE NOTICE OF APPEAL MUST BE FILED WITH THE APPROPRIATE DISTRICT COURT OF APPEAL AND MUST BE ACCOMPANIED BY THE FILING FEE SPECIFIED IN SECTION 35.22(3), FLORIDA STATUTES. YOU WAIVE YOUR RIGHT TO JUDICIAL REVIEW IF THE NOTICE OF APPEAL IS NOT TIMELY FILED WITH THE AGENCY CLERK AND THE APPROPRIATE DISTRICT COURT OF APPEAL. MEDIATION UNDER SECTION 120.573, FLA. STAT., IS NOT AVAILABLE WITH RESPECT TO THE ISSUES RESOLVED BY THIS ORDER. FINAL ORDER NO. DCA10-GM-115 CERTIFICATE OF FILING AND SERVICE I HEREBY CERTIFY that the original of the foregoing has been filed with the undersigned Agency Clerk of the Department of Community Affairs, and that true and correct copies have been furnished as indicated to each of the persons listed below on this DW say of , 2010. aula Ford Agency Clerk By U.S. Mail Amy Taylor Petrick, Assistant County Attorney Palm Beach County 300 North Dixie Highway, Suite 359 West Palm Beach, FL 33401 Tel.: (561) 355-2529 Fax.: (561) 255-4324 Email: apetrick@co.palm-beach.fl.us William L. Hyde, Esquire Gunster, Yoakley & Stewart, P.A. 215 S. Monroe Street, Suite 618 Tallahassee, FL 32301 Phone: (850) 521-1980 Facsimile: (850) 576-0902 Email: whyde@gunster.com James M. Crowley, Esquire Gunster, Yoakley & Stewart, P.A. 450 E. Las Olas Blvd., Suite 1400 Fort Lauderdale, FL 33301 Phone: (954) 713-6416 Facsimile: (954) 523-1722 Email: jcrowley@gunster.com FINAL ORDER NO. DCA10-GM-115 Claudia McKenna, City Attorney City of West Palm Beach 401 Clematis Street West Palm Beach, FL 33401 Phone: (561) 882-1350 Facsimile: (561) 822-1373 Email: cmckenna@wpb.org Keith W. Davis, Esquire Trela White, Esquire Attorney for Village of Royal Palm Beach Corbett & White, P.A. 1111 Hypoluxo Road, Suite 207 Lantana, FL 33462 Phone: (561) 586-7116 Facsimile: (561) 586-9611 Email: keith@corbettandwhite.com; trela@corbettandwhite.com By Hand Delivery Richard E. Shine Assistant General Counsel Department of Community Affairs By Interoffice Mail The Honorable Donald R. Alexander Administrative Law Judge Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675
The Issue The issue is whether Respondent committed a discriminatory housing practice against Respondent in violation of Section 760.23(2), Florida Statutes (2005).
Findings Of Fact Petitioner, an Armenian, began renting one of the units in Respondent’s Colony Apartments on August 14, 2002, The initial lease term was August 14, 2002, to August 31, 2003. The monthly rent was $340 per month. Petitioner renewed his lease beginning September 1, 2003, through March 31, 2004, for a monthly rent in the amount of $350. Petitioner renewed his lease beginning April 1, 2004, through March 31, 2005, for a monthly rent in the amount of $360. Petitioner renewed his lease in a timely manner on or about March 31, 2005. On April 1, 2005, the monthly rent for Petitioner’s apartment increased to $370. On April 4, 2005, Respondent charged Petitioner an extra $50 as a month-to-month charge because Respondent’s staff unintentionally failed to enter the lease renewal into management’s software. This clerical error resulted in Petitioner receiving one or more delinquency notices. On April 6, 2005, Petitioner paid $365 in rent. Petitioner paid $370 in rent on May 6, 2005. The rules addendum to the lease agreement at issue here provides as follows in pertinent part: LATE PAYMENTS AND RETURNED CHECKS: a. Rent paid after the first day of each month shall be deemed as late; if rent is not received by close of business on the 5th day of the month, resident agrees to pay an additional fee of $50.00. Such fees will be considered additional rent. * * * 4. TERMINATION OF LEASE: Either Resident or Landlord may terminate this Lease Agreement at the end of the term by giving the other party thirty (30) days prior written notice. If Resident vacates [or] fails to give such notice, the Lease will be renewed on a month-to-month basis for successive one-month terms at a premium of $50.00 above the current monthly market rent until either party gives thirty (30) days prior written notice to the other, as provided herein. . . . * * * 9. RIGHT OF ACCESS: Landlord shall have the right to enter the Apartment without notice, for inspection maintenance and pest control during reasonable hours. In case of emergency, Landlord may enter at any time to prevent damage to property. * * * 15. REPAIRS: Resident accepts the Apartment in its current “as is” condition. Landlord will make necessary repairs to the Apartment to render Apartment tenantable with reasonable promptness after receipt of written notice from Resident unless the repairs are required due to acts of negligence of Resident of