The Real Deal Miami

Fortune, Chateau and Wharton Equities sued over assessed property values

Miami-Dade Property Appraiser alleges 60 percent reductions violate state law

June 02, 2016 03:45PM
By Francisco Alvarado

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From left, rendering of Ritz-Carlton Residences, Sunny Isles Beach, Burdines site and Pedro Garcia

In an attempt to collect more taxes from the developers of two signature South Florida properties, Miami-Dade County Property Appraiser Pedro Garcia is suing the developers of the Ritz-Carlton Residences, Sunny Isles Beach and the former Burdines redevelopment site in downtown Miami.

The separate lawsuits seek to reinstate a combined $24 million to the assessed market value of both properties.

In a May 24 lawsuit filed in Miami-Dade Circuit Court against Sunny Isles Property Ventures, a partnership between Fortune International Group and Chateau Group, Garcia alleges the owner’s successful attempt to reduce the 2014 assessed market value of the site at 15701 Collins Avenue by more than 60 percent violates state law. Garcia claims the reduction is “below just value” and “will impact subsequent years’ determination of assessed value.”

A similar complaint filed May 25 against New York and Miami-based Wharton Equity Partners also alleges the company received an assessed market value reduction in 2014 of more than 60 percent for its property at 16 Southeast Second Street that at one time was going to be redeveloped into a mixed use condo project.

Roberto Rodriguez, a Garcia spokesman, said the property appraiser’s office doesn’t comment on pending litigation.

A spokeswoman for the Ritz-Carlton Residences‘ developers said that it is fairly common for the property appraiser to file lawsuits challenging reductions to the office’s initial annual assessments. The developers will address the matter accordingly and declined further comment, she added.

Wharton CEO David Eisenberg, who is based in Miami, did not respond to an email and phone message requesting comment.

According to the Ritz-Carlton lawsuit, Garcia contends his office’s initial $17.6 million assessment of the Sunny Isles Beach property represented “just values” in 2014 and should not have been reduced to $6.8 million by the county’s Value Adjustment Board, the body that handles property owners’ appeals of property assessments. The assessed market value determines what one will have to pay in annual property taxes.

Wharton acquired the former Burdines site in 2013 through a deed in lieu of foreclosure from the previous owner after purchasing the mortgage note from Iberiabank. The company has not formally announced what it will do with the site, but company executives have previously stated they are considering all possibilities. Prior to the 2008 real estate downturn, the property had received a special use permit to be redeveloped into a cluster of six buildings that included 430 apartments, 91 live-work units, 207 condo units, 194 hotel rooms and more than 200,000 square feet of commercial space.

Garcia alleges the Value Adjustment Board improperly reduced the initial assessed value in 2014 from $23.2 million to $9.6 million. The property appraiser’s lawsuits also named Florida Department of Revenue Executive Director Leon Biegalski as a defendant, demanding he reinstate Garcia’s initial assessments on both properties.

Revenue department spokeswoman Renee Watters said the state agency does not comment on ongoing lawsuits.