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Treasure Coast Marina, LC, v. The City of Fort Pierce

Supreme Court of Florida

June 15, 2017

TREASURE COAST MARINA, LC, etc., et al., Petitioners,
v.
THE CITY OF FORT PIERCE, FLORIDA, etc., et al., Respondents.

         NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND IF FILED, DETERMINED.

         Application for Review of the Decision of the District Court of Appeal - Certified Great Public Importance Fourth District - Case No. 4D14-3064 (St. Lucie County)

          Brigid F. Cech Samole of Greenberg Traurig, P.A., Miami, Florida; and Jerry Stouck of Greenberg Traurig, LLP, Washington, District of Columbia, for Petitioners

          Robert V. Schwerer and James T. Walker of Hayskar, Walker, Schwerer, Dundas & McCain, P.A., Fort Pierce, Florida, for Respondents City of Fort Pierce and Fort Pierce Redevelopment Agency Loren E. Levy and Jon F. Morris of The Levy Law Firm, Tallahassee, Florida, for Respondent Ken Pruitt, St. Lucie County Property Appraiser

          Harry Morrison, Jr., and Kraig Conn of Florida League of Cities, Tallahassee, Florida; and Benjamin K. Phipps of Phipps & Howell, Tallahassee, Florida, for Amicus Curiae Florida League of Cities

          LEWIS, J.

         This case is before the Court for review of the question certified in the decision of the Fourth District Court of Appeal in City of Fort Pierce v. Treasure Coast Marina, LC, 195 So.3d 1141 (Fla. 4th DCA 2016). Our review involves consideration of the exemption from ad valorem taxation contained in article VII, section 3(a), of the Florida Constitution that applies to property owned and used exclusively by municipalities for municipal or public purposes. Specifically, in Treasure Coast Marina, the district court ruled upon the following question, which the court certified to be of great public importance:

IN LIGHT OF FLORIDA DEPARTMENT OF REVENUE V. CITY OF GAINESVILLE, 918 So.2d 250 (Fla. 2005), DOES A MUNICIPALLY OWNED AND OPERATED MARINA STILL QUALIFY AS A TRADITIONALLY EXEMPT "MUNICIPAL OR PUBLIC PURPOSE" UNDER ARTICLE VII, SECTION 3(a) OF THE FLORIDA CONSTITUTION?

Id. at 1147. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const. We answer this question in the affirmative and approve the decision below.

         FACTUAL BACKGROUND

         This case commenced on October 28, 2011, when the owners of a private marina filed a complaint challenging the tax-exempt status of the Fort Pierce City Marina and the Fisherman's Wharf Marina. Because the marinas were respectively owned by the City of Fort Pierce and the Fort Pierce Redevelopment Agency, the complaint was filed against those entities (collectively "the City"); the St. Lucie County Tax Appraiser (the Property Appraiser); and the Executive Director of the Florida Department of Revenue (the Department of Revenue). The plaintiffs who filed the complaint, Treasure Coast Marina, LC; Raincross Holdings, LC; and Riverfront Developers, LC (collectively "Riverfront"); own and operate a private marina in Fort Pierce which is subject to ad valorem taxation. Of relevance here, Riverfront's amended complaint seeks declaratory and injunctive relief on the basis that the Property Appraiser unconstitutionally granted ad valorem tax exemptions during tax years 2011, 2012, and 2013 to the two marina properties owned and operated by the City.

         Following discovery, cross-motions for final summary judgment were filed and the parties conceded that there were no genuine issues of material fact. The trial court ruled in favor of Riverfront, concluding that neither of the City marinas qualified for the constitutional tax exemption. To reach this conclusion, the trial court determined that both City marina properties at issue were not used for a "municipal or public purpose, " and therefore, in its view the Property Appraiser unconstitutionally granted the exemptions at issue. The trial court applied an exceedingly narrow standard because it believed that we announced a new legal standard and discarded years of precedent when we issued our decision in Gainesville, 918 So.2d 250.

