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Agenda 06/28/2016 Item #16F1 6/28/2016 16.F.1 . EXECUTIVE SUMMARY Recommendation to accept the seventh annual report on the "Impact Fee Program for Existing Commercial Redevelopment";to direct the County Attorney to advertise and bring back to the Board an Ordinance Amendment making the Program permanent by removing the Program's sunset language; and to approve a Resolution extending the Program until such time that the Ordinance Amendment is approved by the Board. OBJECTIVE: That the Board of County Commissioners (Board) accepts the seventh annual report on the "Impact Fee Program for Existing Commercial Redevelopment" (Program) and to make this a permanent Program. CONSIDERATIONS: On March 24, 2009,the Board adopted Ordinance No. 2009-14, which established the "Impact Fee Program for Existing Commercial Redevelopment." The development of this Program arose from two basic problems: 1) a large number of older buildings throughout Collier County were unable to attract tenants due to the economic downturn combined with the required payment of additional impact fees related to changes of use; and 2) tenants were unable to find space in existing buildings due to the required payment of additional impact fees related to changes of use. The "Impact Fee Program for Existing Commercial Redevelopment"provided a solution to both of these issues. Similar to other economic incentive programs,this Program provides economic relief to a targeted problem. Since the initial program adoption, the Board has implemented changes to the Program based on the input of various members of the building industry, including the (former) Economic Development Council of Collier County, the (former) Collier County Productivity Committee, the Development Services Advisory Committee (DSAC) and leadership of the Collier Building Industry Association(May 2010). The Board also expanded the Program to include impact fee assessments for Water and Wastewater, meeting specified criteria (November 2013). The adopted Program provisions are as follows: Collier County Code of Laws and Ordinances-Chapter 74 74-201. Imposition of Fees (5) Impact Fee Program for Existing Commercial Redevelopment. Proposed developments which meet the criteria set forth below shall not be assessed additional impact fees related to changes of use within the existing buildings, except for water and wastewater impact fee assessments which are exempt from this program. This program will officially sunset two years from the date of adoption unless continued by a resolution of the Board of County Commissioners prior to this date. a. Development is proposed within a lawfully existing building which has had a Certificate of Occupancy issued for at least 3 years. Impact fees for the existing building must have been paid the then applicable impact fees at time of construction;and b. Proposed development is solely within the existing building and does not include the addition of any new square footage. c. Demolition and reconstruction projects are not eligible for this program. d. For the purposes of water and wastewater impact fees,projects that require an existing meter to be upsized are not eligible for this program. Packet Page -2016- 6/28/2016 16.F.1 . Beginning in 2010, and annually thereafter, the Board has reviewed the Annual Report on the "Impact Fee Program for Existing Commercial Redevelopment" which, in accordance with Board direction, provides detailed information on the participation in the Program and the fiscal impact on each of the affected impact fee trust funds. The Board reviewed the most recent annual report on June 23, 2015, and approved a Resolution extending the Program to July 1,2016. The 7 new applicants for July 1, 2015 through July 1, 2016 bring the total number of participants assisted over the history of the Program to 142,and interest in the Program continues. The following chart provides a list of the types, and amounts by type,of changes of use that are participating in this Program in Year 7. The land uses indicated correspond to the closest applicable land use for establishing the impact fee rates to be applied. These categories do not dictate the land use classifications for zoning purposes. Change of Use Number of Applicants in Program Year 7 Warehouse to Retail 1 Warehouse to Office 1 Retail to Medical Office 1 Retail to General Office 1 General Industrial to Office 1 Restaurant—Seat Increase 1 t.'1 Retail to Tire Store 1 Total 7 Some of the decline in number of applicants this year can be attributed to a change in methodology in 2015 for Water and Sewer Impact Fees when assessment of the fees changed from being based on ERC values to meter size. The new methodology requires additional fees to be assessed only if the meter size is increased. Additionally, the decline in applicants may also be related to commercial development lagging residential