Port Authority pays $100 while disputing $600,000 Nassau County property tax bill

Legal maneuvering continued Wednesday in the protracted court battle between the Nassau County Property Appraiser and the Port of Fernandina, as the port faces claims that it has been assessed more than $2.4 million in disputed property taxes.

The Ocean Highway and Port Authority (OHPA) voted to pay $100 toward its 2025 property tax assessment of $600,000 in order to preserve its right to appeal the assessment.

In December, a Nassau County circuit judge rejected efforts by the Ocean Highway and Port Authority (OHPA) to block the county property appraiser from seeking ad valorem taxes on port-owned property, allowing the case to move forward as the parties dispute whether the authority qualifies for a property tax exemption as a special district.

The Nassau County Property Appraiser’s Office has assessed more than $2.4 million in property taxes against the port dating back to 2022.

Tammi Bach

“This is going to be a long appellate process. There are no taxes due or collected that I know of until all of this is decided,” OHPA attorney Tammi Bach told commissioners.

Bach said state statutes require that when property taxes are disputed, “you have to pay something,” referring specifically to the appeal of the 2025 assessment.

OHPA maintains that it is exempt from paying property taxes because it is a special district created by the Florida Legislature to serve a public purpose, rather than a private or commercial enterprise.

However, in a November order, the court denied OHPA’s request for relief aimed at stopping Nassau County Property Appraiser David Howard from assessing and pursuing property taxes on land controlled by the authority.

The court declined to accept OHPA’s exemption argument at that stage of the case, finding that the authority had not established a clear legal right to exemption or demonstrated that the property appraiser acted outside his statutory authority. The judge ruled that the issues raised by the port authority require further factual development and legal review.

In a subsequent December order, the court again sided with the property appraiser, denying additional motions filed by OHPA that sought dismissal of the tax assessments or a declaration that the properties were immune from taxation. That ruling allows the property appraiser’s office to continue pursuing the assessments while the litigation proceeds.

Bach told commissioners the case could continue for another two years, prompting OHPA Commissioner Justin Taylor to calculate that the port could face liability totaling $3.6 million, plus interest, in unpaid property taxes by that point if the court ultimately rules in favor of the property appraiser.

“If we don’t do something with the operating agreement now, we run the potential of another $1.2 million in taxes on top of the $2.4 million,” Commissioner Scott Moore said. “I would like to encourage, in light of this court decision, negotiating a new operating agreement to address the concerns the court has with how it is structured.”

In 2018, by a narrow 3-2 vote, OHPA approved a new 10-year operating agreement with Worldwide Terminals. That agreement has since been assumed by Relay Terminals, the current operator of the Port of Fernandina.

It is the terms of that 2018 operating agreement that have played a central role in the court’s recent rulings.

The property appraiser has argued that OHPA’s property is subject to taxation because it has been leased to a private, for-profit company — Nassau Terminals LLC, now operating as Relay Terminals — which runs the port facilities for commercial gain under the operating agreement.

Under Florida law, property owned by governmental entities, including special authorities, is taxable when it is used by a nongovernmental lessee for proprietary or commercial purposes rather than for the direct administration of government. State statutes and prior Florida Supreme Court rulings hold that tax exemptions apply only when leased property is used to perform an actual governmental or public function, not when it is used by a private company to conduct profit-making operations. Because the port property is being used by a private operator for commercial purposes rather than exclusively by the authority itself, the property appraiser contends the Florida Constitution requires the property to be subject to ad valorem taxation.

That determination has prompted OHPA to place discussion of the operating agreement on the agenda for its next meeting, scheduled for Jan. 28. Relay Terminals is under no obligation to renegotiate or amend the agreement. However, if OHPA ultimately loses the case, Relay Terminals would be responsible under the terms of the operating agreement for paying the disputed property taxes.

The court’s recent orders do not resolve the ultimate question of tax liability, but they preserve the property appraiser’s authority to assess the parcels and seek payment unless and until the court rules otherwise. No injunction has been issued preventing the collection process.

Court records indicate the case remains pending, with additional proceedings expected to determine whether OHPA must pay property taxes on the disputed parcels or qualifies for exemption under state law.