The Palm Coast City Council is awakening to several converging realities about Town Center, the once and future promise of the city’s vitality.
Apartment construction there has been brisk. But commercial construction has been nil despite generous incentives, keeping Town Center from developing into the mixed-use cityscape imagined a decade and a half ago. Town Center’s designation as a redevelopment zone is expiring in 2033, when a huge chunk of annual tax revenue currently locked in for city use will revert back to county coffers, leaving the city to provide the same services there but minus the money to pay for them. And few on the council or in the administration today have any connection or memory of Town Center’s creation, its purpose or even its intended future track.
What started as a brief and seemingly inconsequential discussion at a Palm Coast City Council workshop this morning–a conversation updating the council on Town center’s budget figures and an incentive program–turned into a springboard for concerns Mayor Milissa Holland had been mulling over, and that may now take on more urgency, especially with (if not because of) a new council and administration on board.
“It’s been on my mind for a while, it would be a good reset for us,” Holland said.
Holland wants a presentation about “what is coming to Town Center as a whole, sort of like a vision of Town Center,” she said. “I say this because what I don’t want to see is driving into Town center and seeing all apartments, and nothing else. I mean, it was supposed to be a mixed-use development, and I’d like to get a better understanding when we’re going to see commercial.”
Referring to the University of North Florida’s coming expansion in Town Center, Holland continued: “We know MedNex is coming, and there’s other things, we have the Arts District that we’ll hopefully facilitate, some more art opportunities there in our downtown. But this is a large tract of space right in the middle of our city, and I don’t have an understanding of what the true vision is of Town center.”
City Manager Matt Morton said that process was started a few weeks ago.
The city administration last presented a broad overview of Town Center past, present and future in June 2018, when the council had two council members, a city manager and an assistant city manager who have all since left. Eddie Branquinho, elected in late 208, has not had a Town center overview. Two new council members–Ed Danko and Victor Barbosa–will be sworn in on Nov. 17. In essence, the overview will be part of the learning curve for a majority of the council and even the administration, since neither Morton nor DeLorenzo were at the city in 2018.
The discussion this morning unwittingly revealed the consequence of the huge loss of institutional memory and continuity wrought by rapid turnover both on the council and the administration over the last few years–a turnover that reflects the changing direction of the city, if not of Town center itself.
There was one exception to that trend this morning: Jon Netts, the former council member, mayor, and currently appointed council member (filling in for Jack Howell, who resigned in August), whose various tenures on the council cover almost the entire history of the city. Like Adam in what was then seen as Palm Coast’s Eden, Netts was there at the controversial creation of Town Center in 2003, and there when the housing market crashed, taking Town Center down with it for a decade. He was term-limited in 2016.
“Do you remember what the concept was originally?” Holland asked Netts this morning.
“I can remember talking to [developer] Charlie Faulkner when he did the final presentation before the city council, and his vision was primarily DeLand all over again: commercial right up to the sidewalk. Wide sidewalks, benches, tables up front, and I can remember saying at the council meeting, Charlie that vision will probably change three times before the 20 years is over. I think given the fact that this was approved a long time ago by a council no longer is around, it might be worthwhile just to have a review presentation of exactly what the process are, what the intent is. That would be helpful, I think.”
Netts didn’t propose it, but he may as well have been hinting that it would also be helpful to the city, though Netts would no longer be on the council by then, to have the former mayor and council member at the table, if only as a reference point and anchor to a history the city is in danger of overlooking. The administration will work with developers and land owners to craft that presentation.
Residents may commonly misconstrue the city’s role in the development of Town Center. The city is not leading it. It is only accommodating it, setting out its own parameters, such as incentives or overlays like the arts and innovation districts, or the Kick Start program. But the city cannot make developers build there. It’s the municipal application of the equine aphorism: you can bring a horse to water but can;t make it drink. “We only see it when it’s presented to us,” DeLorenzo said of private developments. “We’ll have to do a little research out to them and see what they’re thinking. But there are some projects, there are some commercial projects that are not in the Innovation District, that are coming to Town Center.”
The heart of the discussion this morning was only intended to focus on the Kick Start program.
Town Center’s Innovation District was created in 2018. A centerpiece of the district was that Kick Start program, an incentive to builders to spur residential and commercial development. The city offered a tax credit to developers–$5,000 per residential unit, or $5,000 per 1,000 sauer feet of commercial space. Developers could only use the credit to offset their utility impact fee charges, which are steep (just over $9,000 for single family homes).
