The tax implications have a great deal to do with this from at least three perspectives:

1. Association members have been led to believe the total benefit to OPA was a combination of the lease amount and the taxes. Up until I talked with Art Carmine and posted the factual information about the tax existing only because of the lease, there was plenty of time for those with knowledge to state there was no financial benefit for OPA in Seacrets paying the taxes. Instead there was continued insistence that OPA benefited. You don't see a problem with this?

2. The tax implications have a great deal to do with how OPA should have approached this from a negotiation standpoint. We know that Seacrets was prepared to pay at least $65,000 for the bayside parking rights, based on the prior lease.

With the new lease Seacrets will be paying $55,000, or $10,000 less than we know they were prepared to pay. The total cost to Seacrets is $10,000 less under the new lease than it was under the old lease.

3. There may be much broader implications of leasing the property to a business like Seacrets with a property tax imposed as a result on what was otherwise non-taxable property. The broader implication is the IRS. Seems to me the property tax is not a good thing relative to income unrelated to our HOA operation. Should the IRS tax court decide OPA is liable for income tax on the Seacrets rent, the basic tax, plus interest and penalties going back some number of years could be substantial. I have not seen the details of the new lease but suspect it does not provide for Seacrets to pay our income tax costs over the next five years should the IRS prevail.

Given Ted Moroney said the review people reviewed nothing relative to the numbers, it seems they were only reviewing the legal aspects of the lease. I would suggest in the future any such review committee also provide advice and counsel to the individual negotiating the lease, including the amounts, and have all information available.

Would you like to volunteer to be a member of our contract review team?

Thank you for the offer, but No. I cannot do what I do and be directly involved in such matters.

The new lease is a done deal but, if nothing else, perhaps this discussion will provide some fodder for consideration of future lease negotiations.