STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARING

Re: Petition of Westinghouse Bayside ) Communities, Inc. to establish )

a community development district ) Case No. 91-0849 to be known as Bayside Improvement)

District. )

)

REPORT AND CONCLUSIONS

On April 8, 1991, a public hearing was held in this cause in Fort Myers, Florida for the purpose of considering the petition of Westinghouse Bayside Communities, Inc. (petitioner) to establish the Bayside Improvement District (district) in Lee County, Florida pursuant to Chapter 190, Florida Statutes (1989). At hearing, petitioner was represented by Kenza Van Assenderp, Esquire. Petitioner presented the testimony of Bryon R. Koste, Samuel L. Crouch, David E. Crawford, Thomas R. Peek, William Spikowski, Gary R. Moyer, Dr. James E. Pitts and Dr. Lance deHaven-Smith. Intervenors Donna Buhl, Richard Huxtable and Ruth Norman were represented at hearing by Judith A. Workman, Esquire. Besides testifying on their own behalf, intervenors presented the testimony of Gary L. Beardsley. Offering testimony in the role of public witnesses were Larry Sullivan, Lee Menzies and James Pepper. The names and address of all witnesses are set forth in Appendix A attached to this Report and a summary of their testimony is given in a separate portion of this Report. Petitioner offered exhibits A through K and supplemental exhibits 1 - 7 while intervenors offered intervenors' exhibit 1. All exhibits were accepted and made a part of this record. A list of said exhibits is attached to this Report as Appendix B. Also, including intervenors exhibit 1, five written statements from members of the public were timely filed. Finally, petitioner and intervenors filed post- hearing submissions which have been considered by the undersigned. This Report and Conclusions is submitted to the Florida Land and Water Adjudicatory Commission (Commission) pursuant to Rule 42-1.013, Florida Administrative Code.

Procedural Background

This proceeding began when petitioner filed a petition with the Commission's Secretary on January 29, 1991, seeking authorization to establish a community development district in an unincorporated area of Lee County, Florida. The contents of the petition are found in petitioner's composite exhibit C accepted into the record. After certifying that all elements and contents of the petition were complete, the Secretary forwarded the petition to the Division of Administrative Hearings on February 5, 1991. By notice dated February 8, 1991, as amended on February 18, 1991, a date and location of public hearing were established, and petitioner was required to publish notice of the public hearing in a newspaper of general circulation in the affected area. Such notice was published in the Fort Myers News-Press, a daily newspaper in Fort Myers, Florida on March 11, 18, and 25 and April 1, 1991. Proof of publication is found in petitioner's exhibit G-2 accepted into the record. In addition, and as required by Rule 42-1.011, Florida Administrative Code (1989), a copy of said notice was served upon the Department of Community Affairs. Finally, notice of the hearing was published by the Commission's Secretary in the Florida Administrative Weekly on March 8, 1991, as required by Rule 42-1.010(1)(b),

Florida Administrative Code. A copy of said notice is found in petitioner's exhibit G-1 accepted into the record.

Petitioner also filed a copy of the petition with the Lee County Board of County Commissioners and paid the required $15,000 filing fee to that body. A public hearing before the County Commission was held on November 21, 1990.

After the hearing was concluded, the County Commission voted to take no position on the establishment of the district.

The hearing in this matter was conducted in accordance with the provisions of Subsection 190.005(1)(d), Florida Statutes (1989), and Rule 42-1.012, Florida Administrative Code. A transcript of said hearing was filed with the undersigned on April 17, 1991, and is being transmitted with this Report and Conclusions. As required by Rule 42-1.012(3), Florida Administrative Code, the record was kept open for ten days after the public hearing so that interested parties, if any, could submit written statements concerning the petition. Four such statements in opposition to the petition were timely filed. Replies to said statements and a rebuttal statement were subsequently filed by petitioner.

A Brief Overview of The District

By this petition, petitioner seeks to establish a community development district in Lee County. If approved, the district will be an independent special taxing district authorized by Chapter 190, Florida Statutes (1989). As such, it may plan, finance, construct, operate and maintain a communitywide infrastructure in a planned community development to be constructed in the district. The district, which encompasses approximately 1800 acres, is generally located west of the City of Bonita Springs in southwestern Lee County and is bounded on the north by Coconut Road, on the south by the Spring Creek development of regional impact and Spring Creek, on the west by Estero Bay, and on the east by U.S. Highway 41.

The district is intended to manage and finance basic services for a mixed use community known as Westinghouse Bayside. At the present time, the development has four locally approved and zoned planned unit or residential developments consisting of approximately 820 acres and 1422 units. The remainder of the land is now zoned agriculture. After being fully built, the project is anticipated to include 3,500 dwelling units, 470,000 square feet of retail space, 170,000 square feet of office space, 450 hotel rooms, a 50,000 square foot conference center, several golf courses, and various marina facilities. It is noted, however, that the sole purpose of this proceeding is to authorize the establishment of the distict. Any other necessary permits for construction or planning purposes are not within the scope of this proceeding.

Summarization of Evidence and Testimony

1. Bryon R. Koste - Mr. Koste is president of Westinghouse Bayside Communities, Inc., the corporation that filed the petition in this cause. His prepared written testimony has been accepted into the record as supplemental exhibit 1. Koste has overall responsibility for the project and has been involved in all major decisions involving this petition. Koste described the location of the proposed district as being generally concurrent with the current boundaries of Pelican Landing, a Westinghouse community in Bonita Springs, Florida. If approved, the district will serve as a vehicle to provide the infrastructure for Westinghouse Bayside, including water, sewer, stormwater management, landscaping, roads, bridges and parks. In Koste's opinion, the

   district is the most efficient and effective vehicle to provide the above services and amenities to the community development residents.

   
   

   According to Koste, Westinghouse desires to have a service delivery system in place before the remainder of the community development is begun so that the same entity designs, builds and manages the service facilities. Moreover, this avoids the problem of having to transfer the facilities at a later time from the developer to the district and then having the district inherit facilities planned by another entity.

   
   

   In response to a concern by some that the district will drive up property values in the area, Koste agrees that property values have increased after other nearby districts have been approved. However, he attributes the increase in land value to the development that occurs within the district's boundaries rather than to the creation of the district. He added that Westinghouse does not intend to ever ask the district board of supervisors to exercise the power of eminent domain. This testimony is accepted as being a credible and accurate assessment.

