Valencia Center, Inc. v. Bystrom
| Decision Date | 27 April 1989 |
| Docket Number | No. 72548,72548 |
| Citation | 14 Fla. L. Weekly 222,543 So.2d 214 |
| Parties | 14 Fla. L. Weekly 222 VALENCIA CENTER, INC., Appellant, v. Franklin B. BYSTROM, etc., et al., Appellees. |
| Court | Florida Supreme Court |
John G. Fletcher, South Miami, for appellant.
Robert A. Ginsburg, Dade County Atty., and Craig H. Coller and Daniel A. Weiss, Asst. County Attys., Miami, for appellees.
Arthur J. England, Jr. and Charles M. Auslander of Fine, Jacobson, Schwartz, Nash, Block & England, Miami, amicus curiae, for Intern. Council of Shopping Centers.
We have on appeal Valencia Center, Inc. v. Bystrom, 526 So.2d 707 (Fla. 3d DCA 1988), in which the district court found section 193.023(6), Florida Statutes (1987), unconstitutional. We have jurisdiction. Art. V, § 3(b)(1), Fla. Const. We affirm.
This case presents two issues: whether section 193.023(6) is constitutional, and whether the property appraiser arrived at a proper assessment for shopping center property for the years 1981, 1982, 1984, and 1985. We hold that the statute is unconstitutional and that the property appraiser correctly arrived at a proper assessment.
Valencia Center owns real property developed for use as a shopping center. Current zoning allows office buildings up to thirteen stories high and neighboring properties have been developed for such use. Valencia attempted to develop the property at issue for thirteen-story use but was precluded from doing so by a judicial determination that a pre-1965 lease to Publix Supermarkets, which is highly favorable to Publix, restricts development. Active market demand indicates the property's highest and best use is for thirteen-story buildings, and throughout the tax years in question, the appraiser has based his assessment of the property's value on recent sales of comparable properties zoned for thirteen-story use. Were the assessment to be based on the property's current use as a shopping center and the income from the lease to Publix, the assessment undoubtedly would be reduced. This dispute has been ongoing and, during its course, the 1986 legislature enacted section 193.023(6), which provides:
(6) In making his assessment of improved property which is subject to a lease entered into prior to 1965 in an arm's length, legally binding transaction, not designed to avoid ad valorem taxation, and which has been determined by the courts of this state to restrict the use of the property, the property appraiser shall assess the property on the basis of the highest and best use permitted by the lease and not on the basis of a use not permitted by the lease or of income which could be derived from a use not permitted by the lease. This subsection shall apply to all assessments which are the subject of pending litigation.
Our decision on the constitutionality of this statute is controlled by Interlachen Lake Estates, Inc. v. Snyder, 304 So.2d 433 (Fla.1974). There, we determined that the legislature cannot establish different classes of property for tax purposes other than those enumerated in article VII, section 4 of the Florida Constitution, which provides:
Section 4. Taxation; assessments.--By general law regulations shall be prescribed which shall secure a just valuation of all property for ad valorem taxation, provided:
(a) Agricultural land or land used exclusively for non-commercial recreational purposes may be classified by general law and assessed solely on the basis of character or use.
(b) Pursuant to general law tangible personal property held for sale as stock in trade and livestock may be valued for taxation at a specified percentage of its value, may be classified for tax purposes, or may be exempted from taxation.
The statute in issue in Interlachen provided a favored taxing standard for unsold lots in platted subdivisions. Section 193.023(6) in the instant case creates a similar favored classification for property that is subject to a pre-1965 lease. This is an "unreasonable and arbitrary" classification. Interlachen, 304 So.2d at 435. Section 193.023(6), therefore, is unconstitutional.
While the legislature cannot arbitrarily classify property for favored tax treatment, it can establish the just valuation criteria that are to be applied to all property. Id. at 434. To accomplish this, the legislature has enacted section 193.011, which provides:
193.011 Factors to consider in deriving just valuations.--In arriving at just valuation as required under s. 4, Art. VII of the State Constitution, the property appraiser shall take into consideration the following factors:
(1) The present cash value of the property, which is the amount a willing purchaser would pay a willing seller, exclusive of reasonable fees and costs of purchase, in cash or the immediate equivalent thereof in a transaction at arm's length;
(2) The highest and best use to which the property can be expected to be put in the immediate future and the present use of the property, taking into consideration any applicable local or state land use regulation and considering any moratorium imposed by executive order, law, ordinance, regulation, resolution, or proclamation adopted by any governmental body or agency or the Governor when the moratorium prohibits or restricts the development or improvement of property as otherwise authorized by applicable law;
(3) The location of said property;
(4) The quantity or size of said property;
(5) The cost of said property and the present replacement value of any improvements thereon;
(6) The condition of said property;
(7) The income from said property; and
(8) The net proceeds of the sale of the property....
§ 193.011, Fla.Stat. (1987).
This Court has found that the just valuation at which property must be assessed under the constitution and section 193.011 is synonymous with fair market value, i.e., the amount a purchaser, willing but not obliged to buy, would pay a seller who is willing but not obliged to sell. Walter v. Schuler, 176 So.2d 81 (Fla.1965). In arriving at fair market value, the assessor must consider, but not necessarily use, each of the factors set out in section 193.011. Oyster Pointe Resort Condominium Ass'n v. Nolte, 524 So.2d 415 (Fla.1988). The particular method of valuation, and...
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