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Agenda 03/13/2012 Item #11C3/13/2012 Item 11.C. EXECUTIVE SUMMARY Recommendation to accept the third annual report on the "Impact Fee Program for Existing Commercial Redevelopment" and approve a resolution extending the program for one year, to sunset March 24, 2013, unless otherwise extended. OBJECTIVE: That the Board of County Commissioners (Board) accepts the third annual report on the "Impact Fee Program for Existing Commercial Redevelopment" and approves a resolution extending the program for one year, to sunset on March 24, 2013, unless otherwise extended. 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: l) 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 that 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. On March 23, 2010, the Board reviewed the I 5 Annual Report on the "Impact Fee Program for Existing Commercial Redevelopment," (Item IOB) which, in accordance with Board direction, provided detailed information on the participation in the Program and the fiscal impact on each of the affected impact fee trust funds. During the Program's first year, 40 applicants participated with 20 of the applicants being new businesses. The majority of the applicants were referred to the Impact Fee Administration Office through the Zoning Certificate process. During the discussion the Board directed that additional information be provided, as a future agenda item, related to potential improvements to the Program based on the input of various members of the industry, including the Economic Development Council of Collier County, the Collier County Productivity Committee, the Development Services Advisory Committee (DSAC) and leadership of the Collier Building Industry Association (CBIA). On April 27, 2010, staff presented the input provided by the groups above, for consideration by the Board (Item 10A). The Board directed that the changes, supported by the DSAC, Productivity Committee and staff be implemented, and on May 25, 2010, the Board adopted Ordinance No. 201 0 -22 incorporating those Program revisions (Item 17D). The adopted program provisions are as follows: Collier County Code of Laws and Ordinances - Chapter 74 74 -201. Imposition of Fees Packet Page -889- 3/13/2012 Item 11.C. (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. On March 22, 2011, the Board accepted the 2'6 Annual Report for the Program, detailing the 21 businesses assisted (Item 16A8). The Board also approved Resolution No. 2011 -54 extending -the sunset date of the Program to March 24, 2012. 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 3. The total number of businesses equals 10, with 3 of the applicants being new businesses. This brings the total number of companies directly assisted to 70. 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 3 General Office to Medical 2 General Office to Restaurant 1 Marina to Restaurant 1 Retail to Restaurant Warehouse to Office 2 Warehouse to Retail 1 Warehouse to School 1 Total 10 Packet Page -890- 3/13/2012 Item 11.C. While use of this Program declined from Year 2 to Year 3, staff continues to receive a steady number of inquiries related to the program. Additionally, information on the program is regularly provided to members of the real estate and development communities. Therefore knowledge of the availability of the program continues to increase. Based on the success of the program over the last three years, with 71 businesses assisted, and the continuing interest in the program, combined with the need to facilitate economic recovery in the community, staff recommends that the program be extended. Further, the City of Bonita Springs is actively advertising that there are no impact fees assessed for existing buildings and Lee County has eliminated their "Medical Office" impact fee category. Therefore, extension of the Program would maintain another tool to be used in keeping us competitive with neighboring counties and municipalities. Accompanying this item is a Resolution, for Board consideration, to extend the sunset of the Program for one year, to March 24, 2013, with the continuing option to extend, by resolution, prior to sunset. If the extension is approved, staff will continue to track the use of the Program and report annually to the Board. 