Concern arises that new fee schedule is discouraging the opening of small businesses in areas where board wants to spur economic development
Almost 14 months ago, the Sarasota City Commission voted unanimously to approve the implementation of updated mobility impact fees.
The action followed a presentation by Steve Tindale, CEO of the Tindale Oliver consulting firm based in Tampa, who explained the methodology behind the fees.
However, on April 2, Deputy City Manager Marlon Brown noted that the fees are “really a discouragement” to people interested in starting new small businesses.
After learning how the high the fees are, the City Commission asked staff to come back to it as soon as possible with a comprehensive presentation on all the relative points in regard to reducing or subsidizing the fees in certain cases.
The discussion arose as Steve Stancel, the city’s general manager for economic development, and the city’s two redevelopment managers — DeAndrae Spradley and Susan Dodd — spent slightly more than an hour during the commission’s regular meeting providing a gamut of programs that could be funded from revenue the commission agreed last year to put into a new Economic Development Fund. Established as of the start of the current fiscal year — on Oct. 1, 2017 — that fund has $1,390,000 that encompasses $476,713 in General Fund money and $923,000 in revenue generated by the city’s Local Business Tax. However, $80,000 of that has been appropriated for The Salvation Army and $27,000 for legal purposes, Stancel noted. That leaves a balance of $1,223,577.
The goal of the April 2 presentation, Stancel continued, was to have the commissioners establish priorities for spending the money that is in the account. Not enough revenue is available, he pointed out, to cover the expenses of all the proposals staff would offer.
One potential action the board could take, he explained, is subsidizing the impact and mobility fees, which were adopted after a second reading by the commission on March 20, 2017. Because the fees reflect availability — or lack thereof — of multiple transportation options, they are higher for businesses starting up in the Newtown Community Redevelopment Area (CRA) and along the North Tamiami Trail Corridor, he told the board. For example, he said, a new sit-down restaurant with 1,000 feet in either of those areas would pay $30,212 in mobility impact fees.
He suggested the commissioners consider a formal discussion of the situation. “Mobility fees can’t be waived,” he pointed out, according to state law.
Paying for new infrastructure
Stancel then provided the example of a proposed new restaurant called Miss LuLa’s Paradise Seafood in the Newtown CRA area that would have 2,000 square feet of space. The owner plans to employ family members, he said, and she has no intention of serving alcoholic beverages. Her city mobility impact fee would be $60,424. Prior to implementation of those new mobility fees, the owner would have paid less than $13,000, based a slide he showed the commissioners.
Adding in Sarasota County impact fees, including one that covers emergency medical services, her complete impact fee bill would be $63,522, the slide said.
What formula determines that? Mayor Shelli Freeland Eddie asked.
Stancel reminded her about the Tindale Oliver presentation in early 2017, which discussed the methodology used to generate the fees. (Freeland Eddie was a member of the commission at that time.)
Then Commissioner Hagen Brody, who was elected in May 2017, asked why the fees are so much higher in Newtown and on the North Trail.
Redevelopment Manager Dodd explained that downtown Sarasota “is very multi-modal,” with people more readily able to use buses and bicycles instead of vehicles to reach their destinations.
“So we’re penalizing people for a deficit because there’s not mobility?” Freeland Eddie asked.
“I’m not the bad guy here,” Stancel responded. The theory behind the higher fees in Newtown and on the North Trail is that people have to drive to businesses in those areas, and it costs more for the city to provide roads.
When Brody asked whether the city or the state sets the impact fee parameters, Stancel told him, “We set [the fees] following state guidelines.”
City Engineer Alexandrea DavisShaw explained that the Tindale Oliver study considered the number of trips generated by types of businesses and the correlating expense of the impacts of those businesses on the transportation infrastructure.
After the City Commission has adopted specific impact fees, DavisShaw added, staff is obligated to charge those fees. If the fees were lowered to a level that did not support the necessary infrastructure for new businesses, she continued, then the city would have to find another way of covering its costs. “We have to address that burden somehow.”
The mobility impact fee structure “is inconsistent with our strategic plan, which is encouraging multi-modal [transportation],” Freeland Eddie replied.
DavisShaw pointed out, in the past, the fees the city charged were allocated only to new roads. The implementation of the revised fee schedule last year allows the city to use revenue from new businesses and housing to pay for bicycle and bus facilities, as well.
In theory, City Manager Tom Barwin added, the fees were designed to make the city more multi-modal in areas where roads have been the primary means of transportation.
“What [this] is is inconsistent with economic development for areas of disadvantage,” Freeland Eddie responded.
DavisShaw suggested the potential of re-addressing the fee schedule, as Stancel had indicated.
“We’re the ones who set the [fees],” Vice Mayor Liz Alpert said. “It’s up to us to look at [the schedule] again and see if there’s anything we want to do.”