SPRING HILL – The Hernando County BOCC held a second public hearing on the proposed changes to Kass Circle in Spring Hill on March 22, 2016 to determine whether or not to adopt a resolution stating that Kass Circle qualified as an area for Community Redevelopment under the Florida Statues. A Community Redevelopment Area (CRA) is designed to help revitalize certain portions of a community which are considered “blighted” (generally deteriorated or extremely run down) or a “slum area” (which has a prevalence of higher crime statistics, lower property values, and economic distress).
Since 1969, Florida Statute (F.S.) 163 has provided the guidelines for local governments to improve these areas under a partnership with privately owned corporations or individuals through the use of bonds. This can include changes to infrastructure (water/sewer, lighting, roadways, etc.) and removal or repurposing of buildings, while creating affordable housing and public use areas.
The program does create controversy in communities, and such is the case in Hernando County. Citizens are concerned about government overreach as well as “TIF shortfalls, bond obligations, cost overruns, waste, fraud…” Additional burdens for taxpayers are a concern since the projects take many years from the initial planning stages to completion. Those in favor see that the partnership between the BOCC and private investors would bring a positive focus to Kass Circle, creating housing, shopping, and recreation areas without increasing taxes county-wide.
Assistant County Administrator Ron Pianta and Patricia McNeese with the Hernando County Planning Department presented a slideshow detailing the “roadmap for the future” based upon the plan by the USF Center for Community Design and Research. The goal of the Kass Circle CRA, states McNeese, is to ultimately preserve the character and function of the community.
According to Pianta, the next step in the process is for the BOCC to adopt the resolution of the Finding of Necessity; that is, to declare that Kass Circle meets the conditions set forth in the statutes. Then, the BOCC needs to designate the agency which will be in charge of the redevelopment. Pianta recommended that the BOCC should have complete oversight of the program. McNeese stated that once that is done, the resolutions are filed with the State of Florida. Minimally, it would be approximately a year before a specific plan is developed and returned to the BOCC for a vote. In the interim, no official activity can take place. The plan becomes the authority for the activities and programs in the CRA and must be conformed to. The BOCC will then create the tax income and finance district.
There are some signs of wear and tear in the buildings and the parking areas. Community clean-up projects have yielded some visual improvements. According to McNeese, private investment could be used for the present structures.
Commissioner Jeff Holcomb expressed concern at the county government’s role in the project and believes that many issues could be solved with rezoning, upgrading sidewalks, and having WREC improve lighting in the area. He applauded citizens for working to make the community better with the cleanups and stated there are many groups willing to show up and help, and organized government involvement was not needed. After looking at the proposed master plan, he stated he did not see how to get from the present condition to the three story buildings and walkways without buying the property, bulldozing it and starting from scratch. Fixing up private structures, Holcomb argued, is not government’s job.
Pianta stated that the first issue is showing the BOCC’s level of commitment to the community. This will assist in developing long term partnerships with private investors. Public money can be used to prevent further deterioration to existing infrastructure. Currently, major renovations to the buildings will require the private owners to take the risks or sell to someone who is willing to invest in the neighborhood. Therefore, Pianta concludes that by investing public money and creating an atmosphere which will encourage growth and change, private investors will then see a larger return on their investment over time.
Commissioner Nicholson, who represents the district which includes Kass Circle, has received many emails/letters of support for this project from constituents. He stated that reinvesting in the community will only make it a better place. Pianta agreed that taxes will increase incrementally as the property values increase (after the CRA is in place).
From start to finish, the project could take as few as 10 years, but typically takes 20-30 years depending on the scope and confidence of investors. Though it will start slowly, the changes will be dramatic over time and begin to accelerate. Holcomb acknowledged that new businesses will not look at Kass Circle as growth is currently along State Road 50 and US 19, and so a 30 year plan would be appropriate. However, Holcomb asked Pianta, what is the goal for the current businesses at Kass Circle now?
For now, the current businesses are likely to remain in place, but Pianta thinks that the opportunity for housing is just as important as the shopping center. Although the project is in the early stages, as the County invests in the neighborhood, Pianta expects private investors to come. Nicholson noted that recent rezoning approvals for the area will bring in office and professional businesses.
County Administrator Leonard Sossamon was instrumental in developing a CRA in North Carolina prior to moving to Florida. He stated that putting incentive packages together will be the tip of the iceberg in getting private investors involved. With regard to the Tax Incremental Financing (TIF) he stated the first years were slow and required patience, but when the private sector realized that the government was willing to make the infrastructure changes needed and not walk away from the project, money was invested and like a snowball, gathered speed and generated revenue. Nicholson addressed the issue of taxes stating that the TIF would only apply to that specific district and that they would be reinvesting in themselves. Chairman Jim Adkins stated that no tax would be assessed unless an individual or business did something that would increase the values of their property.
Following citizen comments and discussion, the resolution to adopt the Finding of Necessity was voted on. Commissioner Jeff Holcomb was the only vote against it, having made clear his position that government intervention was not appropriate. The resolution to make the BOCC the CRA agent was also voted on and approved. The resolutions will be filed with the State of Florida and the plan will then be prepared and returned to the County to be adopted.
Editor Notes: Discussion of tax incremental funding
Tax incremental funding is a tool that policymakers use to invest tax dollars into redevelopment, often benefitting private property owners. Tax incremental funding is sold on the idea that an increase in property values following redevelopment is used to pay back bond obligations used in funding the project. It’s not possible to determine whether the property value increase is due to inflation or to the development. It’s also not possible to determine whether the development would have happened without the use of public funds. The increase in property tax revenues is diverted to directly pay the bond obligations, while the amount of property taxes collected before the redevelopment project is frozen to act as a base amount that goes to the general fund. If the increase in revenue is not large enough to payoff the bonds, the county is on the hook to find the revenues elsewhere. An economic downturn could feasibly cause property values not to rise as anticipated.
Some experts have cautioned the use of TIF. According to “A Tool for Local Economic Development” published in Land Lines by the Lincoln Institute of Land Development, “…policy makers should pay careful attention to land use when TIF is being considered. Our evidence shows that commercial TIF districts reduce commercial property value growth in the non-TIF part of the same municipality. This is not terribly surprising, given that much of commercial property is retailing and most retail trade needs to be located close to its customer base. That is, if you subsidize a store in one location there will be less demand to have a store in a nearby location.”
California was the first state to implement TIF’s 60 years ago. However Governor Jerry Brown banned the use of TIFs in 2011. The decision was upheld by the California Supreme Court along with the elimination of CRA’s. In California, the state was found liable for loss of revenue to the public schools which incurred a $3 billion bill every year.