Sarasota, Bradenton developers score big tax breaks with “Rent-A-Cow” loophole
By Josh Salman and Kara Newhouse
A state loophole is costing Sarasota and Manatee counties millions in lost revenue by allowing developers to tap a decades-old law meant to preserve agriculture and shrink the taxes on pastures they intend to pave over.
Known as Greenbelt, the law was designed to protect Florida farmland with rock-bottom tax rates but has been mastered instead by entities eyeing land for subdivisions and shopping centers. By leasing their land to cattle grazers and claiming it as agriculture until they’re ready to build, developers avoid the higher property taxes that come with new construction.
Some of the region’s most active builders and developers used the loophole to deprive Sarasota and Manatee counties of at least $6.6 million in tax revenue last year alone, a Suncoast Searchlight investigation found.
Officials are then left scrambling to find money for infrastructure to accommodate the growth – a burden that falls on the general tax base instead of the very companies profiting from the developments.
“We know they are playing the system,” said Manatee County Property Appraiser Charles Hackney. “But they are acting within the bounds of the law.”
Using officer names and business addresses, Suncoast Searchlight identified more than 1,000 limited liability companies tied to the region’s most well-known local developers: Benderson Development Co., Schroeder-Manatee Ranch Inc., Neal Communities and Medallion Home; along with Canada-based Mattamy Homes, the developer behind the West Villages.
Reporters then matched those LLCs with the listed owners on the property rolls in Sarasota and Manatee counties to decipher how much land these developers control and how often they use the tactic. Suncoast Searchlight also combed through hundreds of pages of real estate deeds, property assessment records and tax bills to pinpoint the biggest beneficiaries.
The investigation found that all but Benderson Development Co. had active Greenbelt sites during the most recent tax year. Together, the other four builders own at least 20 square miles – larger than the entire city of Sarasota – across the two counties that are coded as agriculture.
By claiming Greenbelt, developers erased almost 97% of the taxable value on properties worth more than half a billion dollars across Sarasota and Manatee counties.
Altogether, the four companies paid about $269,000 in ad valorem taxes last year on their Greenbelt sites.
Neal Communities paid $55 in ad valorem property taxes last year on a 6.4-acre commercial development site south of University Parkway that it bought nearly two years ago for $2.2 million.
Schroeder-Manatee Ranch paid $9 in ad valorem taxes last year on 6 acres in Lakewood Ranch with a market value of $1.9 million.
A company tied to Medallion Home used the loophole to pay $442 in property taxes for 59 acres of the former Foxfire golf course off Proctor Road already zoned for new residential development. For comparison, the owner of a 1,900-square-foot house in unincorporated Sarasota paid six times more.
“We have a rancher that leases the property and keeps cows there,” Medallion Home founder Carlos Beruff said in a text message. “Has for years.”
Ad valorem property taxes are the primary revenue source for local governments across Florida, which rely on the funds for roads, schools and police. The annual rates are set by elected officials, then assessed on the parcel’s determined value.
“This has been going on a long time,” Sarasota County Commissioner Tom Knight said. “It’s an antiquated law meant to help farmers of the era that’s not living up to true intentions. Developers are using it to save millions of tax dollars and not pay their fair share.”
Developers note that they are within the bounds of the law. Because their projects are not completed, they contend the properties add no strain to local governments, and therefore, they should pay agricultural rates.
Some builders said forcing them into higher taxes during the waiting and planning stages would prompt them to advance development sooner than intended, expediting the inevitable growth.
“If you have a piece of property that you’re allowed to do this on, then it’s not illegal,” Suncoast Builders Association CEO Jon Mast said. “These homes will bring way more property taxes.”
Decades later, Greenbelt fails to preserve agriculture
Florida lawmakers in 1959 adopted what is known as the Greenbelt law to protect farmers and preserve the state from over-development by offering steep property tax discounts on agricultural land.
All property before then was taxed on the value of its most profitable potential use, which often meant new development. That left a crushing tax blow to Florida ranchers, who as a result, were selling much of their land to eager builders with their eyes set on shopping malls and subdivisions.
“Would you rather make $1 million a year running an orange grove or sell the land to a developer for $30 million up front?” said Steve Geller, a Broward County commissioner, former Florida senator and practicing land-use attorney.
The Greenbelt law instead assesses taxes based on a property’s current use to reflect less-profitable industries like agriculture. The idea was to keep farmers and ranchers in business by saving them thousands of dollars each year.
Property owners must apply for the Greenbelt tax rate, with county appraisers evaluating applicants on the specific type of operation and income produced. If the appraisers determine the land meets the definition of a “good faith commercial agricultural use,” the lucrative tax break is awarded.