development. As strong residential development activity continues,the number of participants in the Program is likely to increase as the trend for commercial development intensifies. Staff does not believe the decline represents a lack of need for the Program. Staff recommends making the Program permanent by removing the sunset language from Section 74-401 of Chapter 74 of the Code of Laws and Ordinances. From all accounts,the Program has been beneficial and is an effective tool for incentivizing commercial redevelopment. This will also provide more certainty that current policy will not change while a project is proceeding through the permitting process. Staff will continue to monitor the Program and notify the Board of any program changes that they may want to consider. Accompanying this item is a Resolution, for Board consideration,to extend the Program until such time that an Ordinance Amendment removing the sunset provision is approved by the Board. If the Board does not desire to extend the Program it will sunset on July 1,2016. t"1 Packet Page-2017- 6/28/2016 16.F.1 . FISCAL IMPACT: The following is a breakdown, by impact fee type, of the total impact fees that were not assessed for the qualifying changes of use. Impact Fee Type Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Correctional Facilities (Jail) $26,175 $29,395 $32,043 $57,670 $8,396 $6,949 $2,321 Emergency Medical Services $11,399 $13,788 $8,589 $15,413 $2,203 $1,509 $587 Government Buildings $59,787 $74,215 $49,852 $88,818 $12,996 $8,853 $3,451 Law Enforcement $21,066 $26,744 $3,696 $7,791 $7,113 $4,868 $1,894 Road $1,147,852 $958,874 $587,663 $1,079,423 $165,435 $359,268 $84,270 Water $0.00 $0.00 $0.00 $0.00 $113,457 $37,498 $78 Sewer $0.00 $0.00 $0.00 $0.00 $113,988 $37,674 $75 Cumulative Total $1,266,279 $1,103,016 $681,843 $1,249,115 $423,588 $456,619 $92,676 The benefits of the Program include encouraging new business within Collier County, retention and expansion of existing businesses in Collier County, and absorption of a portion of the supply of vacant commercial lease space in older buildings. If this program was not available,the alternate option for such customers would be to continue seeking out tenant spaces in which the impact fees had been paid for a use similar to the type they were proposing or abandon plans to relocate/expand. In either case, the County would not collect any additional impact fees. GROWTH MANAGEMENT IMPACT: This Program is consistent with Policy 3.12 of the Economic Element of the GMP which states: "Collier County, in coordination with other appropriate entities, will support the establishment and retention of small businesses throughout the County." Additionally,this Program does not in any way negate or waive existing zoning laws. Any relocation of a new or existing business into an existing facility generates the need for a Zoning Certificate from the Zoning Department and the subsequent issuing of a Business Tax Receipt from the Collier County Tax Collector. Staff, through issuing the Zoning Certificate,verifies that the new business location is properly zoned to allow for the business to legally operate at a new location.Additionally,prior to issuing a Zoning Certificate, staff reviews the proposed business location to ensure that the site provides the required number of parking spaces and meets the minimum landscape code requirements. If the new business location is not located within a zoning district that permits the proposed use, the Zoning Certificate is denied and the business owner is directed to consider other areas within the County that are appropriately zoned for the proposed use. In the alternative, the applicant is advised of the option to seek to Packet Page -2018- 6/28/2016 16.F.1 . rezone the property to a zoning district that would allow the proposed commercial use. All rezoning applications first have to be found consistent with the applicable elements of the Collier County Growth Management Plan(GMP)as well as found to be compatible with the adjacent land uses. If deemed inconsistent n, with the Comprehensive Plan,the applicant would have to seek an amendment to the GMP. LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, is approved as to form and legality,and requires majority support for approval. -JAK RECOMMENDATION: To accept the seventh annual report on the "Impact Fee Program for Existing Commercial Redevelopment"; direct the County Attorney to advertise and bring back to the Board an Ordinance Amendment making the Program permanent by removing the Program's sunset language; and to approve a Resolution extending the Program until such time that the Ordinance Amendment is approved by the Board. Prepared by: Paula Fleishman, Senior Operations Analyst, Capital Project Planning,Impact Fees and Program Management Division, Growth Management Department Attachment: 1) Proposed Resolution Packet Page-2019- 6/28/2016 