My marina has to pay property taxes but yours doesn’t?

marinaDoes a marina serve a public purpose?  Does it matter if the marina is owned by a city or a private business owner?  The Fourth District Court of Appeal offered its thoughts on this issue a couple of weeks ago in City of Ft. Pierce, Florida v. Treasure Coast Marina, LC, No. 4D14-3064 (Fla. 4th DCA May 31, 2016).

The facts are straightforward.  The City of Ft. Pierce owns and operates two marinas.  St. Lucie County exempted both marinas from ad valorem taxes under the “municipal or public purpose” exception in the Florida Constitution.  Riverfront Developers, a private enterprise, owns and operates the Harbortown Marina.  The Harbortown Marina was not exemptedd from ad valorem taxes, so Riverfront sued to stop the exemption of the City’s two marinas.

Riverfront won in the trial court.  The trial judge ruled that the City’s marinas did not serve a public purpose because they had previously been private marinas and still competed with private marinas like Harbortown.  As a result, the trial court ordered that the City’s marinas not receive the tax exemption.

Things went differently on appeal.  The Fourth DCA reviewed several critical Florida cases about what constitutes a public purpose.  Ultimately, the court concluded that the City’s “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.”  The court reinstated the property tax exemption for the City’s marinas.

Because, however, “[t]here is a large boating community in Florida, supported by a large number of public, as well as private, marinas,” the court asked the Florida Supreme Court to chime in.  Specifically, the question that the Fourth DCA posed to the Florida Supreme Court is whether a municipally owned and operated marina qualifies under the “municipal or public purpose” exemption.  Stay tuned, marina owners.

  • Matthew R. Chait

    Matt Chait is the Managing Partner of the West Palm Beach office of Shutts & Bowen LLP, where he is a member of the Business Litigation Practice Group. His statewide practice focuses on commercial real estate and land use litigation ...

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