his guests, in which case, Resident agrees to pay Landlord immediately the cost of repair. Resident agrees to make maintenance checks at regular intervals on each smoke alarm located in the Apartment and to immediately report any and all defects in writing to Landlord . . . Resident shall maintain the Apartment, including the fixtures therein, in a clean, sightly and sanitary condition . . . . * * * 23. RULES AND REGULATIONS: * * * e. Parking: Resident agrees to abide by the parking regulations established by Landlord. No trailers, campers, boats, or commercial vehicles will be allowed without the written permission of Landlord. Motor vehicles may be towed at Resident’s expense, without notice, if parked improperly or if parked on lawns. Only operating passenger vehicles with current tags and ordinary size may be parked on the Premises, motorcycles shall not be parked beside buildings, under overhangs or under stairways; disabled vehicles with flat tires shall not be parked on the Premises and all such vehicles may be towed away without notice and at the Resident’s expense. No vehicle repairs will be allowed on the Premises. * * * o. Maintenance: Service call are performed during normal weekday working hours except in cases of bona fide emergencies. All service calls must be reported by the Resident to the Landlord (i.e. office personnel). They may be reported by telephone, written message, or in person. Maintenance personnel employed by the Landlord are not authorized to take any individual calls except those that are made through the office. Service calls are performed on a “first-come, first-served” basis with priority given to those requests that would constitute a hazard or discomfort to a resident. On April 28, 2005, Petitioner requested Respondent to perform the following maintenance in his apartment after lunch: (a) repair large burner on stove; (b) repair bottom oven element; (c) repair living room blind; and (d) repair rusty kitchen drain. Respondent completed these repairs the next day. Petitioner paid $370 in rent for the month of June 2005. On June 10, 2005, Petitioner complained that his refrigerator was leaking and that he lost food in the freezer compartment. Respondent gave this complaint a high priority and changed Petitioner’s refrigerator. By letter dated June 15, 2005, Respondent advised Petitioner that his apartment was in an unsanitary condition. The letter informed Petitioner that he had seven days to correct the matter at which time, Respondent intended to inspect Petitioner’s apartment. A letter dated June 22, 2005, stated that Respondent intended to inspect Petitioner’s apartment for cleanliness on June 23, 2005 at 8:00 a.m. The letter also advised that Respondent intended to fix a leak causing damage to the apartment below Petitioner’s apartment. In the letter, Respondent demanded that Petitioner clean his bathtub so that Respondent’s maintenance men could caulk it and stop the leak. The letter warned Petitioner that if the bathtub was not cleaned, Respondent would have a housekeeper to clean it and charge Petitioner’s account $50 for the service provided. Petitioner paid $370 in rent for the month of July. On July 6, 2005, Respondent finally adjusted Petitioner’s account to correct the erroneous $50 one-time, month-to-month charge carried over since April 2005. It took three months for Respondent to verify that the $50 charge was Respondent’s clerical error and not Petitioner’s failure to pay his rent on time or his failure to timely renew his lease. The correction resulted in a zero balance on Petitioner’s account. On July 5, 2005, Petitioner requested the following maintenance in his apartment: (a) repair problem causing sink to backup; and (b) repair problem causing bathtub to have spots and an unpleasant odor. Petitioner told Respondent he believed that the maintenance men had poured a chemical in his bathtub, causing the spots and the odor. Respondent gave this complaint a high priority, sending a maintenance man to Petitioner’s apartment later that day. The maintenance man repaired the sink and inspected the bathroom. There is no credible evidence that Respondent used a chemical in the building’s plumbing system that caused the spots and bad smell in Respondent’s bathtub. The greater weight of the evidence indicates that Petitioner did not keep his tub clean. In July 2005, Respondent’s staff placed a warning notice on Petitioner’s vehicle. The notice advised that the vehicle was subject to towing by a date certain due to an expired license tag as of May 2003 and a flat tire. After receiving the notice, Petitioner moved his vehicle and parked it