Several developments benefited: The Venue’s 88 apartments, for a $440,000 credit, Central landings’ 233 apartments, for a $1.17 million credit, and a yet-to-be-named complex totaling 209 single-family homes for $1 million in credits. Two other developments totaling 500 apartments are currently eligible but haven’t been awarded the credits yet.
The credit benefit is not open-ended. “If all of those units are eventually approved, that would expire all of the residential credits that are available in the Innovation District,” Jason DeLorenzo, the city’s development director, said. “That’s actually a little over 1,000.”
But there are still credits available for 500,000 square feet of commercial space. Put another way: not a single square foot of commercial space has been built since the Kick Start program started. The city had hoped for a more even development of residential and commercial projects.
The program is set to expire on Dec. 31. The city administration is recommending that the credit program be extended by a year, to account for covid’s interruptions. If the city does provide the extension, “by the program rules you have to break ground by the expiration date, so as long as they would break ground by Dec. 31, 2021, they’d be eligible for the credits, but if they didn’t complete the project, follow through, we could revote the credits,” DeLorenzo said.
“Also if there’s any other ideas to incite non-residential development to the area, I’d love to hear any ideas that staff could present as well,” Council member Nick Klufas said.
The city has been hoping for development for two decades. The 2018 master plan update of Town center included these lines: “The State Road 100 Corridor Community Redevelopment Area is far from meeting its development potential envisioned in the 2004 Master Redevelopment Plan and Development of Regional Impact Development Orders. With the encouragement of the City, the development environment in the area is promising. Continued market demand for a more diverse mixed-use environment for residents and businesses is anticipated, and the City is committed to welcoming that demand.
In another example of institutional discontinuity, neither the mayor, DeLorenzo or Morton could remember when the Development of Regional Impact–the overall land-development blueprint for Town center–was set to expire. DeLorenzo confirmed it expires at the end of 2025. “And what happens then?” the mayor asked.
“Chaos,” Council member Bob Cuff, in his last full meeting in the council, said under his breath.
“By Dec. 31, 2025, the master developer can certainly ask for an extension of that deadline,” Jose Papa, the city’s senior planner, said. “If it was to expire, my guess is we would sort of have to re-plan the remaining, unentitled lands. So my guess is we would have a request to extend the deadline.” That’s the DRI.
The Community Redevelopment Agency is a different story: that’s the enterprise-zone like designation of Town Center the city secured in 2004, allowing it to segregate almost all property tax revenue drawn from Town center to Town Center, thus denying the county its share of tax revenue every year. The idea behind CRAs is to spur redevelopment in “blighted,” inner city areas. Town Center of course was neither an inner city nor was it blighted when the city designated it a CRA. The city opportunistically used a few square feet of unseemly housing and a couple of shops at the Bulldog Drive entrance to contrive Town Center’s entire 3,000 acres as “blighted,” and to the county’s chagrin, got its CRA. (See an early history of Palm Coast’s Town Center CRA here.)
That designation expires in 2033. That means the city is in line to lose a significant amount of property taxes to the county. “Right now the city benefits from the existence of the CRA. That benefit will go away, and things will change,” Netts said. The CRA’s 2020-21 budget projects $2.1 million in revenue–far short of the $8.6 million midrange revenue projected when the CRA was established. The city could lose a large share of that revenue to the county once the CRA expires. But it would still have to provide the same level of service to Town Center as it does now, as it will in 2033. In other words, the city is facing a looming cash crunch there, and a sharper one if development doesn’t pick up.
“I just want to make sure that we have a long-term strategy to not devalue our community but to increase the value as much as we possibly can to offset the cost to our taxpayers,” Holland said. “Now, understanding this is a CRA is a little different of a scenario, however we still have fire and first responders that go out there, and respond to the commercial, to the residential, that’s still a service we provide. So I’d like to get a very long-range view of what currently is under approval, what is being discussed for approval, what are the other property owners looking to develop out there, and is there a way to align that conversation to ensure there’s at least some consistency and understanding overall what the long-term costs are going to be for the services that we’re required to provide.”
There was no disagreement on the council. “I’d also like to see what amount of control we have over that process, and if we have any amount of input that would be of value,” Holland–who won re-election to her second and final term as mayor last week–said. “I know brick and mortar has changed quite a bit due to Amazon now existing in the world, and shopping patterns have changed. But the residential portion of that is really important, especially when we have a university presence, especially when we’re trying to develop an arts district. Those conversations are really important that the city’s priorities align with the private sector, making sure that we’re creating just a very viable development at the end of the day, that will be beneficial to our residents.”