   
   

2. Samuel R. Crouch - Crouch, who was not tendered as an expert, is executive vice president of Westinghouse Bayside Communities, Inc. and serves as project director for the proposed district. This witness has worked in the community development business for a number of years and was assigned the task of assembling the professional team involved in establishing the district. The team includes an attorney, district manager, economist, engineer, planner and political scientist. Crouch has also been closely involved in the creation and operation of two other districts. His prepared written testimony has been accepted into the record as supplemental exhibit 2.

   
   

   From a historical perspective, Crouch pointed out that the project was begun some nine years ago when Westinghouse purchased 369 acres of land with the intention of building a golf course and club. The club opened three years later. At that point, Westinghouse began acquiring additional parcels of adjoining property and now owns the 1,806 acres which comprise the proposed district.

   
   

   Crouch identified and sponsored petitioner's exhibits A - K which accompanied the petition initiating this proceeding and supplemental exhibits 3- A and 3-B. All exhibits were prepared under his direction and control. Exhibit A is made up of four exhibits, which are numbered A-1 through A-4. The first exhibit within composite exhibit A is a large location map which outlines the general location of the district within the county. It is noted that the proposed district will be located in an unincorporated portion of southwestern Lee County and will encompass 1,806 acres of land. The area is bounded on the north by Coconut Road, on the south by the Spring Creek development of regional impact and Spring Creek, on the west by Estero Bay and on the east by U. S. Highway 41. Exhibit A-2 is a local map outlining the Westinghouse Bayside Community development which will be serviced by the district. Exhibit A-3 is a boundary map of the land area to be included within the jurisdiction of the district. It is noted that the boundaries of the district are coterminus with the boundaries of the development, which exclude the Johnson parcel, T & K Farms, Coconut Road Right-of-Way, and Spring Creek Right-of-Way. Exhibit A-4 is a copy of the Lee County comprehensive plan map, as amended and currently in force. Composite exhibit B is made up of seven exhibits, B-1, B-1b, B-1c, B-1d, B-1e, B-2 and B-3. The first exhibit is a copy of Lee County Ordinance No. 82-

   43 adopted by the County on November 15, 1982. That ordinance is known as the Pelican's Nest PUD ordinance and authorized the establishment and development of

   the Pelican's Nest development. Exhibit B-1b is a copy of Lee County Resolution No. Z-86-168 adopted on December 8, 1986, and which authorized a residential planned development (RPD) for a project known as Ridgewood RPD. Exhibit B-1c is a copy of Lee County Resolution No. Z-88-193 adopted on February 27, 1989, and which authorized a project known as the Palmetto Bay RPD. Exhibit B-1d is a copy of Lee County Resolution No. Z-88-032 adopted on March 14, 1988, and which authorized a project known as Pelican's Nest RPD. The next exhibit (B-1e) is a document prepared by petitioner's planner and summarizes the status of development permits and authorizations generally applicable to the land area to be serviced by the district. It reflects that at the present time, and as evidenced by exhibits B-1 through B-1d, the proposed district has four locally approved, zoned residential planned development parcels within the boundaries of the project. These parcels constitute almost one-half of the total land area within the district while the remainder of the acreage is now zoned agriculture. Exhibit B-2 is the proposed development agreement between Lee County and petitioner. The final exhibit within composite exhibit B is a statement by petitioner's planner, David E. Crawford, to the effect that even though the development is below the threshold for a development of regional impact (DRI), and thus is exempt from DRI review, petitioner is nonetheless filing an application for development approval as though the project was a DRI. This is being done to assure close coordination of the Pelican Landings community and to instill confidence and high quality development planning. Exhibit C is made up of eight separate exhibits identified as exhibits C-1 through C-8-1 and consists of the petition and attachments filed with Lee County and FLWAC. Exhibit C-1 is the petition filed in this cause. The second exhibit contains maps of southwest Florida and of a portion of Lee County showing the location of the land area to be served by the district. Exhibit C-3 contains a metes and bounds description of the proposed taxing district prepared by a professional land surveyor. The next exhibit is identified as a "Consent to Establishment of District" and contains the consent to creation of the district by various property owners and optionees within the district as of the date of the filing of the petition.

   Exhibit C-5 is a map showing the existing major trunk water mains, sewer interceptors or outfalls within the district. They include two 12-inch water mains, two 6-inch force mains (sewer interceptors), one 8-inch force main, and six storm water outfalls. The next exhibit shows the proposed time table and estimated cost of construction for the infrastructure, including water management bridges and culverts, street lights and street landscaping. Such construction is now proposed to be spread out over five phases beginning in January 1, 1990, and ending on December 31, 2008. The estimated cost of the infrastructure is $3,060,000. However, these estimates are not binding.

   Exhibit C-7 is a copy of the planned development designation of future land use element of the existing Lee County comprehensive plan. The final exhibit within composite exhibit C is the statement of economic impact of the proposed rule in accordance with Subsection 120.54(2)(b), Florida Statutes (1989), and concludes that the petition will not constitute a significant burden to either the State or Lee County, makes an analysis of economic costs and benefits to all persons directly affected by the petition, estimates the impact of the district on competition and the open market, and describes the source of information and methodology used in preparing the statement. Exhibit D consists of two exhibits identified as exhibits D-1 and D-2. The first exhibit supplements the metes and bounds description previously given in exhibit C-3 and reflects four areas whose owners have not consented to inclusion of their lands within the district, constituting in effect four enclaves. The next exhibit provides a specific description of all real property within the external boundaries of the district which is to be excluded from the district. Exhibit E-1 is a photocopy of the

   $15,000 check sent to the Lee County Board of County Commissioners. It is noted that after the filing was made, the County held a public hearing on the matter

   on November 21, 1990, and voted to take no position on the establishment of the district. Exhibit E-2 is a copy of the letter dated January 29, 1991, transmitting the petition to the Commision Secretary. Exhibit F is the letter of transmittal dated February 4, 1991, from the Commission Secretary to the Division of Administrative Hearings certifying compliance as to the completeness of the application. Exhibit G is made up of six separate exhibits. The first item, exhibit G-1, is the notice of receipt of petition which appeared in the Florida Administrative Weekly on March 8, 1991. This notice constituted official notice that a petition had been filed and a hearing would be conducted in Lee County on the question of establishing a district. Exhibits G-2 through G-6 are the newspaper affidavits of publication and tear sheets evidencing publication of notice in a local newspaper on March 11, 18 and 25 and April 1, 1991. Composite exhibit H consists of two exhibits, H-1 and H-2. The first exhibit is a copy of the current Lee County Comprehensive Plan. The second exhibit is a letter dated October 25, 1990, from the Department of Community Affairs (DCA) to the chairman of the Lee County Board of County Commissioners indicating that the DCA had completed its review of the county comprehensive plan and had found it to be in compliance with Chapter 163, Florida Statutes.