in another area of the apartment complex. Respondent’s staff issues these warning notices to any vehicles on the apartment premises that are parked improperly, broken down and unattended, had missing or expired license tag, and/or had a flat tire. Respondent’s staff does not check to determine the ownership of the car before issuing the warning. Respondent’s staff placed a second warning notice on Petitioner’s vehicle for the same reasons. On August 23, 2005, Ace Towing & Storage, pursuant to a contract with Respondent, removed Petitioner’s car from the premises. The contract with the towing company results in five to ten cars per month being removed from the premises. Between the time that Petitioner’s car was towed in August 2005 and the hearing, Petitioner compiled a long list of vehicles that he claims violated Respondent’s rules and regulations for motor vehicles. During the hearing, Respondent presented persuasive evidence that all but two of the cars had been moved or towed from the premises. The two vehicles that remained at the apartment complex no longer violated Respondent’s rules and regulations. On August 23, 2005, Petitioner complained that the deadbolt lock on his apartment door would not move. On August 24, 2005, Petitioner complained that his kitchen blind needed to be replaced. On August 25, 2005, Petitioner would not allow Respondent’s maintenance men to enter his apartment to make repairs. On August 30, 2005, Petitioner’s downstairs neighbor filed a written complaint with Respondent. The neighbor complained that his apartment had bathroom mold for the fourth time and that he was experiencing breathing problems due to the mold. The neighbor also complained that Petitioner made noises all night long. According to the neighbor, the noises sounded like Petitioner was moving furniture. On or about August 31, 2005, Respondent sent Petitioner a letter advising him that loud noises from his apartment were disturbing other residents. The letter requested Petitioner’s cooperation in keeping noise at a minimum. At some point in time, Petitioner filed a housing complaint with the City of Jacksonville. In response to Petitioner’s complaint to the City of Jacksonville, Respondent delivered a timely letter dated September 13, 2005, to Petitioner. The letter informed Petitioner that it would be inspecting his apartment on September 14, 2005. The letter complied with the requirements of Section 83.53, Florida Statutes (2005). On September 14, 2005, Respondent and the city’s inspector attempted an inspection of Petitioner’s apartment pursuant to Chapter 518, Jacksonville Municipal Code, to determine compliance with the City’s Property Safety and Maintenance Code, a city ordinance, which sets minimum property standards. The inspector could not complete the inspection because he could not gain access to Petitioner’s apartment. By letter dated October 12, 2005, Respondent provided Petitioner with a seven-day notice of termination of tenancy with option to cure, as authorized by Section 83.56(2)(b), Florida Statutes (2005), and rules addendum to the lease agreement. The letter states as follows in relevant part: You are hereby notified the GMC Property Management intends to terminate you tenancy, for reason of your failure to comply with the duties imposed upon tenants by law and/or with material provision of you rental agreement, to wit: It has come to our attention that you are disturbing and being a nuisance to the resident (sic). This is in violation of your lease agreement. We need you to correct this matter immediately to avoid termination of your lease agreement. Demand is hereby made that you remedy the noncompliance within seven (7) days of this notice or your lease shall be deemed terminated and you shall vacate the premises upon such termination. If this same conduct, or conduct of a similar nature is repeated within 12 months, your tenancy is subject to termination without your being given an opportunity to cure the noncompliance. Because Petitioner was not at home or would not open the door, Respondent delivered this letter to Petitioner in a timely fashion by posting it at the entrance to Petitioner’s apartment. On April 6, 2006, Petitioner renewed a lease for the term beginning April 1, 2006, to March 31, 2007, for $385 per month. On May 8, 2006, Petitioner complained that he was having problems with his plumbing because his bathroom had brown spots on the floor and wall. Petitioner would not let Respondent’s maintenance in his apartment on May 9, 2006.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Florida Commission on Human Relations enter a final order finding that Respondent did not commit a discriminatory housing practice based on Petitioner’s national origin. DONE AND ENTERED this 30th day of November, 2006, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th of November, 2006. COPIES FURNISHED: Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Samuel Sukyasov 2705 Stardust Court, No. 10 Jacksonville, Florida 32211 Gregory Simms GMC Property Management 9550 Regency Square Boulevard, Suite 902 Jacksonville, Florida 32225
