1. This action arises out of the denial for the Tax Years 2016 and 2017 by the St. Lucie. Filing # E-Filed 04124/2017 ll:04:01 PM COMPLAINT

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1 Filing # E-Filed 04124/2017 ll:04:01 PM IN THE CIRCUM COURT OF THE NINETEENTH JUDICIAL CIRCUIT, IN AND FOR ST. LUCIE COUNTY, FLORIDA CITY OF PORT SAINT LUCIE, a Florida municipal corporation, and MICHAEL E. IMBER, in his capacity as the Court-appointed Receiver for VACCINE AND GENE THERAPY INSTITUTE OF FLORIDA CORP., a Florida not-for-profit Corporation, Case No.: Plaintiffs, vs. MICHELLE FRANKLIN, as the Saint Lucie County Prope(y Appraiser, and LEON M. BIEGALSKI, as the Executive Director of the Florida Department of Revenue, Defendants. COMPLAINT Plaintiffs, CITY OF PORT SAINT LUCIE, a Florida municipal corporation (the "Q!!y"), and MICHAEL E. IMBER(the "@gi"), not individually, but solely in his capacity as the Court-appointed Receiver for VACCINE AND GENE THERAPY INSTITUTE OF FLORIDA CORP., a Florida not-forprofit corporation ("@!,") (collectively, the City and the Receiver shall hereinafter be referred to as the '(Plaiintiffs"), by and through their respective undersigned counsel hereby file this Complaint, and sue Defendants, MICHELLE FRANKLIN, as the Saint Lucie County Property Appraiser, and LEON M. BIEGALSKI, as the Executive Director of the Florida Department of Revenue, and states as follows: INTRODUCTION 1. This action arises out of the denial for the Tax Years 2016 and 2017 by the St. Lucie County Property Appraiser of the ad valorem tax exemption previously applicable to VGTI with respect MIAMI t

2 to that certain real and tangible personal property located at 9801 SW Discovery Way in Port St. Lucie, Florida (the "ELbpgI!y,"). JURISDICTION AND VENUE 2. This Court has jurisdiction over the claims stated herein pursuant to Section , Florida Statutes. 3. Venue is appropriate in St. Lucie County, Florida pursuant to Section , Florida Statutes, as the real and personal property that is the subject of the cause of action is located in Port St. Lucie, St. Lucie County, Florida. PARTIES 4. Plaintiff, MICHAEL E. IMBER, solely in his capacity as a Court-appointed Receiver for the Vaccine and Gene Therapy Institute of Florida Corp., a Florida not-for-profit corporation, is a proper party to bring this action under Section (1)(a), Florida Statutes, as authorized by the Corrected Order Appointing Receiver Over Defendant Mo(gaged Property entered on April 5,2016, by the Circuit Court of the Nineteenth Judicial Circuit in and for St. Lucie County, Florida, in Case No. 2015CA VGTI Florida is presently the fee owner of record of the Property pursuant to that certain Special Warranty Deed dated June 12,2009 and recorded on June 18, 2009 in Official Records Book 3101 at Page 61, of the Public Records of St. Lucie County Florida. 5. Plaintiff, CmY OF PORT ST. LUCIE, is a Florida municipal corporation, is otherwise sui juris, and is a proper party to bring this action under Section (1)(a), Florida Statutes. The City is a taxpayer and is responsible for the payment of any taxes assessed against the Property pursuant to certain bond documents, loan agreements, and other instruments of record, and also has obtained the written consent of the Receiver to contest the assessment of the ad valorem taxes against the VGTI Property. Said written consent from the Receiver is attached hereto and incorporated herein by reference as Exhibit "A." Page 2 of 10