   The next exhibit sponsored by witness Crouch was exhibit I which is a copy of Chapter 187, Florida Statutes, the state comprehensive plan.

   
   

   Crouch indicated that at this juncture the district contemplates asking only to exercise the power to establish the infrastructure described in exhibit C-6. It has no intention to exercise the right of eminent domain outside its boundaries. Indeed, supplemental exhibits 3-A and 3-B are letters from Crouch to a nearby mobile home park and recreational vehicle park pledging not to exercise eminent domain powers with regard to any properties located within the two parks. Crouch also stated that until the DRI and land review process is completed, the district is unable to assess which, if any, of the authorized powers it intends to exercise.

   
   

   Crouch further identified the five persons who will serve on the district's board of supervisors. They are Thomas R. Peek, a professional engineer, Jay A. Brett, an attorney, Gene Soloman, a certified public accountant, Andy de Salvo, a real estate broker, and John Pistor, a former county commissioner in Collier County. All are citizens of the United States and residents of the State of Florida.

   
   

   Finally, Crouch concluded that the land area to be served by the district is amenable to being governed by a special district government because the district provides certain benefits that the local government cannot and because of the numerous statutes governing the district's business such as public records law, accountability, and reporting. Crouch's testimony is accepted as being a credible and accurate assessment.

   
   

3. William Spikowski - Spikowski is the deputy director of the Lee County community development department and gave testimony pursuant to a subpoena issued by Westinghouse. In his present position, he has familiarity with all aspects of the Lee County comprehensive plan. This witness pointed out that the establishment of the district is compatible with the goals and objectives of the comprehensive plan, and more specifically with objective 3.1 which provides that it is in the public interest for developers, rather than local government, to furnish the infrastructure for new developments within the county. The rationale underlying this objective is the need for a far reaching program to transfer a substantial portion of the responsibility for providing infrastructure from the county to the landowner. The creation of the district would be a direct implementation of the cited objective. He also pointed out

   that the comprehensive plan specifically authorizes the creation of a district in the area where the district will be located. He added that any development that may occur within the district at a future date is a separate matter from consideration here and, in any event, must be "totally consistent" with the comprehensive plan. This includes the provision of roads within the district. Finally, Spikowski could forsee no circumstances under which the county would be required to take over the district infrastructure in the event the district failed. However, if no district was established and development on the property was approved, the county would be obligated to set up a special taxing district or a benefit unit through a combination of taxes and assessments in order to provide the needed services. Spikowski's testimony is accepted as being a credible and accurate assessment.

   
   

4. Gary L. Moyer - Moyer currently serves as district manager for a number of community development districts located throughout the state. As a district manager, he coordinates the planning, financing, construction, operation, and maintenance of infrastructure to serve new communities. Moyer was tendered as an expert in district management and government. His prepared written testimony has been accepted in the record as supplemental exhibit 4.

   
   

   Moyer found that the district was the best alternative for managing and financing the services. He pointed out that the district is subject to the same checks, balances and accountability as other general purpose governments and the members of the board of supervisors are subject to ethics laws, government-in- the-sunshine, public records law and various statutes related to accountability. In addition, the district is required to conform with the County's plans and standards governing land use, zoning and the like. Moyer stressed that districts cannot prematurely develop infrastructure but instead must recognize the ultimate buildout of a proposed community and then provide those services in a timely fashion to correspond to the development. Thus, before implementation of any facility powers, the district would look to see that there are permits in existence for a particular type development and then proceed to install infrastructure for the approved land use. Moyer added that he is familiar with the existence of the four enclaves within the district and did not forsee them presenting any problem with respect to the district exercising its special powers.

   
   

   In response to the concern raised at hearing that the district might use its power of eminent domain in an unreasonable fashion, Moyer stated that he personally manages approximately 90% of the two dozen existing community development districts in the state and none have ever exercised that power. He added that such powers are limited to specific statutory purposes, not including simple annexation to enlarge the district boundaries, and then may be exercised only after the county commission and circuit court authorize the use of that power. Moyer also stated that districts have never issued general obligation bonds, and if they did, the county and state would not be liable in the event of a default. Moyer further cited two ways in which financing for infrastructure is generally done. First, after notice and hearing, the district may impose a special assessment under Chapter 170, Florida Statutes upon residents who benefit from a particular service. Secondly, Chapter 198, Florida Statutes authorizes the issuance of tax bonds for water management facilities but only after such approval is recommended by a court-appointed independent tax commission and then authorized by the circuit court. In no event would the distict ever be able to go outside its boundaries and make assessments for improvements provided within the boundaries.

   From his perspective as a district manager, Moyer concluded that the creation of the district was consistent with the state comprehensive plan and the local government comprehensive plan, the proposed district was sufficiently compact and sufficiently contiguous to be developable as one functional interrelated community, the district is the best alternative available for delivering community development services and facilities to the area that will be served by the district, the community development services and facilities will not be incompatible with the capacity and uses of the existing local and regional community development services and facilities, and the area to be served by the district is amenable to separate special-district government.

   These assertions were not credibly contradicted and are hereby accepted.

   
   

5. David E. Crawford - Crawford is the director of planning and governmental relations with petitioner and has almost twenty years experience in the field of planning. He was tendered as an expert in land use planning including infrastructure provision for community development and local comprehensive plans and land development. Crawford's prepared written testimony has been accepted in the record as supplemental exhibit 5. In addition, Crawford identified and sponsored exhibit J which is a copy of a letter dated March 14, 1991, from the secretary of the Department of Community Affairs to the Commission Secretary containing comments regarding the proposed district. Attached to the letter are two staff memoranda dated February 10 and 19, 1991.

