Pasco County’s legal team has sent letters to representatives of two apartment developments that the county intends to sue them, if the apartment complexes seek to invoke tax exemptions authorized through the state’s Live Local Act.
David Goldstein, chief assistant county attorney, sent letters dated Feb. 7 to representatives of Passco Cypress Creek DST and to Trinity Odessa Apartments LLC.
In the letter, Goldstein advises the representatives that the county is aware that each entity has filed an application with the Florida Housing Finance Corporation for a certification notice, which is a preliminary step in applying for a property tax exemption under the Live Local Act.
Goldstein also tells the representatives that Pasco County views the Live Local Act as being unconstitutional. He warns the apartment representatives that if they seek to invoke the exemption permitted under Live Local, the county will take them to court.
Goldstein’s letter contends the Live Local Act is unconstitutional because it grants a tax exemption to entities “that are not charitable organizations” and “that are not engaging in any act of charity.”
The county also argues that the Live Local Act “effectively authorizes the expenditure of public ad valorem revenues for a private purpose.”
Plus, the letter argues the exemption “unconstitutionally impairs Pasco County’s contractual obligations to repay its general obligation bonds.”
In addition to the constitutional issues, the letter points out that the exemption will jeopardize the county’s ability to provide essential public services.
Each letter essentially says the same thing, but in the case of Passco Cypress Creek, it notes that the rent of $2,047.50 for a two-bedroom apartment is not affordable for a sheriff’s deputy, firefighter or school teacher.
Goldstein makes the same argument relating to Trinity Odessa Apartments LLC, but in that instance, the attorney says the rent for a two-bedroom apartment of $2,025 is not affordable for a sheriff’s deputy, firefighter or school teacher.
In each letter, Goldstein advises the representatives that the Pasco County Commission has authorized its legal team “to file a declaratory judgment against any entity seeking to invoke the Live Local Property Tax Exemption.”
In each letter, Goldstein adds: “To avoid the time and expense of litigating the Live Local Property Tax Exemption with Pasco County, and to avoid the negative impact on essential public services, we strongly urge you to withdraw (or not file) an application for the Live Local Property Tax Exemption.”
Goldstein also attached a complaint for declaratory judgment and supplemental injunctive relief to each letter.
He told the representatives that if they pursue tax exemption, the county will immediately file the attached documents for legal action.
Goldstein’s letters are just the latest effort in the county’s battle to fight potential impacts from the Live Local Act.
Elected leaders have been ringing alarm bells about the potentially dire consequences the tax exemptions could have on county revenues.
The Live Local Act, adopted by the Legislature last year, aims to increase workforce housing across the state by allowing the conversion of land zoned for commercial, industrial or mixed uses into multifamily developments — provided the project serves people who meet income criteria.
The law also preempts local government from blocking the developments and it allows a tax exemption for newly constructed or substantially rehabilitated developments that meet criteria for setting aside units for households earning 120% of Area Median Income (AMI).
The law’s intent was to make housing affordable to enable workers to live and work in the same community.
In Pasco’s case, 120% AMI means apartment developments charging market rate, or above market rate, could qualify for the exemption, elected leaders have said, during previous discussions of the issue.
They also have argued that the law undermines the county’s persistent attempts to bring more jobs to a county that has long played a bedroom community role for nearby jobs-rich counties.
Seven out of 10 members of Pasco’s workforce commute elsewhere for their jobs.
The Pasco County Commission has been focused on efforts to bring jobs closer to home for its residents through its policy decisions that protect industrial and commercial lands from being converted to residential uses.
Based on a calculation for the two apartment complexes that have applied to convert to Live Local, the county would lose about $38 million in lost tax revenues, Goldstein reported at a recent county board meeting. Plus, the attorney said, that could just be the tip of the iceberg, if other apartment complexes seek the exemption.
Other taxing bodies, such as the school board, would also feel the impacts.
The issue came up at the Pasco County School Board’s Feb. 6 meeting, when board member Alison Crumbley briefed her colleagues on the issue.
She likened the potential negative financial impacts to a “tsunami.”
Betsy Kuhn, assistant superintendent for school support services, said the school district is pursuing possible changes to lessen potential effects on district revenues.
Published February 14, 2024
