Balfour Beatty’s 111 apartments in Key West are exempt from property taxes because they are designated as U.S. Navy housing. But in a recent court filing, the Monroe County Property Appraiser alleged that Balfour Beatty rents 74 percent of those units to non-military tenants and should pay county property taxes.
By Steve Miller
Florida Center for Investigative Reporting
As the dispute between Monroe County and a private housing developer we wrote about earlier this month begins to move forward, we’ve received a number of tips from residents of the Keys. They’re concerned about the status of a major international corporation’s legal quest to dodge property taxes in Monroe County.
Balfour Beatty offshoot Southeast Housing filed a lawsuit last year in response to Monroe County’s effort to obtain $11.5 million in back taxes on property managed by Southeast.
Balfour Beatty is a multinational company with construction, infrastructure development and a number of other operations around the world and has a number of U.S. operations, such as the one in Key West.
The issue is that Balfour Beatty/Southeast, which among many other things manages residential property in this region for the U.S. military and is afforded governmental tax exemption, has allegedly been leasing some of those tax-exempt properties to non-military residents. There is no tax exemption for most companies doing that.
But when Monroe County tried to collect on units rented to non-military tenants, Balfour Beatty’s subsidiary responded with the lawsuit, which contends that it is afforded shelter from taxation as part of its connection to the military.
The most interesting information we received since the story was a court filing from last week by the Monroe County Property Appraiser, which claims that Balfour has rented to non-military tenants 74 percent of the property it maintains is sheltered as tax exempt. From the filing:
The Property is leased to both active Navy personnel and their families and other classes including non-military and civilian tenants. While the percentage of Navy occupants changes annually, there was 20% of active Navy tenants in 2008 and 26% of active Navy tenants in 2012. This is a stark comparison to the allegation of Plaintiff’s counsel that only one percent is occupied by non-Navy.
The filing is part of a motion for summary judgment, which itself is in response to Balfour’s motion for a summary judgment.
Balfour Beatty has at least 10 companies registered in Florida, most of them based in other states, including a construction firm in Dallas, an infrastructure hub in Atlanta, and corporate offices in Newtown Square, Penn.
Here is some coverage from some Keys locals, who are most decidedly against Balfour Beatty’s efforts to avoid local taxes.
Two bills in the legislature, HB 531 and SB 354, address the battle between Monroe County and Balfour Beatty’s subsidiary, Southeast, moving to give tax-exempt status to the multinational housing builder. The latter bill has passed.
Staff analysis contends that the fiscal impact of the bills is nothing — which is true at the state level.
“This currently is a U.S.-based operation building these houses with approximately 12,000 jobs that would be impacted if this legislation is not approved,” state Rep. Jimmy Patronis, R-Panama City, said during a debate on the house bill last week. He portrayed the legislation as support of the military and veterans.
But state Rep. Holly Raschein, R-Key Largo, said the bill “is about an international developer circumventing our tax structure at the cost and to the detriment of our schools and our first responders.”
Balfour Beatty subsidiary’s, Southeast, has not always had such a rocky ride on the taxation issue. In fact, in 2008, Southeast signed off on a deal to pay Santa Rosa County about $12,000 in what was called in the contract “payment in lieu of taxes.”