Billboard Owners Battle Property Appraiser

"It isn't going to hurt the big guys so much as the local property owners who lease their sites to the nationals," says an Orlando real estate lawyer representing one of the plaintiffs. "The problem for the little guys comes when their leases to the nationals forbid them to raise the rent in order to pass along the increased tax assessment."

But the major national billboard owners are upset as well, according to local industrial real estate brokers who represent their interests in Orlando. "Nobody wants to see their tax load go up by 10 times or more in a single year," says the broker who spoke to GlobeSt.com on conditions of anonymity.

Leading the owners group is Clear Channel Outdoor of Phoenix, the nation's largest billboard company. Clear Channel and the Florida Outdoor Advertising Association declined comment to GlobeSt.com, citing current court proceedings.

Donegan's action is the first of its kind among Florida's 67 counties, according to court records. He made the move after the strong national billboard industry lobby persuaded Florida lawmakers to force counties to reimburse billboard owners with immediate cash payments of $100,000 or more when counties arbitrarily remove the billboards.

Donegan and his staff used estimated evaluations of the billboard property from the owners themselves to revise the tax assessments, property appraiser staffers confirm. For example, about 90% of the 900 billboard sites last year were taxed at less than $5,000 each. This year's tax rolls, however, have the same properties valued for tax purposes at $35,000 to $50,000. Donegan's staff estimates the new valuation method could add about $600,000 to the county's coffers.

Donegan's office contends billboard property owners should revise their leases, allowing them to pass along increased taxes to their tenants. The new fight with billboard property owners is old hat for Donegan, a former Orange County commissioner and Maitland, FL retailer.

He is also being sued separately by some of the county's largest landowners and hotel investors who claim his decision to tax some agriculture-zoned land as tourist-zoned dirt is illegal and unfair.

Donegan argues in court papers that planting pine trees and creating citrus groves on land that has already been sold or will be sold for commercial development is a subterfuge by owners to receive a lower annual tax assessment.