More Lawsuits Filed Over Florida Property Taxes

The Walt Disney Company recently filed another wave of lawsuits over rising tax valuation of its properties in Orange County Florida.  

Disney's Animal Kingdom Lodge

Disney's Animal Kingdom Lodge

The Orlando Sentinel reports that Disney filed nearly a dozen new lawsuits in May 2017, challenging the manner in which Orange County Appraiser Rick Singh is assessing property values throughout Walt Disney World Resort.  His methods of valuing property at Walt Disney World, Universal Orlando and other resort areas has come under fire, culminating in legal action from the impacted parties.  Disney, Universal and Sea World of Florida had previously filed suits challenging the 2015 tax valuations for their property.  

The valuation changes not only impact the small amount of Walt Disney World land covered by Disney Vacation Club dues, but thousands of acres of hotel and theme park property for which Disney itself must pay the tax bill.  Among the locations being challenged are the Magic Kingdom (valued at $437 million), Epcot ($446 million), Disney's Hollywood Studios ($339 million), Disney's Animal Kingdom Lodge ($153 million) and Disney's Caribbean Beach Resort ($209 million.)

In previous reports, DVCNews.com has detailed how the tax values on Disney Vacation Club resorts have risen, particularly over the period of 2014 to 2016.  Many properties have seen their tax assessments rise 10% annually over the 3 year period.  Property taxes are an element of the DVC Annual Dues, resulting in the increases being passed along to owners.  

Universal and its hotel partners are similarly challenging valuations on their four hotels: Cabana Bay, Hard Rock, Portofino Bay and Royal Pacific.

Challenges to property values are not uncommon.  Disney has a history of working with county officials to negotiate and adjust initial determinations before the rates are finalized.  However, at the heart of this dispute is Singh's unique methodology which differs from his predecessors.  

The Sentinel quotes a Disney spokesperson as saying "[t]he increases in the assessments of our property are unreasonable and unjustified." Singh was elected to the County Appraiser post in 2012 with voters granting him a second term in November 2016.

Source:  Disney sues over property assessments for Magic Kingdom, other properties

Reader Comments
Re: More Lawsuits Filed Over Florida Property Taxes -- wdrl
2017 Jun 23 12:05:17 PM
I won't pretend that I understand all the legal issues being disputed by the Orange County Property Appraiser (OCPA) and Disney. The issues are now in the courts and the courts will settle the disputes. But here are some opinions I have about these disputes.

I actually prefer that the disputes might be settled in court. The previous head of the OCPA stated he was reluctant to sue corporations like Disney, preferring instead to settle issues out of court. In a way that sounds good, but I wonder how many times there were backroom deals made between the appraiser and the corporations he was suppose to be appraising. At least if the Court issues a decision, the settlement will be a public record for everyone to see.

If Disney thinks it might lose the court cases, I expect it will quickly seek relief from friendly members of the Florida legislature. Look no further than the interesting tax laws that Florida has enacted that have favored the Holy Land Experience theme park if you want to see what a sympathetic legislature might do.

I find it ironic that Disney is suing the entities that establish the mill levies as well as OCPA. OPCA sets the appraisal values, but its Reedy Creek Improvement District, among others, that actually sets the tax rate for the Disney properties. RCID works independently of Disney, but everyone who can vote in RCID elections are tied directly to Disney. At one time I read there are less than 20 registered voters who are eligible to vote in RCID elections and every one is appointed or selected by Disney. So, Disney is sort of suing its own people.
Re: More Lawsuits Filed Over Florida Property Taxes -- kazrak
2017 Jun 23 02:12:00 PM
wdrl wrote:
I find it ironic that Disney is suing the entities that establish the mill levies as well as OCPA. OPCA sets the appraisal values, but its Reedy Creek Improvement District, among others, that actually sets the tax rate for the Disney properties. RCID works independently of Disney, but everyone who can vote in RCID elections are tied directly to Disney. At one time I read there are less than 20 registered voters who are eligible to vote in RCID elections and every one is appointed or selected by Disney. So, Disney is sort of suing its own people.

It's probably not the RCID taxes that they're upset about - they can set that to whatever they want. I don't have any experience with Florida property tax bills, but all the ones I've had in California and Arizona have about 10 different taxing authorities involved - city, county, water district, school district, fire district, community college district, what have you. Then there's any special assessments on top of that, for school bonds or whatever. And all of those are based on OCPA-set property values, at mill rates Disney doesn't control.

Now, here's the problem I can see for them. It's hard to argue that the value of the property isn't going up when they keep increasing its sale price. As per-point prices go up, even for older resorts...well, clearly they think the resort is worth more. Good luck convincing the county that it, in fact, is not.
Re: More Lawsuits Filed Over Florida Property Taxes -- KNWVIKING 2.0
2017 Jun 23 02:30:48 PM
Property Tax isn't determined by the value of the property. The value of the property is determined by the required tax revenue.

What is Orange doing that requires additional taxes? Building new schools? Fire halls? Adding police? Are they offering home owners relief at the expense of business?

In Atlantic City, the Casinos fought their tax assessment and won rebates in the $100's of millions, pretty much bankrupting A.C.
Re: More Lawsuits Filed Over Florida Property Taxes -- kazrak
2017 Jun 23 03:07:31 PM
KNWVIKING 2.0 wrote:
Property Tax isn't determined by the value of the property. The value of the property is determined by the required tax revenue.

Depends where you are. California's Proposition 13 has basically set it so the property tax is solely determined by the value of the property at the last time it was sold. (Because there's a hard cap on the mill rate, and they can only reassess in certain specific circumstances - property transfer being the big one.)

It looks like the issue here is that the new assessor is valuing theme park and resort property at a higher rate than it used to be. (It's not just Disney - Universal and Sea World are suing as well.) It's an interesting problem - how do you set a value on Epcot? It could be that he's arbitrarily setting the values too high, or that his predecessor was setting it too low.

But with the DVC properties...well, the article says tax assessments have gone up 10% over the 3-year period from 2014 to 2016. VGF was $150/point on January 1, 2014, and $180/point on December 31, 2016 - an increase of 20%. AKV went from $150/pt to $160/pt in the same time period, a 6.7% increase. (Historical prices from dvcinfo.com; these are direct purchase prices, not resale.)
Re: More Lawsuits Filed Over Florida Property Taxes -- KNWVIKING 2.0
2017 Jun 23 03:29:43 PM
kazrak wrote:
Depends where you are. California's Proposition 13 has basically set it so the property tax is solely determined by the value of the property at the last time it was sold. (Because there's a hard cap on the mill rate, and they can only reassess in certain specific circumstances - property transfer being the big one.)

So if I bought my home in 1965, my property value is locked in until I sell it?

I bought my home in Jersey in 1990 and it had an assessed value and my property taxes were X cents per $100.00 assessment. My assessed value remained static for nearly 20 years but X cents became X + a + b + c .....

About 5-8 years ago the city actually paid to have each home physically appraised - people went door to door inspecting, measuring, etc.

While my property value nearly doubled, my X+ cents were cut way back to actually X-. End result is my - and most other - home owners saw a little reduction in rates. Flip side is every business in town was screaming bloody murder. Sounds like something similar is happening in Orange County.

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