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Despite Peary Court sale, Navy tax-lien case moves on

Although the sale of U.S. Navy housing at Peary Court in Key West to a private developer has gone through, the Monroe County Property Appraiser's Office lawsuit against the Navy's private housing partner seeking $11.5 million in back taxes continues.

Navy spokeswoman Susan Brink from Naval Facilities Engineering Command in Jacksonville confirmed the sale of the 24-acre, 160-unit Old Town neighborhood to White Street Partners LLC, which includes developers Everett Atwell and Nelson Stabile.

In 2007, the Navy transferred ownership of 895 houses in Key West to the private company Southeast Housing LLC. A previous tax exemption, based on federal ownership, went along with the transfer.

In 2011, then-Monroe County Property Appraiser Karl Borglum reversed the exemption and filed an $11.5 million lien seeking back taxes, penalties and interest for the military housing spread across Sigsbee Park, Trumbo Annex, Truman Annex, Peary Court and the Branch Medical Clinic on South Roosevelt Boulevard.

Southeast is challenging the lien in Monroe County Circuit Court and the matter is heading for a Nov. 20 trial. Chief Judge David Audlin will preside over the planned three-day trial at the Freeman Justice Center in Key West.

Property Appraiser Scott Russell said that while the $1.7 million Peary Court lien, part of the $11.5 million total, was satisfied with the sale closing, "It doesn't change anything. The court case is still proceeding."

"What happens now is with the new owners, that property in its entirety will go at its full value on the 2014 tax roll," he said.

A year ago, the Key West City Commission approved a change to the density requirements at Peary Court to allow White Street Partners to build 48 additional units, allowing for compliance with the city's requirement that 30 percent of redevelopment be dedicated to income-eligible affordable housing.

White Street is in the process of coming up with a final design scheme, which will have to go back to the commission, along with the city's Historic Architectural Review Commission and Planning Board.

The Peary Court sale price has not been disclosed but is rumored to be in the $30 million range.

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