Fort Lauderdale police, on the hunt for temporary office space while a new headquarters gets built, may have to wait a bit longer for a new place to call home.
Commissioners were expected to vote Tuesday on a $3 million, two-year deal to lease space at the Kaplan University building, miles from downtown at 1515 W. Cypress Creek Road.
But things have hit a snag, Mayor Dean Trantalis says.
Trantalis and Commissioner Steve Glassman both say they are worried the deal might end up costing taxpayers even more in the end if the building’s management passes real estate taxes along to tenants — including the city.
The building was put on the tax rolls in 2004, but has not gotten a tax bill since 2010.
The Broward County Property Appraiser’s Office, after getting an inquiry from the South Florida Sun Sentinel, is looking into why, says Property Appraiser Marty Kiar.
“After hearing this, I’m very concerned with the risks the city is now facing and the potential cost to the taxpayers,” Trantalis said this week. “Perhaps we need to look elsewhere to find space for our police. This is getting too complicated. There are other options for the city to consider that do not involve this measure of risk.”
The 20-year-old Kaplan building sits next to Fort Lauderdale Executive Airport on land owned by the city.
Four years ago, Sheldon Gross purchased a leasehold interest on the building and one next door for $36.5 million. At the time, Kaplan was the sole tenant in both buildings.
The lease on the building at 1515 W. Cypress Creek Road ends in 2073, Gross says. The building would revert to city ownership at that time.
Gross started showing up at Fort Lauderdale commission meetings not long after a storm dumped 26 inches of rain on Fort Lauderdale in a span of hours, flooding City Hall and forcing the building to close.
Soon after, Gross made his first sales pitch to commissioners, urging them to lease space at the Kaplan building for City Hall operations.
When commissioners opted to lease space downtown instead, Sheldon began urging them to lease space in the Kaplan building for the police department.
During a commission meeting on Aug. 22, city staff recommended the commission approve a lease with another building nearby.
Commissioner John Herbst argued the Kaplan building had more space and was a better fit for the police.
The mayor asked Gross if he planned to require the city to pay a portion of the tax bill if he ever got one. Gross said any such bill indeed would be passed along to the tenants.
“I was very concerned about that because a triple net lease does allow him to do that,” Trantalis said. “If he does owe back taxes, he could pass that on to the city. I feel there might be a tax liability.”
But that night, Gross also told commissioners the building had tax-exempt status when he bought the lease in 2019.
In the end, commissioners tentatively approved a deal to lease space in the Kaplan building even though no lease had been drafted. The vote was 4-1, with Glassman dissenting.
“I was one out of five (commissioners) who wanted to do what the city manager recommended,” Glassman said. “It was the best option and there were no outstanding questions. I’m eager to get a deal done so we can move our police. And now this is a setback. Do we wait and play this game or move forward with the city manager’s original recommendation?”
The Appraiser’s Office is looking into why the building was taken off the tax rolls in 2010 — and whether any back taxes might be owed, Kiar told the Sun Sentinel.
Herbst said he was not at all worried about the city getting a tax bill.
“We as a city are tax exempt,” he said. “So I don’t care what happens between Sheldon Gross and the Property Appraiser’s Office. We own the land and we (would be) the tenant in the building. If the city government occupies a building, it’s tax exempt.”
Both Kiar and Trantalis, however, said the owner of the building’s management could legally require the city to help pay any real estate taxes if a bill were to ever come due.
The four-story structure was built in 2003 for Kaplan, at the time a for-profit university. Tax bills were paid between 2004 and 2009, according to the Property Appraiser’s website. The last tax bill from 2009 amounted to more than $400,000.
Kaplan was purchased by Purdue University for $1 in 2017 and received tax-exempt status as a nonprofit in 2019.
Kiar launched an investigative review on Aug. 23 after getting a call from a Sun Sentinel reporter inquiring about the building’s tax history.
Investigators conducted a site visit the next day, Kiar says.
On Friday, Kiar said his legal team and investigators were still researching the matter.
Trantalis says he is eager to find an appropriate place for the police department to carry on its work.
“The longer we wait, the harder it is for our police department to function,” Trantalis said. “We need to resolve these issues sooner rather than later. And if we can’t, we need to move on.”
Susannah Bryan can be reached at sbryan@sunsentinel.com. Follow me on X @Susannah_Bryan