3 "fu 6. Defendant MICHELLE FRANKLIN, as the Saint Lucie County Property Appraiser (the yapplq") is a necessary and proper party defendant in this action under Section l94.l8l(2), Florida Statutes. 7. of Revenue, Defendant LEON M. BIEGALSKI, as the Executive Director of the Florida Department a necessary and proper party defendant in this action under Section (5), Florida Statutes. GENERAL ALLEGATIONS APPLICABLE TO ALL COUNTS 8. All conditions precedent to bringing this action have occurred or have been excused or waived or are inapplicable to the City or the Receiver. 9. On March I l, 2008, a charitable, non-profit corporation under the name of Oregon Health and Science University Vaccine and Gene Therapy Institute Florida Corp. was established under the laws of Florida for the purpose of developing and operating a scientific research and educational institute. 10. On December 16,2010, Oregon Health and Science University Vaccine and Gene Therapy Institute Florida Corp. changed its name to Vaccine and Gene Therapy Institute of Florida Corp. 11. Between the years of 2008 and 2010, the City pursued efforts to induce meaningful employment and other economic development projects by providing various economic incentives. 12. As a result of, among other things, economic incentives provided by the City, VGTI selected the City of Port St. Lucie as the location for its state-of-the-art scientific research facility 13. In June 2010, the City issued the $64,035,000 Research Facilities Revenue Bonds, Series 2010 (Oregon Health and Science University Vaccine and Gene Therapy Institute Florida Corp. Project) (the "Wl!l_bdg") to provide funds, together with other available money, to finance the acquisition of land and the construction of an approximately 100,000 squnre foot building on the subject property for purposes of biomedical and other scientific research, development training and educational facilities, and other municipal and public purposes (the "HI-EIq S!"). 14. The VGTI Project is comprised of the VGTI Property, which consists of the land, located at 9801 SW Discovery Way in Port St. Lucie, St. Lucie County, Florida (Parcel ID: Page 3 of 10

4 6) (as more specifically described in Exhibit "B" attached hereto), together with the biomedical and other scientific research, development training and educational facilities, and related improvements constructed upon said land, and the furniture, fixtures, equipment, and other personal property therein (collectively, the "EiILbEr[y"). 15. The VGTI Project was to be a boon to the City and major economic boost "to promote the health, safety and welfare of the residents of the City by providing for the creation of jobs, training, education development and other economic development." (Section 3(J) of City Ordinance 10-18, passed Apit26,2010). City Ordinance is attached hereto and incorporated herein by reference as if fully set forth herein as Exhibit "C." 16. The City financed the VGTI Project through the Series 2010 Bonds, which were issued pursuant to a Trust Indenture, dated as of June l, 2010 (the "Indenture"), between the City and TD Bank, National Association. The Indenture is attached hereto and incorporated herein by reference as if fully set forth herein as Exhibit "D." 17. Proceeds of the Series 2010 Bonds were loaned to VGTI Florida for the VGTI Project pursuant to a Loan Agreement, dated as of June 1,2010, between the City and VGTI Florida as the Borrower (the "Loan Agreement"). The Loan Agreement is attached hereto and incorporated herein by reference as if fully set forth herein as Exhibit "E." 18. The VGTI Project is a Research and Development Park, as defined by Section , Florida Statutes, and shall serve a paramount public purpose by advancing the public health and general welfare of the State of Florida, its citizens, the City, and the City's residents. 19. The City, as authorized to finance the VGTI Project as the "local agency," as such term is defined in Chapter 159, Part II of the Florida Statutes, accordingly issued the Series 2010 Bonds for the VGTI Project for municipal and public purposes. 20. Since its inception, the VGTI Property (the realty and the tangible personal property) has been exempt from advalorem taxation. Page 4 of 10

5 21. While the VGTI Project was granted an exemption from ad valorem taxation, the City did not need to concem itself with VGTI Florida's efforts to maintain the exemption and thus did not assert that the VGTI Property also qualified for an exemption based on the City's ownership interest, equitable or otherwise, and its use of the VGTI Property for municipal or public purposes. 22. On or about October I,2015, based on a lack of additional funding, VGTI Florida ceased activ e research operations. 23. Nevertheless, the VGTI Property is itself highly-specialized and scientific in nature and continues to be used for scientific and public economic and physical purposes including the maintenance of highly-specialized laboratories and equipment, the continued storage of substantial volumes of scientific research data, and as a continuing vital part of the Tradition Center for Innovation, a research and development park with anchor institutions, including the Torrey Pines Institute for Molecular Studies, Mann Research Center and Martin Memorial Health Systems. 24 The City, as the bond issuer with defined obligations under the Indenture and the Loan Agreement, has assumed the financial and other obligations relating to the management and maintenance of the VGTI Property, the building and improvements, and the payments associated with the property insurance and the real estate taxes for the2016 Tax Year. 25. OnJuly l,20l6,plaintiffsreceivedaletterandnoticeof Disapprovalof Applicationfor Property Tax Exemption or Classification by the County Propefi Appraiser (the "2016 Exemption Denial Notice"). A copy of the 2016 Exemption Denial Notice is attached hereto and incorporated herein by reference as if fully set forth herein as Exhibit "F." 26. On July 29,2016, the Receiver filed a Petition to the Value Adjustment Board & Request for Hearing, Petition No (the "@$EIg1tition"), appealingthe2016 Exemption Denial Notice. A copy of the 2016 VAB Petition is attached hereto as Exhibit "G." 27. A hearing on the 2016 VAB Petition was held before a special magistrate on November 8,2016. The Recommended Decision of Special Magistrate, which was to deny the 2016 VAB Petition, was issued on December 13, 2016 (the "Recommended Decision"). The Recommended Decision was Page 5 of 10