   
   

   Crawford read and studied the six factors to be considered by the Commission in determining whether the district should be established. Having assisted in the preparation of the petition and its attachments, he first found all matters contained therein to be true and correct. The next criterion requires that the creation of the district be consistent with the state and local comprehensive plans. In this regard, Crawford examined each of the subjects in the state plan to determine their relevance to this proceeding. He found four subjects, some of which had both goals and policies, to be pertinent to this cause. These included subjects 16, 18, 21 and 26, which pertain to land use, public facilities, governmental efficiency and plan implementation, respectively. After reviewing these particular subjects, Crawford concluded that the creation of the district is not inconsistent with any relevant portions of the state plan.

   
   

   Crawford next reviewed Lee County Ordinance 89-04, which is the Lee County Local Government Comprehensive Plan in effect at this time. He initially noted that a community development district is specifically identified and authorized in Overlay Zone No. 1 of the plan (where the district will be located) as a mechanism to provide for community infrastructure needs. He then analyzed each special power for the infrastructure system in relation to the local plan and found nothing which contravened the plan. These potential special powers include the right to plan, establish, acquire, construct, enlarge, equip, operate and maintain systems and facilities for water management, bridge and culverts, roads, parks, fire prevention, school buildings, security facilities, mosquito control and solid waste collecion and disposal. In his opinion, the existence of the enclaves within the district boundaries did not create any impediment to the exercise of the powers.

   
   

   The next factor considered by Crawford was whether the land area of the district is sufficient as a matter of size, compactness and continuity to be a functionally interrelated community. From his perspective as a professional planner, and after analyzing the effect of the four enclaves within the district, Crawford found the creation of the district to be compatible with this criterion.

   The next criterion considered by Crawford was whether the land area in question is amenable to separate special-district goverance. In this regard, Crawford found the land area to be an area where certain services are not available and where they could not be economically extended by the public sector. The land area is also large enough to provide an adequate economy of scale and compact enough to provide the services efficiently. Therefore, he concluded this factor was satisfied.

   
   

   Crawford next considered whether community development, services and facilities would be incompatible with certain uses and capacities existing or authorized on the land area where the proposed district is to be established. While there are existing facilities (water, sewer, storm drainage, roads, security and parks) on the land area where the district will be established, they present no problem because they will be turned over to the district or continue to function in the same mode as they do at the present time. Further, there are no regional services in the district area. Thus, Crawford found this statutory criterion had been met.

   
   

   Crawford also responded to the letter of the Secretary of the Department of Community Affairs (DCA) dated March 14, 1991, which has been accepted in the record as petitioner's exhibit J. Although the letter points out that the petitioner has not supplied any information concerning the intended uses of the land in the district, and thus the DCA "cannot state whether the establishment of the District will be compatible with the land use element of the Lee County Plan as a whole", Crawford responded that chapter 190 does not require any information about the proposed use of the land for development purposes. In other words, this proceeding does not concern matters relating to the development and use of the land. This is because the process of establishing a district is to be based only on factors material to managing and financing the service delivery function of the district. The DCA's letter goes on to state that a portion of the district lies within an area identified in the local comprehensive plan as "an environmentally critical area" and that to the extent the establishment of the district should permit infrastructure in that area, the functions of the district would be incompatible with the plan. However, as Crawford points out, the establishment of the district does not grant development approval to Westinghouse to do something it would not otherwise be able to do, and any future development within the district must strictly conform with the local plan and all pertinent state laws and regulations pertaining to land use. Similar comments by DCA staff in two memoranda attached to the letter focused on matters not material to the approval of the creation of a district.

   It is noted that the letter does not contain language opposing the creation of the district but rather addresses development issues.

   
   

   In response to other objections raised by intervenors, Crawford first noted that development will not take place directly on the sensitive shores of Estero Bay. He also stated that the DCA has found the local comprehensive plan to be in compliance with chapter 163, as reflected in exhibit H-2. He further stated that the state, regional and local plans do not make the community development district concept outdated but rather reinforce the idea that districts are a desirable method to provide infrastructure. Crawford next denied that Westinghouse is promoting urban sprawl and asserted that because of the Sunshine laws, the public will always have access to the district's decision-making process. Crawford also stated that neither the county nor the DCA believe that a DRI review must be undertaken before a district is established. As to the concern that Westinghouse intends to realign Spring Creek Road once the district is created, Crawford noted that any realignment is contingent on approval from

   the county. Finally, Crawford conceded that Westinghouse has been fined once by the Department of Environmental Regulation for inadvertently removing a small area of wetland vegetation and that it is currently working with the Department of Natural Resources to purchase a 40 square foot area seaward of a seawall that fronts on Estero Bay. This testimony is accepted as being a credible and accurate assessment.

   
   

6. Thomas R. Peek - Peek is a civil engineer and land surveyor who was tendered as an expert in civil engineering with emphasis on municipal engineering. As a licensed professional engineer, Peek has had extensive experience in providing engineering services for various development projects in the southwest Florida area and served as the engineer on the team to establish the district. His prepared written testimony has been accepted in the record as supplemental exhibit 6.

   
   

   From his perspective as a professional engineer, Peek examined the six factors in subsection 190.005(1)(e) which must be satisfied in order to create a district. Based upon his review, he concluded that all matters in the petition were true and correct, the creation of the district would not be inconsistent with any portion of the Lee County comprehensive plan and the state plan, the area of land within the proposed district is of sufficient size and compactness and is sufficiently contiguous to be developable as one functional interrelated community, the district is the best alternative available for delivering community development services and facilities to the area that will be served by the district, the community development services and facilities of the district will not be incompatible with the capacity and uses of existing local and regional community development services and facilities, and the area to be served by the district is amenable to separate special-district government.

   
   

   Finally, in response to concerns that the development would have an adverse environmental impact, Peekman distinguished district establishment issues from development issues. While he acknowledged that no environmental impact assessments concerning proposed district services have been performed to date, Peekman stressed that all environmental concerns will be addressed when the infrastructure is planned and built and that all land use regulations will be fully satisfied. He emphasized the fact that nothing in the DRI regulations or chapter 190 requires that the establishment of a district be delayed until after DRI approval has been obtained. This witness' testimony is accepted as being an accurate and credible assessment.