Geller, a Democrat, coined a nickname for the loophole: “Hertz Rent-A-Cow.”
“All you have to show is that you’ve got six chickens, a pig and horse,” Geller said, tongue-in-cheek. “And that’s ridiculous.”
In the early 2000s, Geller introduced a statewide overhaul to curb the rampant misuse of Greenbelt, including clawbacks modeled at the time after a Texas law allowing local governments to recoup taxes if a rancher decided to build homes.
His measure died with little support. There have been sporadic attempts by others to close the loophole since, but nothing has gained traction.
“Is it really an agricultural use to have two or three cows on your 500-acre property?” quipped Dan Lobeck, a Sarasota attorney who heads the advocacy group Control Growth Now.
There are just 21,053 acres of actual vacant land left in the county, not counting parks and other rights of way. Manatee County has 70,504 acres of vacant land.
Florida cattle and farm trade groups did not return requests for comment.
“It’s not just the direct loss of farmland – even the farmers still here are in danger of development,” said Anne Miller, acting executive director with Community Harvest SRQ, which goes into farms to pick leftover produce to reduce waste.
Ranchers ward off new development
Hugh Taylor is focused on how his ranch can survive getting sandwiched by a new home development and a golf course. He’s unsure of the long-term effect on his cattle.
“We have seen more and more homes go up,” Taylor said. “It does concern us. It has definitely changed the area.”
“Your property is your land, so you can do with it whatever you want,” Taylor said. “As long as it doesn’t interfere with me.”
Greenbelt was crafted decades ago to help ranchers like Taylor. Yet it is builders like Pat Neal who have mastered the law’s loophole.
Two years ago, a company controlled by Neal Communities called Sioux Investment Partners LLC purchased two tracts of land totaling 317 acres east of Interstate 75 for $46.8 million.
Despite the clear value of the sites, by using the property for grazing, Neal carved the taxable value from $36.8 million down to $131,500.
Last year, Neal paid $1,509 in combined ad valorem property taxes on both properties.
That’s less than half of the tax bill for an average middle-class home in Sarasota County.
In an emailed statement, Pat Neal said the properties in question are used for agriculture, so they were entitled to the breaks.
“The purpose is to allow practitioners of agriculture to stay in agriculture and not be taxed out of business,” Neal wrote in the statement.
“The properties that you have referenced are used as agricultural property,” he added. “They are entitled by law and court law to be classified as they are...as agriculture.”
Greenbelt is used across the Suncoast, from the pastures of Parrish to the marshes of West Villages in North Port – and it’s not just local developers.
A subsidiary of Canadian builder Mattamy Homes paid Sarasota County $106 in ad valorem taxes last year on a 52-acre parcel worth $3 million in the massive West Villages development near North Port.
Mattamy representatives did not respond to requests for comment.
Developer expands Lakewood Ranch with steep tax discounts
Lakewood Ranch encompasses more than 30,000 acres hugging Manatee and Sarasota counties and an estimated population of 4072,000 people. That includes at least 15,000 new residents since 2020 alone.
From its early roots in agriculture to its new communities under development, Schroeder-Manatee Ranch has taken the Greenbelt law full-circle.
SMR owns the most land of any of the major developers in Sarasota County, with at least 5,974 acres. Of that, 99% of the land is classified as agricultural.
Despite intentions to develop, SMR gained Greenbelt classifications that chopped the taxable value of its agricultural property across the two counties from $302.5 million to just $3.9 million, records show. That shrunk the ad valorem taxes last year to about $53,000, according to a Suncoast Searchlight review of tax bills.
Public relations representatives at SMR did not respond to calls and emails seeking comment.
“What they’re trying to do now is get rid of the rural,” said Michael Hutchinson, a board member with the grassroots nonprofit Keep the Country Country.
SMR uses the designation on at least 31 parcels in Sarasota and another six in Manatee.
Not everyone who applies gets the break. An applicant must show the operation is at least attempting to become profitable. Property appraisers say their hands are tied. Like it or not, they are obligated to follow the state law and insist that they scrutinize every application, Sarasota County Property Appraiser Bill Furst said.
“The more you look into the law and guidelines, the more vague it is,” Furst said. “There’s not much of a scorecard. There’s no A, B or C.”
In Manatee County, the property appraiser said his office spent months arguing with a property's owners who tried to say their pet llamas qualified.
Officials say addressing the loophole is just one step in a range of controls needed to regulate overgrowth.
“We need to hold developers accountable,” Manatee County Commissioner Tal Siddique said. “Agriculture is an important part of our history and heritage.”
This story was produced by Suncoast Searchlight, a nonprofit newsroom of the Community News Collaborative serving Sarasota, Manatee, and DeSoto counties. Learn more at suncoastsearchlight.org.