Residents of The St. Joe Co.'s SouthWood development are paying on their Leon County tax bills for road improvements across the city in a deal the company made in 1999 to win development approval from Tallahassee and Leon County.
Three residents who are among those shelling out the taxes to pay for the projects are asking the Leon County Commission to step in. They seek to head off committing to projects while St. Joe has voting control. In November, things may change as property owners will gain a majority of the board that directs the special taxing district in SouthWood.
In 1999, St. Joe agreed to a list of more than 36 road projects, which city and county planners said were needed as a result of the development.
St. Joe asked the state Cabinet in 2000 to create a community development district — a governmental entity with taxing authority — to help pay for the development infrastructure. The district, whose board was essentially elected by St. Joe as the district's largest landowner, issued bonds and required SouthWood landowners — including St. Joe itself, as a property owner there — to help pay for projects within the development as well as the road projects scattered around town.
Property owners in SouthWood pay between $361 and $1,415 a year on their tax bills depending on the lot sizes — in addition to maintenance costs for the development. With the cost of the outside road projects increasing from an estimated $19 million in 2003 to $26 million now, a few SouthWood residents have begun questioning the company's control over the government taxing district.
The district has paid $70.1 million for projects through April of this year. $52.3 million of that was within SouthWood.
"Clearly the developer is controlling this entity from A to Z," said Nick Weilhammer, an attorney and a SouthWood resident.
But Brian Crumbaker, an attorney for the Capital Region Community Development District in SouthWood, says the district works closely with St. Joe because it remains the largest landowner in SouthWood. And he says it's all legal under state law.
District officials say current residents of SouthWood won't have to pay more even if the cost of road projects increase in the future.
The projects already built include adding a turn lane at Tharpe Street and Old Bainbridge Road for $207,556. So far, the district has spent $17.8 million on such off-site projects, which also include adding a lane on Bradford Road at North Monroe Street and intersection improvements across town on Capital Circle Southwest.
Weilhammer and two other SouthWood residents have asked the Leon County Commission to exercise its legal oversight, which Weilhammer said could include abolishing the district. County Attorney Herb Thiele said he would research the issue only if directed by the Leon County Commission.
But Crumbaker contends Weilhammer is wrong. State law, Crumbaker says, doesn't give the county oversight authority over the district. That oversight, he says, rests only with the Cabinet and Legislature.
He says state law creates districts to pay for infrastructure related to development regardless of whether it is within the development itself or miles away.
The three SouthWood residents — Weilhammer, wife and law partner Twyla Sketchley and Tom Bishop — say St. Joe maintains control over the district and its staff. Three St. Joe officials, including two who live in SouthWood, serve on the five-member board along with a former company official who was elected by residents.
St. Joe, as the largest landowner in SouthWood, chose all five board members through landowner elections — as provided for under state law — until 2006. That's when two board members were elected by residents.
Two more board members will be elected by residents in November, giving residents four seats. Sketchley is among five candidates to qualify. Another is board member Correy Dietz, a St. Joe employee and SouthWood resident who is leaving the company and resigning from the board this month.
In a legal memorandum sent to Leon County commissioners, the three SouthWood residents also say that Crumbaker represents both St. Joe and the district. Crumbaker acknowledges having represented both at times but says there isn't a conflict of interest because the company has its own attorneys representing it on deals involving the district in SouthWood.
The board will meet Thursday to discuss the memorandum and a possible response, said Alan Hanstein, the board chairman and the one board member who hasn't worked for St. Joe. He is president of Paragon New Media Inc., a small software development company based in Tallahassee.
At a June 12 board meeting, Hanstein said SouthWood residents have benefited from the road projects built across town because they were required for the development to get built. He said homes in SouthWood would cost more if St. Joe had to pay and pass along the costs for the road projects.
"Some (road projects) are a further stretch than others," Hanstein said. "Old Bainbridge and Tharpe — that's one where you say, 'How many people from the neighborhood actually drive out there?'"