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5/27/04 - Palm Beach Daily Business Review

Community Redevelopment Agencies Being Pressured to Go for Short-Term Economic Gains

By Terry Sheridan

Three of Broward County's existing community redevelopment agencies, as well as three others soon to start operations, are caught in a struggle between tradition and new goals that will shake up how the agencies do business.

Slowly and painfully, the old CRA model of decades long redevelopment is giving way to a focus on specific projects designed to produce far quicker returns for local government.

That change is bringing community redevelopment agencies to a policy crossroads, said Cynthia Chambers, director of the county's new Office of Urban Planning and Redevelopment.

"County officials are looking at greater oversight for greater return on their investment," Chambers said.

Increasingly, that's bringing new emphasis on shorter-term goals.

"There is an economic development element to all of the newer community redevelopment plans," said attorney Frank Schnidman, professor of community and economic development at Florida Atlantic University's Department of Urban and Regional Planning in Fort Lauderdale. The newer plans are expanding blight, a benchmark in establishing a redevelopment district, to include areas that could actually have market interest for economic development.

"In the old days of urban renewal, the CRAs were dealing with land the market didn't want," he said. "Now, there are areas within the CRA boundaries that the market is seeing as attractive."

In Margate, an upheaval in the city's CRA offers a snapshot of the concerns.

Agency executive director Jeff Oris resigned last month in the midst of negotiations over a $5 million purchase of a shopping center and service station site. Arguably the most significant purchase in the agency's eight-year history, the property is central to Margate's proposed downtown core at State Road 7 and Margate Boulevard.

Oris quit after city commissioners began questioning the agency's independent decision-making, saying that they wanted more input in planning and acquisitions. The city has since disbanded the agency board, whose members consisted of local business people, and regrouped it with city commissioners as board members.

"All we wanted to do was put the spending of the taxpayers' money in the hands of people who are accountable for it, and those people are the elected officials," said Mayor Pam Donovan. "If a volunteer [independent] board buys a shopping center and people are upset, and they come to us about it and we say we had no say in it, what kind of leadership does that show on our part? If we buy the shopping center and people are upset, they can vote us out."

The service station site was dropped from consideration because it was overpriced and overly burdened with multiparty leases, Donovan said.

Donovan wants the agency to help lure businesses, fill shopping centers, create jobs and improve community appearances - and offer economic incentives. Former agency officials were too focused on buying land for office development, she said.

Oris, who is widely considered among the cognoscenti of redevelopment agency operations, disagrees. The push for CRAs to function as an economic development tool is a short-term solution to a long-term problem, he said.

"Very few CRAs offer incentives to business. That's a short-term gain," said Oris, who is now director of government operations and development services for PMG Associates Inc. of Deerfield Beach, an economic development consulting firm.

"It doesn't enhance the tax base, and that business could be gone a week later. Elected officials look at short-term solutions. They always talk about bringing in businesses but where do you put them? We have obsolete buildings and very little vacant land.

"Offices bring in top-wage earners, but if you don't have a neighborhood where people can go to anything besides the local bar or McDonald's, you cut off a large chunk of the market for top-wage earners."

Margate is top-heavy with lower-tier retail stores, such as pawn shops, sellers of automotive supplies and services, thrift stores and immigration services, Oris added.

Redevelopment agencies are intended to remake an area, said Bill Dowd, who was chairman of the former Margate agency board for almost three years.

"By turning around those areas, economic development happens naturally," said Dowd, information systems director for JM Lexus in Margate. "If you bring in a business and they redevelop one building for tax breaks, how much have you done for the whole area?"


The contention over CRAs has steadily grown for years, and Margate is hardly alone in its struggles.

The agencies are public entities that raise money through bonds and property taxes for redevelopment projects in areas designated as slum and blighted. The agencies typically have a lifespan of 40 to 60 years.

The amount of property taxes collected from a CRA district is frozen in the year the district is created. After that, the agency can keep up to 95 percent of additional taxes generated by development and property value increases. Those funds must be reinvested in the district, a practice known as tax-increment financing, or TIF.

Broward County Administrator Roger Desjarlais and other CRA critics argue that the agencies capture too much money and produce too little actual redevelopment. Earlier this year, the county estimated it would forgo $300 million in tax revenues in the next decade to CRAs.

In 2002, Desjarlais was instrumental in helping change state law to make it tougher for cities to expand existing CRAs and form new ones.