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 I Year 2 Year 3 Correctional Facilities (Jail) $26,174.52 $29,395.10 $32,042.88 Emergency Medical Services $11,398.70 $13,787.52 $8,588.64 Government Buildings $59,786.64 $74,214.86 $49,852.52 Law Enforcement $21,065.73 $26,744.34 $3,696.30 Road $1,147,851.95 $958,874.17 $587,663.04 Cumulative Total $1,266,277.54 $1,103,015.99 $681.843.38 Similar to research conducted in Year 1 and Year 2, staff spoke directly with many of the customers that qualified for the Program. Many of customers indicated that if the Program was not in place, and they were required to pay additional impact fees in order to open or relocate their business to a particular building, they would have elected not to move forward with the proposed use. In addition, many applicants elected to move forward with projects specifically because of the availability of this program. If this program was not available, the alternate option for such customers would have been to continue seeking out tenant spaces in which the impact fees had been paid for a use similar to the type they were proposing; therefore the payment of additional impact fees would not be required. Packet Page -891- 3/13/2012 Item 11.C. In either case, the County would not collect any additional impact fees and in many cases businesses would be unable to open or relocate /expand. Therefore, the benefits of the Program, which 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, minimize the implied fiscal impact on the respective impact fee trust funds. 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 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 with the Comprehensive Plan, the applicant would have to seek an amendment to the GMP. LEGAL CONSIDERATIONS: The County Attorney has reviewed this item which is legally sufficient and requires a majority vote for approval. — JAK RECOMMENDATION: That the Board of County Commissioners accepts the third annual report on the "Impact Fee Program for Existing Commercial Redevelopment" and approves a resolution extending the program for one year, to sunset on March 24, 2013, unless otherwise extended. Prepared by: Amy Patterson, Impact Fee and Economic Development Manager Growth Management Division — Planning and Regulation Attachments: 1) Proposed Resolution 2) Executive Summary Item 16A8 — March 22, 2011 3) Resolution No. 2011 -54 Packet Page -892- 3/13/2012 Item 11.C. COLLIER COUNTY Board of County Commissioners Item Number: 11.C. Item Summary: Recommendation to accept the third annual report on the "Impact Fee Program for Existing Commercial Redevelopment" and approve a resolution extending the program for one year, to sunset March 24, 2013, unless otherwise extended. Meeting Date: 3/13/2012 Prepared. By Name: PattersonAmy Title: Manager - Impact Fees & EDC,Business Management & 2/15/2012 3:30:27 PM Approved By Name: PuigJudy Title: Operations Analyst, GMD P &R Date: 2/23/2012 9:11:30 AM Name: MarcellaJeanne Title: Executive Secretary,Transportation Planning Date: 2/24/2012 8:30:10 AM Name: FederNorman Title: Administrator - Growth Management Div,Transportati Date: 2/24/2012 2:22:38 PM Name: KlatzkowJeff Title: County Attorney Date: 2/29/2012 3:58:29 PM Name: FinnEd Title: Senior Budget Analyst, OMB Date: 3/5/2012 1:30:34 PM Name: OchsLeo Title: County Manager Date: 3/5/2012 2:18:17 PM Packet Page -893- 3/13/2012 Item 11.C. RESOLUTION NO. 2012- A RESOLUTION OF THE 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 MARCH 24, 2012 TO MARCH 24, 2013. WHEREAS, on March 24, 2009, the Board of County Commissioners (Board) adopted Ordinance No. 2009 -14, which established the Impact Fee Program for Existing Commercial Redevelopment; and WHEREAS, Ordinance No. 2009 -14 provides that 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.;" and WHEREAS, accordingly, the Board approved Resolution 2011 -54 extending the program's sunset date from March 24, 2011 to March 24, 2012; and WHEREAS, the Impact Fee Program for Existing Commercial Redevelopment has assisted 71 businesses over a three -year period and based on its overall benefit to the community, County staff recommends extending the sunset date to March 24, 2013; and WHEREAS, the Board of County Commissioners accepts staff's recommendation. NOW, THEREFORE BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, that the sunset date of the Impact Fee Program for Existing Commercial Redevelopment is hereby extended to March 24, 2013, at which time the program shall sunset unless otherwise extended by a resolution of the Board of County Commissioners. THIS RESOLUTION ADOPTED after motion, second, and majority vote favoring same this day of , 2012. ATTEST: RIN , Deputy Clerk Approv as form and legal su i� Jeffrey A%KIaP0* County A , orr y BOARD OF COUNTY COMMISSIONERS COLLIER COUNTY, FLORIDA C FRED W. COYLE, CHAIRMAN Packet Page -895- 3/13/2012 Item 11.C. EXECUTIVE SUMMARY Recommendation to accept the second annual report on the "Impact Fee Program for Existing Commercial Redevelopment" and approve a resolution extending the program for one year, to sunset March 24, 2012, unless otherwise extended OBJECTIVE: That the Board of County Commissioners (Board) accepts the second annual report on the "Impact Fee Program for Existing Commercial Redevelopment" and approves a resolution extending the program for one year, to sunset on March 24, 2012, unless otherwise extended. 