   
   

7. Dr. James E. Pitts - Doctor Pitts is vice-president for university advancement and a professor in the college of business at Florida State University. He was tendered as an expert in economics.

   
   

   This expert's responsibility was to prepare the economic impact statement (EIS) for the creation of the district. The witness emphasized that the EIS pertains only to the creation of the district and not the development of the district. Using the criteria in Subsection 120.54(2)(b), Florida Statutes (1989) as a guide, Dr. Pitts determined an estimate of the cost to the affected agencies of the implementation of the proposed district, an estimate of the cost or the economic benefit to all persons directly affected by the proposed action, an estimate of the impact of the proposed district on competition and the open market for employment, and a detailed statement of the data and method used in making each of the above methods.

   
   

   As to the costs incurred by FLWAC in processing this application, Dr. Pitts estimated such costs to be nominal. In addition, the Comptroller's office,

   which will receive periodic reports filed by the district, would incur a cost of approximately $272 for receiving and filing the first report and a lesser amount for each subsequent report.

   
   

   Doctor Pitts stated that four parties are directly impacted (with costs and benefits) by the proposed district: the state and its citizenry, Lee County and its citizenry, present property owners within the district and future property owners within the district. The costs to the state are discussed in the preceding paragraph and are nominal. At the same time, the state receives the benefit of having the district manage (i.e., plan, implement, operate and maintain) and finance the delivery of infrastructure services. Lee County has incurred the cost of conducting a public hearing and will incur costs related to the filing of reports in the future. However, petitioner has paid a $15,000 filing fee to the county to offset and mitigate such costs. As to present and future property owners within the district, Dr. Pitts found they would benefit by having the district in place to plan and manage the infrastructure for the entire property. These management costs were quantified as being approximately

   $40.78 per acre per year. The property owners will also receive further financial benefits by the district having the capability of financing such infrastructure through the use of taxfree bonds. While the management costs can be estimated at this time, Dr. Pitts could not quantify the economic benefits until the district is established and special powers exercised. However, he believed that the economic benefit was significantly in excess of any economic costs. These considerations led Dr. Pitts to conclude that the district will have a positive economic impact on the state, county and district property owners.

   
   

   The expert next concluded that the creation of the district will generate a modest amount of additional employment opportunities through the district office. It will also have a positive impact on the competition in that it will provide a high quality infrastructure at a reasonable cost.

   
   

   Doctor Pitts also addressed the concern of adjacent property owners who feared that as their property values increased they would experience an increase in property taxes. While he agreed that the properties surrounding the district would probably realize an increase in value over time, he noted that as the district develops and its land values increase, the availability of extra tax dollars would increase the potential for a millage rollback in subsequent years assuming that the county lives within its budget. Dr. Pitts's testimony is accepted as a credible and accurate assessment.

   
   

8. Dr. Lance deHaven-Smith - Doctor deHaven-Smith is professor of political science and provost of the Broward County campuses of Florida Atlantic University. The witness was tendered as an expert in political science with particular emphasis on alternative ways to provide community infrastructure.

   His prepared written testimony has been accepted in the record as supplemental exhibit 7.

   
   

   In conjunction with his testimony, Dr. deHaven-Smith prepared a white paper entitled "Growth Management Considerations in the Proposed Establishment of the Bayside Improvement District" which has been accepted in the record as petitioner's exhibit K. In broad terms, the paper and testimony examined the role of community development districts in the Florida growth management system, discussed the appropriateness of such districts in Lee County, and evaluated alternative approaches to financing, planning, delivering and maintaining capital facilities and services at the development site.

   The expert initially pointed out that Florida has a very complex growth management framework that has developed over the last twenty years. Although growth management laws have many commendable virtues, the witness identified at least four serious problems with the law. First, the state suffers from an inability to pay for capital facilities and services as growth occurs.

   Secondly, the law requires concurrency, that is, infrastructure must be in place as development occurs. Third, the present law discourages large scale development in that large developments come under more public scrutiny (e. g., DRI review) than do small projects. This has caused developers to promote piecemeal, small-scale projects that are difficult to plan for. Finally, the law does not deal with intergovermental coordination in a satisfactory manner.

   That is to say, growth management is generally accompanied by municipal incorporation which produces a number of local governments "pulling" in different directions.

   
   

   Doctor deHaven-Smith considers community development districts to be an effective tool to mitigate and work around the above problems. This is because community development districts provide funding mechanisms for providing infrastructure to the persons that use those services. They also deal with the concurrency issue because a district does not focus exclusively on roads. For example, a district is concerned not only with roads but also with drainage, sidewalks, lighting and other services and combines them into a single package. By doing this, it allows a developer to pass on these costs through a special assessment on those property owners who use the services within the district.

   Finally, a district serves as a unit of local government that provides a municipal level of service and a form of local government that the residents can look to.

   
   

   The witness opined that Lee County needs community development districts for several reasons. First, the county is growing at a rate twice as fast as the state as a whole. Secondly, the county will not be able to pay for the public facilities required for its growth. This is because the county's economy relies principally on tourists and retirees and has no manufacturing base. Thus, its economy does not generate sufficient tax revenues to pay for growth. Third, the community is conservative in nature and the witness does not expect the voters to enact higher taxes to pay for services.

   
   

   Doctor deHaven-Smith next examined three alternative approaches for delivery of public facility services. The first option is for the county to pay for such services. The witness found this to be unacceptable because the county does not have the resources to do so and would have to raise the taxes of all taxpayers throughout the county to provide the necessary funding. The second alternative is for the developer to pay for such facilities. However, this option was not found to be viable since, after the infrastructure is put in place, the developer would typically hand over the responsibility for maintaining the infrastructure to a homeowners association which may or may not satisfactorily carry out that task. The final alternative, and the one which Dr. deHaven-Smith found most attractive, was a public-private partnership such as a community development district. Under the latter option, the district provides a unit of local government specifically created to cover the development with no other responsibilities. The district has the ability not only to plan the services but also to deliver and finance them. It is also free of the economic, legal and political pressures normally associated with a local governmental entity and thus can focus exclusively on the community development.

