AP Housing Authority's LLC is under review

The Avon Park Housing Authority requested that the city council exempt one of its affordable housing apartment developments from the city's fire rescue assessment fee and utility tax.

But before the city can do that, it wants proof the housing authority's limited liability corporation is a non-profit.

The discrepancy came about because the housing authority is seeking a tax exemption through their limited liability corporation, Ridgedale LLC.

The LLC was created to own and operate Ridgedale apartments, a low income Section 8 development.

"This seems to me as a way for these corporations to get away from paying these fees... What they pay will make the difference in them receiving services or not receiving services," said Mayor Sharon Schuler at the Feb. 8 city council workshop.

"We have no idea where or what this organization is," Schuler added.

The housing authority purchased Ridgedale, a 36 unit affordable housing development, in 2008 for a total of $1,565,200.

According to the housing authority, during the acquisition it paid the previous owners a million dollar debt to Housing and Urban Development and the remaining, over half a million, for the property, including closing fees.

In acquiring the property the housing authority created the LLC as it did for its new development North Central Heights LLC., which is set for construction in late April or early May.

North Central Heights LLC and Ridgedale LLC are "instrumentalities" of the housing authority, said Executive Director Larry Shoeman.

Currently North Central, a proposed 72 unit development for low to moderate income families, is not seeking tax exemption but it will in the near future, according to Shoeman.

"The purpose of the LLC, like any LLC, is to insulate the parent organization from liabilities...The sole member of Ridgedale LLC is the Avon Park Housing Authority," Shoeman added.

Despite the functions of these affordable housing developments, the city requested documentation showing the non-profit status of Ridgedale and a letter from its attorney.

The city couldn't make heads or tails of the documents submitted by the authority, said finance director Renee Green. Now it's up to the housing authority to prove the LLC is non-profit.

According to the county's property appraisers office, both Ridgedale and North Central developments are tax exempt as of January 2009.

As part of the application process for tax exemption, the authority had to provide the property appraiser's office with financial statements and documentation on its organization. Although those documents are not public records, the appraiser's office granted them tax exemption status.

"Until it is proven different they should pay the fire assessment fee," said Deputy Mayor Brenda Gray.

Shoeman said he will submit the requested documentation to the city council by the next council meeting.

AP a city for freebies?

The verification process of the authority's LLC brought to light concerns that Avon Park is becoming a city of "freebies."

Since the fiscal year began in October, the city has combed through ways to save and bring in more revenue.

According to Green, the financial constraints are so dire that the police department's budget is higher than what the city gets in property taxes.

In a letter to city attorney Gerald Buhr, Finance Director Rene Green said granting Ridgedale LLC exemption will "open a can of worms" for other LLCs to ask for the same exemption.

"What I meant was if we do this for one LLC then we may have to do this for the rest. It hasn't been proven legally that they Ridgedale LLC are owned by the housing authority," Green said.

Ridgedale development would receive police, fire and water services and at the city's expense. But if it is proven that Ridgedale is a non-profit, Florida statutes does exempt them from paying these fees.

During the meeting, the city council hammered Shoeman on the number of housing projects within the city and the requirements of these applicants. The city was concerned that local residents were not benefiting from these services.

Currently there are no residency requirements to apply for affordable housing. As long as the applicants fall within the income requirements they are placed on a waiting list-and they've received applicants from as far as Puerto Rico.

According to Shoeman, the city can add a residency requirement but as of yet it's not on the table. Based on the discussions among council during the meeting the city wants more taxpayers and less projects.

"We need people to come here that will pay property taxes ... we don't need any more freebies. We have enough," Green added.