Palm Coast and County Resolve Sour Development Conflict, Signaling Falgout’s More Cooperative ‘Playbook’

What a difference a little negotiation, and a key change in personnel around the negotiating table, makes.

Last April Palm Coast government threatened to sue county government over a planned development of a 26,000 square foot shopping strip called Airport Commons at the corner of Aviation Drive and State Road 100, opposite Bulldog Drive and where a Wawa-anchored strip is currently in development.

Airport Commons would be on some 4 acres of a 57-acre property currently in unincorporated Flagler County, not in Palm Coast. The entire airport zone is county land. But for Airport Commons to get water and sewer service, it would eventually have to connect to the city utility. And to do so, it would have to annex into the city–something the property owner did not want to do.

There was also a matter of $180,000 in transportation impact fees the city would charge the property owner–the one-time fees that defray the impact of new development. The developer did not want to pay that cost of annexing into Palm Coast.

County Administrator Craig Coffey and then-City Manager Jim Landon had originally negotiated some compromises but the deal fell through over utility services and those impact fees, to the point that the county considered extending water and sewer lines from the airport to the development (even though those services are provided to the airport by Palm Coast). The county contended that the Airport Commons property fell within a zone that was exempt from municipal annexation requirements even if it were to get utility services through the city.

Palm Coast’s threat to  sue the county was based on the county’s plan to circumvent the city’s services. The developer considered pulling out. It got even messier when Landon intimated that politics were mucking up the project, because the land is owned by Jay Gardner, the county’s property appraiser. Gardner has claimed all along that he’s remained outside the fray.

Landon was fired in mid-September. In the last few weeks, as negotiations carried on between county staff and city staff, at the direction of Interim Manager Beau Falgout and involving Utilities Director Richard Adams and Ray Tyner, the city’s development director, all issues were resolved. That group, Coffey said, was “easier to work with, less tension.”

“I’m happy to say that through negotiations with both the county and the property owner, we came to a good deal for all parties concerned,” Falgout told the city council at a workshop Tuesday.

It was a signal achievement for Falgout, burnishing his emergence out of Landon’s shadow as a far less adversarial, more collegial executive who appears eager to seek out pragmatism without getting blindsided by egos. The resolution of the Airport Commons issue was the Falgout “playbook,” as he called it, at work.

“We had several meetings to try to resolve the issue, and we did,” Tyner said.

Palm Coast has agreed to let the county provide sewer service from the airport, since the city itself doesn’t have sewer lines that can service Airport Commons at the moment. The county and the developer have agreed to annex into the acreage of the development into the city, at the time the development is issued a certificate of occupation, and to connect to city water.

The developer will also pay transportation impact fees, but at the much-reduced rate of $111,326, based on the current plan to develop 26,000 square feet. If the development’s size changes, the rate may be changed accordingly.

Alternately, Airport Commons may choose to forego paying the impact fees and instead build a westbound deceleration lane on SR 100 into the shopping strip, as well as a northbound, right-hand turn lane from Aviation Drive onto SR 100. Those road improvements would ease congestion on SR 100 and traffic flow into and out of Aviation Drive, not just to help Airport Commons, but to vastly improve traffic during big events at the airport, Coffey said.

“The estimated construction costs for the Transportation Improvements are anticipated to be in excess of the transportation impact fee due for the project,” the agreement states. That being the case, the city would extend impact fee credits to the developer.

The agreement controls 3.8 of the 57 acres owned by Gardner. Falgout said  the city encouraged Gardner to move forward with the entire annexation, but Gardner wasn’t ready to do so.

The council is scheduled to approve the pre-annexation agreement at its Nov. 20 meeting.

The site plan has been completed. The planned shopping center will include a fitness center, and have a restaurant on the western portion of the site, city officials say. The county will follow the city’s architectural and landscaping standards. “They want to get this moving as quick as possible,” Tyner said of the developer.

Bill Reischmann, the city attorney, said the agreement preserves the city’s prerogative to ensure that its annexation rules and standards are followed, though the agreement Tyner laid out made clear that it was a negotiated agreement–not one imposed by the city so much as agreed to through pragmatic concessions on both sides, and a dialing down of annexation costs to the developer that paralleled the dialing down of the rhetoric, to which Reischmann, following Landon’s loud lead in November, had initially contributed.

“This is fine. I always prefer seeing an agreement to wasting a lot of money on lawyers. Not that there’s anything wrong with lawyers,” council member Bob Cuff, a lawyer, said.

But Cuff was guarded about the implication of Reischmann’s claim, if it meant further conflict ahead. “What we’re preserving is the right to have this monumental fight for the next 20 years with the county the next time RaceTrac or Hess or somebody wants to put a gas station on some of this property,” Cuff said. “I think we need to work harder at resolving the rest, because it’s just going to keep coming back. The amount of energy we have been expending to get a 4-acre fitness-center and restaurant and retail space, which is all over the county, I mean, if we replicate this model every time somebody else is looking to build something along State Road 100, we’re kidding ourselves.”

Holland called herself “encouraged” not just by the development, “but also by the conversation surrounding this.”

“That’s my point,” Cuff said. “I think if we just pat ourselves on the back and say we’ve solved that one, well, we’ve solved this one assuming everybody is willing to sign this agreement, and I see no reason not to. But we really haven’t solved the issue that generated the need for this agreement.” Cuff’s assessment may have been tainted by the still-simmering background radiation of the Landon years.

Falgout put it in more hopeful terms, as if to remind council members that the tone-setting was different. “I think we have a playbook with this agreement of how to get past the initial–‘I’m going to develop in the county, I’m not going to come talk to you, city,’ or ‘I’m going to develop in the city, I’m not going to come talk to you, county,'” Falgout said. “So now we have a playbook, if we just work together at the beginning and avoid the conflicts that occurred in this one, and I think that’s the playbook. The next developer that walks in just to the east or west, here’s what we reached on this agreement. Try to meet some of our standards, keep our impact fees whole, let us be involved in the discussion on water and sewer, and let the county as well, because it affects their airport. I think we have a playbook to resolve these issues in the future that’s less time-intensive and less adversarial.”

Coffey, long Landon’s nemesis (and vice versa), put it this way: “Falgout is great to work with.”

Airport Commons Agreement (2018)

Click to access airport-commons.pdf