The Issue The issues to be determined in this case are whether the amendments to the Martin County Comprehensive Growth Management Plan (CGMP) adopted by Ordinance Nos. 843, 845 (as amended by Ordinance No. 847), 846, 847, 851, 853, and 854 are “in compliance” as that term is defined in Section 163.3184(1)(b), Florida Statutes.1/
Findings Of Fact The Parties The Department is the state land planning agency and is charged with the duty to review comprehensive plan amendments and to determine whether they are “in compliance,” as that term is defined in the Section 163.3184(1), Florida Statutes. Martin County is a political subdivision of the State of Florida and has adopted a comprehensive plan that it amends from time to time. Groves Holdings, LLC, is a Florida limited liability company. Groves Holdings, LLC operates a real estate management and investment business in the County that manages the leasing, entitlement, and disposition of lands owned by its related subsidiaries Groves 12, LLC, and Groves 14, LLC. Groves 12, LLC, and Groves 14, LLC, are Florida limited liability companies wholly owned by Groves Holdings, LLC. Groves 12, LLC, owns 2,800 acres of citrus grove. Groves 14, LLC, owns 1,700 acres of land being developed as a residential community and equestrian club known as Hobe Sound Polo Club. The land owned by Groves 12, LLC, is located in the rural area of the County, approximately one mile from the closest boundary of an urban service district. The land being developed by Groves 14, LLC, is also located in the rural area. Groves 14, LLC, also owns 450 acres not being developed that are located partially within the rural area and partially within an urban service district The Groves submitted written comments regarding the Plan Amendments to the County during the period of time beginning with the transmittal hearing and ending with the adoption of the Plan Amendments. Donna Melzer and Eliza Ackerly each owns real property in and resides in Martin County. Melzer and Ackerly each submitted comments regarding the Plan Amendments to the County during the period of time beginning with the transmittal hearing and ending with the adoption of the Plan Amendments. MCCA is a not-for-profit Florida corporation incorporated in 1997 for the purposes of conserving the natural resources of Martin County, and maintaining and improving the quality of life for residents of the County. Its members include individuals and corporate and non-corporate entities. A substantial number of its members reside, own property, or operate a business in Martin County. MCCA engages primarily in lobbying, public advocacy, and litigation in Martin County regarding the CGMP. MCCA conducts membership meetings, sends a newsletter to members and others, and sometimes hosts meetings open to the general public. MCCA is also involved in environmental preservation activities in Martin County, including educational meetings, field trips, and lobbying for public purchase of lands for conservation. No evidence was presented to show that MCCA owns property in the County, maintains an office in the County, or holds a business or occupational license. MCCA submitted comments to the County regarding the Plan Amendments, on behalf of its members, during the period of time beginning with the transmittal hearing and ending with the adoption of the Plan Amendments. Hereafter, MCCA, Donna Melzer, and Eliza Ackerly will be referred to collectively as MCCA. The Plan Amendments Section 163.3191(1), Florida Statutes, requires each local government to conduct an evaluation and appraisal of its comprehensive plan every seven years and to prepare an Evaluation and Appraisal Report (“EAR”). Martin County initiated its second evaluation and appraisal process in 2007, culminating in the adoption of an EAR in July 2008. Section 163.3191(10), Florida Statutes, requires a local government to adopt comprehensive plan amendments based on the recommendations in the EAR in a single amendment cycle within 18 months after adopting the EAR. The County’s proposed EAR-based amendments were sent to the Department in September 2009. The Department issued its Objections, Recommendations, and Comments (“ORC”) Report the next month. After considering and responding to the ORC Report, the County adopted Ordinance Nos. 842 through 856 on December 16, 2009, amending all the elements of the CGMP. The Department reviewed the Plan Amendments and determined that a new “Essential Services Nodes” policy of the FLUE adopted by Ordinance No. 845 was not in compliance. The Department determined that all of the other amendments adopted by Martin County were in compliance. The County adopted Ordinance No. 857, which rescinded the Essential Services Nodes policy to which the Department had objected. The decision to rescind the policy was made unilaterally by the County. The rescission was not pursuant to a compliance agreement with the Department. Based on the County’s rescission of the Essential Services Nodes policy, the Department determined that Ordinance No. 845, as amended by Ordinance No. 857, was in compliance. All of the Plan Amendments are text amendments. The Future Land Use Map (“FLUM”) is not changed. Urban Service Districts The CGMP establishes urban service districts (USDs) in the County. There is an Eastern USD and an Indiantown USD. These USDs are subdivided into a primary USD and a secondary USD. About 87 percent of the County’s population resides east of the Florida Turnpike in the Eastern USDs. The Indiantown USDs, which are west of the Florida Turnpike, are separated from the Eastern USDs by more than 20 miles of mostly agricultural lands. The primary purpose of the USDs is to prevent urban sprawl by directing growth to those areas where urban public facilities and services are available or are programmed to be available at appropriate levels of service. The provision of urban public facilities and services is generally limited to USDs. The term “public urban facilities and services” is defined in the CGMP as “regional water supply and wastewater treatment/disposal systems, solid waste collection services, acceptable response times for sheriff and emergency services, reasonably accessible community park and related recreational facilities, schools and the transportation network.” Under FLUE Policy 4.7A.2, urban development, including commercial, industrial, mixed-use, and urban residential land uses may only be located within the Primary USDs. FLUE Policy 4.7B.1 permits low density residential use (half-acre lots or greater) in the Secondary USD. No urban or suburban uses and no utility services such as water and sewer may extend outside the USD boundaries. Most of the lands outside the Primary and Secondary USDs are designated Agricultural, but there are also lands designated Public Conservation and Public Utilities. MCCA’s Issues Section 1.10 Chapter 1 of the CGMP is entitled “Preamble” and addresses general topics such as the legal status of the CGMP, the continuing evaluation of the CGMP, and amending the CGMP. The Preamble contains no goals, objectives, or policies. MCCA objects to a sentence in Section 1.10 of the Preamble, adopted by Ordinance No. 843, which states, “This Plan shall be adopted by ordinance and shall supersede the 1990 Comprehensive Plan and all related amendments.” MCCA contends that this sentence will create problems and confusion if some of the Plan Amendments are determined to be in compliance, but other amendments are determined to be not in compliance. There is no confusion. The reference to “This Plan” in Section 1.10 is reasonably interpreted to refer to the entire CGMP, as amended by the latest EAR-based amendments that are either already in effect or will become effective following the conclusion of these consolidated cases.2/ Chapter 2 Definitions MCCA objects to several definitions added in Chapter 2 of the CGMP, but the evidence presented does not show an internal consistency or other "in compliance" issue. FLUE Goal 4.7 MCCA objects to the changes in FLUE Goal 4.4G, which would be re-designated Goal 4.7. Existing Goal 4.4G states: 4.4G Goal (encourage urban development in urban service areas) Martin County shall regulate urban sprawl tendencies by directing growth in a timely and efficient manner to those areas where urban public facilities and services are available, or are programmed to be available, at the levels of service adopted in this Growth Management Plan. (italics in original) New Goal 4.7 states: Goal 4.7. To regulate urban sprawl by directing growth in a timely and efficient manner to areas with urban public facilities and services, where they are programmed to be available, at the levels of service adopted in this Plan. (italics in original) MCCA contends that the removal of the word “shall” in the new goal “removes the mandatory restriction.” The County did not intend to make a substantive change to Goal 4.4G. In this particular context, the removal of the word “shall” does not require a different interpretation or application of the goal. It is not a substantive change. FLUE Policy 4.12A.2 MCCA’s major objection to Ordinance No. 845 is with new FLUE Policy 4.12A.2. Most of the objections raised by MCCA to other changes in the CGMP are directly related to MCCA's objection to Policy 4.12A.2. MCCA contends that this new policy, which allows “small-scale service establishments” outside the USDs, fails to include reasonable controls on commercial development and will adversely affect agricultural uses and the quality of life of rural residents.3/ Policy 4.12A.2 states: Restrictions outside urban service districts. Outside urban service districts, development options shall be restricted to low-intensity uses, including Agricultural lands, not exceeding one unit per 20 gross acres; Agricultural Ranchette lands not exceeding one unit per five gross acres; and small-scale service establishments necessary to support rural and agricultural uses. (italics in original) Martin County contends that this policy is not a substantive change because nearly the same wording already exists as Section 4.6.D.4 in a part of the FLUE entitled “Implementation Strategies,” and the section was merely re- located and re-designated as Policy 4.12A.2. Section 4.6.D.4 provides: Development outside the urban services district shall be restricted to low intensive development in order to promote cost-effective practices in the delivery of public services. Outside Urban Service Districts development options shall be restricted to low intensity uses including agriculture and agricultural ranchettes, not exceeding one unit per 5 gross acres, and small-scale service establishments necessary to support rural and agricultural uses as provided by section 6.4.A.5.e., Housing Service Zones in the Housing Element. (italics in original) The reference in this policy to Housing Service Zones is an error. Sometime in the past, the County deleted provisions in the CGMP regarding Housing Service Zones, but overlooked this particular reference. Comparing Section 4.6.D.4 with new Policy 4.12A.2, the significant changes appear to be that Section 4.6.D.4 is transformed from a “strategy” to a “policy,” and the new policy no longer ties small-scale service establishments to Housing Service Zones. However, the determination of whether a substantive change was made in the replacement of Section 4.6.D.4 with new Policy 4.12A.2 also requires consideration of Policy 4.4.G.1.e, which states: Martin County shall provide reasonable and equitable options for development outside of Primary Urban Service Districts, including agriculture and small-scale service establishments necessary to support rural and agricultural uses. Policy 4.4.G.1.e is already designated as a policy and it does not tie small-scale service establishments to Housing Service Zones. Therefore, although Section 4.6.D.4 differs from new Policy 4.12A.2, there is no substantive difference between new Policy 4.12A.2 and existing Policy 4.4.G.1.e. MCCA asserts that Policy 4.12A.2 and Policy 4.4.G.1.e differ substantively because the former does not have the “agricultural land use designation limits on uses allowed” that are in Policy 4.4.G.1.e. However, as shown above, both policies allow for small-scale service establishments that support rural uses as well as agricultural uses. In support of its arguments about small-scale service establishments, MCCA also points to existing FLUE Policy 4.4.G.1.b (re-designated Policy 4.7A.2) and “implementation strategy” 4.6.D.3 (to be deleted) which require commercial uses to be located in the Primary USDs. The policy and implementation strategy that restrict commercial uses to the Primary USDs co- exist in the CGMP with Policy 4.4.G.1.e, which allows small- scale service establishments outside the Primary USDs. Therefore, in whatever manner the County currently reconciles these policies and strategies, that reconciliation pre-dates the EAR-based amendments. The FLUE amendments adopted by Ordinance No. 845 do not alter the situation. MCCA refers to the County planning staff's report associated with another proposed plan amendment known as "Becker B-4" in support of MCCA's argument that the amendments at issue in the present case have substantively changed the FLUE with regard to small-scale service establishments. However, none of MCCA's allegations regarding the relevance of the Becker B-4 staff report are borne out. If the Becker B-4 amendment is adopted by the County, it will be subject to its own "in compliance" review. In summary, when all relevant provisions of the CGMP are taken into account, the changes made by Ordinance No. 845 that are related to small-scale service establishments are not substantive changes to the CGMP. MCCA’s claims of internal inconsistency that are based on MCCA’s objections to new Policy 4.12A.2 must also fail as unsupported by evidence of a substantive change. MCCA’s claim that the County did not demonstrate a need for more commercial uses outside the USDs (based on the allowance for small-scale service establishments) must also fail as unsupported by evidence of a substantive change. MCCA’s claim that the allowance for small-scale service establishments constitutes a failure of the County to discourage urban sprawl must also fail as unsupported by evidence of a substantive change. FLUE Policy 4.5F.4 MCCA objects to the changes to Policy 4.5F.4, which allows planned unit developments (PUDs) designed to preserve open space, environmentally sensitive lands, and agricultural land uses. These PUDs can be located in areas currently designated Agricultural and can include residential lots greater than two acres in size if certain criteria are met. MCCA contends that this policy is inconsistent with Policy 4.13A.1, which restricts residential densities in agricultural areas to 20-acre residential lots. The allowance in Policy 4.5F.4 for PUDs with residential lots smaller than 20 acres already exists. Therefore, in whatever manner the County currently reconciles Policies 4.5F.4 and 4.13A.1, that reconciliation pre-dates the EAR-based amendments. The FLUE amendments adopted by Ordinance No. 845 do not alter the situation. Furthermore, a PUD created under Objective 4.5F requires a plan amendment. It appears that one of the purposes of this requirement is to re-designate any agricultural lands to a residential future land use designation.4/ FLUE Objective 4.7A MCCA objects to the removal of the word “shall” from existing FLUE Objective 4.4.G.1 (which would be re-designated as Objective 4.7A). MCCA argues that the existing objective prohibits commercial uses outside the Primary USDs and that the removal of the word “shall” will allow commercial uses outside the USDs. However, the objective does not prohibit commercial uses outside the Primary USDs. The objective states that the County “shall concentrate higher densities and intensities of development” in the Primary USDs. To concentrate a land use in one location does not mean to prohibit it elsewhere. It is Policy 4.7A.2 that requires new commercial uses to be located in the Primary USDs. In this particular context, the removal of the word “shall” does not require a different interpretation or application of Objective 4.7A. It is not a substantive change. FLUE Policy 4.9H.2 MCCA objects to new Policy 4.9H.2, regarding residential PUDs, because the policy indicates that commercial uses can be included in a residential PUD, even if the PUD is located outside the Primary USDs. Policy 4.7A.2 requires all new commercial development to be located in the Primary USDs. Objective 4.5F and its associated policies allow for residential PUDs in agricultural areas outside the USDs, but do not indicate that the PUDs in agricultural areas can include commercial uses. Policy 4.9H.2 conflicts with Policy 4.7A.2 and with Objective 4.5F and its associated policies FLUE Policy 4.13A.7.(1)(d) MCCA objects to new Policy 4.13A.7.(1)(d), which allows one “accessory dwelling unit” on a residential lot. Accessory units cannot be sold separately from the primary dwelling unit and are not counted as separate units for purposes of density calculations. MCCA's argument regarding accessory dwelling units assumes that the new policy allows accessory units in the rural areas of the County, outside the Primary USDs. However, Policy 4.13A.7.(1)(d) appears under the heading "General policies for all urban Residential development." The term "urban" is not defined in the CGMP, but there are several FLUE policies that direct urban residential densities to the Primary USDs, such as Policies 4.7A.2 and 4.7A.3. Objective 4.7A directs densities greater than two units per acre to the Primary USDs, which indicates that densities greater than two units per acre are urban densities. In order to maintain internal consistency, accessory units would have to be confined to areas of the FLUM designated for urban residential density. See FLUE Objective 4.13A.7. The County's proposal to not count accessory uses for density purposes was shown to be a professionally acceptable planning practice. Accessory units are similar to residential additions, converted garages, and other changes that can add bedrooms and residents on a residential lot, but which traditionally have been disregarded when calculating density. FLUE Policy 4.13A.8.(5) MCCA contends that changes made to Policy 4.13A.8.(5), regarding Expressway Oriented Transient Commercial Service Centers ("Expressway Centers"), combined with the proposed deletion of Section 4.6.D.3 of the "Implementation Strategies," allows for more commercial development without data and analysis to support the need for additional commercial development. Policy 4.13A.8.(5) creates Expressway Centers at three large Interstate 95 interchange locations in the County as a special land use designation to accommodate the unique needs of people traveling through the County. Section 4.6.D.3 (which ordinance No. 845 would delete) allows a waiver for Expressway Centers from the general requirements applicable to the USDs if an applicant for a waiver meets certain criteria. MCCA contends that the waiver process weighs "the traveling public’s needs against the value of the urban boundary." That is not an accurate description of the waiver process, because none of the criteria mentions the urban boundary. MCCA contends that the waiver process has been replaced with a "market need test" in Policy 4.13A.8.(5) without supporting data and analysis and that the change encourages urban sprawl. Policy 4.13A.8.(5) requires a market feasibility analysis to show that "the uses proposed are warranted by the traveling public they are intended to serve." MCCA presented no evidence on the County's past applications of Section 4.6.D.3 and Policy 4.13A.8.(5). MCCA failed to show how the demonstration required for a waiver under Section 4.6.D.3 is substantively different and more protective than the demonstration required to establish an Expressway Center under Policy 4.13A.8.(5). MCCA failed to show how the creation of Expressway Centers or the specific amendments to Section 4.6.D.3 and Policy 4.13A.8.