A special master on the county's Value Adjustment Board has ruled Vivendi Universal's 1,800 prime undeveloped acres near the four-million-sf Orange County Convention Center can no longer be classified as "agriculture" land and qualify for a lower annual property tax bill. Donegan's office maintains that although Universal is growing pine trees on the land, the entire parcel is actually being groomed for new development or re-sale to a third party. Universal vigorously denies that argument.
The special master's ruling means Universal's taxes on the dirt near hotel row in the International Drive tourist corridor will rise to $1.8 million from $390,000. A Universal representative tells GlobeSt.com the company will appeal the ruling to the full five-member Value Adjustment Board in February. If the ruling is upheld, Universal is expected to sue Donegan and the county in state Circuit Court, real estate lawyers intimate with comparable issues tell GlobeSt.com.
And if the Universal land controversy reaches state court, area industrial brokers tell GlobeSt.com the lawsuit could affect the December sale of the 1,800 acres to Thomas Enterprises of Smyrna, GA. Although Universal declines to disclose terms of the deal, area brokers in a position to know tell GlobeSt.com shopping center developer Stan Thomas paid Universal about $70 million, or $38,889 per acre, for the tract along Sand Lake Road near Universal Boulevard, as GlobeSt.com previously reported.
Donegan previously won similar tax assessment tussles against Hilton Hotels Corp., Hyatt Hotels Corp., 5226 Hotard Co. and locally based RH Resorts, the largest privately held hotel chain in Florida.
Instead of paying $41,000 annually on a 44-acre undeveloped tract where it is also growing pine trees, Hyatt will be charged $1 million per year. Hilton will be paying $432,000 instead of $216 per year on 26 acres. Hilton and Hyatt bought their land seven years ago from Universal for $1 million per acre, according to Orange County real estate records. RH Resorts, headed by hotelier Harris Rosen, will be taxed at $467,000 annually instead of $26,812 on its 230 undeveloped acres. All three tracts are near the Convention Center whose two million sf of exhibit space is considered among the largest in the US.
Sierra Florida Properties, the sixth card on Donegan's hit list, faces an annual tax hike to $300,000 from $300 on two smaller parcels in the International Drive corridor.
If he is victorious in all of the battles, Donegan will have added about $4.5 million in revenue to the county's treasury, his office tells GlobeSt.com.
Donegan tells GlobeSt.com he was not on a specific mission to battle developers when he took office six years ago. "The integrity of the agriculture zoning was at stake," Donegan says. "When I was first asked to look at these properties, I saw that development had already started. Roads were being built Land was being sold off. Infrastructure was being put in place. I said to the developers, 'Hey, fellas. There isn't any farming going on here. This is commercial development.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