   
   

   From his perspective as a political scientist, Dr. deHaven-Smith concluded that the creation of the district is not inconsistent with the state or local

   comprehensive plans, the land area within the district is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as one functional interrelated community, the district is the best alternative available for delivering community development services and facilities to the area to be served by the district, the services and facilities will be compatible with the capacity and uses of existing local and regional community development services and facilities, and the area to be served is amenable to separate special-district government. This testimony is accepted as being a credible and accurate assessment.

   
   

9. Gary L. Beardsley - Beardsley was offered by intervenors as an expert in coastal management ecology. He is the owner of Tropical Environmental Consultants in Naples, Florida and owns property near the district.

   
   

   Beardsley's principal concern is with the natural resouces that are in the area where the district will be established. Because there are animals and plants in the area, as well as a coastal sensitive zone, Beardsley believes petitioner should have performed a study to determine whether the area could be developed before attempting to establish a district. Thus, he would have preferred the development to be approved prior to the filing of this petition. Although not qualified as an expert in land planning, the witness found the establishment of the district to be consistent with the Lee County and regional comprehensive plans. However, he was of the opinion it was inconsistent with the "9J-5" requirement of the state plan which the witness stated discourages high densities in a coastal sensitive zone. The regulation itself is not of record. Even so, Beardsley was satisfied that his environmental concerns would be addressed during any required hearings on the development phase of the project. He added that large projects such as this have a greater ability to accommodate natural resources than small, fragmented projects and to this degree is a "plus". These expert and lay observations have been accepted and considered.

   
   

10. Richard Huxtable - Huxtable is an intervenor in this cause who owns property that lies within one-quarter mile of the proposed district. He was not qualified as an expert witness. Huxtable contended that without knowing the specific facilities and services planned for the district it is difficult to determine if all statutory criteria in subsection 190.005(1)(e) have been met. Huxtable believes that before the district is established, the contemplated project should undergo DRI review. Under this procedure, one would be able to then ascertain what facilities would be developed. Huxtable next questioned whether the usefulness of the community development district has been outlived. He also fears that the creation of this district will lead to further urban sprawl in the area and become one in a series of large developments that are located within a few miles of the proposed district. Huxtable characterized the district as just another layer of government that one must deal with, fears the board of supervisors will be pro-development, and questioned whether the county could deal as effectively with a district as it could with the developer. He is also concerned that the district will cause area property values and taxes to rise, including his own. Huxtable further expressed concern that the county would be forced to carry the debt of the district in the event the project failed. Like some others, Huxtable is concerned that the district will annex adjacent properties through the power of eminent domain and believes the county would authorize the use of that power. In addition, he doubted the assertion by the district that the issuance of bonds will create savings for the district residents and be passed on to those residents. Finally, Huxtable was angered by the split in the community the project has caused with some residents favoring

    and others opposing the establishment of the district. These observations have been taken into consideration commensurate with his status as a lay witness.

    
    

11. Larry Sullivan - Sullivan, a lay witness, is president of the Spring Creek Village Mobile Homeowners Association, an organization representing more than three hundred mobile home units in a park adjacent to the district. Sullivan pointed out that although most of the members initially opposed the establishment of the district, this opposition faded after the details of the project were explained. As a matter of fact, in a vote taken on November 12, 1990, the association voted to withdraw its opposition to the petition. Sullivan described Westinghouse as being cooperative, open and frank with the association members and with having met with members on at least four occasions to explain its proposal. This testimony has been accepted as that of a lay witness.

    
    

12. Lee Menzies - Although testifying as a member of the general public, Menzies is president of the Business Development Corporation of Southwest Florida. Menzies, who is a lay witness, fully supports the concept of a community development district and advocates favorable action on the petition. In arriving at that conclusion, Menzies pointed out that as recent as six or seven years ago, the Lee County economy was dependent on tourism, retirement and construction as its mainstay. However, due to the advent of several large,

    well-planned developments in the area, the community has become more diversified and is now having discussions with several large national employers concerning the relocation of their businesses to the Fort Myers area. In addition, Menzies pointed out that the county is faced with a possible revenue shortfall of around five hundred million dollars during the next decade. Under the community development district concept, the needed infrastructure for the Pelican Landing community will be paid for by the district rather than the local government.

    This testimony has been accepted as that of a lay witness.

    
    

13. Donna Buhl - Buhl, a lay witness, is an intervenor in this cause who resides in Spring Creek Village and owns property around 210 feet from the district property line. Buhl opposes the granting of the petition for several reasons. First, she is concerned that as soon as the district is approved and development begins, her property taxes will increase due to an increase in land values. Secondly, she fears that the district's board of supervisors will exercise eminent domain powers and condemn her property at some point in the future, particularly since it is adjacent to the district property and of considerably lesser value. Next, she indicated that Westinghouse has shown disregard for anything that inhibits its goals, has been fined several times for allegedly impacting wetlands and cutting mangroves, and will not adhere to the local comprehensive plan. Finally, Buhl is concerned with the number of new residents that the project will attract and its impact on the area. This testimony has been accepted as that of a lay witness.

    
    

14. Ruth Norman - Norman, a lay witness, is also an intervenor who opposes the creation of the district. Norman resides in Estero Bay Shores which is a community contiguous to the land where the proposed district will be established. Like the other intervenors, Norman is concerned that the property values will increase substantially after the district is established. She pointed out that her property taxes have increased 100% during the past year alone and further increases may be anticipated if the petition is approved. Because many of the homeowners in the area are on fixed incomes or have limited financial resources, she fears that after the taxes increase, many homeowners will be forced to sell their homes. Norman is also concerned with the fact that contractors who perform work within the district will not be selected on a bid

    basis, and this will be prejudicial to her husband, who is a contractor. Finally, Norman is concerned with the impact that the development will have on the environment and pointed out that Westinghouse has violated environmental laws on several occasions. This testimony has been accepted as that of a lay witness.

    
    

15. James Pepper - Pepper is the past president of the Spring Creek Village Mobile Homeowners Association which is located adjacent to the proposed district and has some 500 residents. The association's principal concern was that the power of eminent domain would be used once the district is established and that the park's property would be condemned by the district. After the district received written assurance from Westinghouse that it would never urge the board of supervisors to exercise that power, the matter was placed to a vote by members of the association. Of the 200 unit owners who opted to vote on the issue of supporting or opposing the petition, 161 voted to support the petition. Finally, Pepper wanted assurance that the record presented to FLWAC contained the written pledge by Westinghouse that it would not ask the district to exercise the power of eminent domain. This testimony has been accepted as that of a lay witness.