6 presented to the Value Adjustment Board at its February 22,2017 Meeting for a final decision. The Value Adjustment Board approved the Recommended Decision and the VAB clerk mailed the decision to the ReceiveronFebruary24,20l7(the..@u,,).AcopyoftheFinalVABDecisionisattached hereto as Exhibit "H." Accordingly, pursuant to Section , Florida Statutes, this action is timely filed. 28. On or about November 16, 2016, the Receiver received and forwarded to the City, for payment, the Notice of Ad Valorem Taxes and Non-ad Valorem Assessment for the VGTI Property for the20l6 Tax Year (the "2016 Real Estate Tax Bill"). A copy of the 2016 Real Estate Tax Bill is attached hereto and incorporated herein by reference as Exhibit "I." 29. According to the 2016 Real Estate Tax Bill for the VGTI Property, the Total Ad Valorem Taxes is $279, and the Total Assessments (the non-ad valorem assessments for which the Plaintiffs are entitled to receive an exemption) are $188, Therefore, the combined taxes and assessments due for the 2016 Real Estate Tax Year on or before March 31,2017, totals $467, On or about January 27,2017, the City paid, in full with a2%o discolnt applied, and under protest, the total amount of $458,102.60, which is the amount due for the 2016 Real Estate Tax Bill for the VGTI Property. A file copy of the check payment that was mailed directly from the City to the St. Lucie County Tax Collector for the Payment of the Taxes is attached hereto as Exhibit "J." 3 1. The Plaintiffs, on or before March l, 2017, each filed an Ad Valorem Tax Exemption Application and Return seeking exemption for the VGTI Property from ad valorem taxation for the 2Ol7 Tax Year. 32. On or about April 12,2017, the Receiver and undersigned counsel for the City had each received a telephone call from the Property Appraiser's office informing Plaintiffs of the denial by the Prope(y Appraiser of both applications for the ad valorem tax exemption for the 2017 Tax Year for the VGTI Property. Page 6 of 10

7 33. As a direct result of the Property Appraiser's denials of the ad valorem exemption for the 2016 Tax Year and the 2017 Tax Year, Plaintiffs are asserting their rights to claim entitlement to ad valorem exemption for the VGTI Property for the 2016 and 2017 Tax Years. COUNT I - EXEMPTION FROM AD VALOREM TAXATION FOR SCIENTIFIC PHYSICAL use AND ECONOMIC USE IS RBQUIRED PURSUANT SECTTON , FLORIDA STATUTES 34. The Plaintiffs re-allege and re-aver the allegations contained in the above paragraphs I through 30 as iffully set forth herein. 35. VGTI Florida is a not-for-profit corporation and a 501(c)(3) tax exempt entity. 36. Section , Florida Statutes, provides for exemption of property owned by an exempt entity and used exclusively for exempt purposes. Further, the statute requires that each use of the property be considered, including any economic use. 37. Section , Florida Statutes, defines "use of exempt property for exempt purposes" as including educational, scientific, and charitable purposes as defined in Chapter 196 of the Florida Statutes. 38. At all times pertinent to this action, the physical and economic uses of the VGTI Property, continued to be scientific purposes and the VGTI Property has not been used for any non-exempt purpose. WHEREFORE, the Plaintiffs respectfully request that the Court (1) direct the Defendant Property Appraiser issue a refund to the City for its payment of the amount due for the non-ad valorem assessments for the 2016 Real Estate Tax Bill for the VGTI Property, with interest as allowed under applicable law; (2) require the Defendant Property Appraiser to grant the VGTI Property an exemption from ad valorem taxation for the 2017 Tax Year and any subsequent years for which the City may submit an application for ad valorem tax exemption as the record fee title owner or equitable owner of the VGTI Property; (3) award Plaintiffs their costs of this action pursuant to Section , Florida Statutes; and (4) and grant such other and further relief which this Court deems just and proper. Page 7 of 10