(5) will lead to more commercial uses outside the Primary USDs, so as to encourage urban sprawl. State Comprehensive Plan MMCA failed to present evidence or argument to demonstrate that any of the Plan Amendments is inconsistent with the State Comprehensive Plan. Other Issues MCCA raised other issues in its petitions for which it did not present evidence at the final hearing. With regard to all the issues raised by MCCA that are not specifically addressed above, MCCA failed to prove an inconsistency. The Groves' Issues The Groves’ principal objection to the Plan Amendments is with the County’s methodology for determining the need for residential dwelling units, which is based in large part on the a residential capacity analysis (RCA) set forth in FLUE Policy 4.1D.4, adopted by Ordinance No. 845. The Groves contend that the RCA overestimates the capacity or supply of dwelling units on vacant lands that can be used to meet projected population growth. Because need is derived from a comparison of supply and demand, the Groves contend that the RCA’s overestimation of supply will always cause the County to underestimate the need for additional dwelling units. FLUE Policy 4.1D.4 provides: The County shall consider the following factors in its residential capacity analysis: The current peak population, based on the University of Florida’s Bureau of Economic and Business Research (BEBR) medium population, shall be used to demonstrate the unit need in the fifteen year planning period; A market factor of 125 percent shall be applied to the unit need; The Eastern Urban Service District and the Indiantown Urban Service District shall be considered separately; Maximum density shall be calculated for Future Land Use categories in which residential development is allowed; Wetland acreage shall be subtracted from the vacant, undeveloped acreage; Because some land will be taken up by non-residential uses such as roads and utilities, a reduction of 8.5 percent shall be calculated to account for such uses. In the past, Martin County used a similar methodology for determining residential need, but it was not a part of the CGMP. New FLUE Policy 4.1D.3 requires that a new RCA be performed every two years. The RCA is to be used to evaluate future plan amendments and future changes to USD policies. The Groves did not dispute the County’s calculation of residential demand, the number of dwelling units needed to serve the projected population through the planning period 2010 to 2025. As stated in FLUE Policy 4.1D.4, demand is based on mid- range population projections from the University of Florida’s Bureau of Economic and Business Research, which is then adjusted by a 125 percent market factor. A market factor is a multiplier that is applied to account for factors that prevent the full or efficient use of densities allowed by a FLUM. FLUE Policy 4.1D.4 requires that the Eastern USDs and the Indiantown USDs be considered separately. This requirement is based on an historical pattern of higher population growth east of the Florida Turnpike and the expectation that the pattern will continue into the foreseeable future. The County projected an increase of 17,598 new residents in the Eastern USDs and an increase of 754 in the Indiantown USDs by 2025. When these figures are divided by average persons per household (2.21), the result is a demand for 7,963 dwelling units in the Eastern USDs and 341 dwelling units in the Indiantown USDs. Applying the market factor of 125 percent results in a demand for 9,954 dwelling units in the Eastern USDs, and 426 units in the Indiantown USDs for the 2010-2025 planning period. To calculate the residential supply of dwelling units that can be developed on existing vacant lands, FLUE Policy 4.1D.4 directs that the calculation begin by determining the maximum density allowed under each future land use category of the vacant lands. In the following discussion, the maximum density allowed under a future land use designation will be referred to as the “theoretical” maximum density. It is the general practice of the Department to require local governments to use theoretical maximum densities in a need analysis unless there are policies in the comprehensive plan preventing landowners from attaining the theoretical maximum densities. However, like the Department's general practice to accept a market factor no greater than 125 percent, these are not requirements explicitly stated in Department rules from which the Department never deviates. FLUE Policy 4.1D.4 incorporates two limiting factors that prevent the attainment of theoretical maximum densities: (1) wetlands and (2) roads rights-of-way and utility easements. Development is generally prohibited in wetlands. However, landowners whose lands contain wetlands can transfer half of the “lost” density associated with the wetland acreage to the uplands. Therefore, in calculating the acreage of vacant lands that are available for residential development, the RCA subtracts half the wetland acreage. The County also reduces the total vacant land acreage by 8.5 percent to account for the loss of developable acreage due to the presence of road rights-of-way and utility easements within which development is prohibited. After reducing the total acres of vacant lands in the USDs to account for wetlands and for rights-of-way and utilities, the County determined that there is a supply or vacant land capacity of 5,790 dwelling units in the Eastern USDs and 5,335 units in the Indiantown USDs. The County then adjusted these numbers to account for approved residential developments that have not yet been constructed. This adjustment resulted in final calculation of the existing supply in the Eastern USDs of 9,339 dwelling units and an existing supply in the Indiantown USDs of 6,686 dwelling units. The Groves' Critique of the RCA The Groves argue that the RCA overestimates supply by failing to account for other policies of the CGMP that restrict development and prevent a landowner from attaining the theoretical maximum density. Conservation and Open Space Element (COSE) Policy 9.1G.4 requires the preservation of a wetland buffer around a wetland. There was conflicting evidence about whether the County credits the landowner for the acreage set aside as a wetland buffer. The Groves contend that no credit is given and cites Table 4-2 of the FLUE, which indicates that wetland buffer acreage is not subtracted to arrive at the total available acreage that can be developed. The Groves also point to the testimony of a County planner, who stated that the County intended to subtract buffer acreage from vacant land acreage, but ultimately did not do so "based on adamant public comment." However, the County's planning director, Nicki Van Vonno, stated that "[Y]ou do get the full density off of the buffer land." It would be logical for the County to not subtract wetland buffer acreage when calculating residential capacity if the landowner is getting full credit for the buffer acreage. Therefore, it is found that the County allows a full transfer of the density associated with wetland buffer acreage to the uplands. COSE Policy 9.1G.5 requires that 25 percent of upland native habitat on a site be preserved. The landowner is allowed to transfer density from these native upland habitat areas to the unaffected areas of the property. Nevertheless, the Groves contends that COSE Policy 9.1G.5 impairs the ability of landowners to attain the theoretical maximum density. The CGMP also requires a portion of the site be set aside for sufficient water retention and treatment. The RCA does not account for any loss of density caused by water retention and treatment areas. The County had proposed to reduce the theoretical maximum density by 15 percent to account for "surface water management and required preservation,” but abandoned the idea when the Department objected to it as not adequately supported by data and analysis. The evidence presented at the hearing was insufficient to establish that the requirements of the CGMP associated with surface water management and preservation reduces the theoretical maximum density of residential lands by 15 percent. The County has a mixed-use land use category called Commercial-Office-Residential (COR). The County allows only a third of a COR parcel to be developed for residential uses and this practice reduces the theoretical maximum density of COR lands. However, the RCA assumes 100 percent of the COR acreage is available for residential use. The County attempted to justify this discrepancy by pointing out that the limitation of residential uses on COR lands is not incorporated into the CGMP. However, it is an undisputed fact (datum) that the County's practice reduces residential capacity on COR lands. The RCA fails to account for this fact. If the RCA accounted for the limitation of residential development on COR lands, the supply of dwelling units in the Eastern USDs would be reduced by 733 units. FLUE Policy 4.13A.7.(1)(a) establishes a 40-foot height limit countywide which sometimes prevents a landowner from attaining the theoretical maximum density. The RCA does not account for any loss of density caused by building height restrictions. FLUE Policies 4.1F.1 through 4.1F.3 require transitional density zones when land is developed at a higher density than adjacent lands. FLUE Policy 4.1F.2 establishes a zone (or “tier”) abutting the adjacent land, equal to the depth of an existing adjacent residential lot in which development is restricted, to the same density and compatible structure types (e.g., height) as on the adjacent property. The RCA does not account for any loss of density due to the tier policies. Although the landowner is allowed to transfer density to the unaffected portion of the property in the case of some development restrictions imposed by the CGMP, there is not always sufficient acreage remaining to make full use of the transferred density. The Groves' expert witness, Rick Warner, reviewed residential development projects that had been approved or built during the past 15 years in the Eastern USDs and compared the actual number of approved or built units to the theoretical maximum density allowed by the applicable land use designation for the property at the time of approval. Warner determined that, on average, the projects attained only about 45 percent of the theoretical maximum density. The Groves presented the testimony of Morris Crady, who testified that, of the 14 development projects in the County that he was involved in, CGMP policies caused the projects to be developed at 1,285 units fewer than (about 41 percent of) the maximum theoretical density. Comparing the County’s estimated demand for 9,954 dwelling units in the Eastern USDs through 2025 with the County’s estimated supply of 9,339 dwelling units, indicates a deficit of 615 dwelling units. Comparing the County’s estimated demand for 426 dwelling units in the Indiantown USDs through 2025 with the County’s estimated supply of 6,686 dwelling units, indicates a surplus of 6,260 dwelling units. The County decided to make no changes to the FLUM because it believes the projected population can be accommodated with existing land use designations. The Groves argue that, because the RCA overestimates supply, the deficit in the Eastern USDs is actually substantially larger.5/ For example, taking into account the County's policy regarding limiting residential uses on COR lands, the deficit would be 1,348 units in the Eastern USDs. The deficit would be enlarged by the effects of the other factors discussed above that reduce a landowner's ability to attain the theoretical maximum density. The County contends that there is additional residential capacity outside the USDs that should be considered. The County also points to the large surplus of available dwelling units in the Indiantown USDs. The County asserts that there is excess supply to meet the need when all the available dwelling units in the County are considered. These other considerations, however, are not a part of the RCA and, therefore, are in conflict with the RCA. Acres vs. Dwelling Units The Groves assert that County's determination of residential does not identify the amount of land needed for each category of land use as required by law, but, instead, expresses need solely in terms of total dwelling units. The Department has accepted residential need analyses expressed in dwelling units. Dwelling units can be converted into acreages, but only if one is told what density to apply. A local government must determine how many dwelling units it wants in each land use category in order to convert a need expressed in total dwelling units into a need expressed in acreages. Martin County believes that it has a sufficient supply of dwelling units to meet the projected population through the planning period. Apparently, the County is also satisfied with the existing size and distribution of future land use categories as depicted on the FLUM. The existing vacant land acreages for each land use category, set forth in the CGMP, represents the amount of land in each land use category that the County believes is needed to meet the projected population. However, there is an imbalance in the various types of residential land uses in the Eastern USDs. For example, there are only 13 acres of high density residential land and 57 acres of medium density residential land remaining in the Eastern USDs. In contrast, there are 2,950 acres of rural residential lands. The County has acknowledged that its past emphasis on low-height and low-density has contributed to a lack of affordable housing. The Treasure Coast Regional Planning Council noted that the small amount of vacant land in the County available for medium and high residential development contributes to the lack of affordable housing in the County. The Plan Amendments include policies which are designed to address the imbalances in land uses and the lack of affordable housing. These policies include permitting accessory dwelling units for urban residential development; allowing a 10 du/ac density bonus and an affordable housing density bonus in Medium Density Residential developments; reducing the criteria for an affordable housing density bonus in High Density Residential developments; and reviewing residential capacity in the Indiantown USDs. Commercial Need There is no state-wide standard for the amount of commercial, industrial, institutional, conservation, or agricultural lands that a local government must identify in its comprehensive plan in order to accommodate its projected population. The County acknowledges that there is a deficit of commercial land necessary to accommodate economic needs, but no changes in the FLUM are proposed as part of these EAR-based amendments.
Conclusions For Petitioners Martin County Conservation Alliance, Inc., Donna Melzer, and Elisa Ackerly: Donna Sutter Melzer, Esquire 3471 Southwest Centre Court Palm City, Florida 34990-2312 For Petitioners Groves Holdings, LLC, Groves 12, LLC, and Groves 14, LLC: Andrew J. Baumann, Esquire Tara J. Duhy, Esquire Lewis, Longman & Walker, P.A. 515 North Flagler Drive, Suite 1500 West Palm Beach, Florida 33401-4327 For Respondent Martin County: David A. Acton, Esquire Martin County Administrative Center 2401 Southeast Monterey Road Stuart, Florida 34996-3322 Linda Loomis Shelley, Esquire Fowler White Boggs, P.A. 101 North Monroe Street, Suite 1090 Tallahassee, Florida 32301-1547 For Respondent Department of Community Affairs: L. Mary Thomas, Esquire Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Community Affairs enter a final order determining that Plan Amendments are “in compliance,” except for the following policies adopted by Martin County Ordinance No. 845, which the Department should determine are not "in compliance": FLUE Policy 4.1D.4; and FLUE Policy 4.9H.2. DONE AND ENTERED this 7th day of September, 2010, in Tallahassee, Leon County, Florida. BRAM D. E. CANTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of September, 2010.
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) Bryon R. Koste, 801 Laurel Oak Drive, Suite 500, Naples, Florida 33963 Thomas R. Peek, 3200 Bailey Lane at Airport Road North, Naples, Florida 33942 Gary L. Moyer, 10300 N.W. 11th Manor, Coral Springs, Florida 33071 Dr. Lance deHaven-Smith, Florida Atlantic University, 220 S.E. 2nd Avenue, Fort Lauderdale, Florida 33301 Samuel R. Crouch, 9200 Bonita Beach Road, Suite 101, Bonita Springs, Florida 33923 David E. Crawford, 9200 Bonita Beach Road, Suite 101, Bonita Springs, Florida 33923 Dr. James E. Pitts, College of Business, Florida State University, Tallahassee, Florida 32306 William Spikowski, Lee County Community Development Department, 1831 Hendry Street, Fort Myers, Florida 33901 Gary L. Beardsley, 2396 13th Street North, Naples, Florida Richard Huxtable, 4741 Spring Creek Road, Bonita Springs, Florida 33923 Larry Sullivan, 4778 Tahiti Village, 4501 Spring Creek Road, Bonita Springs, Florida 33923 Lee Menzies, Business Development Corporation of Southwest Florida, corner of Summerlin and College Parkway, Fort Myers, Florida Donna Buhl, 4501 Spring Creek Road, Box 91, Bonita Springs, Florida 33923 Ruth Norman, 24578 Redfish Street, S.W., Bonita Springs, Florida 33923 James Pepper, P. O. Box 1260, Bonita Springs, Florida 33923 (Names and addresses of persons filing written statements) Eugene S. Boyd, 5225 Serenity Cove, Bokeelia, Florida 33922 Edward S. Zajchowski, 4501 Spring Creek Road, Box 178, Bonita Springs, Florida 33923 Winifred M. Wheeler, 24593 Dolphin Street, S.W., Bonita Springs, Florida 33923 James W. Campbell, 4501 Spring Creek Road, Box 131, Bonita Springs, Florida 33923 Dorothy Jean Kendrick, 300 Haral Street, Sturgis, Michigan 49091 Exhibit A Appendix B (List of Documentary Evidence) Location map Local boundary map outlining district Map of district and surrounding areas Collier County Comprehensive Future Land Use Map Exhibit B Pelican's Nest PUD 1b Ridgewood RPD 1c Palmetto Bay RPD 1d Pelican's Nest RPD 1e Summary of status of permits Proposed development agreement Statement by Crawford concerning DRI Exhibit C Petition filed by Westinghouse Bayside Communities, Inc. Location map Metes and bounds legal description of district Consent to establishment of district Map of existing major trunk water mains, sewer interceptors or outfalls Proposed time tables and cost estimates Future land use portion of Lee County Comprehensive plan Economic impact statement Exhibit D Supplement to metes and bounds description in petition Specific description of all real property within district Exhibit E Photocopy of $15,000 processing check sent to County Letter transmitting petition to Commission Secretary Exhibit F Letter transmitting petition to Division of Administrative Hearings Exhibit G Notice of Publication in Florida Administrative Weekly on March 8, 1991 Affidavit for Fort Myers News-Press publication, March 11, 1991 Affidavit for Fort Myers News-Press publication, March 18, 1991 Affidavit for Fort Myers News-Press publication, March 25, 1991 Affidavit for Fort Myers News-Press publication, April 1, 1991 Exhibit H Lee County Comprehensive Plan 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 Prefiled testimony of Bryon G. Koste Prefiled testimony of Samuel R. Crouch 3A Letter from Samuel R. Crouch to Jim Pepper 3B Letter from Samuel R. Crouch to Lloyd Read Prefiled testimony of Gary L. Moyer Prefiled testimony of David E. Crawford Prefiled testimony of Thomas R. Peek 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
The Issue At issue in this hearing was the Petition to Establish the Sarasota National Community Development District filed on January 20, 2006. The Petition, filed by Tuscano, LLC, requested that the Florida Land and Water Adjudicatory Commission (“Commission”) adopt a rule to establish a state- chartered uniform community development district, to be called the Sarasota National Development District, on certain property in Sarasota County, Florida. The hearing was for purposes of gathering information in anticipation of quasi-legislative rulemaking by the Commission.
