INDIAN RIVER COUNTY — Recent reports in the daily newspaper of property taxes being paid by high-profile residents of the barrier island have raised some eyebrows – particularly if you were looking at the history of Emilio and Gloria Estefan’s oceanfront estate north of Windsor.
For about a decade in the 1990s and early 2000s, the oceanfront lot that would become the famous Miami couple’s Indian River County beachside retreat at 11686 State Road A1A was valued and taxed at only $250,000 for the 1.34 acres of land with 90 feet of direct oceanfront.
When the Estefans bought the property in May of 2002, the land was re-assessed at $385,000 for one year, then lowered back down to $250,000 again, just as the real estate market was heading upwards.
In 2005, it was assessed at $379,000 where it stayed through the peak of the real estate market, until 2009.
The neighboring oceanfront lots of about the same size with somewhat more ocean frontage in Seaview were valued at $850,000 to $1.4 million — just for the vacant lot — during the same time period.
The value of the Estefan lot was then raised from $379,000 to $918,170 in 2009.
When asked about the unusual seesawing of assessed land values that contradicted the market conditions, Indian River County Property Appraiser David Nolte took offense.
“What market research are you looking at? You’re making this up as you go,” he told Vero Beach 32963. “You need to go check the sales, you need to go check the market, you need to do the market research. You’re making this up as you go.”
While similar-sized lots down the road in John’s Island are valued at more than $2 million, Nolte said, “in a place like John’s Island, you have a different amenity set that is counted in the value because people are willing to pay more for those amenities, they pay a different price than for a property without those amenities.”
The Estefan estate is located outside any gated community, though it has a private, gated entry and its own tennis court. Nolte said the availability of a golf course, tennis club, clubhouse or beach club adds to the valuation of a lot inside a club community.
But down on South Beach, in Castaway Cove where there are no golf and tennis courts, clubhouses or similar amenities, much smaller oceanfront lots with approximately the same frontage as the Estefan estate saw assessments soar to as much as $1.7 million – just for the land – in years when the Estefan lot was holding steady at $379,000.
The value of the five-bedroom, four-bath Estefan home with guesthouse ranged from $160,000 to $195,000 during the period before they bought it.
In 2004, after extensive remodeling, the value of the home was increased to $868,243 but in 2009, the value of the home was reduced to $438,000 following visits to the property by Field Appraiser Robert Taylor in December 2008 and again in June 2009.
There is no paper record of why any of the changes up or down took place, or if it was the result of a complaint or an appeal from the Estefans. The Property Appraiser does not keep paper files or worksheets justifying the mass valuation of properties. A record is kept for a few months until the deadline to appeal has passed, then that data is purged.
“We have 85,000 properties, there is no archive showing you why every number changed each minute of the day,” Nolte said. “That would be impossible archive to keep. We don’t show why it was $250,000 last year and why it’s now $265,000 the next year, we don’t do that.”
“We don’t have to,” Nolte continued. “We have files to back up the changes for one year, but each year stands on its own. Last year is history. We keep it as long as we need to until the Value Adjustment Board meets.”
So all that’s left of the nearly 20 years or so are lists of values that anyone can see on the website and the Property Appraiser’s own computer programs, which have a bit more detail.
“Some counties don’t even list a history, all you see is the current year,” Nolte said. “Now I know why.”
The explanation Vero Beach 32963 got when we asked about how any oceanfront property could be valued so low in the mid-2000s – when virtually any oceanfront lot in 32963 went for more than $1 million — was that it was determined by market research.
“It could have been caused by a tremendous jump of a lot of sales in that area, or it doesn’t even have to be a lot of sales,” Nolte said. “There are many properties that have doubled or tripled in value in one year. We do not base the next year’s value on the previous year, we don’t use the previous year as a starting point.”
“Sometimes there’s no logic up or down because there were no sales,” Nolte said.
When asked if a correction would be made if a historically undervalued property was discovered on the tax rolls, Nolte would not acknowledge that this could happen.
“Well I don’t know what you mean by a historically undervalued property,” Nolte said. “Even if we go back and make a change or someone appeals and we make an adjustment, that does not mean that a mistake was made in the first place. It just meant that there was a difference of opinion or that new information came in.”
So if no one jumps up and complains that they’re being undercharged, what happens?
“Most people do come to us because they feel that their taxes are too high,” Nolte said. “But there are a few who come to us because they feel their valuations are too low.”
Long-time Realtor Marta Myrtych, who has sold properties in several different markets in Florida and in the Northeast, said she has problems helping clients estimate the taxes they’ll be paying for certain properties when they’re looking to buy.
“It seems very random sometimes, some people pay very high taxes and some people pay lower taxes,” she said. “It’s a big question sometimes how properties are valued.”