Palm Coast Council Tables Westward Expansion Development Plan, Demanding Economic and Other Guarantees

Nearing midnight following a six-hour meeting Tuesday night, the Palm Coast City Council tabled until Aug. 25–the week after the primary election–the land-use proposals that would clear the way for the so-called westward expansion, the plan to build 22,000 housing units on 21,000 acres west of U.S. 1. 

The council signaled it would approve the development plan by Raydient, the development arm of the Rayonier Corporation that owns the land, pending changes to the Master Planned Development, or development order, the council wants. 

Those changes include:

• Increasing the ratio of non-residential-to-residential uses by increasing non-residential uses by 1 million square feet.
• Preserving historic Old Brick Road as a linear park.
• Including the county at the table especially regarding the future of Old Brick Road, which is a county road. 
• Capping the maximum density of development per acre.
• Ensuring that mitigation agreements are in place with the school district before any technical site plans are approved (meaning that if a subdivision is to go up, concurrent infrastructure needs and school space is available to accommodate the growth first).
• Removing data centers as a permitted use outside of the city’s regular land use rules. 
• Applying Palm Coast’s Land Development Code to all provisions of the master planned development (even though according to Palm Coast land rules, an MPD may override the LDC.)

None of the changes appear insurmountable for Raydient, including the increase in non-residential land uses, which only changes the acreage ratio, not the density ratio. In other words, Raydient may simply redesignate some acreage for non-residential uses but it may not necessarily diminish its overall plan for 22,0000 housing units. 

The Palm Coast Planning Board last month voted unanimously against recommending approval of the development plan.

The council, against strong public opposition, earlier passed on 3-2 votes three convoluted motions that approved on first reading the annexation of 7,043 acres on the west side, contingent on approval of the development plan–known as a master-planned development–and the amendment to the city’s comprehensive plan, all of which were on the council’s agenda. Council members Charles Gambaro, Dave Sullivan and Ty Miller voted for annexation, Theresa Pontieri and Mayor Mike Norris voted against. 

An attempt by Norris to secure a formal agreement between Raydient and Palm Coast City Historian Preston Zepp to grant Zepp access to the Raydient land to identify historical resources failed, 3-2. Norris wanted any further discussion on the development plan to be contingent on that agreement. Other council members, including Miller and Pontieri, were sympathetic with his point, but not its reach: they did not want to end the evening’s discussion, so they voted against the measure. 

 Raydient’s Mike Hahaj, director of commercial development and operations, said he was all for the principle, but opposed to the matter being part of Tuesday’s proceedings. 

“This is a very important topic that we need to ensure that the applicant is fully aware of how important this is,” Miller said. 

“What we’re talking about tonight are conditions of development, and this is a condition of development,” Pontieri said. She said she had a number of issues with the proposed development order. “This is just one of them.”

The vote to table the remaining land use proposals hours later, after the discussions, was unanimous. By then, the chamber was nearly empty. 

Hahaj and  Ray Spofford, vice president of planning for ETM, the engineering firm for the project, presented for the company. Senior Planner Jose Papa did so for the city. (John Zobler, the city’s community development director, was on vacation.) 

Hahaj said there would be 8.2 million square feet of non-residential uses, producing 25,700 direct and indirect jobs, $1.5 billion in tax and fee revenue for the city and $2 billion for the county over 30 years. He said if the homestead exemption proposal passes in November, it would lower revenue estimates by 40 percent. (The city is also facing a lawsuit over its impact fee rates.)

“Can I ask you what you all plan to do about ensuring this is not a road to houses?” Pontieri, who has criticized the development plan for over two years, said. “The whole reason for this is economic development, and residential building is not economic development. So how can we guarantee that?”

Hahaj, in one of many parries with council members, fell back on property rights and free enterprise. “Mandating or trying to engineer economic development through zoning restrictions has almost the exact opposite and unintended impact. It’s a poison pill,” he said, the first of several times he used the poison-pill analogy. “Once you restrict residential development for a zoning restriction that requires commercial, you’ve essentially given away your competitiveness and your value on your commercial land.” 