The Issue The issue is whether the actions of Florida Housing concerning the review and scoring of the responses to Request for Applications 2019-102 (“RFA”), titled “Community Development Block Grant--Disaster Recovery (‘CDBG- DR’) to be Used in Conjunction with Tax-Exempt MMRB and Non- Competitive Housing Credits in Counties Deemed Hurricane Recovery Priorities,” were contrary to the agency’s governing statutes, rules, policies, or the RFA specifications.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: THE PARTIES Berkeley is an applicant in the RFA that requested an allocation of $6,500,000 in CDBG Development funding; $2,500,000 in CDBG Land Acquisition funding; and $844,699 in non-competitive housing credits. The Berkeley Application, assigned number 2020-017D, was preliminarily deemed ineligible for consideration for funding. Brisas is an applicant in the RFA that requested an allocation of $5,000,000 in CDBG Development funding and $1,674,839 in non-competitive housing credits. The Brisas Application, assigned number 2020-056D, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Northside is an applicant in the RFA that requested an allocation of $7,300,000 in CDBG Development funding; $1,588,014 in non-competitive housing credits; and $24,000,000 in Multifamily Mortgage Revenue Bonds (“MMRB”). The Northside Application, assigned number 2020-024D, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Beacon Place is an applicant in the RFA that requested an allocation of $6,925,500 in CDBG Development funding; $4,320,000 in CDBG Land Acquisition funding; $1,764,203 in non-competitive housing credits; and $24,000,000 in MMRB. The Beacon Place Application, assigned number 2020-045DB, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Bella Vista is an applicant in the RFA that requested an allocation of $8,000,000 in CDBG Development funding; $1,450,000 in CDBG Land Acquisition funding; $609,629 in non-competitive housing credits; and $13,000,000 in MMRB. The Bella Vista Application, assigned number 2020-038DB, was preliminarily deemed eligible but was not selected for funding under the terms of the RFA. Solaris is an applicant in the RFA that requested an allocation of $3,420,000 in CDBG Development funding; $4,500,000 in CDBG Land Acquisition funding; and $937,232 in non-competitive housing credits. The Solaris Application, assigned number 2020-039D, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Metro Grande is an applicant in the RFA that requested an allocation of $3,175,000 in CDBG Development funding and $1,041,930 in non-competitive housing credits. The Metro Grande Application, assigned number 2020-041D, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Sierra Bay is an applicant in the RFA that requested an allocation of $3,650,000 in CDBG Development funding; $3,300,000 in CDBG Land Acquisition funding; $1,074,173 in non-competitive housing credits; and $16,000,000 in MMRB. The Sierra Bay Application, assigned number 2020-040DB, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Bembridge is an applicant in the RFA that requested an allocation of $7,800,000 in CDBG Development funding; $564,122 in non-competitive housing credits; and $10,100,000 in MMRB. The Bembridge Application, assigned number 2020-046DB, was deemed eligible and preliminarily selected for funding under the terms of the RFA. East Pointe is an applicant in the RFA that requested an allocation of $4,680,000 in CDBG Development funding and $690,979 in non-competitive housing credits. The East Pointe Application, assigned number 2020-053D, was deemed eligible and preliminarily selected for funding under the terms of the RFA. Florida Housing is a public corporation organized pursuant to Chapter 420, Part V, Florida Statutes, and, for purposes of these consolidated cases, is an agency of the State of Florida. Florida Housing is tasked with distributing a portion of the CDBG-DR funding allocated by the U.S. Department of Housing and Urban Development (“HUD”), pursuant to the State of Florida Action Plan for Disaster Recovery. THE COMPETITIVE APPLICATION PROCESS AND RFA 2019-102 Florida Housing is authorized to allocate low-income housing tax credits and other named funding by section 420.507(48). Florida Housing has adopted Florida Administrative Code Chapter 67-60 to govern the competitive solicitation process. Rule 67-60.009(1) provides that parties wishing to protest any aspect of a Florida Housing competitive solicitation must do so pursuant to section 120.57(3), Florida Statutes. Funding is made available through a competitive application process commenced by the issuance of a request for applications. Rule 67-60.009(4) provides that a request for application is considered a “request for proposal” for purposes of section 120.57(3)(f). The RFA was issued on July 30, 2019, with responses due on August 27, 2019. The RFA was modified four times and the application deadline was extended to September 24, 2019. No challenges were made to the terms and specifications of the RFA. Section Five of the RFA included a list of 48 “eligibility items” that an applicant was required to satisfy to be eligible for funding and considered for funding selection. Applications that met the eligibility standards would then be awarded points for satisfying RFA criteria, with the highest scoring applications being selected for funding. No total point items are in dispute. Proximity Point items are contested as to the Beacon Place, East Pointe, and Bembridge Applications. Applicants could select whether they would be evaluated as Priority I, II, or III applications. All of the parties to these consolidated cases identified themselves as Priority I applications. Through the RFA, Florida Housing seeks to award an estimated $76,000,000 of CDBG Land Acquisition Program funding to areas impacted by Hurricane Irma, and in areas that experienced a population influx because of migration from Puerto Rico and the U.S. Virgin Islands due to Hurricane Irma. Florida Housing will award up to $66,000,000 for CDBG Development funding and an additional $10,000,000 for CDBG Land Acquisition Program funding. Applicants were not required to request CDBG Land Acquisition Program funding. Forty-four applications were submitted in response to the RFA. A Review Committee was appointed to review the applications and make recommendations to Florida Housing’s Board of Directors (the “Board”). The Review Committee found 34 applications eligible for funding. The Review Committee found 8 applications ineligible, including that of Berkeley. Two applications were withdrawn. The Review Committee developed charts listing its eligibility and funding recommendations to be presented to the Board. On December 13, 2019, the Board met and accepted the recommendations of the Review Committee. The Board preliminarily awarded funding to 12 applications, including those of Sierra Bay, Solaris, Metro Grande, East Pointe, and Bembridge. Petitioners Berkeley, Brisas, Northside, Beacon Place, and Bella Vista timely filed Notices of Protest and Petitions for Formal Administrative Hearing. THE BERKELEY APPLICATION As an eligibility item, the RFA required applicants to identify an Authorized Principal Representative. According to the RFA, the Authorized Principal Representative: must be a natural person Principal of the Applicant listed on the Principal Disclosure Form; must have signature authority to bind the Applicant entity; (c) must sign the Applicant Certification and Acknowledgement form submitted in this Application; (d) must sign the Site Control Certification form submitted in this Application; and (e) if funded, will be the recipient of all future documentation that requires a signature. As an eligibility item, the RFA required applicants to submit an Applicant Certification and Acknowledgment form executed by the Authorized Principal Representative. As an eligibility item, the RFA also required applicants to submit a Site Control Certification form executed by the Authorized Principal Representative. In section 3.e.(1) of Exhibit A of the RFA, the applicant is directed to enter the contact information of its Authorized Principal Representative. Berkeley entered the name, organization, and contact information for Jennie D. Lagmay as its Authorized Principal Representative, in response to section 3.e.(1). The name of Jennie D. Lagmay was not disclosed on the Principal Disclosure form required by the RFA. The Applicant Certification and Acknowledgment form and the Site Control Certification form were executed by Jonathan L. Wolf, not Jennie D. Lagmay, the designated Authorized Principal Representative. On both forms, Mr. Wolf is identified as “Manager of Berkeley Landing GP, LLC; General Partner of Berkeley Landing, Ltd.” Jonathan L. Wolf is listed on the Principal Disclosure Form. Aside from section 3.e.(1) of Exhibit A, Jennie D. Lagmay’s name is not found in the Berkeley Application. Florida Housing determined that the Berkeley Application was ineligible for an award of funding for three reasons: 1) the Authorized Principal Representative listed was not disclosed on the Principal Disclosure form; 2) the Applicant Certification and Acknowledgement form was not signed by the Authorized Principal Representative; and 3) the Site Control Certification was not signed by the Authorized Principal Representative. Two other applications for this RFA were found ineligible for identical reasons: Thornton Place, Application No. 2020-020D; and Berkshire Square, Application No. 2020-034D. In these, as in the Berkeley Application, Jennie D. Lagmay was named as the Authorized Principal Representative in section 3.e.(1) of Exhibit A, but Jonathan L. Wolf executed the Applicant Certification and Acknowledgement form and the Site Control Certification form as the Authorized Principal Representative. Berkeley concedes it made an error in placing the name of Ms. Lagmay in section 3.e.(1), but argues that this constituted a minor irregularity that should have been waived by Florida Housing. Berkeley contends that the entirety of its Application makes plain that Jonathan D. Wolf is in fact its Authorized Principal Representative. Berkeley argues that Florida Housing should waive the minor irregularity and determine that the Berkeley Application is eligible for funding. Berkeley points out that only two members of the Review Committee, Rachel Grice and Heather Strickland, scored the portions of the Berkeley Application that led to the ineligibility recommendation. Ms. Grice determined that the Authorized Principal Representative listed in the Berkeley Application was not disclosed on the Principal Disclosure form. Ms. Strickland determined that neither the Applicant Certification and Acknowledgement form nor the Site Control Certification form was executed by the Authorized Principal Representative. Neither Ms. Grice nor Ms. Strickland conducted a minor irregularity analysis for the Berkeley Application. Rule 67-60.008, titled “Right to Waive Minor Irregularities,” provides as follows: Minor irregularities are those irregularities in an Application, such as computation, typographical, or other errors, that do not result in the omission of any material information; do not create any uncertainty that the terms and requirements of the competitive solicitation have been met; do not provide a competitive advantage or benefit not enjoyed by other Applicants; and do not adversely impact the interests of the Corporation or the public. Minor irregularities may be waived or corrected by the Corporation. Berkeley contends that because a minor irregularity analysis was not conducted by the Review Committee members, the Board was deprived of a necessary explanation for the preliminary recommendations of Ms. Grice and Ms. Strickland. Marisa Button, Florida Housing’s Director of Multifamily Allocations, agreed that the Review Committee members did not perform a minor irregularity analysis but testified that none was required given the nature of the discrepancy in the Berkeley Application. Ms. Button performed a minor irregularity analysis as Florida Housing’s corporate representative in this proceeding and concluded that the error could not be waived or corrected without providing an unfair competitive advantage to Berkeley. Ms. Button testified that the fact that the person identified as the Authorized Principal Representative was not the same person who signed the certification forms could not be considered a minor irregularity because the application demonstrated conflicting and contradictory information, creating uncertainty as to the applicant’s intentions. She stated that Florida Housing is required to limit its inquiry to the four corners of the application. Ms. Button stated that Florida Housing cannot take it upon itself to decide what the applicant intended when the information provided in the application is contradictory. Berkeley points to the fact that the Application Certification and Acknowledgement form, signed by Mr. Wolf, includes the following language: “The undersigned is authorized to bind the Applicant entity to this certification and warranty of truthfulness and completeness of the Application.” Berkeley argues that it should have been clear to Florida Housing that Mr. Wolf is the person authorized to bind the company and that the inclusion of Ms. Lagmay’s name in section 3.e.(1) was in the nature of a typographical error. Florida Housing points out that the Application Certification and Acknowledgement form also includes the following language below the signature line: “NOTE: Provide this form as Attachment 1 to the RFA. The Applicant Certification and Acknowledgement form must be signed by the Authorized Principal Representative stated in Exhibit A.” Florida Housing notes that the Site Control Certification form includes similar language: “This form must be signed by the Authorized Principal Representative stated in Exhibit A.” Berkeley contends that Florida Housing was well aware that Jonathan L. Wolf has been the named Authorized Principal Representative on multiple applications filed under the umbrella of Wendover Housing Partners, the general developer behind Berkeley. In at least one of those previous applications, Ms. Lagmay, an employee of Wendover Housing Partners, was identified as the “contact person.” Ms. Button responded that Review Committee members are specifically prohibited from using personal knowledge of a general development entity in a specific application submitted by a single purpose entity. She further testified that if Florida Housing employees were to use their personal knowledge of an experienced developer to waive errors in a specific application, applicants who had not previously submitted applications would be at a competitive disadvantage. Ms. Button testified that Berkeley was established as a single purpose entity in accordance with the RFA’s requirements. She testified that she has known general developers to structure these single purpose entities in different ways, depending on the requirements of an RFA. An applicant might designate an employee, such as Ms. Lagmay, as a principal to give her experience as a developer. Again, Ms. Button emphasized that Florida Housing is not in a position to decide what the applicant “really meant” when there is a discrepancy in the information provided. Ms. Button testified that Florida Housing has determined in prior RFAs that an applicant was ineligible because the person identified as the Authorized Principal Representative was not the same person who signed the certification forms. Florida Housing rightly concluded that there are only two possible ways to interpret the Berkeley Application. If Ms. Lagmay was the Authorized Principal Representative, then the application is nonresponsive because she was not listed on the Principal Disclosure form and she did not sign the required certification forms. If Ms. Lagmay was not the Authorized Principal Representative, the application is nonresponsive because no Authorized Principal Representative was identified. There is no way to tell from the four corners of the application which of these alternatives is the correct one. Florida Housing cannot step in and cure the defect in the application by making its own educated guess as to the intended identity of the Authorized Principal Representative. Berkeley has failed to demonstrate that Florida Housing’s preliminary determination of ineligibility was contrary to the applicable rules, statutes, policies, or specifications of the RFA, or was clearly erroneous, contrary to competition, arbitrary, or capricious. THE SIERRA BAY APPLICATION The parties stipulated to the facts regarding the Sierra Bay Application, which are incorporated into this Recommended Order. Florida Housing deemed the Sierra Bay Application eligible and, pursuant to the terms of the RFA, preliminarily selected Sierra Bay for funding. In order to demonstrate site control, the RFA required execution of the Site Control Certification form. Site control documentation had to be included in the application. One way to demonstrate site control was to include an “eligible contract.” The RFA required that certain conditions be met in order to be considered an “eligible contract.” One of those requirements was that the contract “must specifically state that the buyer’s remedy for default on the part of the seller includes or is specific performance.” Sierra Bay acknowledged that the site control documentation included within its application did not meet the “eligible contract” requirement because it failed to include language regarding specific performance as a remedy for the seller’s default. Sierra Bay agreed that the omission of the specific performance language was not a minor irregularity and that Sierra Bay’s Application is ineligible for funding under the terms of the RFA. THE SOLARIS APPLICATION The RFA specified that a Local Government, Public Housing Authority, Land Authority, or Community Land Trust must hold 100 percent ownership in the land of any qualifying Priority I application. The RFA defined “Community Land Trust” as: A 501(c)(3) which acquires or develops parcels of land for the primary purpose of providing or preserving affordable housing in perpetuity through conveyance of the structural improvement subject to a long term ground lease which retains a preemptive option to purchase any such structural improvement at a price determined by a formula designed to ensure the improvement remains affordable in perpetuity. The RFA provided that if a Community Land Trust is the Land Owner, the Community Land Trust must provide the following documentation as Attachment 2 to the application to demonstrate that it qualifies as a Community Land Trust: The Community Land Trust must provide its Articles of Incorporation or Bylaws demonstrating it has existed since June 28, 2018 or earlier and that a purpose of the Community Land Trust is to provide or preserve affordable housing; and The Community Land Trust must provide a list that meets one of the following criteria to demonstrate experience of the Community Land Trust with owning property: (i) at least two parcels of land that the Community Land Trust currently owns; or (ii) one parcel of land that the Community Land Trust owns, consisting of a number of units that equals or exceeds at least 25 percent of the units in the proposed Development. The RFA required that the proposed development must be affordable in perpetuity. For purposes of the RFA, “perpetuity” means 99 years or more. Solaris identified Residential Options of Florida, Inc. (“Residential Options”), as the Community Land Trust owner in its Priority 1 Application. Attachment 2 of the Solaris Application included the Articles of Incorporation of Residential Options (“Original Articles”), filed with the Division of Corporations on July 30, 2014. The purpose of the corporation as stated in the Original Articles was as follows: Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Attachment 2 of the Solaris Application also included Amended and Restated Articles of Incorporation of Residential Options (“Amended Articles”), filed with the Division of Corporations on September 20, 2019. The Amended Articles retained the boilerplate statement of purpose of the Original Articles, but added the following paragraph: This shall include the purpose of empowering individuals with intellectual and developmental disabilities to successfully obtain and maintain affordable and inclusive housing of their choice and to provide affordable housing and preserve the affordability of housing for low- income or moderate income people, including people with disabilities, in perpetuity. Attachment 2 of the Solaris Application also included the Articles of Incorporation of ROOF Housing Trust, Inc. (“ROOF Housing Trust”) filed with the Division of Corporations on July 17, 2017. The purpose of the corporation as stated in these Articles includes the following: “to acquire land to be held in perpetuity for the primary purpose of providing affordable housing for people with developmental disabilities.” Finally, Attachment 2 of the Solaris Application included Articles of Merger, which were filed with the Division of Corporations on September 10, 2019. The Articles of Merger indicated that the Residential Options and ROOF Housing Trust had merged, with Residential Options standing as the surviving corporation. The petitioners contesting the Solaris Application raise several issues. The first issue is whether the RFA requires only that the entity named as the Community Land Trust have been in existence in some form as of June 28, 2018, or whether the entity had to exist as a Community Land Trust as of that date. The Community Land Trust named in the Solaris Application, Residential Options, existed prior to June 28, 2018, but not as a Community Land Trust. The second issue is whether the June 28, 2018, date applies only to the existence of the Community Land Trust or whether the RFA requires that the Community Land Trust have been in existence and have had a stated purpose to provide or preserve affordable housing and have met the ownership experience criteria as of June 28, 2018. It is questionable whether Solaris would be eligible