8 COUNT II _ EXEMPTION FROM AD VALOREM TAXATION SHALL BB GRANTED PURSUANT TO THE FLORTDA CONSTITUTION, SECTION , FLORIDA STATUTES, AND/OR SECTION (7), FLORIDA STATUTES 39. The Plaintiffs re-allege and re-aver the allegations contained in the above paragraphs 1 through 30 as if fully set forth herein. 40. The City as the bond issuer with defined obligations under the Indenture, has fulfilled and will continue to fulfill its obligations under the Indenture and will thus remain as the party responsible for the payment of the real estate taxes as a result of VGTI Florida's default under the Indenture, VGTI Florida's breach of the Loan Agreement, and its breach and default of other agreements, until such time as title to the VGTI Property transfers to an entity other than VGTI Florida or the City. 41. The City as the entity that loaned the proceeds of the Series 2010 Bonds to VGTI Florida pursuant to the Loan Agreement, has fulfilled and will continue to fulfill its obligations under the Loan Agreement and will thus remain as the party responsible for the payment of the real estate taxes as a result of VGTI Florida's default underthe Indenture, VGTI Florida's breach of the Loan Agreement, and its breach and default of other agreements, until such time as title to the VGTI Property transfers to an entity other than VGTI Florida or the City. 42. The City is a deemed owner of the VGTI Property and used by the City of Port St. Lucie for a public or municipal purpose pursuant to Section (7), Florida Statutes, and is therefore exempt from ad valorem taxation. Statutes. 43. The City issued the Series 2010 Bonds pursuant Chapter 159, Part II of the Florida 44. Section , Florida Statutes, specifically provides that "[T]he local agency shall not be required to pay any taxes on any project or any other property owned by the local agency under the provisions of this part or upon the income therefrom." The City, as the "local agency," shall therefore not be required to pay any taxes relating to the VGTI Project or the VGTI Property. 45. Under Article VII, Section 3 of the Florida Constitution, "all property owned by a municipality and used exclusively by it for municipal or public purposes shall be exempt from taxation." Page 8 of 10

9 46. The VGTI Property is entitled to exemption under Article VII, Section 3 of the Florida Constitution from ad valorem taxation as it is property that is either deemed to be owned or is equitably owned and used by the City for municipal and public purposes. 47. The City, as the responsible taxpayer for the real estate taxes and the tangible personal property taxes claimed to be due and owing for the VGTI Property, must shoulder the burden associated finding funding from one source to pay the ad valorem taxes, which should not be assessed against the VGTI Property, and will likely not be able to use any funds received from those taxes to replenish the funding source from which the money was originally taken. 48. This circumstances concerning the denial of the ad valorem tax exemption for the VGTI Property creates an absurd result and burden upon the City and its citizens. WHEREFORE, the Plaintiffs respectfully request that the Court (l) direct the Defendant Property Appraiser issue a refund to the City for its payment of the amount due for the non-ad valorem assessments for the 2016 Real Estate Tax Bill for the VGTI Property, with interest as allowed under applicable law; (2) require the Defendant Property Appraiser to grant the VGTI Property an exemption from ad valorem taxation for the 2017 Tax Year and any subsequent years for which the City may submit an application for ad valorem tax exemption as the record fee title owner or equitable owner of the VGTI Property; (3) award Plaintiffs their costs of this action pursuant to Section , Florida Statutes; and (a) grant such other and further relief which this Court deems just and proper. Respectfully submitted this 24ft day of April,2017. Attorneys for the Plaintiff City of Pon St. Lucie 121 SW Port St. Lucie Boulevard Pon St. Lucie, FL34984 By: /s/ Azlina Goldstein Siepel Azlina Goldstein Siegel, Esquire Florida Bar No.: 0c John J. Fumero, Esquire Florida Bar No.: John K. Rice, Esquire Florida Bar No Park of Commerce Boulevard, Suite 210 Page 9 of 10

10 Boca Raton, Florida Telephone: (561) ll4 Facsimile: (561) nasonyeager.com nasonyeager.com j nasonyeager.com j fi nasonyeager.com -and- Attorney for the Co-Plaintiff Michael E. Imber, Receiver Bilzin Sumberg Baena Price & Axelrod LLP 1450 Brickell Avenue, 23rd Floor Miami, Florida By: /s/ Jeffrev L Snvder Jeffrey I. Snyder, Esquire Florida Bar No.: Telephone: (305) Facsimile: (3O5) isnyder@bilzin.com Page 10 of 10