Florida has High drama over higher fees

Developers fear a construction slowdown, more sprawl.
from Orlando Business Journal, June 12, 2006
"Proposed transportation impact fee increases, including one that could hike right-of-way costs nearly seven times above today's amount, could halt new construction and push developers out of Orlando and into other areas, further contributing to urban sprawl.
That's the alarming assessment of commercial real estate owners and developers.
If adopted at 100 percent, we're really concerned (the city of Orlando's fee increase) is going to have a very negative effect on commercial and residential growth. Because of the rapid rise in construction costs and a need to help alleviate crowded roads, city and county officials, however, argue the changes are necessary.
Still, commercial developers and owners face a double-whammy as cities and counties play catch-up on transportation infrastructure.
Orange County, for instance, has an estimated $3 billion infrastructure deficit.
Meanwhile, the existing fee assessed by the city for right of way is $50,000 an acre and construction is $588,000 per lane mile. The updated fee using Florida Department of Transportation cost averages, however, would be $396,748 per acre -- a 693 percent increase -- and
$1.6 million per lane mile for construction -- or a 170 percent increase.
In addition, all city and county governments in Florida must adopt a new fee by Dec. 1 that will help them catch up on transportation infrastructure.
Orange County already has adopted the new fee, which doubles what developers must pay for road infrastructure.
The city of Orlando levies impact fees to pay for additional demands placed by new development on transportation infrastructure. Adopted in 1986 and last evaluated a decade ago, the city's rate has fallen behind many of the surrounding jurisdictions, Orlando transportation officials argue. A comparison shows Apopka and Ocoee charge much more, $2,772 and $3,968, respectively, for a single-family unit, than Orlando's $1,192.
The fees would help pay for several planned or ongoing projects with money still owed: Narcoossee Road, $14.2 million over nine years; Crystal Lake Drive, $8 million over 10 years; John Young Parkway,
$1.5 million over four years; and Lee Vista Blvd., $2 million over four years.
The proposal will go before the Orlando City Council on June 19. If the Council members approve the new fees as recommended, they would take effect on Oct. 1. Meanwhile, Orange County has replaced its former transportation fees system. Adopted in 1996, the county's pay- as-you-go system was based on state concurrency legislation that allowed the county to figure out how it would require developers and owners to pay for their fair share of transportation impacts. If a road was over capacity, a developer could pay an extra fee and move ahead with the project. The problem with the system was the county undercharged developers and has lost a total of $46 million because it underestimated road construction costs by 50 percent and undercharged impact fees by more than half. In 2005, the Legislature created another program called proportionate fair share, which provided the county with a standard formula that essentially doubles the fair share fee. Further, as of March 28, the at-capacity road must be on Orange County's list of roads slated for improvement.
Otherwise, the county will deny the building permit. Fees would increase nearly eight times for right-of-way purchases and more than twice the cost of building new lanes on roadways.
The timing of the proposed fees, some say, couldn't be worse.
Predictions are for double-digit hikes in material costs in 2006, with prices for plumbing pipes rising 20-50 percent; diesel fuel, which runs construction equipment, 20-30 percent higher; and cement increasing 10-15 percent over 2005. Such additional costs, some fear, could grind some development to a screeching halt.
Developers don't seem as concerned about the county's increases as they are with the city's. Nevertheless, they are worried about Orange's fees relative to other Central Florida counties."
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