for funding if the RFA required the latter, because Residential Options did not have a stated purpose of providing or preserving affordable housing prior to its merger with ROOF Housing Trust, at least no such purpose as could be gleaned from the four corners of the Solaris Application. The third issue is whether the RFA’s definition of “Community Land Trust” requires the qualifying entity to have existing ground leases at the time of the application. Florida Housing and Solaris concede that Residential Options did not have operative ground leases at the time Solaris submitted its application. Hurricane Irma struck Puerto Rico and Florida in September 2017. Ms. Button testified that in creating this RFA, Florida Housing wanted to weed out opportunistic community land trusts created only for the purpose of obtaining this funding. Florida Housing initially proposed an RFA requirement that the community land trust have existed as of September 2017, but discovered through workshops with interested parties that the early date would exclude legitimate Community Land Trusts that had been established in response to the storm. Ms. Button testified that Florida Housing’s intent was to make this RFA as inclusive as practicable. Florida Housing therefore selected June 28, 2018, as a date that would exclude opportunists without penalizing the genuine responders to the natural disaster. Both Florida Housing and Solaris point to the text of the RFA requirement to demonstrate that the date of June 28, 2018, should be read to apply only to whether the Community Land Trust existed as of that date. Solaris argues that the RFA states three independent criteria for eligibility: 1) that the Community Land Trust “has existed since June 28, 2018 or earlier”; 2) that a purpose of the Community Land Trust is1 to provide or preserve affordable housing; and 3) the Community Land Trust must demonstrate its property ownership experience, one means of doing which is to name at least two parcels of land that the Community Land Trust currently owns. Florida Housing argues that Solaris met the first criterion by providing its Articles of Incorporation showing it has existed since July 30, 2014. Florida Housing argues that Solaris met the second criterion by providing its Amended and Restated Articles of Incorporation, which stated the purpose of providing or preserving affordable housing in perpetuity. Florida Housing argues that Solaris met the third criterion by identifying two properties in Immokalee, Independence Place, and Liberty Place as parcels that it currently owns. Florida Housing thus reached the conclusion that Residential Options met the definition of a Community Land Trust in the RFA as of June 28, 2018. Florida Housing argues that, according to the definition in the RFA, a Community Land Trust must be a 501(c)(3) corporation, which Residential Options clearly is. It must acquire or develop parcels of land, which it has done. Finally, it must have the “primary purpose of providing or preserving affordable housing in perpetuity through conveyance of the structural improvement subject to a long term ground lease.” Ms. Button testified that Florida Housing’s interpretation of the RFA’s Community Land Trust definition was that if Residential Options had the primary purpose of providing affordable housing in perpetuity through the use of long term ground leases, the definition has been met even if Residential Options had not actually entered into any ground leases at the 1 Both Florida Housing and Solaris emphasize that the second criterion is stated in the present tense, which suggests that it does not intend a backward look to June 28, 2018. time it submitted its application. This is not the only way to read the RFA’s definition, but it is not an unreasonable reading, particularly in light of Florida Housing’s stated intent to make the RFA as inclusive as possible in terms of the participation of legitimate community land trusts. Sheryl Soukup, the Executive Director of Residential Options, testified via deposition. Ms. Soukup testified that in 2017, Residential Options realized there was a need for housing for people with disabilities and decided to become a nonprofit housing developer of properties that would be kept affordable in perpetuity. To that end, ROOF Housing Trust was created to act as the community land trust for the properties developed by Residential Options. The two companies had identical Boards of Directors and Ms. Soukup served as Executive Director of both entities. In its application to the IRS for 501(c)(3) status, ROOF Housing Trust included the following: The organization does not own any property yet. ROOF Housing Trust intends to own vacant land, single family homes, and multi-family units. Some of the units will be provided as rental units. ROOF Housing Trust will sell some of the houses for homeownership, while retaining the land on which they are located. The land will be leased to homeowners at a nominal fee to make the purchase price affordable, using the community land trust model. Ground leases and warranty deeds not been developed yet [sic], but will be based on the sample documents provided by the Florida Community Land Trust Institute.[2] Ms. Soukup described ROOF Housing Trust as “a vehicle by which Residential Options of Florida could act as a community land trust…. [I]t was always the intention of Residential Options of Florida to develop and put into 2 The ROOF Housing Trust 501(c)(3) application was not a part of the Solaris Application. It was included as an exhibit to Ms. Soukup’s deposition. a community land trust property so that it would remain affordable in perpetuity for use by people of intellectual and development [sic] disabilities.” Residential Options acquired the aforementioned Independence Place and Liberty Place properties but never conveyed ownership to ROOF Housing Trust. Residential Options acted as a de facto community land trust. No ground leases have yet been entered into because the properties are at present rented directly by Residential Options to persons with developmental disabilities. Ms. Soukup testified that at the time ROOF Housing Trust was created, the Board of Residential Options was undecided whether to create a separate entity to act as a community land trust or to incorporate that function into the existing entity. The decision to incorporate ROOF Housing Trust was based on the Board’s intuition that a separate corporation would “allow us the most flexibility in the future.” In any event, Residential Options and ROOF Housing Trust were functionally the same entity. Ms. Soukup testified that plans to merge the two companies emerged from a situation in which Collier County refused to allow Residential Options to convey its two properties to ROOF Housing Trust. The Board that controlled both companies decided that there was no point in maintaining separate legal entities if ROOF Housing Trust could not perform its main function. As noted above, Articles of Merger were filed on September 10, 2019. Northside points to minutes from Residential Options’s Board meetings in August and September 2019, as indicating that the Board itself did not believe that Residential Options was a community land trust prior to the merger with ROOF Housing Trust. Northside contends that the September 2019 merger was initiated and completed mainly because Residential Options had been approached about serving as the Community Land Trust for the applications of Solaris and Sierra Bay in this RFA. Northside points to the “frenzied activity” by Residential Options to create an entity meeting the definition of Community Land Trust in the days just before the September 24, 2019, application deadline. Northside argues that Residential Options is the very kind of opportunistic community land trust that the June 28, 2018, date of creation was intended to weed out. Northside’s argument is not persuasive of itself, but it does point the way to an ultimate finding as to the Solaris Application. Both Florida Housing and Solaris gave great emphasis to Ms. Soukup’s testimony to refute the suggestion that Residential Options acted opportunistically. Ms. Soukup was a credible witness. Her explanation of the process by which Residential Options first created then merged with ROOF Housing Trust dispelled any suggestion that Residential Options was a community land trust created solely to cash in on this RFA. The problem is that Ms. Soukup’s explanation was not before the Review Committee when it evaluated the Solaris Application. The only information about Residential Options that the Review Committee possessed was Attachment 2 of the Solaris Application. The dates of the merger documents and Amended Articles certainly give some credence to the suspicions voiced by Northside. However, the undersigned is less persuaded by the implications as to the intentions of Residential Options than by the contradictions between Florida Housing’s statements of intent and its reading of the RFA in relation to the Solaris Application. The decision to find the Solaris Application eligible for funding founders on the first issue stated above: whether the RFA requires only that the Community Land Trust have been in existence in some form as of June 28, 2018, or whether it had to exist as a Community Land Trust as of that date. Ms. Button testified that the June 28, 2018, date was settled upon as a way of including community land trusts created in the wake of Hurricane Irma, while excluding those created to cash in on this RFA. During cross- examination by counsel for Northside, Ms. Button broadened her statement to say that Florida Housing’s intention was to exclude entities that had not been involved in affordable housing at all prior to June 28, 2018. Nonetheless, the RFA language is limited to Community Land Trusts. The RFA states: “The Community Land Trust must provide its Articles of Incorporation or Bylaws demonstrating that it has existed since June 28, 2018 or earlier…” The Solaris Application shows that Residential Options existed prior to June 28, 2018, but not as a Community Land Trust. Residential Options did not become a Community Land Trust until it completed its merger with ROOF Housing Trust and filed the Amended Articles on September 20, 2019. Ms. Button’s statement of intent is accepted as consistent with the plain language of the RFA: the date of June 28, 2018, excludes Community Land Trusts created subsequently. It is inconsistent for Florida Housing to also read the RFA language to say that the qualifying entity need not have existed as a Community Land Trust prior to June 28, 2018. It would be arbitrary for Florida Housing to set a date for the creation of Community Land Trusts then turn around and find that the date does not apply to this particular Community Land Trust. Ms. Soukup’s testimony was that Residential Options and ROOF Housing Trust were effectively a single entity and that Residential Options was in fact operating as a community land trust prior to the September 10, 2019, merger. However, Ms. Soukup’s explanation was not before the Review Committee, which was limited to one means of ascertaining whether an entity was a Community Land Trust prior to June 28, 2018: the Articles of Incorporation or Bylaws. Residential Options’s Original Articles included no language demonstrating that it was a Community Land Trust prior to the September 10, 2019, merger with ROOF Housing Trust and the filing of the Amended Articles on September 20, 2019.3 As set forth in the discussion of the Berkley Application above, Florida Housing is required to limit its inquiry to the four corners of an application. It was contrary to the provisions of the RFA for Florida Housing to find that Residential Options’s mere existence as a legal entity prior to June 28, 2018, satisfied the requirement that the Community Land Trust must demonstrate that it existed prior to June 28, 2018. Ms. Button’s own testimony demonstrated that Florida Housing intended to exclude Community Land Trusts created after June 28, 2018. ROOF Housing Trust existed as a Community Land Trust in 2017, but ROOF Housing Trust was not the Community Land Trust named in the Solaris Application. Ms. Soukup’s explanation of the circumstances showed that Residential Options was well intentioned in its actions, but her explanation was not a part of the Solaris Application that was before Florida Housing’s Review Committee. THE METRO GRANDE APPLICATION Florida Housing deemed the Metro Grande Application eligible. Pursuant to the terms of the RFA, the Metro Grande Application was preliminarily selected for funding. Petitioner Brisas contends that the Metro Grande Application should have been found ineligible for failure to include mandatory site control documentation. Metro Grande submitted a Priority I application that was not seeking Land Acquisition Program funding. The site control requirements for such applicants are as follows: 3 This finding also disposes of Solaris’s arguments regarding the legal effect of corporate mergers. The RFA provided one simple way of demonstrating whether an entity was a Community Land Trust as of June 28, 2018. Florida Housing’s Review Committee could not be expected to delve into the complexities of corporate mergers to answer this uncomplicated question. The Local Government, Public Housing Authority, Land Authority, or Community Land Trust must already own the land as the sole grantee and, if funded, the land must be affordable into Perpetuity.[4] Applicants must demonstrate site control as of Application Deadline by providing the properly executed Site Control Certification form (Form Rev. 08-18). Attached to the form must be the following documents: A Deed or Certificate of Title. The deed or certificate of title (in the event the property was acquired through foreclosure) must be recorded in the applicable county and show the Land Owner as the sole Grantee. There are no restrictions on when the land was acquired; and A lease between the Land Owner and the Applicant entity. The lease must have an unexpired term of at least 50 years after the Application Deadline. Metro Grande did not include a deed or certificate of title in its application. In fact, no deed or certificate of title for the Metro Grande site exists. Miami-Dade County owns the Metro Grande site. Miami-Dade County acquired ownership of the Metro Grande site by eminent domain. The eminent domain process culminated in the entry of four Final Judgments for individual parcels which collectively compose the Metro Grande site. The Final Judgments were not attached to Metro Grande’s Application. There was no requirement in the RFA that Metro Grande include these Final Judgments in its application. The Final Judgments were produced during discovery in this proceeding. In its application, Metro Grande included a Land Owner Certification and Acknowledgement Form executed by Maurice L. Kemp, as the Deputy Mayor of Miami-Dade County, stating that the county holds or will hold 100 percent ownership of the land where Metro Grande’s proposed 4 The RFA defined “Perpetuity” as “at least 99 years from the loan closing.” development is located. Additionally, in its application, Metro Grande stated that Miami-Dade County owned the property. The RFA expressly states that Florida Housing “will not review the site control documentation that is submitted with the Site Control Certification form during the scoring process unless there is a reason to believe that the form has been improperly executed, nor will it in any case evaluate the validity or enforceability of any such documentation.” Florida Housing reserves the right to rescind an award to any applicant whose site control documents are shown to be insufficient during the credit underwriting process. Thus, the fact that no deed or certificate of title was included with Metro Grande’s site control documents was not considered by Florida Housing during the scoring process. Ms. Button testified that while this was an error in the application, it should be waived as a minor irregularity. The purpose of the documentation requirements was to demonstrate ownership and control of the applicant’s proposed site. There was no question or ambiguity as to the fact that Miami- Dade County owned the Metro Grande site. Florida Housing was not required to resort to information extraneous to the Metro Grande Application to confirm ownership of the site. The Land Owner Certification and Acknowledgement form, executed by the Deputy Mayor as the Authorized Land Owner Representative, confirmed ownership of the parcels. Metro Grande’s failure to include a deed or certificate of title, therefore, created no confusion as to who owned the property or whether Miami-Dade County had the authority to lease the property to the applicant. There was no evidence presented that the failure to include a deed or certificate of title resulted in the omission of any material information or provided a competitive advantage over other applicants. Brisas contends that the RFA was clear as to the documents that must be included to satisfy the site control requirements. Metro Grande failed to provide those documents or even an explanation why those documents were not provided. Florida Housing ignored the fact that no deed or certificate of title was provided, instead relying on information found elsewhere in the application. It is found that Metro Grande failed to comply with an eligibility item of the RFA, but that Florida Housing was correct to waive that failure as a minor irregularity that provided Metro Grande no competitive advantage, created no uncertainty as to whether the requirements of the RFA were met, and did not adversely affect the interests of Florida Housing or the public. Brisas has failed to demonstrate that Florida Housing’s preliminary determination of eligibility and selection for funding was contrary to the applicable rules, statutes, policies, or specifications of the RFA or was clearly erroneous, contrary to competition, arbitrary, or capricious. THE BEACON PLACE APPLICATION Florida Housing deemed the Beacon Place Application eligible. Pursuant to the terms of the RFA, Beacon Place was not preliminarily selected for funding. The RFA provides that an application may earn proximity points based on the distance between its Development Location Point and the selected Transit or Community Service. Proximity points are used to determine whether the Applicant meets the required minimum proximity eligibility requirements and the Proximity Funding Preference. Beacon Place is a Large County Application that is not eligible for the “Public Housing Authority Proximity Point Boost.” As such, the Beacon Place Application was required to achieve a minimum Transit Point score of 2 to be eligible for funding. Beacon Place must also achieve a total Proximity Point score of 10.5 in order to be eligible for funding. Beacon Place must achieve a total Proximity Point score of 12.5 or more in order to receive the RFA’s Proximity Funding Preference. Based on the information in its Application, Beacon Place received a Total Proximity Point score of 18 and was deemed eligible for funding and for the Proximity Point Funding Preference. The Beacon Place Application listed a Public Bus Rapid Transit Stop as its Transit Service. Applying the Transit Service Scoring Charts in Exhibit C of the RFA, Florida Housing awarded Beacon Place 6 Proximity Points for its Transit Service. The Beacon Place Application listed a Grocery Store, a Pharmacy, and a Public School in its Community Services Chart in order to obtain Proximity Points for Community Services. Using the Community Services Scoring Charts in Exhibit C of the RFA, Florida Housing awarded Beacon Place 4 Proximity Points for each service listed, for a total of 12 Proximity Points for Community Services. Beacon Place has stipulated, however, that the Public School listed in its application does not meet the definition of “Public School” in the RFA and Beacon Place should not receive the 4 Proximity Points for listing a public school. The RFA defines a “Public Bus Rapid Transit Stop” as: [a] fixed location at which passengers may access public transportation via bus. The Public Bus Rapid Transit Stop must service at least one bus that travels at some point during the route in either a lane or corridor that is exclusively used by buses, and the Public Bus Rapid Transit Stop must service at least one route that has scheduled stops at the Public Bus Rapid Transit Stop at least every 20 minutes during the times of 7am to 9am and also during the times of 4pm to 6pm Monday through Friday, excluding holidays, on a year- round basis. Additionally, it must have been in existence and available for use by the general public as of the Application Deadline. The Beacon Place Application included Metrobus Route 38 (“Route 38”) as a Public Bus Rapid Transit Stop. Route 38 has scheduled stops at the location identified in the Beacon Place Application at the following times during the period of 7 a.m. and 9 a.m. Monday through Friday: 7:01, 7:36, 7:56, 8:11, 8:26, 8:41, and 8:56. Brisas and Northside contend that Route 38 does not meet the definition of a Public Bus Rapid Transit Stop because there is a gap of more than 20 minutes between the 7:01 a.m. bus and the 7:36 a.m. bus. Applicants are not required to include bus schedules in the application. Florida Housing does not attempt to determine whether an identified stop meets the RFA definitions during the scoring process. During discovery in this litigation, Florida Housing changed its position and now agrees that Route 38 does not satisfy the definition. Nonetheless, the standard of review set forth in section 120.57(3) is applicable to Florida Housing’s initial eligibility determination, not its revised position. All parties stipulated that Route 38 meets the definition of a Public Bus Rapid Transit Stop as to scheduled stops during the hours of 4 p.m. to 6 p.m. Monday through Friday. If the bus stop listed by Beacon Place does not also meet the definition of a Public Bus Rapid Transit Stop as to scheduled stops during the hours of 7 a.m. to 9 a.m., Beacon Place would not be entitled to any Transit Service Proximity