City of Gainesville v. Crapo

• Decision Date: 12 February 2007
• Docket Number: No. 1D05-4253.,1D05-4253.
• Citation: 953 So.2d 557
• Parties: CITY OF GAINESVILLE, (the "City"), Appellant/Cross-Appellee, v. Ed CRAPO, as Property Appraiser for Alachua County, Florida, Von Fraser; as Tax Collector for Alachua County, Florida; Jim Zingale, as Director of the Florida Department of Revenue, Appellees/Cross-Appellant.
• Court: Florida District Court of Appeals

953 So.2d 557

CITY OF GAINESVILLE, (the "City"), Appellant/Cross-Appellee, v. Ed CRAPO, as Property Appraiser for Alachua County, Florida, Von Fraser; as Tax Collector for Alachua County, Florida; Jim Zingale, as Director of the Florida Department of Revenue, Appellees/Cross-Appellant.

No. 1D05-4253.

District Court of Appeal of Florida, First District.

February 12, 2007.

Rehearing Denied April 12, 2007.

Elizabeth A. Waratuke, Litigation Attorney, and Marion J. Radson, City Attorney, Gainesville, for Appellant/Cross-Appellee.

Steven L. Brannock of Holland & Knight, LLP, Tampa, Amicus Brief of the Florida League of Cities, Inc. and the Cities of Lakeland, Orlando, St. Petersburg, and West Palm Beach.

Bill McCollum, Attorney General, and Nicholas Bykowsky, Assistant Attorney General, Tallahassee, for Appellee/Cross-Appellant the Florida Department of Revenue; Sherri L. Johnson and John C. Dent, Jr. of Dent & Johnson, Chartered, Sarasota, for Appellee/Cross-Appellant Ed Crapo.

Donna E. Blanton and Susan F. Clark of Radey, Thomas, Yon & Clark, P.A., Tallahassee, Amicus Curiae Brief of the Florida Telecommunications Industry Association Supporting the Appellees/Cross-Appellant(s).

LEWIS, J.

Appellant/Cross-Appellee, the City of Gainesville ("City"), appeals the trial court's order granting final summary judgment partially in favor of appellees/cross-appellants, Ed Crapo, as Property Appraiser for Alachua County, Florida, Von Fraser, as Tax Collector for Alachua County, Florida, and Jim Zingale, as Director of the Florida Department of Revenue ("Department"), arguing that the trial court erred in finding that nine of its communication towers and its "Deerhaven Property" were subject to ad valorem taxation. On cross-appeal, Crapo and the Department argue that the trial court erred in granting final summary judgment in favor of the City with regard to its fiber optic network and internet equipment because that property is not exempt from ad valorem taxation pursuant to article VII, section 3(a) of the Florida Constitution. For the reasons expressed herein, we affirm the trial court's ruling as to the communication towers and Deerhaven Property but reverse its conclusion as to the fiber optic network and internet equipment and remand for further proceedings consistent with this opinion.

On December 8, 2003, and December 6, 2004, the City filed suit against appellees/cross-appellants, seeking a declaratory judgment that certain property was exempt from ad valorem taxation. Specifically, the City asserted that in 2003 and 2004, ad valorem taxes were erroneously imposed on nine of its communication towers, its fiber optic network and internet service provision equipment, and its "Deerhaven Property." The City contended that all of the property at issue was exempt pursuant to article VII, section 3(a) Florida Constitution and section 196.199, Florida Statutes, because it was used for a municipal or public purpose. The cases were eventually consolidated for purposes of summary judgment. On May 11, 2005, the City filed a Motion for Summary Judgment, arguing that it was entitled to judgment as a matter of law because there was no genuine issue of material fact "that the City's property is used by it for a municipal or public purpose and thus is exempt from ad valorem taxation." In support of the motion, the City filed affidavits of David Richardson, Edward J. Regan, Jr., Ann Mullins, and Ed Hoffman.