The Issue Whether an assessment should be made against Petitioner for additional sales and use tax, interest, and penalty in connection with the business operations of WHI Limited Partnership relating to Wyndham Harbour Island Hotel in Tampa, Florida, for the audit period July 31, 1990, through June 30, 1995, and, if so, in what amount.
Findings Of Fact On March 1, 1988, Lincoln Island Associates No. 1, Limited (Lincoln Island Associates) and WHI entered into a 30-year Lease and Agreement (Lease), whereby WHI leased from Lincoln Island Associates a tract of land on Harbour Island, Tampa, Florida, and the Harbour Island Hotel located on the tract of land. Section 5.5 of the Lease provides: Use of Leased Property. Lessee may use the Leased Property only for the purpose of operating the Hotel (and ancillary activities) as a hotel and will not do or permit any act or thing that is contrary to any Legal Requirement or Insurance Requirement, or that may impair the value (subject to ordinary wear and tear), useful life or usefulness of the Leased Property or any part thereof, or that constitutes a public or private nuisance or waste of the Leased Property or any part thereof provided that Lessee may use the Leased Property for purposes other than as a hotel with the prior written consent of the Lessor. The Department is authorized to administer the tax laws of Florida pursuant to Section 213.05, Florida Statutes (1990- 1994).3 The Department conducted an audit of WHI to determine its compliance with Florida sales and use tax laws. The audit covered the period from July 31, 1990, through June 30, 1995. Based on the audit, the Department determined that the hotel property was a multiple-use property and was subject to taxable allocation pursuant to Section 212.031, Florida Statutes. The Department considers to be taxable the portions of the hotel property which are used by the hotel operator for functions that do not involve guest accessibility or use, are used by the hotel operator to carry on commercial businesses serving the general public, and are not used by the hotel operator to serve guests exclusively at no charge as part of the guests' accommodations. WHI takes the position that the hotel property is not a multiple-use property; the hotel property is used exclusively as dwelling units; the lease agreement between WHI and Lincoln Island Associates is a capital lease and thus a sale; the Department is estopped from assessing a tax based on a previous audit in which the Department found that the hotel property was not subject to taxation; Lincoln Island Associates is the proper party against whom the assessment should be made; and the Department improperly determined the amount of taxable property based on an unpromulgated rule by using the square footage of the property. The Department conducted a sales and use tax audit for the audit period of December 28, 1988, through May 31, 1990 (first audit), on Wyndham Hotel Co., Ltd (Wyndham) on the same property at issue in the instant case. During the first audit, WHI and Wyndham had a principal and agency relationship. WHI leased the hotel property from Lincoln Island Associates, and Wyndham operated the hotel. WHI and Wyndham are separate entities and have separate taxpayer identification numbers. In the first audit, the Department originally determined that 15.892 percent of the hotel property was not subject to rentals to guests and was therefore taxable. Wyndham protested the assessment, and a letter of reconsideration was issued on May 14, 1992, finding that zero percentage of the property was taxable. The 1992 letter of reconsideration was drafted by Richard Parsons, who was a tax audit specialist with the Department and whose responsibilities included handling protested audit cases. He acknowledged that the reconsideration letter was in error and that the property subject to taxation should not have been reduced to zero percentage. He attributes this error to the auditor having revised the audit based on an updated floor plan submitted by Wyndham and his adoption of the auditor's revisions. When asked why he did not change the assessment when it came to