Points and would be ineligible for funding. Beacon Place cannot contest the fact that there is a 35 minute gap between the 7:01 and the 7:36 buses. Beacon Place has attempted to salvage its situation by comparing the language used in the RFA definition of a Public Bus Stop with that used in the definition of a Public Bus Rapid Transit Stop. The RFA defines Public Bus Stop in relevant part as [a] fixed location at which passengers may access one or two routes of public transportation via buses. The Public Bus Stop must service at least one bus route with scheduled stops at least hourly during the times of 7am to 9am and also during the times of 4pm and 6pm Monday through Friday, excluding holidays, on a year round basis…. Florida Housing has interpreted the “hourly” requirement of the Public Bus Stop definition to mean that a bus must stop at least once between 7:00 a.m. and 8:00 a.m., and at least once between 8:00 a.m. and 9:00 a.m. Beacon Place suggests that Florida Housing should interpret the “every 20 minutes” requirement for a Public Bus Rapid Transit Stop similarly, so that a bus must stop at least once between 7:00 a.m. and 7:20 a.m., once between 7:20 a.m. and 7:40 a.m., and once between 7:40 a.m. and 8:00 a.m. Florida Housing has rejected this interpretation, however, noting that the language in the two definitions is explicitly different. Ms. Button testified that if Florida Housing had intended these two distinct definitions to be interpreted similarly, it could easily have worded them differently. It could have required a Public Bus Stop to have stops “at least every 60 minutes,” rather than “hourly.” It could have required a Public Bus Rapid Transit Stop to have “three stops per hour” rather than “every 20 minutes.” Ms. Button observed that the purpose of the Public Bus Rapid Transit Stop definition is to award points for serving the potential residents with frequent and regular stops. The idea was to be sure residents had access to the bus during the hours when most people are going to and from work. Florida Housing’s interpretation of “every 20 minutes” is consonant with the plain language of the phrase and reasonably serves the purpose of the definition. Florida Housing also rejected the idea that the failure of the identified stop to meet the definition of a Public Bus Rapid Transit Stop in the RFA should be waived as a minor irregularity. Ms. Button testified that allowing one applicant to get points for a stop that did not meet the definition would give it a competitive advantage over other applicants, including some potential applicants who did not apply because they could not satisfy the terms of the definition. Because the bus stop listed by Beacon Place does not meet the definition of a Public Bus Rapid Transit Stop, Beacon Place is not entitled to any Transit Service Proximity Points and is thus ineligible for funding. Brisas and Northside have demonstrated that Florida Housing’s preliminary determination of eligibility for Beacon Place was contrary to the specifications of the RFA. Florida Housing’s original recommendation would have been contrary to the terms of the RFA. THE EAST POINTE APPLICATION Florida Housing deemed the East Pointe Application eligible. Pursuant to the terms of the RFA, East Pointe was preliminarily selected for funding. Bella Vista challenged Florida Housing’s action alleging that the Medical Facility selected by East Pointe did not meet the definition found in the RFA. East Pointe proposed a Development in Lee County, a Medium County according to the terms of the RFA. Applicants from Medium Counties are not required to attain a minimum number of Transit Service Points to be considered eligible for funding. However, such applicants must achieve at least 7 total Proximity Points to be eligible for funding and at least 9 Proximity Points to receive the Proximity Funding Preference. The East Pointe Application identified three Public Bus Stops and was awarded 5.5 Proximity Points based on the Transit Service Scoring Chart in Exhibit C to the RFA. However, East Pointe has stipulated that Public Bus Stop 1 listed in its application does not meet the definition of a Public Bus Stop because it does not have the required scheduled stops. Based on the Transit Service Scoring Chart, East Pointe should receive a total of 3.0 Proximity Points for Transit Services for Public Bus Stops 2 and 3. East Pointe listed a Grocery Store, a Medical Facility, and a Public School in its Community Services Chart. Based on the Community Services Scoring Charts in Exhibit C to the RFA, East Pointe received 1 Proximity Point for its Grocery Store, 4 Proximity Points for its Medical Facility, and 3 Proximity Points for its Public School, for a total of 8 Proximity Points for Community Services. East Pointe listed Lee Memorial Health System at 3511 Dr. Martin Luther King Jr. Boulevard, Ft. Myers, Florida, as its Medical Facility. The RFA defines “Medical Facility” as follows: A medically licensed facility that (i) employs or has under contractual obligation at least one physician licensed under Chapter 458 or 459, F.S. available to treat patients by walk-in or by appointment; and (ii) provides general medical treatment to any physically sick or injured person. Facilities that specialize in treating specific classes of medical conditions or specific classes of patients, including emergency rooms affiliated with specialty or Class II hospitals and clinics affiliated with specialty or Class II hospitals, will not be accepted. Additionally, it must have been in existence and available for use by the general public as of the Application Deadline. If East Pointe’s selected Medical Facility does not meet the definition of “Medical Facility” in the RFA, East Pointe will lose 4 Proximity Points, reducing its total Proximity Points to 7. The East Pointe Application would still be eligible but would not receive the Proximity Funding Preference and, therefore, would fall out of the funding range of the RFA. Bella Vista alleged that East Pointe should not have received Proximity Points for a Medical Facility because the Lee Community Healthcare location specified in its application “only serves adults and therefore only treats a specific group of patients.” Lee Community HealthCare operates nine locations in Lee County, including the “Dunbar” location that East Pointe named in its application. Lee Community Healthcare’s own promotional materials label the Dunbar location as “adults only.” Robert Johns, Executive Director for Lee Community Healthcare, testified by deposition. Mr. Johns testified that as of the RFA application date of September 24, 2019, the Dunbar office provided services primarily to adults 19 years of age or over, by walk-in or by appointment. A parent who walked into the Dunbar office with a sick or injured child could obtain treatment for that child. A parent seeking medical services for his or her child by appointment would be referred to a Lee Community HealthCare office that provided pediatric services. Mr. Johns testified that the Dunbar office would provide general medical treatment to any physically sick or injured person who presented at the facility, including children. Children would not be seen by appointment at the Dunbar facility, but they would be treated on a walk-in basis. The RFA requires a Medical Facility to treat patients “by walk-in or by appointment.” Ms. Button testified that Florida Housing reads this requirement in the disjunctive. A Medical Facility is not required to see any and all patients by walk-in and to see any and all patients by appointment. Florida Housing finds it sufficient for the Medical Facility to see some or all patients by walk-in or by appointment. Ms. Button opined that the Dunbar office met the definition of a Medical Facility because it treated adults by walk-in or appointment and treated children on a walk-in basis. Florida Housing’s reading is consistent with the literal language of the RFA definition. While it would obviously be preferable for the Dunbar facility to see pediatric patients by appointment, the fact that it sees them on a walk-in basis satisfies the letter of the RFA provision. Bella Vista has failed to demonstrate that Florida Housing’s preliminary determination of eligibility and selection for funding was contrary to the applicable rules, statutes, policies, or specifications of the RFA or was clearly erroneous, contrary to competition, arbitrary, or capricious. THE BEMBRIDGE APPLICATION Florida Housing deemed the Bembridge Application eligible. Pursuant to the terms of the RFA, Bembridge was preliminarily selected for funding. Bembridge proposed a development in Collier County, a Medium County in RFA terms. As an applicant from a Medium County, Bembridge was required to achieve at least 7 total Proximity Points to be eligible for funding and at least 9 Proximity Points to receive the Proximity Funding Preference. Medium County applicants are allowed, but not required, to claim both Transit Service points and Community Service points. As to Community Services, the RFA provides that an applicant may receive a “maximum 4 Points for each service, up to 3 services.” The RFA goes on to state: Applicants may provide the location information and distances for three of the following four Community Services on which to base the Application’s Community Services Score.[5] The Community Service Scoring Charts, which reflect the methodology for calculating the points awarded based on the distances, are outlined in Exhibit C. In its Application, Bembridge listed four, not three, Community Services. Bembridge was one of six Applicants that mistakenly submitted four Community Services instead of three. The Review Committee scorer reviewing Community Services in the applications stated on her scoring sheet: “After removing points for the service with the least amount of points, all still met the eligibility requirement.” 5 The four listed Community Services were Grocery Store, Public School, Medical Facility, and Pharmacy. Florida Housing interpreted the RFA as not specifically prohibiting an applicant from listing four Community Services, but as providing that the applicant could receive points for no more than three of them. As to the six applicants who submitted four Community Services, Florida Housing awarded points only for the three Community Services that were nearest the proposed development.6 Bembridge received 3 Proximity points for its Grocery Store, 3.5 Proximity Points for its Pharmacy, and 4 Proximity Points for its Public School, for a total of 10.5 Proximity Points for Community Services. Thus, as originally scored, Bembridge met the Proximity Funding Preference. Florida Housing did not score the Medical Facility listed by Bembridge, which was the farthest Community Service from the proposed development. Ms. Button testified that this fourth Community Service was treated as surplus information, and because it did not conflict with any other information in the application or cause uncertainty about any other information, it was simply not considered. Ms. Button likened this situation to prior RFAs in which applicants included pharmacies as Community Services even though they were not eligible in proposed family developments. Florida Housing disregarded the information as to pharmacies as surplus information. It did not consider disqualifying the applicants for providing extraneous information. Ms. Button also made it clear that if one of the three Community Services nearest the proposed development was found ineligible for some reason, the fourth Community Service submitted by the applicant would not be considered. The fourth Community Service was in all instances to be disregarded as surplusage in evaluating the application. 6 When queried as to whether the fourth Community Service was removed because it was worth the fewest points, as the reviewer’s notes stated, or because it was farthest away from the proposed development, Ms. Button replied that the distinction made no difference because the service that is farthest away is invariably the one that receives the fewest points. Florida Housing did not consider disqualifying Bembridge and the other five Applicants that mistakenly listed an extra Community Service in their applications. Ms. Button stated, “They provided in all of them, Bembridge and the others that were listed in this, they did provide three Community Services. And so I don’t think it is reasonable to throw out those applications for providing a fourth that we would just not consider nor give benefit to for those point values.” Bella Vista contends that Florida Housing should have rejected the Bembridge application rather than award points for the three nearest Community Services. Ms. Button testified that this was not a reasonable approach if only because there was nothing in the RFA stating that an application would be rejected if it identified more Community Services than were required. Ms. Button also noted that this was one of the first RFAs to allow applicants to select among four Community Services. She believed the novelty of this three-out-of-four selection process led to six applications incorrectly listing four Community Services. She implied that the Community Services language would have to be tweaked in future RFAs to prevent a recurrence of this situation, but she did not believe it fair to disqualify these six applicants for their harmless error. The Review Committee scorer did not perform a minor irregularity analysis relating to the fourth Community Service provided by Bembridge and the other applicants. Ms. Button opined that the addition of an extra Community Service amounts to no more than a minor irregularity because it provided no competitive advantage to the applicant and created no uncertainty that the terms and requirements of the RFA have been met. The RFA allows up to six proximity points for Transit Services. It specifically provides: Up to three Public Bus Stops may be selected with a maximum of 2 points awarded for each one. Each Public Bus Stop must meet the definition of Public Bus Stop as defined in Exhibit B, using at least one unique bus route. Up to two of the selected Public Bus Stops may be Sister Stops that serves the same route, as defined in Exhibit B. The RFA defines “Sister Stop” as: two bus stops that (i) individually, each meet the definition of Public Bus Stop, (ii) are separated by a street or intersection from each other, (iii) are within 0.2 miles of each other, (iv) serve at least one of the same bus routes, and (v) the buses travel in different directions. The Bembridge Application listed two Public Bus Stops, the definition of which is set forth at Finding of Fact 107 above. Based on the Transit Service Scoring Chart, Bembridge received a total of 1.0 Proximity Point for Transit Services for its two Public Bus Stops. Numerous questions were asked at the hearing about whether Bembridge’s identified bus stops were “Sister Stops” as defined in the RFA, and the evidence on that point was not definitive. However, whether they are Sister Stops is irrelevant because each stop identified by Bembridge independently met the definition of “Public Bus Stop” in the RFA and was therefore eligible for Transit Proximity Points. Bella Vista has failed to demonstrate that Florida Housing’s preliminary determination of eligibility and selection for funding was contrary to the applicable rules, statutes, policies, or specifications of the RFA or was clearly erroneous, contrary to competition, arbitrary, or capricious.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Housing Finance Corporation enter a final order as to RFA 2019-102 finding that: The Berkeley Application is ineligible for funding; The Sierra Bay Application is ineligible for funding; The Solaris Application is ineligible for funding; The Metro Grande Application is eligible for funding; The Beacon Place Application is ineligible for funding; The East Pointe Application is eligible for funding and entitled to the Proximity Funding Preference; and The Bembridge Application is eligible for funding. DONE AND ENTERED this 6th day of April, 2020, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of April, 2020. COPIES FURNISHED: Christopher Dale McGuire, Esquire Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301 (eServed) Craig D. Varn, Esquire Manson Bolves Donaldson & Varn, P.A. Suite 820 106 East College Avenue Tallahassee, Florida 32301 (eServed) Amy Wells Brennan, Esquire Manson Bolves Donaldson & Varn, P.A. Suite 300 109 North Brush Street Tampa, Florida 33602 (eServed) Hugh R. Brown, General Counsel Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 (eServed) Michael P. Donaldson, Esquire Carlton Fields, P.A. 215 South Monroe Street, Suite 500 Post Office Drawer 190 Tallahassee, Florida 32302-0190 (eServed) Donna Elizabeth Blanton, Esquire Radey Law Firm, P.A. Suite 200 301 South Bronough Street Tallahassee, Florida 32301 (eServed) M. Christopher Bryant, Esquire Oertel, Fernandez, Bryant & Atkinson, P.A. Post Office Box 1110 Tallahassee, Florida 32302-1110 (eServed) Anthony L. Bajoczky, Jr., Esquire Ausley & McMullen, P.A. Post Office Box 391 Tallahassee, Florida 32301 (eServed) Maureen McCarthy Daughton, Esquire Maureen McCarthy Daughton, LLC Suite 3-231 1400 Village Square Boulevard Tallahassee, Florida 32312 (eServed) Michael J. Glazer, Esquire Ausley & McMullen, P.A. 123 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302 (eServed) Seann M. Frazier, Esquire Parker, Hudson, Rainer & Dobbs, LLP Suite 750 215 South Monroe Street Tallahassee, Florida 32301 (eServed) Betty Zachem, Esquire Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301 (eServed) Corporation Clerk Florida Housing Finance Corporation Suite 5000 227 North Bronough Street Tallahassee, Florida 32301-1329 (eServed)
The Issue The issue is whether the Petition to Establish the Bexley Community Development District I (Petition) meets the applicable criteria set forth in Chapter 190, Florida Statutes (2006),1 and Florida Administrative Code Rule Chapter 42-1. The purpose of the hearing was to gather information in anticipation of quasi- legislative rulemaking by the Florida Land and Water Adjudicatory Commission (Commission).
Findings Of Fact Development and Construction of Sandy Pines and Bella Grande Each Petitioner is a limited partnership that owns a low-income housing project. Heritage Partners Group VIII, Inc. is the general partner in each limited partnership. Heritage Partners Group VIII, Inc. owns one percent of the partnership interests in each partnership, and unaffiliated limited partners own the nearly all of the remaining interests The purpose of each Petitioner is to develop, construct, own, and lease a low-income housing project consisting of single- family detached houses. Petitioners structured the projects so that they would qualify for low-income housing tax credits (LIHTCs) allocated by Respondent and below-market interest second mortgages under the State Apartment Incentive Loan (SAIL) program administered by Respondent. These cases involve only the LIHTCs; Petitioners obtained the SAIL mortgage loans for satisfactory amounts. The partnerships retained Heritage Rural Housing, Inc. (HRH) to serve as the developer of the Sandy Pines and Bella Grande housing projects. On April 16, 1993, each partnership entered into a Development Services Agreement with HRH in which HRH assumes the responsibility of overseeing the development of the respective housing projects. Among the responsibilities of HRH under the agreement are the selection of the architect and engineer, maintenance of financial records, supervision of the general contractor, preparation of preliminary plans and specifications, and representation of the partnership with respect to zoning, building codes, occupancy permits, and all other local government matters. Customarily, the role of the developer is to acquire the site and obtain financing. The general contractor performs the site improvements. The developer may handle site preparation, such as running utilities and paving roads. These are aspects of horizontal construction, which also includes land clearing. But the general contractor is responsible for the vertical construction, which is the physical construction of the houses. The only difference in the two Development Services Agreements is the fee. The fee for the Sandy Pines project is $281,663--amended by agreement dated May 24, 1994, to $382,994-- and the fee for the Bella Grande project is $520,295--amended by agreement dated May 24, 1995, to $685,991. A couple of weeks after entering into the Development Services Agreements with HRH, the two partnerships entered into preliminary construction contracts with Heritage Construction Co., Inc. (Heritage; Heritage, HRH, Heritage Partners Group VIII, Inc., and Heritage Property Management, Inc. are the Heritage Companies) to act as the general contractor for each project. On April 30, 1993, each limited partnership entered into a Standard Form of Agreement Between Owner and Contractor (AIA Form A101). The preliminary contract price for Sandy Pines is $2,780,440, and the preliminary contract price for Bella Grande is $1,559,277. The Sandy Pines preliminary contract calls for construction of 45 single-family houses, and the Bella Grande preliminary contract calls for the construction of 30 single- family houses with 1200 square feet of living area, including three bedrooms and two bathrooms. Neither contract contained any plans and specifications. However, on the basis of these contracts, the partnerships filed applications with Respondent on April 30, 1993, for LIHTCs and possibly for SAIL loans as well. Heritage was formed in 1988 primarily to construct new multifamily developments. At the time of the two housing projects involved in these cases, Heritage had completed, over a two and one-half year period ending in August 1993, 15 low- income housing projects comprising 1512 units at a total cost of $14.7 million. Eight of these jobs were rehabilitation, and the remainder were new construction. Each project qualified for LIHTCs. At the time of the two housing projects involved in this case, Heritage had in progress two rehabilitation