Dunedin looks for new incentives to encourage downtown development

DUNEDIN — Downtown residential developers could start receiving breaks on parkland impact fees under a proposal being explored by city leaders and staff.

At issue is Dunedin's Land Dedication Ordinance, or LDO. Since the mid 1970s, the ordinance has required owners of new residential developments containing five or more housing units to either include green space for their residents or contribute to a city fund for future Dunedin parks. The fee is based on the property's value.

But as property values increase, the city has received complaints that developers are discouraged from doing business in Dunedin, especially downtown, due to high LDO fees and little space for parkland in projects.

The city staff has proposed that developers in downtown's Community Redevelopment Area receive an automatic 50 percent discount on LDO fees. Developers could earn up to another 35 percent in discounts if they meet certain incentives, such as erecting a mixed-use project.

The Community Redevelopment Agency would cover the extra 35 percent in developer incentives, paying the money into the LDO fund over a five-year period.

Under Dunedin's current formula, the parkland fee alone on a 22-unit downtown mixed-use project built on land valued at $1.5 million would cost roughly $396,000, or $18,000 per unit, officials said. The proposed formula could reduce the per-unit cost for that project to roughly $3,000.

Developers "come through our conference room and things are wonderful until we get to the (LDO) calculation. … They get up and say 'I'm sorry. That's not going to work,' " city planning director Greg Rice said at a commission workshop last week.

City commissioners gave the staff a green light to continue researching the matter.

Five speakers — including developer Joe Kokolakis and Manny Koutsourais, a former Dunedin mayor and parks/recreation advisory committee member — said they also support the change.

"This LDO is a disincentive and is preventing development," Kokolakis said, adding that the proposed incentives will free up money that encourages developers to, among other things, invest in better architecture.

However, former city attorney John Hubbard, who wrote the original ordinance, vehemently argued against it. Estimating that thousands of people have paid into the LDO since its creation, Hubbard questioned the equity of now giving up to an 85 percent break on fees to six or seven potential downtown landowners.

"Limiting this to the CRA is very questionable," Hubbard said, adding the city has valuable properties on its waterfront and causeway. "If you're going to give a break to wealthy property owners, you need to give the break citywide."

But commissioners said the city needs to do something to generate revenue.

"We need to get some shovels in the ground down there," Commissioner Ron Barnette said.

Mayor Dave Eggers said the proposed new formula would encourage development that would generate new money for parks and other projects.

Commissioner Julie Ward Bujalski said she supports offering developers incentives, but she asked City Attorney Tom Trask to research the legal concerns raised by Hubbard. She also asked the staff to study ways to ensure that the Community Redevelopment Agency would consistently pay the money it owed into the LDO fund.

Keyonna Summers can be reached at (727) 445-4153 or ksummers@tampabay.com. To write a letter to the editor, go to tampabay.com/letters.

Dunedin looks for new incentives to encourage downtown development 01/17/14 [Last modified: Friday, January 17, 2014 6:44pm]

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