16.F.1. COLLIER COUNTY Board of County Commissioners Item Number: 16.16.F.16.F.1. Item Summary: Recommendation to accept the seventh annual report on the "Impact Fee Program for Existing Commercial Redevelopment";to direct the County Attorney to advertise and bring back to the Board an Ordinance Amendment making the Program permanent by removing the Program's sunset language; and to approve a Resolution extending the Program until such time that the Ordinance Amendment is approved by the Board. Meeting Date: 6/28/2016 Prepared By Approved By Name: PattersonAmy Title:Division Director-IF,CPP&PM, Capital Project Planning,Impact Fees and Program Management Date: 5/31/2016 10:19:25 AM Name: MarcellaJeanne Title: Executive Secretary,Transportation Administration Date: 6/7/2016 10:16:19 AM Name: KlatzkowJeff Title: County Attorney, Date: 6/8/2016 9:02:57 AM Name: IsacksonMark Title:Division Director-Corp Fin&Mgmt Svc, Office of Management&Budget Date: 6/15/2016 10:55:35 AM Name: CasalanguidaNick Title:Deputy County Manager,County Managers Office Date: 6/16/2016 11:20:12 AM Packet Page-2020- 6/28/2016 16.F.1 . RESOLUTION NO.2016- A RESOLUTION OF IRE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA PROVIDING FOR THE EXTENSION OF THE SUNSET DATE OF THE "IMPACT FEE PROGRAM FOR EXISTING COMMERCIAL REDEVELOPMENT," AS PROVIDED IN CHAPTER 74, SECTION 74-201(c)(5) OF THE COLLIER COUNTY CODE OF LAWS AND ORDINANCES, FROM JULY 1, 2016, UNTIL SUCH TIME THAT AN ORDINANCE AMENDMENT IS APPROVED BY THE BOARD REMOVING THE SUNSET PROVISIONS OF HIE PROGRAM. WHEREAS, on March 24, 2009, the Board adopted Ordinance No. 2009-14, which established the "Impact Fee Program for Existing Commercial Redevelopment;" and WHEREAS, on March 24, 2011, the "Impact Fee Program for Existing Commercial Redevelopment" was scheduled to sunset in accordance with Chapter 74, Section 74-201(c)(5) of the Collier County Code of Laws and Ordinances, unless otherwise extended by a Resolution of the Board of County Commissioners;and WHEREAS, on March 22, 2011,the Board of County Commissioners extended the sunset date of the"Impact Fee Program for Existing Commercial Redevelopment"to March 24,2012 by way of Resolution 2011-54;and WHEREAS,on March 13,2012,the Board of County Commissioners extended the sunset date of the "Impact Fee Program for Existing Commercial Redevelopment"to March 24,2013,by way of Resolution 2012-45;and WHEREAS, this Program was identified as a potential topic for discussion and/or workshop in May of 2013;and WHEREAS,on March 12,2013,the Board of County Commissioners approved a temporary extension of the Program, to July 1, 2013, due to the Program having been identified as a potential topic for discussion and/or workshop, and that the temporary extension of the Program allowed businesses to utilize the Program until the Board of County Commissioners provided further direction;and WHEREAS, on May 28, 2013, and June 4, 2013, the Board of County Commissioners heard presentations and discussed impact fees and economic development. During the workshop, many of the concerns raised by speakers related to impact fees for commercial development; and WHEREAS, on June 25, 2013, the Board of County Commissioners extended the sunset date of the"Impact Fee Program for Existing Commercial Redevelopment"to July 1,2014,by way of Resolution 2013-149;and Packet Page -2021- 6/28/2016 16.F.1 . WHEREAS, on June 24, 2014, the Board of County Commissioners extended the sunset date of the"Impact Fee Program for Existing Commercial Redevelopment"to July 1,2015,by way of Resolution 2014-132;and WHEREAS, on June 23, 2015, the Board of County Commissioners extended the sunset date of the "Impact Fee Program for Existing Commercial Redevelopment"to July 1,2016,by way of Resolution 2015-128;and WHEREAS, the "Impact Fee Program for Existing Commercial Redevelopment"has assisted 142 businesses over a seven-year period;and WHEREAS, staff recommends that in order to allow businesses to continue to utilize the Program,the sunset date of the"Impact Fee Program for Existing Commercial Redevelopment" be extended until such time that an Ordinance Amendment removing the sunset provisions is approved the Board; and WHEREAS, the Board of County Commissioners accepts the recommendations from staff. NOW, THEREFORE BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, that the Board of County Commissioners hereby declares that the "Impact Fee Program for Existing Commercial Redevelopment"be extended until such time that an Ordinance Amendment is approved removing the sunset provisions of the Program. This Resolution is adopted after motion; second and majority vote favoring adoption this day of June,2016. ATTEST BOARD OF COUNTY COMMISSIONERS Dwight E.Brock,Clerk OF COLLIER COUNTY,FLORIDA By: By: ,Deputy Clerk DONNA FIALA,Chairman Approve41a; 6 .:' a legality: ,iegeritt Jeffrey A. la ow,County Attorney Page 2 of 2 Packet Page -2022-