jobs for $8 million and a new construction job for $1 million. At the same time, Heritage was under contract for 15 construction and two rehabilitation projects involving a total of 1382 units for a total price of $52.2 million. The Heritage Companies are management, construction, and development companies. Michael McPhillips and his sister, Jacqueline McPhillips, own and control all of the Heritage Companies directly or indirectly. After entering into the preliminary construction contracts, Heritage commenced working on the two projects. Much of the work of Heritage on these two projects was done by Bill Stead and Don Pace. At the time, Mr. Stead was the vice president and director of construction for Heritage. He left the company in September 1995, although he continues to earn bonuses from past work and serve as a consultant to the company. Mr. Stead reported directly to Mr. McPhillips, who left all decisions to Mr. Stead, subject to Mr. McPhillips' approval of contracts. Mr. Stead is a licensed general contractor in Florida with considerable construction experience. He served as the qualifying agent for Heritage. Mr. Stead previously was employed by Cardinal Industries as vice president of construction for Florida. After Heritage entered into the preliminary construction contracts, Mr. Stead, on behalf of Heritage, assisted the owners in selecting the architect and engineers for the projects and then assisted the architect and engineers in value engineering the projects. Value engineering is a process under which less costly design alternatives are identified without any loss in quality or performance. Value engineering, such as in plumbing, saved about $400 per house in Bella Grande and $1000 per house in Sandy Pines. The design process was complex. The owners, architects and engineers, and Heritage examined over 50 designs before selecting the plans to be used at Sandy Pines and Bella Grande. Mr. Stead solicited bids from prospective subcontractors through February 1994. In the year since Heritage had entered into the preliminary construction contracts, subcontractors had become busier and prices had increased. Pricing was exacerbated by the remote locations of both projects, and Heritage had taken on a considerable amount of work. Mr. Stead then considered prime subcontracts. Eventually obtaining three prime subcontract bids for Bella Grande and two prime subcontract bids for Sandy Pines, Mr. Stead entered into intense negotiations with Picerne Construction Corp. (Picerne) in April and May 1994 toward hiring Picerne as the prime subcontractor for both projects. Mr. Pace, who is still employed by Heritage, is a certified general contractor in Florida with considerable construction experience. He had worked previously for Cardinal Industries under Mr. Stead at Cardinal Industries. Mr. Stead hired Mr. Pace on a contract basis for six months, ending on June 16, 1994, when Mr. Pace became a fulltime, permanent employee for Heritage. While a contract employee, Mr. Pace invoiced Heritage, HRH, the two partnerships, and possibly other Heritage-related partnerships. He was working on several projects, including Sandy Pines and Bella Grande. It is evident from the invoiced items, as it is conceded by Mr. Stead, that most of Mr. Pace's work prior to his fulltime, permanent employment with Heritage involved development, rather than construction. The invoices to Heritage cover services from January 3 through June 17, 1994. These invoices total more than $10,000 for services and costs, which are mostly travel and telephone. Through mid-March, the invoiced work for Sandy Pines and Bella Grande includes discussing a floodplain issue, meeting with engineers and subcontractors regarding the submission of bids, meeting with utility directors regarding sewer and water capacity, and preparing and revising construction budgets. On March 15, 1994, Petitioner Sandy Pines, Ltd. entered into a Standard Form of Agreement Between Owner and Contractor (AIA Form A101) with Heritage for the construction of Sandy Pines Subdivision. The subject of the contract is the construction of 45 single-family rental homes in Sebastian, Florida. The contract price is $2,609,940. The standard-form contract contains detailed provisions for progress payments and releases of liens. The contract requires the contractor to carry builder's risk insurance for the completed value of each house with the owner reimbursing the contractor for the cost of such insurance. The contract calls for the contractor to secure all building permits. The contract incorporates the general conditions set forth in the AIA A201 form. Article 1.1.3 defines the work, or subject matter of the contract, as the project contained in the agreement and the responsibilities of the contractor as set forth in all of the contract documents. Article 3.3.1 requires the contractor to supervise and direct the work, which is the construction and services required by the contract. The contractor is solely responsible for and has control over construction means, methods, techniques, sequences and procedures and for coordinating all portions of the work under the contract. Article 3.3.2 states that the contractor is responsible to the owner for the acts and omissions of the subcontractors. Article 3.5.1 provides that the contractor warrants to the owner that the materials and equipment will be of good quality, that the work will be "free from defects not inherent in the quality required or permitted," and that the work will "conform with the requirements of the [contract]." In Article 3.18.1, the contractor indemnifies the owner and architect from claims arising out of the performance of the work, if caused by the negligence of the contractor or any subcontractor. Article 3.9.1 requires the contractor to employ a competent superintendent "who shall be in attendance at the Project site during performance" of the work. Article 5.1.1 defines a subcontractor as an entity "who has a direct contract with a Contractor to perform a portion of the Work at the site." However, as previously noted, "Work" includes not only the project description, but also all of the contractor's responsibilities under the contract. Under this definition, Picerne did not assume responsibility for all of the work on either project. Addendum A to the contract is the Schedule of Values. Dated March 16, 1994, the schedule itemizes the following costs: DIV. DESCRIPTION COST 1 General Requirements $103,500 2A Site Work; Site improvements $ 0 2B Site Work; Lot improvements $250,507.68 3 Concrete $186,424.32 4 Masonry $335,563.78 5 Metal $ 4,660.61 6 Carpentry $530,144.16 7 Moisture Protection $ 95,542.46 8 Doors & Windows $ 97,872.77 9 Finishes $235,360.70 10 Specialties $ 19,807.58 11 Equipment $118,845.50 12 Furnishings $ 10,486.37 13 Special Construction $ 7,456.97 15A Plumbing $106,028.83 15B HVAC $ 87,386.40 16 Electrical $116,247.67 17 Misc. Site Cost $ 24,468.19 SUBTOTAL DIVISIONS 1-17 $2,330,304.00 BUILDERS OVERHEAD AND PROFIT $279,636.00 TOTAL COST OF HOUSE $2,609,940.00 Addendum B is the Construction Cost Schedule. Broken down by individual houses, this schedule shows a total hard cost of $51,784.53 per house. Total builder's overhead of $46,606 and total builder's profit of $233,030 generate a total per-house cost of $57,998.67. The Bella Grande construction contract dated March 15, 1994, between Bella Grande, Ltd. and Heritage is identical to the Sandy Pines contract except that the Bella Grande contract calls for the construction of 30 single-family rental homes in LaBelle for a total price of $1,541,904. The Schedule of Values shows a total of $1,376,700 for Divisions 1-17 and $165,204 for builder's overhead and profit. Unlike the Sandy Pines contract, the Bella Grande contract includes horizontal improvements or lot development. The hard cost of each house in Bella Grande is $45,890, including $2898.77 for lot development. The total builder's overhead is $27,534 and the total builder's profit is $137,670. The total per-house cost in Bella Grande is thus $51,396.80. From mid-March through the end of March, Mr. Pace's invoices to Heritage reflect the following work on Sandy Pines and Bella Grande: forwarding construction plans for review, preparing contract documents, preparing schedules of value, preparing bid forms, and meeting with "city and contractor" to start project. The invoice containing an entry for April 1, 1994, is the first mention of Picerne. On that date, Mr. Pace and possibly Mr. Stead visited Picerne to review plans and budgets for Sandy Pines and an unrelated project. On April 8, 1994, Mr. Pace visited Bella Grande to check on site development. On April 11, 1994, Mr. Pace reviewed Picerne's proposed costs for Sandy Pines. Later April entries include preparing a site plan for Bella Grande, coordinating with a power company for furnishing power to Bella Grande, meeting again with Picerne representatives concerning Bella Grande, meeting with city officials concerning right-of-way dedications at Bella Grande, and reviewing construction costs for Bella Grande. In early May, Mr. Pace met with a power company representative about furnishing power to Sandy Pines and updated the plat for Bella Grande. Mr. Pace met with a Picerne representative regarding Sandy Pines and other projects on May 10; the next day, he met with a representative of Wesco, which later submitted a prime subcontract bid for Bella Grande. On May 13, Mr. Pace "worked on house sub-contractor list on Bella Grande." Three days later he spoke with Bill Bennett regarding the plat for Bella Grande; Bennett Homes was the third prime subcontractor later to bid on the Bella Grande project. Among the invoice entries for late May and early June are completing the Sandy Pines contract for Picerne, inspecting the site development at Bella Grande, working on a contract addenda for both projects, finishing the contract for a meeting with Picerne, and inspecting site development at Bella Grande. On June 14, an invoice entry is for talking to an individual regarding the cost of wiring Bella Grande. On June 16, an invoice entry of three hours is for meeting with an individual regarding permitting at Bella Grande. In the meantime, on May 19, 1994, Heritage entered into payment and performance guarantees with the lender on both projects. In each guarantee, Heritage guarantees a $900,000 note executed by the limited partnership. Nine days before Mr. Pace became a fulltime, permanent employee of Heritage, on June 7, 1994, Heritage entered into a Standard Form of Agreement Between Contractor and Subcontractor (AIA Form A401) with Picerne. Through this subcontract, Picerne assumed the role of a prime subcontractor for Sandy Pines for a subcontract price of $2,330,280. The subcontract requires Picerne to obtain workers compensation insurance and property and general liability insurance, but Heritage was to provide the builder's risk insurance. Article 4.5.1 of the subcontract requires Picerne to warrant to the owner, architect, and contractor that the materials and equipment are of good quality, that the work will be "free from defects not inherent in the quality required or permitted," and that the work will "conform with the requirements of the [subcontract]." Article 4.6.1 provides that Picerne will indemnify and hold harmless the owner, contractor, and agents from claims arising out of the performance of the subcontractor's work to the extent caused by the negligence of the subcontractor or its subsubcontractors. The Schedule of Values attached to the subcontract is also different from the Schedule of Values attached to the contract. The values in the subcontract are as follows: Div. 1 Description General Requirements Cost $103,500 2A Site Work; Site improvements $ 0 2B Site Work; Lot improvements $135,225.00 3 Concrete $227,835.00 4 Masonry $ 81,000.00 5 Metal $ 0 6 Carpentry $516,375.00 7 Moisture Protection $110,475.00 8 Doors & Windows $116,100.00 9 Finishes $321,075.00 10 Specialties $ 10,260.00 11 Equipment $124,200.00 12 Furnishings $ 7,560.00 13 Special Construction $ 0 15A Plumbing $134,325.00 15B HVAC $ 89,775.00 16 Electrical $129,825.15 17 Misc. Site Cost $ 42,749.85 SUBTOTAL DIVISIONS 1-17 $2,150,280.00 BUILDERS OVERHEAD AND PROFIT $180,000.00 TOTAL COST OF HOUSE $2,330,280.00 Under the Construction Cost Schedule attached to the subcontract, the per-house hard cost is $47,484. After adding total builder's overhead of $72,000 and total builder's profit of $108,000, the total per-house cost is $51,784 for Sandy Pines. Under Addendum F, which is Miscellaneous Provisions, Article 4.2.1 provides that the subcontractor is to apply for and obtain all building permits, impact fees and connection and meter charges. On June 7, 1994, Heritage and Picerne entered into a subcontract on the same form for Bella Grande. The subcontract between Heritage and Picerne for Bella Grande is the same except the subcontract price is $1,290,000. The total hard cost of each house is $40,000. Heritage did not subcontract the responsibility for lot development, so there is no adjustment for this item, as there is in the Bella Grande contract between the owner and contractor. With total builder's overhead of $36,000 and total builder's profit of $54,000, the total per-house cost is $43,000. Another difference between the Sandy Pines and Bella Grande subcontracts is that Heritage and Picerne entered into a supplemental agreement regarding Bella Grande on July 1, 1994. Referring to the Bella Grande project and an unrelated project known as County Club Woods, the agreement states that the two parties would split equally the per-unit costs if they exceed the costs stated in the Construction Cost Schedule ($40,000 per house in Bella Grande). Vertical construction on the first units at Sandy Pines and Bella Grande commenced in the latter half of July 1994. Certificates of occupancy for houses at both projects were issued from mid-October 1994 through mid-February 1995. After Heritage entered into the prime subcontracts with Picerne, Mr. Pace, now as a fulltime, permanent employee of Heritage, continued to be directly involved with the Sandy Pines and Bella Grande projects. He took the architectural plans and met with the building officials, mastering the plans so as to facilitate the issuance of individual building permits later. The local- government permitting process is lengthy. For instance, it took 6-8 weeks at LaBelle. After construction began, Mr. Pace visited each site 2- 3 times weekly. Responsible for 7-8 Heritage sites during this time, Mr. Pace met with the project superintendent each visit, walked the site, and ensured that the proper subsubcontractors were on site. Keeping a daily log, Mr. Pace prepared a field report for the owners, typically every two weeks but never less often than monthly. Monthly, Mr. Pace prepared a draw review to ensure that the owner did not pay for more work than had been performed. Allocations of LIHTCs Section 42 of the Internal Revenue Code provides income tax credits for qualifying low-income housing expenditures. The amount of the tax credit is nine percent of the qualifying basis, and this nine percent credit is available annually for ten years. Calculation of the qualifying basis starts with the project cost, less the cost of land acquisition. The difference is then multiplied by a ratio of affordable units (or floor space, if a smaller ratio results) over total units (or floor space) in the proposed project. The amount of federal income tax credit is based on the population of each state. In Florida, the demand exceeds the supply of these credits, so Florida's allocation plan includes procedures for the allocation of these limited credits. Section 42(m)(2)(A), Internal Revenue Code, limits the credit allocation for any project to the amount Respondent "determines is necessary for the financial feasibility of the project and its viability as a qualified low- income housing project throughout the credit period." Section 42(m)(2)(B)(iv), Internal Revenue Code, requires Respondent, in determining the feasibility and viability of the project, to consider "the reasonableness of the developmental and operational costs of the project." Certain guidelines have evolved in the LIHTC and SAIL programs to limit the fees payable to developers and contractors, on which credits may be calculated. The portion of an allocation based on developers' fees is limited to fees constituting no more than 20 percent of a project's hard costs plus land acquisition. The 20 percent developer's limitation, which is not a promulgated rule, is not directly involved in these cases. Another guideline, which is contingently involved in these cases, is that the portion of an allocation based on contractor's fees is limited to fees constituting no more than 14 percent of a project's hard costs. The so-called "626 rule" breaks the contractor's maximum fees into 6 percent general requirements, 2 percent overhead, and 6 percent profit. This guideline is directly relevant in these cases only if the larger contractor's fees payable to Heritage are disregarded. The contractor's fees payable to Heritage are within the 14 percent guideline, so if allocations were based on those fees, Heritage would not challenge the 14 percent limitation. If the contractor's fees were limited to the smaller fees paid Picerne, Petitioners would challenge the 14 percent limitation to try to increase its allocation of credits. In the related cases, Petitioners have thus challenged as an unpromulgated rule the 14 percent contractor's limitation. The 14 percent limitation, which is not promulgated as a rule, is recorded in two documents: the Best Practices Manual for the LIHTC program and the Underwriting Guidebook. It is undisclosed when the Best Practices Manual first included the 14 percent limitation, but this limitation has been in effect for about three years. The reference to the 14 percent limitation was included in the Underwriting Guidebook after March 1995, or else the Underwriting Guidebook itself was not in existence until after March 1995. The Underwriting Guidebook, which was prepared jointly by Respondent and underwriters, prohibits the allowance of general contracting fees in excess of 14 percent of hard costs. An owner of a qualifying low-income housing project must file its application with Respondent for an allocation of tax credits at the inception of the project for which the credits are sought. Respondent makes a preliminary or provisional allocation pending receipt of the owner's final costs reports and final certification and approval by Respondent. After receiving applications from the two partnerships for their respective projects, Respondent preliminarily approved the projects under the LIHTC and SAIL programs. The preliminarily approved tax credits under the LIHTC program were $466,705 annually for Sandy Pines and $248,298 annually for Bella Grande. As is typically required, the two partnerships obtained Respondent's approval to carryover the credits, so that they had to be used for qualifying housing completed on or before December 31, 1995. The carryover tax credits were in the same amount as the preliminarily allocated tax credits. Upon receipt of the final cost reports, Respondent referred the materials to its independent underwriter, as is customary. The underwriter employs an independent construction consultant for the lending community. The underwriting process for the SAIL and LIHTC programs is largely identical. The same group of underwriters and consultants work in both programs, using substantially the same underwriting standards, including the 14 and 20 percent limitations. The Underwriting Guidebook applies to the SAIL and LIHTC programs. The Underwriting Guidebook states that the underwriters are to review project costs "to determine whether the project can be constructed . . . at a cost which is reasonable and in lines with costs of comparable projects in the area." The general-contractor issue emerged around March 1995 when the SAIL loans were under final cost review prior to funding. The underwriter relied on advice given by the construction consultant. Neither the underwriter nor the construction consultant is a certified or licensed contractor. However, the construction consultant questioned the "layering" of the contractors when Heritage entered into the prime subcontracts with Picerne. He concluded that contractor's fees should be limited to the amounts stated in the Picerne prime subcontracts. This was the first or possibly second time in the SAIL or LIHTC program that Respondent had encountered a prime subcontract. The underwriters raised the issue late in the processing of the SAIL mortgage loans. Typically, these loans are funded before construction, but they were not funded for these projects until after construction. In any event, Respondent decided not to reduce the amount of the SAIL loans by disregarding the fees paid Heritage as the general contractor. Implicitly rejecting the suggestion that the representatives of the SAIL program did not have the time to investigate and resolve the contractor issue, the administrator of the SAIL program testified that she believed that Heritage should have been treated as the general contractor. She testified that Respondent should have implemented prospectively the policy to disregard fees paid to general contractors which entered into prime subcontracts. Representatives of the LIHTC program pursued the contractor issue. By letters dated September 12, 1995, Respondent advised Heritage Partners Group VIII, Inc. that, after reviewing the final cost reports and evaluating the "credit need" for each project, Respondent decided to limit the annual tax credit allocation. The allocation for Sandy Pines would be $409,902, instead of the preliminary carryover credit of $466,705, and the allocation for Bella Grande would be $228,075, instead of the preliminary carryover credit of $248,298. These reduced allocations were the result of substituting the lower contractor's fees in the Picerne prime subcontract for the higher contractor's fees in the Heritage contract. Because the Picerne fees were below the 14 percent limitation, the underwriter effectively