The tax assessor says a well-heeled partnership got a dubious agricultural exemption in New Tampa. If so, other Hillsborough County taxpayers had to make up the $1.6-million that these
real estate investors avoided paying. By Francis X. Gilpin Two retired University of Florida extension service professors trucked 25 head of cattle from Mulberry to New Tampa in 1992. The cows weren't getting milked. But it looks like Hillsborough County taxpayers were. Sidney L. Sumner of Bartow and Wayne T. Wade of Plant City know their beef. But even Sumner and Wade struggled to keep a dozen of the cows adequately nourished on the 566 acres that they had been hired to "agriculturally manage" for out-of-state owners.
"Because of the productivity of the forage, the cattle got thin," Sumner testified recently. "The calf weights were light and we had to decrease the number." By 1999, the head count had dwindled to five. This herd was unusual not only for its puny size. The cattle appear to have grazed for little more than a few weeks a year on the property, which awaited development near the I-75/Bruce B. Downs Boulevard interchange. Odder still, one of the times of the year was the dead of winter. In December and January, the grass wasn't any greener in New Tampa than in Mulberry.
The brief annual appearances of these cows in the burgeoning North Tampa suburbs may have been part of a scheme by the owners to shave hundreds of thousands of dollars off their tax bills, county officials said. If true, it worked like a charm. From 1992 through 1998, the presence of Sumner's cows — however fleeting — convinced government officials to grant tax breaks worth about $1.6-million to the owners, according to a Weekly Planet analysis of county records.
Who made up the difference? You did, if you were a Hillsborough taxpayer during those years.
Details of the tax avoidance have emerged from a lawsuit filed last year by a partnership led by Connecticut lodging magnate Barry S. Sternlicht.
Sternlicht's Starwood/Tampa I Ltd. went to court after county Property Appraiser Rob Turner rejected the partnership's bid to retain a so-called "greenbelt" agricultural exemption on the New Tampa real estate.
During pretrial questioning, Wade acknowledged under oath that he and Sumner were annually paid as much as $10,000 a piece to haul cows from Polk County and make like they were raising cattle on the New Tampa tract, especially on or about Jan. 1 of each year.
Turner aides believe other landowners in their county and elsewhere in Florida employ similar techniques to obtain improper tax breaks.
County appraisers freeze New Year's Day in time every year and base their annual assessment of real estate for taxes on a property's status as of that date. If there were cows around on the first of January, the taxman generally considers the landowner a rancher for the rest of the year.
Anybody toiling in what Florida law calls "bona fide agriculture" gets a steep discount on their property taxes as reward for engaging in the commendable pursuit of helping to feed the rest of us.
With a greenbelt exemption, Star-wood/Tampa I paid just $4,069 in property taxes on the 566 acres in 1996. Without the exemption, the tax bill would have been $275,686. The partnership saved $271,617 for that year alone.
But were Sumner and Wade really ranching?
Gregory J. Orcutt, a Tampa lawyer for Sternlicht's partnership, has no doubt they were genuine cowpokes. "We didn't pull these guys in off the street," said Orcutt, noting Sumner's service on the board of the National Cattlemen's Beef Association. "This was not a situation where you put one cow in a pasture or plant some pine trees and call that agriculture. These were legitimate ranchers, making a living at it."
If they were just pretending, however, the partnership headed by Sternlicht avoided hefty tax bills while gradually unloading the land at the peak of the 1990s development boom in New Tampa. Sternlicht is chairman and chief executive of the world's biggest hotel proprietor, Starwood Resorts & Hotels Worldwide Inc., owner of the Sheraton and Westin chains.
City-slicker developers impersonating cattle-driving Marlboro Men to fool the tax collector have been around Florida almost as long as shysters hawking swamp land. New Tampa, in particular, has hosted its share. (See "Green Fleece," Weekly Planet, Jan. 14-20, 1999.) Turner is one of the few appraisers who don't accept cattle-grazing leases between development-minded landowners and ranchers on their face as legally sufficient for a greenbelt exemption. "No other appraiser that I know of is being this aggressive," said Orcutt. "If anything, Mr. Turner has been too aggressive in contesting these agricultural designations. And he's gotten a lot of grief for it." Orcutt wanted it made clear during Sumner's pretrial testimony March 6 that his clients think theirs were perfectly legal exemptions. Downplaying the possibility that the cows were rotated onto the property to secure the agricultural classification, Orcutt asked Sumner: "Even at the level of five cows with calves, is it in your opinion a legitimate agricultural utilization of that property, the Starwood property?"
"Yes," Sumner answered. "I think it was a very legitimate agricultural utilization."
"Is it worth your time and trouble just for five cows and their offspring?" Orcutt followed up.
"Well, we thought it was."
Sumner and Wade testified that they made no money from raising cattle in 1998 or 1999. But Orcutt said the greenbelt law doesn't require ranchers to be profitable.
Nevertheless, the handful of cows roaming for food on this New Tampa range finally failed the county's smell test in 1999 — and not because of what was left behind when the animals were trucked back to Mulberry in January.
An aerial photograph of the property from around that time shows just three cows on the entire spread, which had shrunk to 263 acres by encroaching development. "It'd be hard to turn a profit with three cows," said Warren J. Weathers, the county's deputy property appraiser. "Three cows on 263 acres? Sounds like a lot of bull to me."
The Sternlicht partnership appealed Turner's denial to a county tax board, which granted a partial agricultural exemption on 50 acres. But Starwood/Tampa I wanted the whole spread covered by a greenbelt tax break and sued.
The lawsuit opened the door for Turner to question Sumner and Wade under oath. The men spelled out their deals with Sternlicht's partnership and previous owners, including the old Barnett Bank, which initially recruited the men for the alleged cattle-ranching ruse.
When Turner lawyer William D. Shepherd confessed puzzlement at the men bringing back cattle for a year-end scavenger hunt for food in 1998, Wade acknowledged: "It wasn't very good pasture in the winter."
So Shepherd asked: "Why would the pasture conditions be any better in the middle of winter? If you put the cattle back on at the end of December, why would those conditions have improved?"
"Well, it was our agreement that we would manage this property for agricultural purposes, and the cattle went back in there, like, in late December," Wade testified. He claimed 6 or 8 acres of Bahia grass near two ponds hadn't turned brown in the cool and dry conditions.
After New Year's Day, Wade said the cows were removed in the middle of January. The Sternlicht partnership sold off the last of the land in 1999. A subdivision called Richmond Place occupies most of the site now.
State records show Starwood/Tampa I's general partner was Starwood Development Corp., of which Sternlicht was chairman and president. Sternlicht has been hyped in the national business press as a whiz kid. At age 40, the Harvard MBA has amassed a fortune that includes a stake in Innisbrook Resort in Pinellas County, according to filings with the U.S. Securities and Exchange Commission. Sternlicht couldn't be reached for comment at his Greenwich, Conn., offices.
Turner settled Starwood/Tampa I's lawsuit over the 1999 taxes in April without granting additional greenbelt exemptions to the Sternlicht partnership. "The average homeowner should not be subsidizing developers," Weathers said.
Contact Staff Writer Francis X. Gilpin at 813-248-8888, ext. 130, or [email protected].