Now, Broward County officials have begun in earnest what Desjarlais has pushed for more than five years: holding redevelopment agencies accountable for the tax dollars they claim, and endorsing only those agencies that target specific projects. Because the county ultimately approves the formation of new agencies and expansion of existing ones, it wields considerable power.

Chambers' urban planning office also is pushing to partner in cities' redevelopment efforts. As an alternative to the usual CRA funding, the county has rolled out a $10 million investment program that, through bonds and other investments, could grow to $100 million. In approving redevelopment agencies that target only specific projects, the county has offered to help fund those projects through its financial program.

That leaves cities with the power, under state law, to assemble properties for projects.

It's a political and financial arrangement that has drawn a wide mix of responses. Some city officials think that they had best go along with the county. Others, whose CRAs predate the county program, think that the county should butt out.

Even Margate's Donovan, who criticized her city's CRA, said she didn't want "to be in the position of having to go to the county and be turned down. We have our [agency] and we're going ahead."

Dania Beach, which originally wanted a traditional CRA but never got approval, stepped forward in March as the first city to join the county's new finance plan. While the agency can assemble and take land, it does not collect tax-increment financing, and it has no term limit.

Early next month, Dania Beach will present for county approval at least three redevelopment projects in a district around Federal Highway and Dania Beach Boulevard.

City Manager Ivan Pato, who declined to identify the proposed projects, considers the proposal itself a test of the county's plan.

"We're in unchartered territory here," he said. "We don't really know how it will work except to say that we are supposed to identify projects and bring them to the county for evaluation and approval. If they like it, we'll develop an interlocal agreement for that project."

It bears watching whether the city's projects will get caught up in county red tape that will lengthen approval times, Pato said. If so, "you defeat the very reason given to us for wanting to change the model, which is making things happen faster," he added. "We shall see."

Pato, in fact, is anxious to test the county's new method, adding that he thinks traditional CRAs take too long to make things happen. But pushing for economic development - especially in a 100-year-old city like Dania Beach, Broward's oldest - is "putting the cart before the horse," he said. "Our mission is redevelopment. It can't all be about dollars. It has to be about quality of life. We have vacant lots and blocks that we would like to redevelop so they look quite different."


In Fort Lauderdale, the city's traditional CRA may have to straddle the transition to a new model if it is to add 300 acres to the north of its current 1,400-acre redevelopment district. The CRA wants the addition to be made under older CRA rules, but its proposal, submitted to the county about two years ago, has been on hold in anticipation of the county's new redevelopment plan, said CRA director Kim Jackson.

The county wants Fort Lauderdale's CRA to segregate its expansion so that the new acreage operates under the new program.

Chambers, the county urban planning office director, said the county wants the CRA to craft an interlocal agreement, which the agency board opposes. That's largely because board members were led to believe last year that the expansion would be allowed to operate under the old rules, Jackson said.

The county currently is reviewing what's called a "finding of necessity" needed before the CRA can expand. The finding and CRA plan are expected to go before the County Commission in August.

Meanwhile, Oakland Park, Lauderhill and Wilton Manors all have new or proposed CRAs that need county approval of their redevelopment plans.

"All of them understand that the Dania Beach model is what we want to achieve," Chambers said.

Wilton Manors officials could not be reached by deadline.

In an interview late last year, Wilton Manors community development director Harold Horne said the city wanted to tie its CRA specifically to a mixed-use project along the Florida East Coast Railway tracks, called Wilton Station.

In Oakland Park, the city is balancing redevelopment of its older infrastructure with economic lures to businesses, said Pat Himelberger, special project coordinator.

The city's 1,000-acre CRA is tied to its Main Street project - an overhaul of its commercial corridor.

The CRA, interlocal agreement and redevelopment plan are still in negotiations with the county, she added.

In Lauderhill, economic development coordinator Elijah Wooten said the city's two CRAs target two projects, redevelopment of the old MacArthur Dairy at Sunrise Boulevard and State Road 7, and the former Kmart across the street.

The Kmart site would become stores, offices and a hotel. The old dairy site would be transformed into 100 townhouses and a hotel. The city, which owns both sites, is enlisting Amera Broward Central to develop the projects. Amera's principal, George Rahael, also is one of the developers involved in the redevelopment of a site at University Drive and Sample Road in Coral Springs - the heart of that city's CRA.

Lauderhill's agencies are approved, but their business plans are under county review. The city is hoping for an OK by August, Wooten said.

"I look at this from the economic development perspective for the city," he said. "Anything you can use to attract industry will help."