him, Mr. Parsons stated: Well, because when it came back to me, the audit had been revised and at the time that this was issued, we were under a heavy backlog and it probably wasn't a material amount of money, so we issued the NOR [Notice of Reconsideration] as it came back. The Department audited WHI for the hotel property for the period July 31, 1990, through June 30, 1995 (the second audit). Araks Navasartian conducted the second audit for the Department. She personally observed the layout of the hotel and whether guests were permitted to visit or were restricted from areas of the hotel. Ms. Navasartian correctly found that the hotel property was multiple-use property based on the hotel's rental of conference rooms and banquet halls; the operation of a bar and catering services; the use of a loading dock; the use of kitchens by hotel employees; the use of laundry areas; the utilization of warehouse storage, a phone room, and maintenance area; and the operation by WHI of accounting, security, and personnel offices. Ms. Navasartian requested WHI to provide her with plans or schematic drawings of the hotel so that she could determine the areas that were being used by WHI. She was not provided with any plans or drawings of the hotel, but WHI did provide a list of areas used by WHI with a square footage measurement of each area. However, the auditor was unable to identify the areas in the hotel itself based on the list provided by WHI. Because WHI did not provide sufficient information on which Ms. Navasartian could determine the amount of square footage that was being used by WHI rather than hotel guests, she calculated the square footage of the various areas by measuring the length of her pace, pacing the areas, and calculating the square footage based on the number of paces and the length of her pace. Ms. Navasartian determined the square footage that was being used exclusively for guests and the square footage that was being used by WHI and calculated the percentage of the property which would be subject to taxation. She did not calculate the commercial rentals tax on parts of the hotel that were being used as sleeping quarters or guest rooms. Ms. Navasartian determined that approximately 25 percent of the hotel was being used by WHI for taxable purposes and applied that percentage to the total rent to determine the taxable portion of the lease payment. The use of square footage to determine the ratio for calculating the amount of rental charge that would be taxable was an appropriate method to determine the amount of tax that was due on the multiple-use property at issue. While the second audit was being conducted, WHI did not suggest or offer an alternative method for determining the taxable portion of the commercial rentals portion of the lease with Lincoln Hotel Associates. After the audit was completed, the Department issued a Notice of Proposed Assessment of Tax, Interest and Penalty to WHI for the audit period July 31, 1990, through June 30, 1995. On August 23, 1996, WHI made a payment of $108,950.61, which was applied to reduce the sales and use tax liability. On February 17, 1997, WHI filed a protest letter of the tax assessment and provided to the Department an old set of blue prints which may not have accurately reflected the current areas in the hotel. On October 15, 1997, the Department issued a Notice of Decision, which reduced the taxable percentage of lease payments and stated: The auditor also included conference and meeting rooms as taxable that WHI has since established were rerented with taxes paid on those charges. These areas have been reclassified as nontaxable for purposes of proration. The auditor requested and was not provided with a blueprint to assist her in determining how various portions of the property were used. As a result, she was forced to estimate non-exempt usage based on visual inspection. A blueprint has now been provided. It is, however, almost 14 years old and may not accurately reflect current size and usage of all areas. For purposes of this notice, the list of areas the auditor determined were taxable have been used. Certain areas that are either rerented or are used by hotel guests at no additional cost to them have been eliminated. Space used by WHI for storage, security, maintenance, laundry, management and accounting offices is treated as taxable. These areas are used by WHI for functions that do not involve guest accessibility or use. Space used for the restaurant and bars is taxable, as is the kitchen. These areas are used by WHI to carry on commercial businesses serving the general public, not to serve hotel guests exclusively at