         The City and Property Appraiser jointly appealed to the Fourth District Court of Appeal. On appeal, the Fourth District reversed. Treasure Coast Marina, 195 So.3d at 1147. The Fourth District reasoned that this Court in Gainesville "did not change the legal standard for municipal purpose under article VII, section 3(a) of the Florida Constitution, and that it used the same definition of municipal or public purpose as in prior court opinions. Under this definition, municipal marinas are traditionally considered exempt from taxation." Id. at 1142-43. The district court further reasoned that:

[t]he marinas are open to public use, are exclusively owned and operated by the City, and provide recreation for local residents and support the local economy by attracting non-local residents. . . . Thus, not only do the City's marinas serve a purpose that has been repeatedly and explicitly recognized as a "municipal or public purpose, " they also operate specifically "for the comfort, convenience, safety, and happiness of the municipality's citizens[, ]" and serve the public purpose of developing recreational facilities in "increas[ing] trade by attracting tourists and [providing] recreation for the citizens."

Id. at 1146-47 (internal citations omitted). Noting the large boating community in Florida and the economic impact of tax exemptions for municipal marinas, the district court certified the question to this Court. Id. at 1147. This review follows.

         ANALYSIS

         We embark on our voyage by looking to the underlying constitutional provisions at issue, and because this case involves questions of constitutional law, our review is de novo. See Lewis v. Leon Cty., 73 So.3d 151, 153 (Fla. 2011). The first provision of note is contained in article VII, section 4, of the Florida Constitution, and it specifically requires that real property be subject to ad valorem taxation with certain exceptions that do not apply here:

By general law regulations shall be prescribed which shall secure a just valuation of all property for ad valorem taxation . . . .

Art. VII, § 4, Fla. Const. However, our Constitution also recognizes that certain properties owned and used exclusively by municipalities are constitutionally exempt from ad valorem taxation, pursuant to article VII, section 3(a), which provides in pertinent part:

All property owned by a municipality and used exclusively by it for municipal or public purposes shall be exempt from taxation.

Art. VII, § 3(a), Fla. Const.

         Seeking to eject the City's marinas from the safe harbor provided by that constitutional language, Riverfront attempts to transform the ripples from our decision in Gainesville into a landscape-altering tempest. Specifically, in challenging the exemptions historically applied to the City Marina and the Fisherman's Wharf Marina, Riverfront contends that in Gainesville we announced an entirely new, more restrictive standard for the application of the constitutional exemption. While Riverfront acknowledges that the definition of "municipal or public purpose" has not changed, it asserts that the Gainesville majority opinion changed application of the test by focusing on the word "essential." According to Riverfront, our focus on the word "essential" in Gainesville was new and represents a different and more narrow application of the tax exemption than is reflected in prior cases, which Riverfront considers to be an indication that prior precedent is no longer relevant.

         Although Riverfront's misplaced reliance on Gainesville is understandable given the nature of the facts, our discussion in Gainesville, and the fact that Gainesville emanated from this Court-our state's highest court-Riverfront loses its bearings by extrapolating Gainesville beyond its narrow confines onto areas of law that have been well-settled for years. In reality, our decision in Gainesville was no more than a passing wave in the vast ocean of ad valorem taxation precedent.

         As evidence of this truth, in Gainesville we explicitly noted the distinct circumstances we were reviewing. First, in Gainesville we did not have before us an as-applied challenge to the issuance of an exemption, but rather a facial challenge to a statute imposing ad valorem taxes on a municipality. 918 So.2d at 253. Thus, our review was limited to determining whether there were any circumstances under which the statute could be upheld. Id. at 256, 265. The statute in question authorized municipalities to provide telecommunications services for the first time but conditioned that authorization on a municipality paying ad valorem taxes on the relevant properties. See id. at 253-54. Prior to the statute authorizing municipalities to provide telecommunications services for the first time ever, the Public Service Commission was not authorized to issue such permits to a municipality. See id. Therefore, we recognized a second distinction by explicitly noting in Gainesville that we were analyzing the exemption in the context of a service that has historically been provided by the private sector rather than any traditional municipal function. Id. ...


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