The affidavits of David Richardson, the System Planning Director for the City's utility system, which does business as Gainesville Regional Utilities ("GRU"); Edward J. Regan, the Assistant General Manager for Strategic Planning for GRU; and, Ann Mullins, a land rights coordinator who represented the City in the purchase of the Deerhaven Property, indicate that the City purchased the property to serve as a buffer between its Deerhaven Generating Plant and residential development in the surrounding area and to accommodate future retrofitting or expansion of the plant. Mullins' affidavit further indicates that the City's staff decided that it did not need to purchase a timber operation that existed on the property because the timber did not interfere with the use of the land as a buffer or with the City's plans for future expansion of the plant. Thus, the City purchased the Deerhaven Property in fee simple but did not purchase the timber or timber rights on it, although it retained the first right to do so in the deed and can do so when the timber and timber operation become inconsistent with its use. Although the City was aware the timber company leased hunting rights on the property to a local hunt club, it did not ask the timber company to break the lease because it also did not interfere with the City's use of the property as a buffer.

The affidavit of Ed Hoffman, the acting director of the City's communication utility, which operates under the name "GRUCom," indicates because the City's communication towers can hold more antennas than those required "for City purposes" and to foster the availability of personal communication services, the City entered into lease agreements with several private Personal Communication Service ("PCS") providers that allow them to place antennas on the towers. The affidavit describes the uses of each of the towers as follows: (1) the "Depot Tower" holds one public use antenna that is used by the City's Regional Transit System, is of strategic importance for future public safety uses because of its location, and holds antennas of one PCS provider; (2) the "Sugarfoot Tower" holds two public use antennas that are used by the City's fire and police departments and antennas of two PCS providers; (3) the "Ft. Clarke Tower" supports one public use antenna, which is not currently used by the City but will be reactivated in the future, and antennas of two PCS providers; (4) the "Parker Road Tower" holds one public use antenna that is used by the City's fire rescue department and antennas of one PCS provider; (5) the "Millhopper Tower" is the prime switching site for the City's Trunked Radio System ("TRS"), the primary radio communication system for various public safety and government agencies, and holds the Electric System Control Center, which performs energy management activities, five TRS antennas, five other public use antennas, and antennas of six PCS providers; (6) the "Springhill Tower" supports five public use antennas, three of which are used by the City's fire department and two of which are used by its police department, and antennas of seven PCS providers; (7) the "39th Avenue Tower" does not currently support any public use antennas, although it is planned that a repeater antenna will be installed on it as a backup for the TRS and for other miscellaneous functions, is located in a strategic area near the airport, which makes it an important asset for future expansion of communications capacity, and holds antennas of three PCS providers; (8) the "UF Foundation Tower" supports two public use antennas used by GRU and antennas of five PCS providers and contains space reserved for use by the University of Florida; and (9) the "McMichen Tower" does not support any public use antennas as the public antenna located on the original tower was damaged and removed after the original tower was replaced in 2001 with a tower capable of more antenna loading, is located close to the airport and the City's primary water plant and well fields, and holds antennas of one PCS provider. There are also future plans to install an antenna "to provide improved [TRS] communications capabilities for public safety aviation units" on the McMichen Tower. Hoffman's affidavit further indicates that the City's fiber optic network and internet service provisioning equipment were used both to provide critical municipal services to the City and other government agencies and to provide telecommunication services to the public at a cost.

Crapo subsequently filed a Motion for Final Summary Judgment, asserting that he was entitled to judgment as a matter of law because there was no genuine issue of material fact that the property at issue was not being used exclusively by the City for a municipal or public purpose on January 1 of 2003 or 2004. The Department also filed a Motion for Summary Judgment, arguing that the City's commercial and proprietary use of the property conclusively established that it did not qualify for the article VII, section 3(a) exemption because it was not exclusively used for a municipal or public "governmental-governmental" purpose.

Along with its motion, the Department filed the transcript of the deposition of Ed Hoffman, wherein he testified that the antennas of the private PCS providers took up more of the usable space on the communication towers than the City's antennas and that some of the towers had been rebuilt to hold the antennas of PCS providers. Hoffman acknowledged that if they only needed to hold the City's antennas the towers would not need to be as structurally sound as they had to be to hold the PCS antennas.

Following a hearing on the motions for summary judgment, the trial court issued the Order on Motions for Final Summary Judgment and Final Judgment that is at issue on appeal. The court granted in part and denied in part each of these motions for summary judgment. With regard to the fiber optic network and internet equipment, the court found "that in today's highly technological society, the communications services provided by the City, just as with electricity and water, constitute a basic and essential utility service," noting the provision of utility services by a municipality has long been held to serve a public purpose and Florida courts have consistently found the property of a municipal electric utility exempt from ad valorem taxation. Because it found "no real difference" between the provision of electricity and water and the provision of telecommunications...