no charge as part of their accommodations. The square footage of taxable areas as estimated by the auditor have been compared to the blueprints and adjusted if more accurate measurements were available for any particular area. As a result of eliminating certain areas from the taxable category and revising the estimated measurements where the blueprints contain a clearly comparable area, the percentage of taxable rent is reduced to 13.50 percent for purposes of this Notice. WHI filed a Petition for Reconsideration dated November 13, 1997. Because the blueprints which WHI had submitted with its protest dated February 17, 1997, were old, WHI hired a contractor to determine the areas and square footages dedicated to various uses. In the petition, WHI contended that the taxable rental percentage should be five percent or less based on the new square footage dimensions provided by its contractor. WHI also raised the issue of its reliance on the Department's first audit in which the Department found that the taxable rental percentage of the hotel property was zero. Such reliance, WHI concluded, constituted grounds for finding doubt as to liability and served as a basis for the Department compromising WHI's liability pursuant to Subsection 213.21(3)(a), Florida Statutes (1997). WHI knew that the Department was in error when the Department found the taxable rental percentage for the first audit was zero. During the second audit, an employee of WHI, Tray Seamans, told Ms. Navasartian that five percent would have been agreeable in the first audit, but the Department "goofed up" and reduced it to zero. On December 23, 1997, the Department issued a Notice of Reconsideration and recalculated the percentage of taxable real property rentals as follows: Taxpayer has now provided an updated list of areas and square footages prepared by a building contractor. Based on this list, 6.90 percent of Taxpayer's space is used as offices, 4.29 percent is "support space," 65.79 percent is "guest space" and 23.102 percent is "public space." Taxpayer asserts that the taxable percentage should be approximately 5 percent or less. The guidelines for proration were discussed earlier. All of the office space (6.90 percent) is taxable. All of the support space (kitchen, laundry and storage) is taxable. The guest space (guest rooms and corridors on guest room floors) is exempt. The Taxpayer treats all "public space" as not taxable. This includes function spaces and corridors and the entire lobby (except for the kitchen and office spaces, which are specifically identified and classified as office or support space). The lobby level also includes a bar, restaurant space, front lobby area, cooler room, storage space, phone system space, registration area, and a room labeled by the auditor as "President's Club." According to Taxpayer, the President's Club is actually a meeting room that is re-rented. The registration area provides services to overnight guests exclusively. The remaining lobby areas identified by the auditor are taxable. Using the more accurate measurements of the contractor rather than the auditor's visual estimates, the additional taxable lobby space is 10,745 square feet. When this is added to the office space and support space as measured by Taxpayer's contractor, the total taxable square footage is 37,485, which is 15.684 percent of the total 238,994 square foot facility. The auditor's report and the contractor's measurements are the best information available upon which to base proration. For purposes of this Notice, it is determined that 15.684 percent of the real property rentals paid by the Taxpayer for its facility are taxable. Based on the recalculation of the percentage of taxable real property, the Department assessed the tax liability for sales and use as of December 15, 1997, at $303,865.14, which included a penalty of $83,132.69 and interest accrued December 15, 1997, less the $108,950.61 payment in August 1996. Interest continued to accrue at the rate of $36.32 per day for the sales and use tax. The tax liability for the indigent care surtax totaled $24,165.72, which included interest through December 15, 1997. Interest continued to accrue at the rate of $4.11 per day for the indigent care surtax. During the protest period and after WHI filed its petition for reconsideration, the Department made it clear to WHI that the Department would consider methodologies, other than the use of square footage, to determine the portion of the property rentals which would be taxable. WHI did not suggest another method for attributing the taxable portion of the hotel property not used exclusively as