hile most Florida homeowners are itching for a break on their property taxes, Fisher Island’s wealthy residents have been getting breaks for years.
Residents of the exclusive island at the foot of South Beach have gotten accustomed to challenging the property appraiser’s assessments before the Miami-Dade County Value Adjustment Board —and saving big on property taxes.
The assessment cuts approved by the county board have translated to $15.2 million in lost tax revenue from 2002 to 2005, according to a report by Service Employees International Union Local 11, which is trying to organize island workers.
The tax-trimming strategy extended into the 2006 tax year as island homeowners filed more than 540 petitions with the board to challenge their property valuations.
“Every American has a right to appeal his property taxes, and many Americans choose to do so. The people of Fisher Island paid $21.5 million in property taxes last year and received virtually no services from the county,” Fisher Island Community Association president Mark James said. “We have no apologies for our right to appeal our property taxes.”
The SEIU report also estimated property taxes that would have been paid by Fisher Island homeowners without valuation appeals under a formula calculating property appreciation and the island’s millage rate.
Island residents have successfully appealed assessments and lowered their cumulative assessed property values more than $965 million below what SEIU estimates the actual values would have been without appeals.
The actual property tax bill was subtracted from the amount calculated by SEIU by applying a 3 percent annual increase to homesteaded properties and the average annual increase in single-family home values in the Miami area to nonhomesteaded properties.
Based on the report’s methodology, the Fisher Island residents who got the most out of their appeals were retired investment banker George Collins and wife Maureen for their three-bedroom, 6,820-square-foot condo in Oceanside at Fisher Island. SEIU estimated $183,384 in lost tax revenue for their unit from 2002 to 2005.
Other Oceanside owners, Jeffrey and Margaret Arnold, saved $158,289 in the same period. Jeffrey Arnold is a former co-chief executive officer of WebMD.
There were no listed phone numbers for the Collinses and the Arnolds.
The median assessed property value for nonhomestead properties rose 14 percent on the island while the value of nonhomestead Miami-area homes rose 90 percent in the same time frame, according to the report.
Fisher Island residents are still pursuing valuation appeals for their 2006 taxes.
All 38 units of Oceanside at Fisher Island Condo No. 5 went before the VAB on April 2. Reductions were approved for 24 condos, resulting in a combined cut in assessed value of $7.24 million and an average assessment cut of $190,526.
The reasons for granting reductions were comparable sales and units having their views permanently restricted.
The Oceanside condo with the largest reduction was a three-bedroom unit owned by Villa Del Mare Realty. The county board cut the assessment 9.7 percent from $6,377,750 to $5,760,500. Villa Del Mare’s company manager is Leon Cohen, president of Miami Beach-based Knowledgeware and founder of Cortex Telecom. Cohen received a 3.4 percent reduction in value for the 2005 tax year. A message for comment was not returned before deadline.
The 2006 value of the Oceanside unit owned by Craig J. Duchossois, chief executive of Elmhurst, Ill.-based Duchossois Industries, was reduced $477,810 to $5,495,200, according to a review of county records. A voicemail system at the company did not accept messages Tuesday.
Gary A. Appel of Garth Realty, an attorney representing all of the Oceanside units, had no comment on the Fisher Island tax appeals. He has made a cottage industry out of valuation appeals for island owners.
Several Fisher Island residents who appealed their tax assessments could not be reached for comment before deadline. A call to the island’s club was not returned before deadline.
James L. Riley, a special magistrate who oversaw the Oceanside petitions, could not be reached for comment by deadline.
“Your average homeowner doesn’t know about the system” of tax appeals, said Hiram Ruiz, deputy director of the SEIU local. “If your property taxes went up … you aren’t going to be able to afford an attorney.”
Owners can challenge their assessed value either through an informal conference with the county property appraiser or petition the VAB for a reduction.
The board is composed of County Commissioners Joe Martinez, Audrey Edmonson and Javier Souto and school board members Agustin Barrera and Robert Ingram, who appoint a special magistrate to oversee the petitions. The county has 19 real estate appraisers and seven attorneys serving as magistrates.
Property owners have 25 days to file a $15 appeal petition after receiving their annual notice of proposed property taxes. In cases where joint petitions are filed by condo associations, the fee is $5 per property folio.
A total of 49,577 appeals were filed with the VAB for the 2006 tax year, according to board manager Robert Alfaro. About 32,000 had been heard by the end of May.
A 2005 performance audit by the state auditor general found more petitions were filed in Miami-Dade than any other Florida county.
About 40 percent of the petitions end up with reductions, Alfaro said. Based on that percentage, reduced values for 2006 would be approved for about 19,831 Miami-Dade properties.
About 1 percent of the petitions are filed by Fisher Island owners even though the make up only less than 0.06 of a percent of the county’s population. About 76 percent of Fisher Island properties filed appeals at least once from 2002 to 2005, according to the SEIU report.
Of 750 Fisher Island residential properties found on the county appraiser’s Web site, more than 500 appeals for the 2006 tax year are still pending before the VAB. Most are set for hearings June 27.
Appel is handling more than 90 percent of the Fisher Island petitions, Alfaro said.
Only a handful of island residents are scheduled to make personal appearances before the board. These include Miami developer Homero Meruelo and Mark D. Coe, president of Coe Capital Management in Lincolnshire, Ill. A call to Meruelo’s office reached a full mailbox Tuesday. Coe did not respond to a message before deadline.
There is a maximum reduction permitted depending on assessed values, and the property appraiser may appeal decisions exceeding that amount. For instance, if a property is worth more than $1 million and the VAB cuts the valuation more than 5 percent, the property appraiser is allowed to challenge the board’s decision in Miami-Dade Circuit Court.
SEIU found 85 instances of valuation cuts of more than 5 percent on Fisher Island homes worth more than $1 million from 2002 to 2005. Two dozen Oceanside units received cuts, and all but two assessments were cut by more than 5 percent.
“If the VAB allows a reduction, the PA [property appraiser] determines within the context of its limited resources which reductions to challenge. Challenges are often lengthy and invariably expensive. As such the [property appraiser’s office] has to consider the cost effectiveness and the chances of mounting a successful challenge,” Patrick Smikle, spokesman for the appraiser’s office, wrote in an e-mail.
In 2005, the board approved 11,850 valuation reductions. Of those, 6,578 met the statutory requirements for challenge, but the appraiser’s office challenged only 105 of them, Smikle said.
SEIU analyzed assessments while organizing Fisher Island workers and has threatened to file an unfair labor practice complaint with the National Labor Relations Board over the firing of a restaurant worker who supported the union organizing effort.
“On the island we are working for people, rich people, but they don’t give us enough to survive,” Fisher Island worker Cristiana Monestine said at an SEIU news conference last week.
She earns $8.50 an hour and is one of the few Fisher Island workers who owns her home. Her property taxes increased about $300 last year.
“For the system to be used by our wealthiest residents to get out of paying their fair share is unfair to the rest of us,” Ruiz said.