Summarization of Written Statements and Replies

1. Edward S. Zajchowski - Mr. Zajchowski's written statement was submitted at hearing by intervenors and was accepted into the record as intervenors' exhibit 1. He is a resident of Spring Creek Village and is opposed to the proposed district for several reasons. First, he views Westinghouse's motives as being purely monetary in nature and objects to that corporation having the right to issue tax exempt bonds to finance infrastructure. Mr. Zajchowski also believes that the usefulness of the community development district has been outlived. Finally, the writer is concerned that the district will use the power of eminent domain in an unreasonable fashion and that his home will eventually be condemned by Westinghouse.

   
   

   Written Response of Petitioner - In its written reply, Westinghouse first notes that a district is a special purpose local government and cannot make a profit. Secondly, the right to issue tax exempt bonds is a policy decision of the United States Congress and is available to a variety of state and local government entities, including district governments. Next, Westinghouse points out that the community development district was a precursor to local government comprehensive planning and land development regulation and encourages large- scale development with related economies of scale which prevent adverse impacts on land use and the environment which comes from piecemeal development.

   Finally, Westinghouse relies again upon the fact that only the district, and not Westinghouse, can exercise the power of eminent domain, and then only after a series of legal steps have been satisfied.

   
   

2. Winifred M. Wheeler - Wheeler submitted a written statement at the public hearing. She is a member of the Estero Bay Shores Homeowners Association in Bonita Springs, Florida. She opposes the petition on a number of grounds. First, she contends the DRI process should precede the filing of a petition to establish a district. She also points out that if the district is created, petitioner intends to realign Spring Creek Road. Like intervenors, she fears that the possibility of the district invoking eminent domain powers is real once the district is established. Wheeler further contends that the development within the district will be detrimental to the area's water supply, the waters of Estero Bay will be polluted, and the additional traffic generated by the project will exacerbate efforts to evacuate the area in the event of a

   hurricane. Finally, Wheeler is concerned that her property taxes will rise if the district is established.

   
   

   Written Response of Petitioner - Petitioner responded to Wheeler's statements in the following manner. First, it interprets Wheeler's letter as not opposing the district but rather questioning why the district is being established prior to the development. As to her contention that a road will be realigned if the district is approved, Westinghouse points out that any realignment of roads can only be done with the County's approval and that such a decision does not belong to the district. Concerning Wheeler's fears about the use of the eminent domain power, Westinghouse relies upon the fact that no such power can be used unless the district makes a showing for the need for land to be condemned for a specifically authorized purpose, the county approves that decision, and the courts then authorize the use of the power. In any event, Westinghouse has pledged not to ask the district to invoke that power. Finally, as to Wheeler's development concerns, Westinghouse responds that any future development will be subject to existing local, regional and state land use regulations as well as public hearings at which time her concerns can be addressed.

   
   

3. Eugene S. Boyd - Mr. Boyd filed a written statement with the undersigned on April 15, 1991. He signed the letter as president of an organization known as the Responsible Growth Management Coalition, Inc. In his letter, Mr. Boyd opined that petitioner has failed to meet the stated goals of Subsection 190.002(2)(a) and (b), Florida Statutes in two respects. First, Boyd contended that at hearing petitioner failed to supply sufficient details concerning the proposed development within the district. Secondly, Boyd stated that petitioner has not indicated whether it intends to furnish the more expensive infrastructure (e.g., roads, water and sewer lines) required by the district residents.

   
   

   Written Response of Petitioner - Westinghouse first differs with Boyd as to the purpose of Subsections 190.002(2)(a) and (b), Florida Statutes. Moreover, it points out that there is nothing in the record to show that the district will result in needless and indiscriminate proliferation of facilities and services. As to Boyd's comments concerning a lack of detail of the project, Westinghouse points out that chapter 190 does not require such information in conjunction with the establishment of a district but that Westinghouse's witnesses have explained in broad terms the type of development planned. As to Boyd's second concern, Westinghouse will not know the type and degree of infrastructure required for the project until the DRI development order is issued at some point in the future.

   
   

4. James W. Campbell - Campbell is a retired osteopathic physician who resides in Spring Creek Village. He filed a written statement with the undersigned on April 17, 1991. Doctor Campbell is opposed to further development in southwest Florida given the population density and rate of growth in the area. He also opposes giving a "rich" corporation such as Westinghouse the ability to issue tax free bonds. He points to the fact that Westinghouse developed a similar project known as Bonita Bay without having to establish a community development district and questions why one is needed here. Finally, Dr. Campbell considers the district's power of eminent domain to be a "frightening power" and does not accept Westinghouse's representation that it will never ask the district to use that power.

   
   

   Written Response of Petitioner - Westinghouse has first responded that the legislature has already determined that the community development district is

   available as an economic growth management solution to counties and landowners. Westinghouse next pointed out that the cost and benefit to consumers, taxpayers and district landowners has been fully covered in the testimony of Dr. Pitts.

   As to Dr. Campbell's concerns regarding density and growth, Westinghouse avers that these considerations are by law not material or relevant to the case at hand. Similarly, Westinghouse points out that the fact that the Bonita Bay project proceeded without the benefit of a district has no bearing on this procceding. Finally, Westinghouse relies upon its written legal argument concerning the use of the eminent domain power and its written pledge to not ask the district to exercise that power with respect to the area in which Dr.

   Campbell resides.

   
   

5. Dorothy Jean Kendrick - Kendrick is a resident of Spring Creek Village who opposes the petition. She filed a written statement with the undersigned on April 18, 1991. Kendrick first questioned the fairness of the vote taken by the homeowners association since only mobile home units rather than residents were granted the right to vote. Like some others, she fears that if the petition is granted, Westinghouse will condemn her property. She also is concerned with the water supply in the area and does not think there is an adequate water supply for a new development of the size proposed by Westinghouse.

Written Response of Petitioner - In its response, Westinghouse states that it respects and understands the opinions and sentiments expressed by Kendrick. However, it does not forsee the district adversely affecting the park where the Kendricks reside. Indeed, Westinghouse intends for the Spring Creek Village to remain as it is. Finally, it points out that the development process is open for public participation and that Kendrick's land use concerns can be addressed at that time.

