Nocatee is not unique in stirring up controversy
Developer accused of hiding intentions

COURTESY : First Coast Community - The Beaches Shorelines
BY Drew Dixon 
Published March 17, 2004 

As a state judge prepares to make a recommendation on community development districts proposed for the planned Nocatee development west of Ponte Vedra Beach, the history of the designations has included controversy, particularly along the First Coast.

Residents have filed lawsuits over CDDs at the Julington Creek Plantation development in Northwest St. Johns County and Eagle Harbor in Clay County, questioning the fairness of the CDDs' assessments against property owners.

Officials with the Parc Group, Nocatee's developers, asked Administrative Law Judge J. Lawrence Johnston last month to recommend CDD designations for both areas of Nocatee -- 2,000 acres in southeast Duval County and 13,000 adjacent acres in St. Johns County. Assistants in Johnston's office said last week he's still reviewing the case but he's expected to make a recommendation by the end of this month to the Florida Land and Water Adjudicatory Commission, made up of the governor and the Cabinet.

The districts allow for the establishment of boards, made up of developers' representatives and eventually residents, that can assess homeowners to pay for bonds used to pay for roads, sewers and other infrastructure. About 270 CDDs have been approved in Florida since the Legislature enacted a law allowing the quasi-government boards in 1980.

But critics charge the CDDs let developers levy assessments on top of property taxes without future homeowners being fully aware of those assessments before they move in.

"I still get calls from residents who say, 'I was never told, I didn't know this,'" said St. Johns County Commissioner Nicholas Meiszer, who represents the area where most of Nocatee will be built.

Meiszer was referring to residents of Julington Creek Plantation, west of Nocatee. That area is already a CDD but the designation has never been wholeheartedly embraced by residents. They pay $360 in assessments each year to the CDD.

Some Julington Creek residents sued the developer, Julington Partners Limited. The 1999 suit said the CDD board, then appointed by the developer, forced them to pay impact fees to St. Johns County to offset infrastructure costs as well as the $360 assessment, which paid for the same work. In 2000, residents demanded the appointment of more homeowners to the CDD board.

Meiszer said the Julington Creek Plantation CDD typifies some of the questions with the setup.

"The issue there had to do with who should get the rebate for the impact fees," Meiszer said. "The developer took the rebate.

"It's a way of getting people to think they're getting something for nothing," Meiszer said. "All these fancy fronts and these fountains and the streets and the sidewalks and the swimming pools, it's like all that comes with the development. But you don't realize that you're paying for all that because it was financed through the CDD."

Although there may be confusion among residents who live in CDDs, state officials are reluctant to discuss the districts. Public information officials for Gov. Bush and the Florida Department of Community Affairs declined to comment on CDDs.

But Nocatee officials have argued CDDs efficiently generate the capital needed to pay for road and infrastructure projects to make a new housing and commercial complex more attractive to potential homeowners. For Nocatee, part of that will include a major reconfiguration of County Road 210, a $100 million project scheduled to begin this year.

Richard Ray, president of the Nocatee Development Co., said the Julington Creek Plantation episode isn't typical of CDDs.

"There are always isolated instances," Ray said. "We know that community development districts within Nocatee will be good for the residents.

"There will be a long-term, stable entity that will be there long after the developer leaves to maintain the community facilities and the services, which will include the parks and recreation system and the amenities," Ray said. 

Greg Barbour, president of Parc Group Inc., said Nocatee is different because Parc Group won't be disputing impact fee refunds or credits -- the company has decided to waive impact fee credits it would get for placing schools and other facilities in the development.

"We waived the ability to get credit for impact fees," Barbour said. "We don't want any credit as far as the schools go. For improvements that are funded by the community development district, the impact fees that are collected by the county will be credited back to community development district, not the developer. That's the difference between us and Julington Creek and that issue they had."

But Julington Creek Plantation isn't the only North Florida CDD to attract controversy. Litigation continues in Clay County, where the Property Appraiser's Office is seeking to assess property taxes for two swimming areas and a golf course within the Crossings CDD, which services much of Eagle Harbor.

Roger Suggs, assistant property appraiser for Clay County, said, "There was a property tax exemption on one of the swim parks that we denied, never an exemption on another swim park and never on the golf course.

"The issue was the Crossings [CDD board] felt they should be exempt on those Parcels because they served a public or governmental purpose. We took it to three years of litigation and it was tried in November 2003. And this office took the position they did not serve a public purpose and did not serve a government purpose," Suggs said.

The trial ended in November, but Suggs said they're still waiting for a ruling from Circuit Judge Marvin Gillman. The only case involving property tax exemptions for CDDs ever ruled on by a judge in Florida was last year in Highlands County, where the property appraiser won the case and revoked exemptions for a CDD.

"Our position is that CDDs were created as a vehicle for developers to develop large acreage property without impacting those outside that property," Suggs said. "I think we've got five in Clay County now; the only concern is that the property being used is exclusively for those residents. This litigation in Clay County could have some impact. We just feel like it's our job to grant or deny an exemption and we'd really like some direction from the court."

Meiszer used to adamantly oppose CDDs, but he's now resigned to the fact that they're inevitable.

"I felt the infrastructure and facilities could have been financed in another way," Meiszer said, through a municipal service taxing unit or municipal benefit service district, both special taxing areas that assess taxes to residents for infrastructure that serves only them. But control would remain in the hands of local government, not CDD boards, he added. 

As far as Nocatee and potential CDDs there, Meiszer said, "I don't think there will be a problem in collecting the assessment or paying the debt."

Ray said the Nocatee developers will inform all future residents about the assessments if the districts are approved by the governor and Cabinet. He believes there'll be no issues.

"They've been used and they've been successful," Ray said. "But you can't develop a 15,000-acre parcel of land without having exposure. You're leaving yourself exposed to critics. But, no, we are not concerned about the future of the community development district."


 
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