dwelling units. When conducting the second audit of WHI's hotel operations, the Department did not rely on any method found in any Department training manual to compute the amount of tax on WHI's multiple-use property. The Department's auditors are not required to follow any particular methodology in assessing the liability for multiple-use property, and have some discretion in determining the manner in which the audit is conducted. The Department uses at least three different methodologies for allocating the taxable and non-taxable portions for multiple-use properties under Section 212.031, Florida Statutes: square footage, revenue, and percentage of sales. When the square footage method is used, as it was in the instant case, the percentage of taxable property is determined by comparing the square footage of hotel property not used exclusively by the guests to the total square footage of the hotel property. If a revenue method is used, the Department would look at the revenue generated by the different areas of the property and compare that to the total revenues of the property. For example, if a department store subleases a portion of its store to a jewelry concessionaire and the jewelry concession takes up one percent of the square footage of the store, but generates ten percent of the revenues of the store, the Department could value the jewelry location as ten percent of the value of the building rather than one percent. If a percentage of sales method is used, the Department would look at the percentage of sales of the concessionaires. For example, in one case a store's prime lease was based on a percentage of sales that took place for the entire store. Parts of the store were subleased to concessionaires, and the concessionaires' rent was based on a percentage of their sales. The Department determined what portion of the total sales were attributable to individual concessionaires and gave credit to the taxpayer for that amount. A revenue method of allocation of taxes for multi-use hotel property is used for several hotels in the Orlando area. The taxpayers are leasing property from the Walt Disney Corporation and are operating hotels on the property. This method of allocation based on revenue is sometimes referred to as the Disney method. Typically the cases that involve an assessment method other than square footage are a result of an agreement between the auditor and the taxpayer that the assessment method is a fair way to determine the non-taxable portion of the commercial lease. The vast majority of the audits involving the use of square footage to determine the tax liability is a result of an agreement between the auditor and the taxpayer that square footage is appropriate. The Lease between WHI and Lincoln Island Associates identifies WHI as the Lessee and Lincoln Island Associates as the Lessor. Pursuant to the Lease, WHI is to pay Lincoln Island Associates basic rent, additional rent, and contingent rent. With certain exceptions, Lincoln Island Associates is required by Section 6 of the Lease to "keep the foundation, roof and structural portions of the Improvements in good order, condition, and repair." Section 21.9 of the Lease provides that before Lincoln Island Associates may sell the leased property, but "before any sale of the Leased Property to an Unaffiliated Assignee, the Lessor shall first offer the Leased Property to the Lessee for sale on the same terms and conditions offered to such Unaffiliated Assignee for the sale of the Leased Property." Section 39 of the Lease provides: "Lessee shall have the right to purchase the Leased Property on the last day of the Term, at a price equal to the Fair Market Sales Value of the Leased Property on the date of such purchase." Fair Market Sales Value is defined in Section 34 of the Lease as follows: the fair market sales value that would be obtained in an arms'-length transaction between an informed and willing buyer and an informed and willing seller, under no compulsion to buy or sell, and neither of which is a subsidiary, Affiliate or a Person related to the Mortgagee, the Lessor, or the Lessee, for the purchase of the Leased Property, assuming that the Leased Property is in the condition and repair required to be maintained by the terms of the Lease (including compliance with all Legal Requirements[)]. Section 35 of the Lease provides the following: End of Lease Term. Upon the expiration or other termination of this Lease, except an expiration or other termination at which Lessee purchases the Leased Property, Lessee, at its expense, shall quit and surrender to Lessor the Leased Property in good order and