A lawsuit about how much, if any, in property taxes are owed on five military properties in Key West will be tried in November, a judge ruled Monday.
Southeast Housing LLC, which partners with Naval Air Station Key West on housing projects, sued the Monroe County Property Appraiser's Office last year to fight $11.3 million in liens and back taxes placed on the properties, and the right to keep those properties exempt from local property taxes.
Both parties in the lawsuit recently asked Circuit Court Judge David Audlin to rule in their favor in a summary judgment, which would have kept the case from going to trial. But Audlin ruled Monday that it should be tried.
Southeast Housing is a partnership between the international, multimillion-dollar development company Balfour Beatty and the Navy. The Navy owns the land and Balfour Beatty owns the buildings and facilities at Trumbo Point, Sigsbee Park, Truman Annex, Peary Court and the Navy hospital on South Roosevelt Boulevard.
Attorneys for Southeast Housing have argued the properties should remain tax exempt, as they are owned by the military and serve a military purpose.
However, the Property Appraiser's Office ruled that the Navy had entered into a ground lease agreement in December 2007 in which it "conveyed ownership for all facilities and improvements," making the properties subject to taxation.
"We are secure in our case. We can prove our case," said John Dent, an attorney for the Property Appraiser's Office. "The judge felt something was unresolved, so the only way to resolve the case is to take it to trial. This is an important case; it has implications in this state and other states."
Southeast Housing's attorney, David Paul Horan, did not return multiple phone messages requesting comment.
Complicating the issue is the fact that the state Senate and House of Representatives passed a bill in April that would exempt companies, like Balfour Beatty and Southeast, that partner with the military on housing projects. However, the bill stipulates that the tax exemption only applies to those units housing active-duty military.
Gov. Rick Scott has yet to sign the bill, which would make it law.
Southeast Housing oversees 895 units in Key West.
Peary Court is rented out to civilians, and there are civilian employees living at Sigsbee Park and Truman Annex. The Veterans Administration and Trumbo Point properties are used solely by the military.
Of the 895 units, 544 are rented to active military, 221 to Department of Defense civilian employees and 74 to private-sector civilians, according to Key West Navy base spokeswoman Trice Denny. This equates to a total civilian occupancy of 33 percent, she said.