It did not satisfy Pontieri, who pushed for a way to make residential development contingent on commercial economic activity. 

“You will have a no from me until the cows come home if we do not have some type of guarantee that before 2036 there is something besides houses in the westward expansion,” Pontieri said. “And I don’t mean a Publix here and there or a Wawa here and there. I mean meaningful jobs that will create the economic development that the whole intent of this development is for.” She said what Raydient was presenting “is not that.” 

Hahaj pushed back again. “We don’t build buildings. we don’t employ the people and bring the–we are not the users coming in and do it,” he said. “I can’t guarantee any of it. What we can do is provide the opportunity for that to occur in the municipality. If it’s a poison pill approach, I don’t think that’s going to help anybody here.” 

“Right now the phases are nothing more than a virtue signal,” Pontieri said. “What I’m asking for is not for you to build buildings. It’s for the MPD to provide the opportunity for some meaningful economic development.” She wanted “teeth” added to the projection of economic development. 

It remains unclear what “teeth” will mean, short of a targeted and legally risky moratorium on residential development in the westward expansion that ties housing permits to commercial activity. A city may require a developer to build a road or a school or a park once residential density hits a certain level. It may not require a developer to have an Amazon or an Anthropic office park in place before proceeding to further housing construction. 

And Pontieri herself–who is running for a County Commission seat and will be off the council in November–saw clearly enough to caution the large audience: Raydient owns the land. It will keep reapplying for development rights. 

There were unexpected revelations, as when Norris asked Hahaj who will be paying for the roads and the underlying infrastructure in the expansion, other than the $126 million state appropriations paying for the major artery known as the loop road. 

“Roadways, local roads are built by the development,” Hahaj said. “They’re maintained by a special taxing district. This is one of the advantages that’s different than the city of Palm Coast today. You will not pay to maintain, repave roads in the future.” 

“You’re creating a special taxing district in my city,” Norris said. 

“That’s correct, to provide for the roadways and stormwater that reduces the city’s burden and makes the citizens of that area directly pay for that responsibility,” Hahaj said. 

The western expansion will be a pseudo city with its own tax overlay in addition to existing taxes to the city, the county and the schools, in essence charging residents the equivalent of homeowner association fees. Norris, pointing to Raydient’s development in Nassau County, wants the developer to produce concrete examples of typical taxation on housing there, when the matter returns to the council on Aug. 25. 

Norris has led the effort to preserve Old Brick Road. When Pontieri asked Hahaj directly about protecting the road, Hahaj called it “the obvious kind of thing with it,” but he did not offer a plan and seemed to criticize the county’s move at one point to prohibit crossings on Old Brick Road. “You need to think about it thoughtfully. What is the right thing to do?”

Raydient has two development orders approved by the council and in place, dating back to 2010, the so-called Developments of Regional Impacts known as Neoga Lake and Old Brick Township. The two developments, however, won approval for half the housing units provided by the proposed master planned development. Raydient wanted more. That history lent itself to venting from the dais. 

Norris was especially critical of the $126 million state appropriation that went to the loop road instead of to needs in Palm Coast proper. “What we could have done with that $126 million for our infrastructure, we would have to take out maybe half of that bond,” he said, referring to the $330 million bond the city approved to improve its utility infrastructure earlier this year. “Now we’re on the hook for $330 million, and it’s because the previous administration and because of your organization, because you guys came together to do this plan, and now we’re on the ass end of it because we got to pay for it, and this that’s why I’m so angry. This pisses me off to no end, and I watched it come.”

On the other hand, the development plan now reverts financial responsibility to the developer to build a sports complex, including a 28,000-seat stadium (more than six times the capacity of Jackie Robinson Ballpark in Daytona Beach). “Thank God we didn’t take out a $20 million bond for that,” Pontieri said. 

“The crux is we don’t want our residents to pay for all these things,” Council member Charlie Gambaro, who has generally been supportive of the development plan, said.