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 that 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. On March 23, 2010, the Board reviewed the 15' Annual Report on the "Impact Fee Program for Existing Commercial Redevelopment," (Item IOB) which, in accordance with Board direction, provided detailed information on the participation in the Program and the fiscal impact on each of the affected impact fee trust funds. During the Program's first year, 40 applicants participated with 20 of the applicants being new businesses. The majority of the applicants were referred to the Impact Fee Administration Office through the Zoning Certificate process. During the discussion (Item 1013) the Board directed that additional information be provided, as a future agenda item, related to potential improvements to the Program based on the input of various members of the industry, including the Economic Development Council of Collier County, the Collier County Productivity Committee, the Development Services Advisory Committee (DSAC) and leadership of the Collier Building tn Industry Association (CBIA). On April 27, 2010, staff presented the input provided by the groups above, for consideration by the Board (Item IOA). The Board directed that the following changes, which are supported by the DSAC, Productivity Committee and staff, be implemented: • Eliminate impact fee review for changes of use in order to obtain a Zoning Certificate and /or Business Tax Receipt. Status: Staff is no longer conducting an impact fee review for changes of use in order to obtain a Zoning Certificate and /or Business Tax Receipt. Packet Page -896- 3/13/2012 Item 11.C. • Expand the Program to include buildings that have had a CO for at least 3 years, and allow buildings to `'age -in" to the Program. Status: Change implemented via Ordinance 2010 -22 (May 25, 2010). 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. 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 2. The total number of businesses equals 21, with 13 of the applicants being new businesses. 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. Packet Page -897- 3/13/2012 Item 11.C. Change of Use Number of Applicants in Program Year 2 General Light Industrial to Gymnastics 4 General Light Industrial to General Office 4 General Light Industrial to Retail 2 General Office to Medical 4 General Office to Restaurant 2 Intensification of Use - Restaurant I Intensification of Use - School I Retail to Bank I Retail to Restaurant I Service Station to Convenience Store I Total 21 As discussed above, based on Board direction, staff no longer performs an impact fee review for changes of use in order to obtain a Zoning Certificate and /or Business Tax Receipt. This decision was made, in part, because the staff time and burden on the customer far exceeded anv potential revenue generated from such reviews. Upon implementation of this change, it was expected that it may appear that there was an overall decline in Program activity. Participation in the Program is now identified related to Building Permit applications or other similar land use applications (Site Development Plan Amendments, etc.). In the first year, impact fees that were not assessed by way of the program and were related to Building Permits totaled $349,614.08, related to three (3) Building Permits. The remaining 37 participants were identified through the Zoning Certificate and /or Business Tax Receipt process. In Year 2, 16 of the 21 participants were related to Building Permit applications or other similar land use applications. This represents a significant increase in activity. Further, prior to the suspension of the Zoning Certificate and /or Business Tax Receipt review, 5 applicants had already been identified as qualified participants for Year 2, within an approximate one -month timeframe, and are included as part of the report. Therefore, it can be assumed that a substantial number of businesses were assisted by these actions taken by the Board, and that the benefits of the program in Year 2 are at least as great as those provided in Year 1. Staff continues to receive a steady number of inquiries related to the program. Additionally, information on the program is regularly provided to members of the real estate and development communities. Therefore, knowledge of the availability of the program continues to increase. The Program was initially established for a two -year period, with a report to the Board after one year and again prior to the sunset. The first report occurred on March 23, 2010. This item Packet Page -898- 3/13/2012 Item 11.C. represents the second report. Based on the success of the program over the last two years, with over 60 businesses assisted, and the continuing interest in the program, combined with the need to facilitate economic recovery in the community, staff recommends that the program be extended. Accompanying this item is a Resolution, for Board consideration, to extend the sunset of the Program for one year, to March 24, 2012, with the continuing option to extend, by resolution, prior-to sunset. If the extension is approved, staff will continue to track the use of the program and will report again to the Board in March of 2012. 