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City offers cash to annex apartments

In an unusual move, the city is offering the owners of the Oaks Apartments $20,000 to annex into Largo.

The city has offered such incentives before, but, administrators say, this is the largest cash incentive ever offered to a residence or business.

Since 1998, the city has set aside money to help encourage annexation. Any homeowner, for example, who enters into an agreement with the city receives $200 to step inside the city's boundaries. This year Largo set aside $200,000 to encourage residents and businesses to become a part of the city.

In order to annex the Oaks, the city will spend nearly $9,000 to extend city sewer service to three contiguous properties now on septic tanks. The three properties also will annex into Largo, and, like the Oaks, no longer will be an unincorporated enclave.

Offering incentives is somewhat common for cities. But Clearwater has not offered cash to those considering annexation and has no plans to develop such a policy, said Ralph Stone, an assistant city manager.

By contrast, Pinellas Park has offered incentives for a portion of construction of a road, for example, or has waved as much as $90,000 in land development fees but has never given a direct cash payment to a business owner to seal the deal, said Bud Wortendyke, Pinellas Park's economic development director.

Leaders in Clearwater and Pinellas Park would not comment on whether such a deal is prudent, saying it was none of their business.

Largo city leaders, however, say the deal is well worth it and will pay for itself in about 18 months. They point to the property's 7.7 acres valued at $6.4-million. That alone, could funnel more than $22,000 a year in property taxes to the city. When franchise and other fees are added, it could take even less time for the city to recoup its money, said Ric Goss, Largo's development director.

"Basically what you're doing here is giving the guy a break in the first year he comes into the city," Goss said.

The city was interested in the property for a number of reasons. It helps eliminate an island of county land surrounded by city boundaries that already was receiving city fire and sewer services.

"Why not have them in the city? Why subsidize them?" Goss asked.

As for the owners of the apartment complex, they couldn't be happier. They will no longer have to pay a 25 percent surcharge on water and will pay taxes at a lower rate in Largo. But they will have to pay some fees they hadn't had to pay before.

"I think it's a good move for us and the rest of the complex," said Angelo Astuto, a co-owner of the Oaks and four other complexes in Pinellas County. "It allows us to do something on the property."

They figured since they were bringing so much tax revenue to the table, it was only fair that they get some relief.

They plan to use the $20,000 to improve the parking lot, roof and landscaping.

Residents in the apartment's 252 units would become citizens of Largo and gain access to city recreational programs.

The terms of the agreement, approved Tuesday by the City Commission, also include a trash compactor for solid waste collection and a connection for reclaimed water service, if it becomes available.