Palm Coast Sets Special Meeting Tuesday to Consider Tax Breaks for Palm Harbor Shopping Center’s Redevelopment
FlaglerLive | September 26, 2014
In an unusual move, the Palm Coast City Council set a special meeting immediately following Tuesday’s workshop to adopt two proposed measures: a tax-break package valued at $52,000 for the Palm Harbor shopping center redevelopment, and a $900,000 purchase of 21 vehicles for the city’s fleet.
The Flagler County Commission routinely holds meetings immediately after workshops to ratify by vote decisions reached during the workshop, when votes cannot be taken. The commission has occasionally been criticized for doing so, as the matters at hand have little time to be divulged and discussed in the community. The Palm Coast City Council has not held such meetings immediately after a workshop in the past several years, keeping to a schedule of alternating workshops and business meetings every Tuesday.
“We were already having a special meeting anyway, due to the cost savings on the white fleet purchase,” Cindi Lane, the city’s spokesperson, said. “So with Palm Harbor, this provided an opportunity for us to bring to council more quickly. It’s a complex and important project with a sensitive timeline.”
The incentive package for Palm Harbor Shopping Center was the result of would
Oakbrook, Ill.-based Inland American had owned the shopping center since 2009. The center had once been the heart of Palm Coast—indeed, its only commercial center, before the city’s incorporation. But it declined over the years as the city grew and its commercial center of gravity began shifting away from Palm Harbor. Not much was done to maintain the quality of the center, and tenants had difficulties preserving workable relationship with the landlord as rents and Common Area Maintenance fees were raised. Store after store went vacant. The property continued to decline. Last May Inland sold the strip mall to Branch Island Walk Associates, an Atlanta-based company, for $12.4 million.
The future Island Walk, as the development will be renamed, will be anchored by a larger, 54,000 square foot Publix, among a total of more than 220,000 square feet of retail space on 28.7 acres. The developer, Winter Park-based Michael Collard Properties, projects spending $40.8 million. It has big hopes—as does the city—of revitalizing the shopping center and bringing in new national tenants despite the difficulties other shopping centers have had doing that in the wake of the Great Recession. The rebuilding and reconfiguring of Island Walk is intended to create a new look and magnet for existing and new businesses. (Several existing businesses have moved to enable the reconstruction.)
“During review of the site plan and in consultation with the new owner, several issues were raised that put the redevelopment project in jeopardy,” background documentation for the city’s incentive proposal states. It’s not clear what those issues were. The city did not reply to an email inquiry. Beau Falgout, senior planner and the point man on the project, did not return a call Friday. “City staff was approached by the owner about possible incentives for redevelopment in order to keep the project moving forward,” the background documentation continues.
The incentives entail the city not imposing water and sewer impact fees on the developer, the one-time tax charged to builders to offset the cost of development. Local governments have water, sewer, parks, transportation, fire and schools impact fees. The developer of a single-family house in Palm Coast would pay roughly $15,000 in combined impact fees, a cost passed on to the home-buyer. Commercial developments pay more, depending on the size of the development. Island Walk would get a $52,000 break. It would also be eligible, according to the proposal, for a break on transportation impact fees. That figure is not yet known.
“Notwithstanding redevelopment,” city documents state, “the Palm Harbor Shopping Center could fall further into disrepair and become a source of blight, negatively impacting the City and surrounding neighborhoods. In addition, the redevelopment of the Palm Harbor Shopping Center will increase taxable sales, increase sales tax collections, and improve the conditions of the local economy and surrounding neighborhoods. For these reasons and for the public purpose of economic development, City staff is recommending approval” of the incentives.
Phase I of Island Walk, which includes the majority of small shop tenants, is expected to be completed next spring, according to the developer, followed by Phase II with Publix and additional small shop space by Fall 2015. The final phase to the east of the new Publix is expected to be complete by mid 2016.
The council approved the purchase of vehicles as part of its coming budget. On Tuesday, council ,members will face three options on how to proceed with the purchase. Local car dealers were offered a chance to bid but they declined. Duval Ford, Allan Jay Chevrolet Cadillac, Inc., and Nextran Truck Center provided quotes to the city, which now proposes to buy the vehicles from all three dealers, though most of the vehicles would be bought from Duval Ford by piggybacking on a Florida Sheriff’s Association Contract. The piggybacking allows the city to buy vehicles at a lower rate.
Council members can choose to buy 2014 models on the current, 2013-14 Sheriff’s Association contract before prices increase, or they can wait for a new contract, after Oct. 1, for 2015 models. But in that case prices will most likely be higher.
The workshop discussing both matters, and other matters, begins at 9 a.m. at the city’s conference room at City Marketplace. It’s open to the public. The special meeting will immediately follow the workshop in the same place. But it’s impossible to know at what time the special meeting will begin. Workshops usually last several hours.