increased them to 14 percent to offset to a small extent the loss of tax credits. At no time did either the underwriter or construction consultant determine that the contractor's fees were unreasonable, that the overall project costs were unreasonable, or that either project was feasible and viable with the reduced allocation. At no time did the underwriter or construction consultant object to the affiliation between Heritage and the owners. To the contrary, the administrator of the LIHTC program, who unlike her counterpart in the SAIL program testified that Heritage should not be treated as the general contractor, admitted that she favored the affiliation because it gave the general contractor added incentive to build a superior product. She likewise commended Heritage for its past projects, disavowed any problems with the construction on the Sandy Pines or Bella Grande projects, and stated that Respondent encouraged the type of single-family detached, low-income housing provided by Petitioners. As to project costs, the construction consultant actually was surprised by the low cost of the Bella Grande project. He prepared an Existing Property Evaluation in March 1995 for each project. He described the Bella Grande houses as all four bedroom, two bathroom houses with a one-car garage. Half the houses consist of 1725 square feet, and half the houses consist of 1775 square feet. Situated on lots about 75 feet by 172 feet, the houses feature six different front elevations. The consultant calculated their construction costs, including general requirements, overhead, and profit, at $22.22 per square foot, which "appears lower than expected, considering what is being provided." The Existing Property Evaluation for Sandy Pines describes similar houses. Noting construction costs of $27.87 per square foot, the report states that these costs, which include general requirements, overhead, and profit, "appear. . . reasonable, considering what's being provided, although slightly higher than expected." The construction consultant's determination that Picerne served as the real general contractor on the two projects is based primarily on the existence of the two prime subcontracts. The consultant did little investigation into the factual background or distinctions between Heritage and Picerne, including, as discussed below, the assumption by the former of considerable financial risks not assumed, or charged for, by the latter. Even at the final hearing, the consultant had no idea what the role of Heritage was in the two projects. Respondent's subsequent review of the contractor issue involved other factors, such as who pulled the permits. But the review failed to account for the differences in financial risk confronted by Heritage and Picerne, the pricing for such additional exposure, services provided by Heritage and not by Picerne, the feasibility and viability of the projects with the reduced allocations, and the overall reasonableness of the project costs under the Heritage contract prices. The underwriter relayed to Respondent the concerns of the construction consultant concerning the identity of the general contractor in the event of a prime subcontract. Sharing the concerns of its underwriter and the consultant, Respondent's staff met with outside consultants and ultimately decided to reduce the LIHTC allocations on both projects by treating the Picerne prime subcontract as the contract and maximizing the fees to Picerne to the 14 percent limit. In October 1995, Respondent's board members confirmed the reduction of Petitioners' tax credit allocation. Respondent's board members confirmed the 20 percent limitation on developer's fees ("exclusive of land," which is incorrect) and 14 percent limitation on contractor's fees ("hard costs" only). Noting that both of these formulas have been in effect since 1991, the board members stated that these limits have been in the LIHTC Best Practices Manual since it was developed in 1993. The board members stated that the 14 percent cap was a "'generally accepted industry standard.'" At the October 1995 meeting, Respondent's board members approved a definition of general contractor as follows: "General Contractor" means a general contractor licensed in the State of Florida who performs not less than ten percent (10 percent) of the actual construction of the project, not including design or supervisory services, with its own employees and, with respect to the owner, other contractors, subcontractors, laborers and materialmen, has ultimate authority and respon- sibility with respect to construction of the project. Respondent's board members noted that a task force of Respondent's employees and representatives of its independent credit underwriters had developed a listing of general contractor responsibilities to be including in the Underwriting Guidebook. The responsibilities are: --Hires subcontractors and pays subcontractors --Negotiates and issues purchase orders for materials --Supervises and schedules all labor and materials throughout the construction process --Typically carries builder's risk, general liability, and workmen's compensation insurance on the project --Typically processes and acquires the building permits --Schedules inspections of the construction with local government authorities as required --Coordinates with the owner, architect, and engineer during the construction process --Has a daily presence on the site to supervise and oversee the entire construction process Respondent has since promulgated a rule regarding the definition of a general contractor. However, the parties agree that the rule is of no direct applicability to these cases because it cannot be applied retroactively. Heritage as General Contractor If not unprecedented in 1993, single-family detached, low-income rental housing was highly unusual at the time. Multifamily housing was and remains far more prevalent, despite the growing need for larger homes to shelter larger families unable to afford market rents or house payments. The construction and ownership of single-family detached, rental houses qualifying for LIHTCs pose certain risks to their owners. First, due to a combination of legal and market reasons, the partnerships must retain ownership of the homes for an extended period of time, as much as 30 years. Second, for the same reasons, the single-family houses produce little operating income for maintenance, so it is crucial that the houses be as maintenance-free as possible. At the time of these projects, Heritage was a pioneer in the construction of single-family detached, low-income housing. The quality of workmanship in Heritage's projects is very high, and the maintenance costs to date for the two projects have been low. Heritage lent its valuable experience in the construction of such specialty housing to both partnerships. The key reason why Heritage is the general contractor on both projects is the financial risk that Heritage assumed, as a contractor, in these projects. Heritage committed to firm contract prices in March 1994 without the benefit of firm quotes from a single prime subcontractor or a variety of subcontractors. A couple of months later, Heritage provided payment and performance guarantees to the main lender on both projects. In effect allowing the lender, in the event of default, to receive contract payments otherwise due to the contractor, these guarantees cover a total of $1.8 million in notes executed by the two limited partnerships. The guarantees appear to be substantive because the lender implied that it would not have made the loans without Heritage's guarantees or without Heritage's participation as the general contractor on each project. Ultimately, Heritage extended the builder's warranty to the owner, and, at all times, Mr. Stead's general contractors license guaranteed the work at each site. Heritage even agreed with Picerne to split additional costs over a specified amount at Bella Grande. And Heritage maintained builder's risk insurance, as well as general liability and, at times, workers compensation insurance. These are real and substantial risks, and they are the risks typically associated with general contractors, not subcontractors, owners, or developers. Heritage is not a shell corporation, but has a net worth in the six-figure range, according to credit underwriting done in connection with these deals. Heritage charged for these risks in the contract, and Picerne did not. Picerne would not have undertaken the responsibilities of a general contractor for the prime subcontract prices. Mr. Stead performed real work for Heritage, as a general contractor. These projects were still relatively early in the era of single-family detached, low-income housing, and Mr. Stead provided valuable experience in this area. Now that the Heritage Companies and the partnerships with which they are involved have acquired more experience in this type of housing, and perhaps prompted by anti-layering concerns of Respondent and similar agencies in other states, the companies and partnerships use unaffiliated general contractors, which evidently do not enter into prime subcontracts. However, consistent with a finding that Mr. Stead provided valuable contracting services, rather than owner or developer services, he no longer works for Heritage. Most of Mr. Pace's work prior to fulltime, permanent employment with Heritage involved development. But he performed valuable contractor work on Heritage's behalf after his employment in mid-June 1994, which was at least one month before any construction began and four to eight months before construction was completed on individual houses. Mr. Pace served as a project manager, not a project supervisor. It is not unusual in the construction industry for a general contractor, which necessarily assumes the responsibility for project supervision, to contract with a nonemployee to perform daily supervision on the job site. On these projects, Picerne itself subcontracted with a nonemployee for project supervision. And Mr. Pace was in routine contact with the supervisor and Picerne representatives, identifying problems and suggesting solutions in a manner that would not be typical of an the involvement of an owner or even a developer in a construction project. The construction paperwork cuts both ways on the contractor issue. For the most part, the parties, including subsubcontractors and suppliers, treated Heritage as the general contractor. Although Heritage assumed the responsibility to coordinate with the architect and communicate with the owners, Picerne likely scheduled the subsubcontractors and delivery of materials. It is not unusual for a general contractor in Florida to enter into a prime subcontract under which the subcontractor assumes the types of responsibilities that Picerne assumed in these two projects. Despite the language of the AIA form A101 implying that a subcontractor performs only a "portion of the Work" under a subcontract, the existence of a prime subcontract in Florida does not change the role of the general contractor as the contractor under the contract. The Schedules of Values attached to Picerne's subcontracts price individual items differently than they are priced in the Schedules of Values attached to Heritage's contracts. To some extent, the differences reflect the fact that Picerne's total prices are lower than Heritage's total prices. To some extent, the differences are due to the practice of each entity to include the same expenditures in different divisions or categories. Heritage merely backed these item prices out of the total contract prices by applying percentages for each item. But, again, Heritage assumed the risk of this manner of pricing its contract. Heritage retained nearly ten percent of the "general requirements" line items for such expenses as salaries and travel expenses of Heritage project management for these two projects. In discharging its administrative duties for the projects, Heritage maintained 30 different file designations in three boxes. In mastering the permits, Heritage expended 80-160 manhours at LaBelle for Bella Grande and at least 160 hours at Sebastian for Sandy Pines. Mastering the building plans into the permitting system of each municipality, Heritage assured that building officials would issue individual permits readily to Picerne, which pulled the permits. It is not contrary to custom in Florida for the prime subcontractor to pull building permits. And where, as here, the contractor has mastered the permits, the fact that the prime subcontractor pulls the permits is entitled to little weight in determining which entity is the real contractor. Heritage assured that subsubcontractors and suppliers were paid and obtained releases of liens so that the owners would not make progress payments prematurely. Some of the mechanics' lien paperwork was erroneously completed, but little weight attaches to this documentation completed typically by persons with little if any knowledge concerning the relationship of Heritage and Picerne to the projects. Likewise, Picerne sometimes listed itself under the contractor heading in Request for Payment forms, but it always submitted these to Heritage, rather than directly to the limited partnership. And sometimes Picerne executed final affidavits and releases of lien as a contractor. However, the completion of these forms, which are completed by contractors and subcontractors alike, did not reflect the actual roles of the two entities. Picerne was sometimes sloppy with the paperwork, even misidentifying itself as a related company, Picerne Development. Toward the end of construction, a Heritage representative would walk through the units with a Picerne representative compiling punchlists. When represented, the partnerships were represented by an employee of Heritage Property Management, Inc. At the conclusion of each project, Heritage provided each partnership with a Final Contractor's Affidavit and Final Release of Lien. Subsequently, Heritage, not Picerne, took care of items needing correction. Reasonableness of Projects' Costs, including Heritage's Contractor's Fees, and Feasibility and Viability of Projects After Reductions of LIHTC Credit Allocations The total project costs for Sandy Pines and Bella Grande are reasonable, even with the contractor's fees payable under the contract to Heritage. The impact of the reallocation of tax credits in these cases is large. The projects have been completed. As is customary in the industry, the limited partnerships have sold the tax credits to obtain crucial equity for the projects. Any loss of tax credits would double the loss to the limited partnerships, which sold the tax credits at 50 percent of face value, but are contractually obligated to reimburse the buyers of the tax credits at 100 percent of face value. The feasibility and viability of each partnership depends on the allocation of the full amount of the preliminarily allocated and carryover tax credits without any reduction whatsoever. The rental houses produce little rental income and will require maintenance over the extended period of time that the partnerships will own them. HRH has deferred nearly all of the developer's fees, which were not at the 20 percent limit until effectively raised by the underwriter after disallowing the contractor's fee paid Heritage. Federal law requires that the partnerships pay these fees within 10 years, which is well in advance of when the partnerships are likely to sell the properties. If the partnerships lack the funds at that time to pay the fees, Heritage Partnership Group VIII, Inc. must advance them to the partnerships, which will pay them to HRH. This transaction would only represent an additional investment by the Heritage Companies in the partnerships, rather than the receipt of any real income. Unrelated to the present issue involving the allocation of tax credits, the partnerships already experienced a financial setback when they received considerably less on the primary loans than they had anticipated. The loss of the value of the disallowed tax credits would have grave consequences on the financial ability of the owners to discharge their maintenance responsibilities to the low-income tenants occupying these houses.
Recommendation It is RECOMMENDED that the Florida Housing Finance Agency enter a final order allocating to each Petitioner all of the low-income housing tax credits that were earlier allocated in the preliminary and carryover allocations. ENTERED on May 13, 1996, in Tallahassee, Florida. ROBERT E. MEALE 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 on May 13, 1996. APPENDIX Rulings on Petitioners' Proposed Findings 1-54: adopted or adopted in substance. 55: although true contractually, there is no evidence that Heritage discharged this responsibility itself. Instead, it appears that Heritage subcontracted this responsibility to Picerne. 56-68: adopted or adopted in substance. 69-71: rejected as subordinate. 72-73: adopted or adopted in substance. 74-75: rejected as subordinate. 76-77: adopted or adopted in substance. 78-80: rejected as subordinate. 81-84: adopted or adopted in substance. 85-87 (first sentence): rejected as subordinate. 87 (remainder)-95: adopted or adopted in substance. 96-97: rejected as repetitious. 98: adopted or adopted in substance. Rulings on Respondent's Proposed Findings 1-22 (except for last sentence): adopted or adopted in substance. 22 (last sentence): rejected as legal argument. 23-24: adopted or adopted in substance. 25: rejected as unsupported by the appropriate weight of the evidence. 26-31 (except last sentence): adopted or adopted in substance. 31 (last sentence): rejected as unsupported by the appropriate weight of the evidence. 32-36: adopted or adopted in substance. 37: rejected as unsupported by the appropriate weight of the evidence. Work includes the responsibilities retained by Heritage as the contractor. In terms of the project descriptions, this proposed finding is also not entirely accurate. 38-39: adopted or adopted in substance. 40: rejected as legal argument. 41-51 (first sentence): adopted or adopted in substance. 51 (remainder): rejected as unsupported by the appropriate weight of the evidence. 52-59: adopted or adopted in substance. 60 (first two sentences): rejected as subordinate. 60 (remainder)-65 (except last clause): adopted or adopted in substance. 65 (last clause): rejected as unsupported by the appropriate weight of the evidence. 66-70 (first sentence): adopted or adopted in substance. 70 (second sentence): rejected as unsupported by the appropriate weight of the evidence. (third sentence)-71 (first sentence): adopted or adopted in substance. (remainder): rejected as unsupported by the appropriate weight of the evidence. 72-73 (first sentence): adopted or adopted in substance. 73 (second sentence): rejected as unsupported by the appropriate weight of the evidence. 74-77: rejected as recitation of evidence. 78-81: rejected as unsupported by the appropriate weight of the evidence. 82: adopted or adopted in substance, except as to "some unspecified role" and implication diminishing Heritage's substantial involvement in mastering the permits. 83-86: rejected as unsupported by the appropriate weight of the evidence. 87: adopted or adopted in substance. 88-89 (second sentence): adopted or adopted in substance. 89 (remainder)-90: rejected as unsupported by the appropriate weight of the evidence. COPIES FURNISHED: Susan J. Leigh, Executive Director Florida Housing Finance Agency 227 North Bronough Street, Suite 500 Tallahassee, Florida 32301-1329 James F. Murley, Secretary Department of Community Affairs 2740 Centerview Drive Tallahassee, Florida 32399-2100 Stephanie M. Gehres, General Counsel Department of Community Affairs 2740 Centerview Drive Tallahassee, Florida 32399-2100 Alfred O. Bragg, III Assistant General Counsel Department of Community Affairs 2740 Centerview Drive Tallahassee, Florida 32399-2100 Thomas A. Sheehan, III Jon C. Moyle, Jr. Moyle Flanagan 210 South Monroe Street Tallahassee, Florida 32301
The Issue The issue for determination in this proceeding is whether proposed changes to a previously adopted Development of Regional Impact Development Order should be approved. The City Council for Boca Raton, Florida voted on July 24, 1990, not to approve two resolutions that would have amended a Development of Regional Impact Order approved by the City Council on January 12, 1988.1 On September 14, 1990, Petitioners submitted an Amended Notice of Appeal and Petition for Administrative Hearing. The matter was referred to the Division of Administrative Hearings for assignment of a hearing officer on November 21, 1990, and assigned to Hearing Officer Stuart Lerner on November 28, 1991. A formal hearing was scheduled for May 22, 1991. The matter was transferred to the undersigned on May 20, 1991. The parties waived a formal hearing and stipulated to substantially all of the evidence of record. The parties disagreed on the applicable burden of proof, and Respondent made evidentiary objections to three documents in the stipulated record. The parties agreed that issues regarding the burden of proof and evidentiary objections would be disposed of in this Recommended Order. The parties further agreed that rulings made in this Recommended Order regarding the burden of proof and evidentiary objections would not affect the quantity or quality of proof that would have been presented by either party if a formal hearing had been conducted. The stipulated record consists of 74 exhibits. The stipulated record was amended to include Exhibits 73 and 74 pursuant to the Order entered on July 2, 1991, granting the Joint Motion To Modify Order Of The 28th Day Of May, 1991, And Supplement The Record. /2 All exhibits were admitted in evidence pursuant to the stipulation of the parties except for Exhibits 70-72. /3 Ruling on the admissibility of Exhibits 70-72 was reserved for disposition in this Recommended Order. Since no formal hearing was conducted, there was no transcript. Proposed findings of facts and conclusions of law were timely filed by the parties on June 20, 1991. The parties' proposed findings of facts are addressed in the Appendix to this Recommended Order.
