Thursday, May 15, 2014

Fairhope Single Tax Colony Meeting for May

     The monthly meeting for lessees and members of the Fairhope Single Tax Colony was held in the Library at 6:30pm. After approximately five minutes, it was announced all non-members were to leave as the meeting had become private. Two lessees and about a dozen others left the meeting.
     The issue currently at hand is the process of distributing funds from eminent domain proceedings due to the expansion of Highway 181. Leaseholders affected by the condemnation have been sent a settlement letter issued by the Colony. The letter stipulates 30% of the State funds go to the leaseholder while 70% go to the Colony. Many, including some members of the Colony, don't agree. 
     The dissenting members argue the issue has been settled through the Alabama Court System. 

 They cite cases:  

Drummond Coal Co. v. State 
"Generally speaking, the measure of damages for a leasehold interest taken under eminent domain is the fair market value of the lease."
"Rather, this case involves a condemnee (Drummond) seeking just compensation for a leasehold interest the value of which is directly and intimately associated with the land itself."
"After considering the excellent oral argument and briefs of the parties and our own independent research, we conclude that the factfinder should be allowed to consider the following factors in determining the value of a leasehold interest as that value affects the fair market value of the land:
a) The length of the unexpired term of the lease;
b) the fair market value, if any, of the unexpired term of the lease;"
Fairhope Single Tax Corp v. Rezner 
"we construe this right to include the right to be treated equally with members in the determination of annual rents."
"and it follows that the non-member lessees are under no duty to make an internal demand on FSTC before filing suit to enforce contract rights under their lease agreements."
SouthTrust Bank of Baldwin County v. Fairhope Single Tax Corporation.
"We would note that only one witness, Joe Courtney, a real estate appraiser, testified regarding the fair market value of the leasehold interest. Courtney testified regarding his method of calculating the estimated value of the leasehold interest in the condemned portion of the parcel, i.e., the economic rent less the contract rent multiplied by the unexpired term of the lease."
      The Colony offers no case law to support their position nor do they outline a formula for arriving at leaseholder value. The five member executive council of the Colony voted and approved the 70/30 split. However, Eminent Domain Section 18-1A-291 of the Code of Alabama stated the amounts awarded are determined by the probate court:
"Any one of the owners or parties alleged in the complaint to own or hold any claim, interest or title in the lands sought to be condemned may, after the granting of the application, file with the probate court his claim for his part or division of the award made by commissioners; and upon the filing of such claim and upon the payment by the plaintiff into probate court of such award, the probate court shall set down for hearing the claim so filed by such party and determine the same. Upon such determination, the probate court shall distribute the funds to each of the parties so entitled thereto in the sum and manner in which the facts disclosed upon the hearing show each of said parties to be so entitled, less all court costs arising from the filing of each such claim."
The next meeting of the Fairhope Single Tax Colony is June 11, 2014 at 6:30pm. 
If you are a lessee and have any questions concerning the Colony, please email TFC here. 

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