HispanicBusiness

Orange County has lost more in property taxes than any other Florida county because of a tax break meant for nonprofit-housing groups but which largely benefited companies that develop low-income apartment complexes.

According to Florida Housing Finance Corp., Orange County lost about $16 million in taxable-property value last year because of the exemption, out of an estimated $115 million that was shaved from property-tax rolls statewide.

That's because the Florida Legislature changed the state's property-tax laws two years ago so Habitat for Humanity and similar nonprofit organizations would not face large property-tax bills when they built apartments or other multifamily-housing projects, officials at Florida Housing Finance Corp. said.

But the exemption also wound up reducing the tax bills of multifamily-housing developers, including two Orlando-area businesses: CED Cos. and Atlantic Housing Partners. Maitland-based CED was founded about a quarter-century ago by one of Central Florida's leading philanthropists, Alan Ginsburg of Winter Park. Atlantic Housing Partners, based in Winter Park, was formed about seven years ago by former CED executives.

"My board was not happy about" the exemption having been extended to apartment complexes produced by such companies, said Wellington Meffert, general counsel for Florida Housing Finance Corp. "It appears that none of these projects needed any kind of relief. ... They are all cash-flowing projects."

The loophole, as one Florida legislator calls it, is in the process of being plugged. The Legislature during its recent session passed a measure that would eliminate the exemption for apartment owners, such as CED, that partner with nonprofits by transferring their interests to them. The legislation has been sent to Gov. Rick Scott for his signature.

The tax break allows for-profit developers to transfer ownership of apartment complexes in a way that removes the properties from local tax rolls. As a result, local governments statewide lost out on more than $11 million in property taxes last year alone.

"When it was originally put into law, this exemption was only projected to result in a small loss to local governments," said state Sen. Wilton Simpson, R-New Port Richey, who sponsored this year's bill to close the tax loophole. Instead, local governments lost revenue needed to fund schools and build other infrastructure, he said.

"There are still other state and federal tax credits available to entities involved in affordable housing," Simpson noted. "Repealing this exemption was the right thing to do for the state of Florida."

Moves to undo the property-tax break in the Legislature this spring were opposed in Tallahassee mostly by Southern Affordable Services Inc., a housing-related nonprofit formed in 2009 by executives with CED Cos. and Atlantic Housing Partners. Those two companies subsequently transferred their interests in 80 apartment complexes to Southern Affordable Services Inc. so they would be exempt from property taxes.

Ginsburg was out of the country and unavailable for comment. Officials with Atlantic Housing Partners and CED could not be reached for comment.

Ginsburg, who founded CED in 1988, is known for constructing apartments using the federal government's system of tax credits for low-income housing. Through