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 Correctional Facilities (Jail) $26,174.52 $29,395.10 Emergency Medical Services $11,398.70 $13,787.52 Government Buildings Zn $59,786.64 $74,214.86 Law Enforcement $21,065.73 $26,744.34 Road $1,147,851.95 $958,874.17 Cumulative Total $1,266.277.54 $1,10-3,015.99 Similar to research conducted in Year 1, staff spoke directly with many of the customers that qualified for the Program. Many of customers indicated that if the Program was not in place, and they were required to pay additional impact fees in order to open or relocate their business to a particular building, they would have elected not to move forward with the proposed use. In addition, several applicants elected to move forward with projects specifically because of the availability of this program. If this program was not available, the alternate option for such customers would have been to continue seeking out tenant spaces in which the impact fees had been paid for a use similar to the type they were proposing; therefore the payment of additional impact fees would not be required. In either case, the County would not collect any additional impact fees and in many cases businesses would be unable to open or relocate /expand. Therefore, the benefits of the Program, which 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, minimize the implied fiscal impact on the respective impact fee trust funds. GROWTH MANAGEMENT IMPACT: Impact Fees generate funds to be expended for capital improvements to public facilities necessitated by growth which is consistent with Policy 2 of the Capital Improvement Element (CIE) of the Collier County Growth Management Plan Packet Page -899- 3/13/2012 Item 11.C. (GMP), which states: "Future development will bear a proportionate cost of facility improvements necessitated by growth." While many of the new and existing business noted that the program was a key factor in their decision to proceed, it should also be noted that their corresponding increase in impacts to public facilities, especially roads, were not addressed. Long tern, this could negatively impact the County's ability to address any potential transportation infrastructure improvements necessitated by the changes in use. Although the Program limits the additional impact fees that will be assessed for changes of use, despite the intensification of use and demand on public facilities, this type of program for redevelopment 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 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 with the Comprehensive Plan, the applicant would have to seek an amendment to the GMP. LEGAL CONSIDERATIONS: This item raises no legal issues, and requires majority affinnative vote. -JAK RECOMMENDATION: That the Board of County Commissioners accepts the second annual report on the "Impact Fee Program for Existing Commercial Redevelopment" and approves a resolution extending the program for one year, to sunset on March 24, 2012, unless otherwise extended. Prepared by: Amy Patterson, Impact Fee and Economic Development Manager Growth Management Division — Planning and Regulation Attachments: 1) Proposed Resolution Packet Page -900- 3/13/2012 Item 11.C. RESOLUTION NO. 2011 - 54 A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, EXTENDING 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 MARCH 24, 2011 TO MARCH 24, 2012. WHEREAS, On March 24, 2009, the Board of County Commissioners (Board) adopted Ordinance No. 2009 -14, which established the "Impact Fee Program for Existing Commercial Redevelopment;" and WHEREAS, the "Impact Fee Program for Existing Commercial Redevelopment" is scheduled to sunset on March 24, 2011, 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; and WHEREAS, the "Impact Fee Program for Existing Commercial Redevelopment" has assisted over 60 businesses over a two -year period, and staff recommends that the sunset date be extended to March 24, 2012, based on the Program's overall benefit to the community; and WHEREAS, the Board of County Commissioners accepts staff s recommendation. NOW, THEREFORE BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF COLLIER COUNTY, FLORIDA, that the sunset date of the "Impact Fee Program for Existing Commercial Redevelopment" is hereby extended to March 24, 2012, at which time the Program shall sunset unless otherwise extended by a Resolution of the Board of County Commissioners. n THIS RESOLUTION ADOPTED after motion, second and majority vote on this the 01 day of AliQrch , 2011. ATTEST: DWIGHT 4E.'AMXK, Clerk wLL� :L �ti so' lark BOARD OF COUNTY COMMISSIONERS COLLIER COUNTY, FLORIDA Y: FRED W. COYLE, CHAIAMAN Packet Page -901-