CONCLUSIONS

Having considered the entire record in this cause, it is concluded that petitioner has satisfied all requirements in Subsection 190.005(1)(e), Florida Statutes (1989). More specifically, it is concluded that all statements contained within the petition have been found to be true and correct, the creation of a district is consistent with applicable elements or portions of the state comprehensive plan and the Lee County comprehensive plan currently in force, the area of land within the proposed district is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as one functional interrelated community, the district is the best alternative available for delivering community development services and facilities to the area that will be served by the district, the community development services and facilities of the district will be compatible with the capacity and uses of existing local and regional community development services and facilities, and the land that will be served by the district is amenable to separate special- district government.

Respectively submitted this 7th day of May, 1991, in Tallahassee, Leon County, Florida.

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904)488-9675

Filed with the Clerk of the Division of Administrative Hearings this 7th day of May, 1991.

Appendix A

(Names and Address of Witnesses)

1. Bryon R. Koste, 801 Laurel Oak Drive, Suite 500, Naples, Florida 33963

2. Thomas R. Peek, 3200 Bailey Lane at Airport Road North, Naples, Florida 33942

3. Gary L. Moyer, 10300 N.W. 11th Manor, Coral Springs, Florida 33071

4. Dr. Lance deHaven-Smith, Florida Atlantic University,

   220 S.E. 2nd Avenue, Fort Lauderdale, Florida 33301

5. Samuel R. Crouch, 9200 Bonita Beach Road, Suite 101, Bonita Springs, Florida 33923

6. David E. Crawford, 9200 Bonita Beach Road, Suite 101, Bonita Springs, Florida 33923

7. Dr. James E. Pitts, College of Business, Florida State University, Tallahassee, Florida 32306

8. William Spikowski, Lee County Community Development Department, 1831 Hendry Street, Fort Myers, Florida 33901

9. Gary L. Beardsley, 2396 13th Street North, Naples, Florida

10. Richard Huxtable, 4741 Spring Creek Road, Bonita Springs, Florida 33923

11. Larry Sullivan, 4778 Tahiti Village, 4501 Spring Creek Road, Bonita Springs, Florida 33923

12. Lee Menzies, Business Development Corporation of Southwest Florida, corner of Summerlin and College Parkway, Fort Myers, Florida

13. Donna Buhl, 4501 Spring Creek Road, Box 91, Bonita Springs, Florida 33923

14. Ruth Norman, 24578 Redfish Street, S.W., Bonita Springs, Florida 33923

15. James Pepper, P. O. Box 1260, Bonita Springs, Florida 33923 (Names and addresses of persons filing written statements)

1. Eugene S. Boyd, 5225 Serenity Cove, Bokeelia, Florida 33922

2. Edward S. Zajchowski, 4501 Spring Creek Road, Box 178, Bonita Springs, Florida 33923

3. Winifred M. Wheeler, 24593 Dolphin Street, S.W., Bonita

   Springs, Florida 33923

4. James W. Campbell, 4501 Spring Creek Road, Box 131, Bonita Springs, Florida 33923

5. Dorothy Jean Kendrick, 300 Haral Street, Sturgis, Michigan 49091

   
   

   Exhibit A

   Appendix B

   (List of Documentary Evidence)

   1. Location map

   2. Local boundary map outlining district

   3. Map of district and surrounding areas

   4. Collier County Comprehensive Future Land Use Map Exhibit B

1. Pelican's Nest PUD 1b Ridgewood RPD

   1c Palmetto Bay RPD 1d Pelican's Nest RPD

   1e Summary of status of permits

2. Proposed development agreement

3. Statement by Crawford concerning DRI Exhibit C

1. Petition filed by Westinghouse Bayside Communities, Inc.

2. Location map

3. Metes and bounds legal description of district

4. Consent to establishment of district

5. Map of existing major trunk water mains, sewer interceptors or outfalls

6. Proposed time tables and cost estimates

7. Future land use portion of Lee County Comprehensive plan

8. Economic impact statement Exhibit D

1. Supplement to metes and bounds description in petition

2. Specific description of all real property within district

Exhibit E

1. Photocopy of $15,000 processing check sent to County

2. Letter transmitting petition to Commission Secretary Exhibit F

Letter transmitting petition to Division of Administrative Hearings

Exhibit G

1. Notice of Publication in Florida Administrative Weekly on March 8, 1991

2. Affidavit for Fort Myers News-Press publication, March 11, 1991

3. Affidavit for Fort Myers News-Press publication, March 18, 1991

4. Affidavit for Fort Myers News-Press publication, March 25, 1991

5. Affidavit for Fort Myers News-Press publication, April 1, 1991

Exhibit H

1. Lee County Comprehensive Plan

2. Documentation of plan status Exhibit I Chapter 187, Florida Statutes

   Exhibit J Letter of March 14, 1991 from Secretary of Department Community Affairs to Commission Secretary

   Exhibit K White Paper by Dr. Lance deHaven-Smith Supplemental Exhibits

   1. Prefiled testimony of Bryon G. Koste

   2. Prefiled testimony of Samuel R. Crouch

3A Letter from Samuel R. Crouch to Jim Pepper 3B Letter from Samuel R. Crouch to Lloyd Read

1. Prefiled testimony of Gary L. Moyer

2. Prefiled testimony of David E. Crawford

3. Prefiled testimony of Thomas R. Peek

4. Prefiled testimony of Dr. Lance deHaven-Smith Intevenors Exhibit 1 - Letter of Edward S. Zajchowski

COPIES FURNISHED:

Douglas M. Cook, Secretary

Florida Land and Water Adjudicatory Commission Office of the Governor

The Capitol

Tallahassee, FL 32399-0001

Kenza Van Assenderp, Esquire

P. O. Box 1833

Tallahassee, FL 32302-1833

Judith A. Workman, Esquire

408 Old Trail Road Sanibel, FL 33957

Marianne Kantor, Esquire Asst. County Attorney Lee County Courthouse 1700 Monroe Street

Fort Myers, FL 33901

David M. Maloney, Esquire Office of the Governor The Capitol, Room 309

Tallahassee, FL 32399-0001

Docket for Case No: 91-000849

Orders for Case No: 91-000849