condition, ordinary wear and tear excepted, in compliance with all Legal Requirements, provided that the Lessor shall pay to the Lessee amounts for certain additions and improvements not removed from the Hotel as provided in Section 6. (emphasis in original) Attached to the Lease as Exhibit D is a tax indemnity agreement dated March 1, 1988, between WHI and Lincoln Island Associates. The agreement provides: SECTION 2. Tax Assumptions. Basic Rent during the Term has been calculated by the Lessor, and the Lease is being entered into by the Lessor partly on the basis of certain Federal income tax assumptions, including the following assumptions referred to herein as the "Tax Assumptions": Lessor will, as owner of the Leased Property, be required and entitled to take into account in computing its tax liability all items of income, gain, loss and deduction regarding the Leased Property allowed by law (including depreciation deductions with respect to the Improvements); The Lease will be a true lease for Federal income tax purposes, and throughout the Term of the Lease, the Lessor will be treated as the owner and the lessor of the improvements; From and after the commencement of the Term of the Lease, the Lessor, as the owner of the Improvements, will be entitled to such deductions and other benefits as are provided by the Code to the owner of Improvements, and such deductions and benefits will be allowed, including, but not limited to depreciation deductions with respect to 100 percent of the Lessor's tax basis for the Improvements at the commencement of the Term of the Lease, determined under Section 168 of the Internal Revenue Code of 1954 for 15-year real property ("Depreciation Deductions"); The Lessor will not realize any income in connection with the transaction in any taxable year of the Lessor during the Term other than Basic Rent and Contingent Rent in the amounts and at the times set forth in Sections 2 and 3 of the Lease. The Lessor will not realize any recapture of investment tax credit previously claimed with respect to the Leased Property (the "Investment Tax Credit"). SECTION 3. No Inconsistent Action. Neither the Lessee nor any Affiliate of the Lessee will claim any tax benefits, file any tax returns or take any other actions that would be inconsistent with Section 2(a), (b), and (c). Tori Lambert, a certified public accountant licensed in Texas, reviewed the lease between WHI and Lincoln Island Associates and concluded that WHI was characterizing the Lease as a capital lease for financial accounting purposes. Her determination that it was a capital lease was based on her finding that the life of the lease was equal or greater than 75 percent of the economic life of the hotel and that the net present value of the cash flows were greater or equal to 90 percent of the fair value of the asset. The expected useful life of the hotel was 40 years and the lease term was 30 years. The value of the hotel at the inception of the lease was 18.3 million dollars, and the value of the lease payments was 18 million. Ms. Lambert is not licensed in Florida. She has never conducted a Florida sales or use tax audit. From 1990 to the time of her deposition in 2002, none of Ms. Lambert's practice has related to Florida sales and use tax matters. She does not consider herself an expert in any aspect of Florida tax law. Linda Bridges, an attorney with over 20 years' experience in tax law, opined that for the purposes of Chapter 212, Florida Statutes, the Lease was a true lease and not a capital lease or sale. Ms. Bridges is currently a revenue program administrator with the Department. She has worked for the Department since 1996 and is familiar with the Florida sales and use tax laws. In determining whether the Lease is a true lease or a sale in the form of a capital lease, she considers whether there is a purchase at the end of the term of the lease and whether it is for fair market value or for a nominal amount. If the property is to be purchased at the end of the lease for the fair market value, it is not generally viewed as a capital lease. WHI did not present any evidence that it paid the taxes that are being assessed to its landlord, Lincoln Island Associates, for payment to the Department.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered: Denying WHI's request for relief. Assessing the sales and use tax, indigent care surtax, penalty, and interest as set forth in the Notice of Reconsideration dated December 23, 1997. DONE AND ENTERED this 29th day of July, 2005, in Tallahassee, Leon County, Florida. S SUSAN B. HARRELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of July, 2005.
