Court backs down on Disney ruling
Decision would have made it easier for hotels to lower property taxes.
A Florida appellate court backed away Friday from a controversial ruling that could have made it much easier for Walt Disney World and other hotel companies to win lower property tax bills.
The ruling arose out of a long-running legal battle between Disney and Orange County Property Appraiser Rick Singh over the value of Disney’s Yacht & Beach Club Resort, a nearly 1,200-room luxury hotel with an annual property tax bill of more than $4 million.
In in its original decision, handed down in June, the Fifth District Court of Appeal ruled not only that Singh’s office had overstated the value of the Disney hotel — but that the entire appraisal method Singh had used was illegal under Florida law.
The sweeping declaration sent shockwaves across Florida, where many property appraisers use the same appraisal method to determine the value of hotels — which in turn helps determine how much those hotels pay in property taxes, the primary funding source for cities, counties and school districts.
Singh, who said he was alarmed by the broad nature of the decision, quickly asked the court to reconsider the decision and narrow its scope.
On Friday, the 5th DCA did so. The three-judge panel that heard the case — all appointed by Republican governors — issued a revised opinion that said Singh had incorrectly applied the hotel appraisal method, which is known as “Rushmore,” after the name of an author of appraisal textbooks. But the new opinion stops short of declaring the Rushmore method itself illegal.
In a prepared statement, Singh, who is running for election, said he was pleased with the new ruling, which he noted also rejected a much lower property value for the Yacht & Beach Club hotel that had been proposed by an appraiser hired by Disney. The ruling orders Singh’s office to reappraise the Disney hotel itself.
“We now return to our work in arriving at a fair and accurate assessment of the resort in accordance with the court’s recommendations and look forward to a resolution of this case,” Singh said.
A spokeswoman for Disney did not immediately respond to a request for comment.
Jennifer Dixon, an appellate attorney at the Lowndes law firm, said the revised ruling amounts to the appellate court acknowledging that it “went a little too far” with its original decision. Dixon represented the Central Florida Hotel & Lodging Association in the case, a lobbying group that Disney helps fund and that filed a legal brief in support of Disney.
After the initial ruling, attorneys on both sides of property tax disputes predicted that hotel owners would use the Disney decision to contest their own property values. Disney alone is also challenging Singh’s appraisal of more than 10 of its other hotels.
Dixon said the revised decision is still likely to provide fodder for more property tax appeals. But it may not be quite as powerful the ammunition that the original ruling would have been.
“I think that appraisers may still choose to use this appraisal method but, because of this case, they’re going to have to be extremely careful and they’re going to probably expect litigation to arise out of it,” she said. “The court has signaled through this that the Rushmore method should be highly scrutinized on a case-by-case basis.”