The First Presbyterian Church of Miami, the oldest organized congregation in the city, has been hit with a $7.1 million tax bill by the Miami-Dade Property Appraiser, which claims the church has leased a portion of church grounds to a for-profit school and food trucks, violating its religious exemption status.
The church, located at 609 Brickell Ave., has run a K-8 religious school on the property since 2008. The bill comprises a tax lien totaling $6.5 million (including interest and fines) for the years 2009-2017 and a current bill of $509,526.24 for the 2018 year.
The taxes only apply to the portions of the property deemed to be in violation of the exemption, between 29-35 percent, depending on the year.
According to Florida Statute 196.196, only the portions of a property that are used predominantly for charitable, religious, scientific, or literary purposes can be deemed exempt from taxation.
In two complaints filed in civil court on Nov. 30, attorneys for the First Presbyterian Church argue that the operation of the school “is motivated by the Church’s sincere religious beliefs.” The lawsuits demand a jury trial to ascertain the entire church property is exempt from taxation and for the outstanding and current tax bills to be removed.
“By partially revoking the Property’s tax exempt status and seeking to collect the tax allegedly owed for 2018, the Defendants have acted in an arbitrary, capricious and discriminatory manner and thereby denied the Church equal protection under the law in violation of the Church’s constitutional rights,” the complaint states.
Attorney Andrew Ittleman, who is representing the church, did not respond to repeated requests to comment for this story.
But some legal experts think the discrimination claim will have a tough time sticking in court.
“What’s happening to this church is the ultimate nightmare scenario,” said Franklin Zemel, a partner at the Fort Lauderdale office of Saul Ewing Arnstein & Lehr, who represents dozens of churches, synagogues and mosques around the country. “I don’t see this as religious discrimination. I don’t see anything that suggests the county is acting in a mean or arbitrary way. To me, it sounds like you’ve got a church that is leasing out a school, they’re making money and not paying what they owe.”
Zemel is not associated with the Brickell church matter.
Key Point Christian Academy is the school currently operating on church grounds. It has 178 students and 45 teachers, according to the Private School Review website. Tuition for kindergarten through fifth-grade students is $15,850 per year; sixth- to eighth-grade tuition is $16,185.
The academy is operated by International School of Brickell LLC, which was founded in February 2013. The lawsuit filed by the church argues that the company serves as a third party administrator for the school.
The preregistration packet on the school’s website instructs applicants to send payment directly to International School of Brickell, not the church. Key Point Schools also operates a private preschool in Coral Gables and The Fun Spot, a venue for after-school classes, activities and birthday parties for children.
Key Point Christian Academy School officials did not respond to repeated requests for a comment for this story.
Location, location, location
The First Presbyterian Church of Miami sits on a valuable parcel of waterfront land measuring 148,540 square feet. The 3.4-acre property’s assessed 2018 value is $66,375,545. The market value is estimated at $86 million and would probably fetch much more due to the scarcity of available waterfront land in the Brickell area.
For example, Argentine developer German Coto paid a record-setting $125 million for a 1.25-acre parcel on the Miami River at Biscayne Bay in 2014, less than a mile away from the church. Construction is under way on the 66-story Aston Martin Residences tower on that site.
In his legal complaint, Ittleman argues that the Property Appraiser has “targeted the Church for this inequitable treatment because of the high assessed value of the Property.”
The church’s property includes a waterfront parking lot that measures nearly two acres. The property is also zoned for high density mixed use, so a developer could conceivably build a tower as high as 48 stories on the lot.
The Property Appraiser declined to comment for this story because the case is under litigation. But a spokesperson said the investigation into the church was launched after a tip was submitted through the county’s website and that the office is investigating between 1,000 to 2,000 leads at any given time.
Florida Lt. Gov. Carlos Lopez-Cantera, who served as the Miami-Dade Property Appraiser from 2013-2014, confirmed that the office’s main source of leads for homestead fraud cases during his tenure came through anonymous tips. He also said that the Property Appraiser has no mechanism to collect on the tax lien levied on the church.
“As long as the church doesn’t sell the property, the lien just sits there and accrues interest,” he said. But the church is required to pay the current 2018 tax bill of $509,526. A good-faith payment of $16,131.72 has been filed to the Tax Collector while the case winds its way through court.
The First Presbyterian Church of Miami was founded in 1896, and its initial services were held inside a tent home. Four years later, developer Henry M. Flagler gifted the congregation a newly built church, which was located on Flagler Street and Southeast Third Avenue.
The current church on Brickell Avenue was built in 1949, using some of the original pews and stained glass windows from the previous building, to accommodate the growing congregation. Since then, development in Brickell has exploded. According to Zillow, the current median price per square foot in the neighborhood is $499 and the median rent is $2,550.
In 2003, the First Presbyterian Church of Miami was deemed a historic site by the city of Miami. The building cannot be demolished or relocated.
Pastor Christopher Atwood, who joined the First Presbyterian Church in 2012, said the school is a critical part of the church’s mission. He teaches a chapel class and his daughter is a student.
Atwood said he was unable to comment on the lawsuit, but he remains sanguine about the outcome.
“We trust the process,” he said. “The property appraiser is doing their job and we are doing ours. The rest is in the hands of God.”