My View: All restaurants should pay taxes

There’s only one reason why Marina Jack — Jack Graham Inc. — does not pay property taxes on its restaurant and marina: The city of Sarasota owns the underlying land.

The city negotiated a sweetheart deal for Marina Jack by taking only 3% of annual gross receipts as rent for 40 years. There are plenty of restaurateurs who would jump at such a deal for prime waterfront property, as opposed to their short-term lease arrangements, plus property taxes. It’s safe to say that if city bureaucrats were negotiating on property they owned, they would have driven a much harder bargain. But, alas, this was just taxpayers’ land.

The problem here is that government owns the land in the first place. Lesson learned: Anytime government gets into any business it was not meant to be in — which is most of what modern government is in — it does it poorly.

However, there are dozens of restaurants within walking distance of Marina Jack, at the foot of Main Street, that do not get to skate on property taxes. Why should one restaurant get to go tax-free while using all the amenities those taxes pay for when its competitors must shell out those taxes? This is essentially a small subsidizing of Marina Jack by other restaurants and property owners.

Not right.

There is a long and laborious history to the current arrangement. Marina Mar was the first to lease the property in 1964 but went under, so to speak, two years later. Jack Graham Inc. became the leaseholder in 1968 and turned the failed venture into a successful one. The company has also privately financed more than $10 million in improvements.

There is little argument that Marina Jack has been good for the bayfront. It has been and continues to be. And clearly Graham and its operators have been successful businessmen, something harder to accomplish than many people think.

An attempt to get Marina Jack to pay taxes in the early 1990s was rebuffed in court when a judge upheld the company’s contractually required claim that it served a public purpose. But, as far as I’m concerned, so does Café Epicure, Two Senioritas Restaurant, Selva Grill, Bijou Café, Mattison’s City Grille, Patrick’s … and Walmart.

The value of having Marina Jack is not at issue. The question is should it be exempt from paying taxes when all of its nearby competitors do?

I can’t get inside the mind of Sarasota Property Appraiser Bill Furst as to his motivations for launching the lawsuit to get Marina Jack to pay taxes. Because the city re-negotiated and extended the 40-year lease in 2006, Furst considers it a new lease, and therefore he is not bound by the old court ruling. He sent Jack Graham Inc. a 2010 tax bill for about $380,000 and is seeking back taxes of nearly $1.5 million.

The Furst challenge has merit if for no other reason than Marina Jack’s competitors all must pay property taxes. Life’s not fair, but when government is the one that makes it unfair, government should at least try to right the wrong.

And Furst is doing that.

+ Kudos to school board
The Sarasota County School Board is making the eminently sensible request to stop collecting temporarily its $2,032 school-impact fees for two years.

School taxes on new homes, known as impact fees, are tacked on to the price of a new house to pay the cost of adding classrooms needed because of the growth represented by that house. Leave aside the dubious nature of these taxes, the School Board claims, again quite sensibly, that it does not need the taxes on new homes because it has built what is needed for at least the next few years.

According to a county agenda report: “The School Board believes that collecting the fee in the current economy is unnecessary and that a suspension could spur growth in the construction section.”

County commissioners decided recently to hold a public hearing as soon as possible to consider the request, which would suspend the fees from Dec. 1, 2010, through Nov. 30, 2012.

Unless there is some arcane legal issue — for which I’m sure the anti-growthers are feverishly searching — there is only one reason to oppose this sensible request: to stop growth.

For some of us, a driving factor in impact fees all along has been to use them as bludgeons against growth — a critical element of our economy.

Rod Thomson is executive editor of the Gulf Coast Business Review and can be reached at [email protected].