Findings Of Fact Background 1. A Development of Regional Impact ("DRI") for a proposed project known as the Knight Commerce Centre was approved by the City of Boca Raton, Florida (the "City") on January 12, 1988, when the City Council approved Resolution 14- The proposed project consists of professional offices, banks, financial institutions, and a hotel/motel to be constructed on approximately 70 contiguous acres within the City. The site of the proposed project is not in an area of critical state concern. The site of the proposed project was originally zoned M-3 under the local zoning ordinance. An M-3 designation permitted land use contemplated in the proposed project only upon conditional approval. Petitioners received conditional approval from the City Council on January 13, 1987, of the Master Plan and land use contemplated in the proposed project. Conditional approval of the uses and Master Plan was based upon Ordinance No. 3377 which is now codified as Ordinance Nos. 25-66.10 and 25-80. Ordinance No. 3377 permitted conditional approval of offices, financial institutions, and hotels in the district zoned M-3. Subsequent to conditional approval of the uses and Master Plan on January 13, 1987, but prior to the approval of the Development of Regional Impact Development Order on January 12, Resolution 3-87 was approved by the City Council on January 13, 1987. It granted conditional use and Master Plan approval of the proposed project "subject to certain conditions set forth is such resolution and to all requirements set forth in the final DRI Development Order." The Development Order, in relevant part, contained the following conditions: Failure to initiate construction and physical development within three years from the effective date of the Development Order, or failure to maintain reasonable progress toward completion of the development after having initiated construction in a timely manner, shall constitute a substantial deviation and the development shall be subject to further review pursuant to Section 380.06, Florida Statutes ["Condition 2"]; No additional building permits shall be issued after December 31, 1993, unless a traffic study has been conducted by the developer, submitted to and approved by the City of Boca Raton, Palm Beach County, and Treasure Coast Regional Planning Council that demonstrates that the regional roadway network can accommodate a specified amount of additional Knight Commerce Centre generated traffic and growth in background traffic beyond 1993 and still be maintained at Level of Service C during average annual conditions and Level of Service D during the peak season ["Condition 38"]; Compliance dates for commencing development and complying with conditions of approval and phasing requirements are listed in the conditions of approval. The Development Order shall terminate five years after the effective date of the Development Order [January 12, 1993; "Section 5" of the Development Order]; and The City of Boca Raton specifically agrees that the Knight Commerce Center Development of Regional Impact shall not be subject to downzoning, unit density reduction, or intensity reduction for a period of five years from the effective date of the Development Order, unless the City of Boca Raton can demonstrate that substantial changes in the conditions underlying the approval of the Development Order have occurred or that the Development Order was based on substantially inaccurate information provided by the developer, or that the change is clearly established by the City of Boca Raton to be essential to the public health, safety, or welfare ["Section 6" of the Development Order]. The Development Order was approved by the City Council pursuant to Resolution 14-88. Resolution 14-88 approved the Development Order and was adopted by City Council on January 12, 1988. Conditions 24-36 of the Development Order condition construction and phasing of the proposed project on roadway improvements that include construction of the 1-95/Congress Avenue interchange and the six-laning of: Congress Avenue between Linton Boulevard and Yamato Road; Linton Boulevard between Congress Avenue and Military Trail; and Yamato Road between Military Trail and IBM Way. Condition 24 of the Development Order generally prohibits the issuance of any building permits for construction of the proposed project until the Florida Department of Transportation indicates in writing its ". . intent to include within the first year of its five-year work program and to construct the 1-95/Congress Avenue interchange, park and ride facility, and [high occupancy vehicle] extension to Linton Boulevard . . . ["Condition 26"]." Conditions 29-36 generally prohibit the issuance of additional building permits for construction in excess of prescribed amounts of square footage area prior to the letting of contracts for construction of specified roadway improvements. The Florida Department of Transportation did not include the 1- 95/Congress Avenue interchange and park and ride facility in the first year of the five year work program. Petitioners sought modifications to the time frames in the Development Order for the purpose of complying with Conditions 24-38. In March, 1990, Petitioners filed a petition with the City and the Florida Department of Community Affairs. The petition, in relevant part, sought the following amendments to the Development Order: an extension of two years for commencement of the proposed project from January 12, 1991, until January 12, 1993; an extension of two years for traffic studies required in Condition 38 from December 31, 1993, until December 31, 1995; and an extension of four years for the termination date of the Development Order from January 12, 1993, to January 12, 1997. The proposed amendments were reviewed and analyzed by the appropriate state and local agencies. Both the Florida Department of Community Affairs and the Regional Planning Council determined that the extension of four years for the termination of the Development Order did not create a substantial deviation within the meaning of Section 380.06, Florida Statutes. An extension of the date of buildout, or any phase thereof, of three years or more, but less than five years is statutorily presumed not to create a substantial deviation. /7 The Florida Department of Community Affairs determined that the extension of time for traffic studies created a presumption of substantial deviation pursuant to Section 380.06(19) (e) (3), Florida Statutes. The Regional Planning Council determined that both the extension of time for traffic studies and the extension of time for commencement of the proposed project created a presumption of substantial deviation. The Regional Planning Council made its determination with respect to the extension of time for commencement of the proposed project based upon Section 380.06(19) (a), Florida Statutes. Petitioners rebutted the presumptions of substantial deviation to the satisfaction of the staff of the state and local agencies. Petitioners submitted a traffic analysis, updated traffic information, and additional conditions to the proposed amendments. The traffic analysis and information and additional conditions resolved the concerns of the Regional Planning Council, the Florida Department of Community Affairs, and the City Engineering Department. The City Planning and Zoning Board (the "Zoning Board") conducted public hearings and, on July 19, 1990, recommended approval of the Petitioners' petition for amendments to the Development Order. The Zoning Board found that the proposed amendments do not constitute a substantial deviation and that the proposed amendments are consistent with the Comprehensive Plan. The Zoning Board approved the proposed amendments with additional conditions by a vote of 5-0. The Regional Planning Council notified the City on July 19, 1990, that issues arising from the proposed amendments had been resolved. The Regional Planning Council found that additional traffic studies demonstrated that the regional roadway network could continue to operate at the prescribed level of service and that ". . . the time extensions to the commencement and buildout dates do not create the likelihood of additional new and previously unreviewed regional impacts pursuant to subsection 380.06(19) (a), F.S." The Florida Department of Community Affairs notified the City on July 23, 1990, that ". . . the proposed time extensions to the commencement, buildout and traffic study do not create the likelihood of additional adverse impacts to regionally significant transportation facilities . . . ." The Department found that once the proposed project was built out the roadway network would continue to operate at the level of service sought by the City. The proposed amendments and additional conditions were embodied in Resolution 143-90 and submitted to the City Council. The City Council conducted a public hearing and considered Resolution 143-90 on July 24, 1990. The record considered by the City Council included the recommendations for approval by the Regional Planning Council, Florida Department of Community Affairs, the Zoning Board, and the City Staff. The City Council called no witnesses and introduced no additional facts to rebut the recommendations for approval in the record. The only witnesses called by the City at the public hearing on July 24, 1990, were the City Engineer and City Planner. The City Planner presented the staff opinion which was: In summary, the City staff, the Treasure Coast Regional Planning Council staff, the Department of Community Affairs staff and the Planning and Zoning Board would recommend approval of the proposed modifications for the Knight Commerce Center DRI development order with proposed conditions. The Assistant City Attorney did prepare an amendment to the resolution of approval before you which incorporates those proposed amendments. The City Council voted 3-2 on July 24, 1990, to deny Resolution 143- The City Council did not explain the reasons for denying the proposed changes or delineate the criteria which would have made the proposed changes acceptable. The City Council did not make a determination that the proposed amendments either constituted a substantial deviation or failed to satisfy the criteria in Sections 380.06(12) and (14), Florida Statutes /8 De Novo Findings The proposed changes to the Development Order, including the additional conditions, do not constitute substantial deviations. The additional conditions to the proposed changes require additional roadway improvements including traffic lanes at designated intersections and a flyover to be built at Congress Avenue and Yamato Road. The proposed extension of the commencement date by two years is not a substantial deviation pursuant to Section 380.06(19) (e)2, Florida Statutes. The proposed extension of the date of buildout by four years is presumed under Section 380.06(19) (c) not to create a substantial deviation. No persuasive evidence was presented in this proceeding to rebut that statutory presumption. The statutory presumption in Section 380.06(19) (e) (3) that the proposed extension of the traffic study creates a substantial deviation was rebutted by competent and substantial evidence in the form of an updated traffic study, background information, and additional roadway improvements. No persuasive evidence was presented in this proceeding to support a finding that Petitioner did not rebut the statutory presumption regarding the traffic studies.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that the Florida Land and Water Adjudicatory Commission enter a Final Order approving the proposed changes with additional conditions. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 3rd day of September, 1991. DANIEL MANRY 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 5th day of September, 1990.
The Issue Whether the Petition to Establish the Dovera Community Development District meets the criteria established in Chapter 190, Florida Statutes.
Findings Of Fact A The property which is the subject of the Petition in this case consists of approximately 410 contiguous acres. All of the subject property is located in unincorporated Seminole County. Petitioner presented the testimony of John R. Maloy. Maloy is Corporate Vice President of A. Duda & Sons, Inc. and Executive Vice President of The Viera Company, positions he has held for approximately eight years. The Viera Company, the Petitioner, is a wholly owned subsidiary of A. Duda & Sons, Inc. Maloy is responsible for planning and disposition of real estate assets. He is also responsible for those projects which have reached the development phase. It was Maloy's responsibility in this matter to select and work with the team of professionals who prepared the Petition. He also reviewed the contents of the Petition and approved its filing. Maloy identified Petitioner's Composite Exhibit B, which is a copy of the Petition and its attached exhibits as filed with the Commission. Maloy stated that, for purposes of clarification, a sentence should be added to page 3 of the Petition indicating that the current version of the Seminole County Comprehensive Plan is dated September, 1991. Maloy then testified that, to the best of his knowledge, the statements in the Petition and its attached exhibits are true and correct. Other witnesses testifying on behalf of Petitioner similarly confirmed the accuracy of the Petition and its attached exhibits, as supplemented at hearing. The Viera Company, a Florida corporation, is owner of 100 percent of the real property to be included in the District. As required by statute, the owner has given its written consent to the establishment of the proposed District. Maloy was designated as the agent of The Viera Company to act on its behalf with regard to any matters relating to the Petition. No real property within the external boundaries of the District is to be excluded from the District. All of the land to be included in the District is the subject of a DRI Development Order which has been approved by the Commission. The five persons designated in the Petition to serve on the initial board of supervisors are: Jack Maloy 135 Highway A1A North Satellite Beach, FL 32937 Don Spotts 1113 Tuskawilla Road Winter Springs, FL 32708 David Duda 7979 Dunstable Circle Orlando, FL 32817 Tracy Duda 1601 Highland Road Winter Park, FL 32789 Donna Duda 2436 Mikler Road Oviedo, FL 32765 All of them are residents of the State of Florida and citizens of the United States. Existing residential communities are located on the north and west sides of the proposed District. To the south and east, the proposed District is generally bordered by the Seminole County Expressway and by a large undeveloped tract to the south. The land in the area to be included in the proposed District is currently undeveloped and is used for agricultural purposes, principally cattle grazing. All of the land to be included in the District has been planned as a single, mixed-use community to be developed pursuant to a development order for the DLI Properties Development of Regional Impact approved by the Commission on October 10, 1989, and issued to Duda Lands, Inc. Duda Lands, Inc. is now The Viera Company. Creation of the District will not constitute any change to the DRI development, its plan, its timing, its design, or anything else related to the DRI. The proposed District is a mechanism for financing infrastructure, and any change that might be made in the future would be subject to all requirements and conditions specified by statute. For example, establishment of the District will result in no change with respect to the present requirement that the District donate utility lines to the County. The proposed development of lands to be included in the District contemplates construction of significant commercial and office/showroom space, together with some residential units and hotel rooms over a twelve-year period. Creation of theproposed District will not constitute any change in the basic character of the development. With respect to the provision of infrastructure and services, it is presently anticipated that the CDD will construct or otherwise provide for a surface water management system, roads, street lighting, landscaping, culverts, and water and sewer facilities. With Seminole County's consent, the CDD will also exercise other special powers, as authorized under Section 190.012(2), Florida Statutes, for the purpose of providing facilities for parks and recreation, security, and mosquito control. Capital costs of these improvements are presently intended to be borne by the District. There is no intent to have the District apply for any of the private activity bond allocation monies available. Mr. Maloy testified that Petitioner has no intent to have the District exercise its ad valorem taxing authority. Mr. Maloy's unchallenged and unrefuted testimony in this regard is accepted. From the perspective of The Viera Company, creation of the proposed District is important for the construction, operation, long-term management and maintenance of major infrastructure for the development. Mr. Maloy testified that the CDD the best alternative for delivering the needed community development facilities and services and that the creation of the CDD will also help ensure that District residents pay for the costs of the necessary infrastructure that will be constructed to serve them. In the present economic climate, a developer's access to the money necessary for the provision of needed infrastructure is very limited. One of the few avenues available is the bond market. The CDD will permit access to this source of funds to provide capital to build the necessary infrastructure. To address issues related to planning, Petitioner presented the testimony of Brian C. Canin. Canin is President of Canin Associates Urban and Environmental Planners, a planning and consulting firm. He has held that position since the firm's inception in 1980. Canin has extensive experience with Developments of Regional Impact and in planning and development of other large-scale projects, as well as in reviewing comprehensive plans. Canin was qualified at the hearing as an expert in land use planning. Canin was coordinator for the consulting team which prepared the DLI Properties DRI. He prepared and submitted the application for development approval encompassing all of the property located within the external boundaries of the proposed district. He also participated in all of the hearings. With respect to the Dovera CDD petition, Canin worked as part of the project team, providing supporting materials for the Petition. Canin identified Exhibit 5 to the Petition as a map prepared by Canin Associates for the DRI which depicts the land use plan for the proposed District. He indicated that Canin Associates later provided the map to Gee & Jenson (Engineers, Architects and Planners) for use in compiling the Petition. Canin also identified an updated version of Exhibit 5 to the Petition. He indicated that the version contained as an attachment to the Petition was submitted with the DRI. In the course of the hearings held on the DRI and during the approval of the Master Plan, certain changes were made to the land uses. Petitioner's Exhibit E represents the land uses currently proposed and approved for the area encompassed by the proposed District. Canin noted that the updated version of the land use plan includes a revision of the typical roadway section. Petitioner had been informed by County staff that the typical roadway section initially submitted by the developer did not meet the standards for a County road. The roadway section, which meets the standards for a county-owned road, was drawn to show that the road could meet those specifications without changing the amount of buildable acreage within the proposed development. This means that the existing right-of-way can accommodate a change, if necessary, to meet County-owned road standards. There will be no change in the DRI requirements with respect to buildable acres. Encompassing approximately 410 acres, the proposed land uses for the area within the Dovera CDD comprise a Planned Unit Development consisting of 512 multi-family residential units and related commercial, institutional, recreational, and other uses. The proposed development includes over 247,000 square feet of commercial space and more than two million square feet devoted to office and office/showroom space. The plan also includes 250hotel rooms. The development is set within environmental open spaces that are integrated into stormwater facilities and roadways. A copy of the September, 1991 Seminole County Comprehensive Plan was admitted into evidence as Petitioner's Exhibit F. Based on his review of the Seminole County Comprehensive Plan, Canin testified that the proposed district is consistent with the Seminole County Comprehensive Plan. In addition, project approval required numerous reviews in the course of the DRI process, as well as various hearings conducted by the County Land Planning Agency and Board of County Commissioners. Unless the project had been consistent with the Seminole County Comprehensive Plan at all these points in time, the developer would not have been allowed to proceed. Canin also testified that he had reviewed the State Comprehensive Plan found in Chapter 187, Florida Statutes, and that, in his opinion, the proposed District is consistent with the State Comprehensive Plan. He noted that Section 187.201(18), Florida Statutes, provides for the creation of partnerships among local governments and the private sector which would identify and build needed public facilities. Canin also identified Section 187.201(20) which encourages the coordination of transportation infrastructure to provide major travel corridors and enhance system efficiency. Coordination of the Red Bug Lake Road construction and the proposed District's involvement in its financing are examples of how the proposed district fulfills this policy. Canin further testified that Section 187.201(21) permits the creation of independent special taxing districts as a means of lessening the burden on local governments and their taxpayers, and also encourages the use of such districts in providing needed infrastructure. Based on his extensive experience with Developments of Regional Impact, Canin testified that creation of the proposed District will not constitute any change to the DRI development, its plan, its timing, its design, or anything else related to the DRI. The District's activities are subject to the regulatory and permitting authority of the county, including the DRI approval process. From a land use perspective, the proposed District is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as one functional interrelated community. Requiring DRI approval, the project was designed from the outset using an integrated land use plan, the purpose of which was to integrate diverse systems into one common plan. Canin testified that the proposed District is the best available alternative for delivering community development services and facilities to the area that will be served by the District. According to Mr. Canin, the proposed District will facilitate long-term financing of necessary infrastructure while providing a perpetual entity capable of operating and maintaining those systems and facilities. In Mr. Canin's opinion, private development would not be as advantageous because a private developer could not provide the same guarantees with respect to long-term operation and maintenance. Finally, based on his familiarity with the type and scope of development as well as the available services and facilities locate din the area of proposed development, Canin testified that the District's services and facilities will not be incompatible with the capacity and uses of existing local and regional community development services and facilities. He noted that transportation services were taken into account in the DRI process and are thoroughly integrated into the local comprehensive plan. To address engineering-related matters, Petitioner offered the expert testimony of Fred A. Greene. Greene is President, Chairman, and Chief Executive Officer of Gee & Jenson Engineers-Architects-Planners, Inc., an engineering and planning firm. He has held these positions for a combination of sixteen years. Greene is a registered engineer in Florida and personally has been involved in a number of DRI-related projects. He has a wide range of experience in providing engineering services relating to the use and operation of special districts, including community development districts. He advises districts on construction matters, design and maintenance, beginning with permitting for major infrastructure. Greene was qualified at the hearing as an expert in civil engineering and in land development, specializing in special districts. Greene played an active role in preparation of the documents required to establish the Dovera CDD. He visited the site and reviewed designs prepared by others for the water management system, the roadway system, and the water and sewer facilities. He also assisted in the preparation of the cost estimates contained in the Petition. The land within the proposed District is not presently developed and is primarily used for cattle operations. The land uses adjacent to the proposed district include residential communities to the north and west. The Seminole County Expressway is east of the proposed District and the land to the south is vacant. The existing drainage basins and outfall canals, the existing major trunk water mains, sewer interceptors and lift stations are identified in Petitioner's Composite Exhibit B, attached Exhibit 6. The land presently is drained by a series of ditches installed for agricultural purposes, the water flowing from west to east before discharging through Bear Creek into Lake Jessup. The proposed District is currently expected to construct the water management system, water and sewer facilities, internal roadways, security, mosquito control, and parks and recreation facilities. Seminole County will provide potable water through the existing twelve-inch lines. The District will construct water mains along the internal roads and later transfer title to the County. There is no plan to have the District provide water service to the development. With respect to the provision of sewer service and facilities, Petitioner plans to have the District construct a collection system along with lift stations and force mains that will discharge to the County's Iron Bridge Treatment Plant. These facilities will also be dedicated to the County. There is no plan to have the District provide sewer service to the development. The Petitioner plans to have the District construct and/or maintain within its boundaries a system of lakes, dry retention areas, wet retention areas, wetlands, flowways, culverts and control structures to accommodate surplus stormwater. Discharge would be through control structures and flow north through a system of existing canals to Lake Jessup. The Petitioner also expects the District to be involved in the construction and maintenance of roads. The roads would be constructed to applicable Seminole County standards, and to the extent that the roads remain district roads, the District will maintain them. The Seminole County Expressway is a N/S roadway presently under construction along the eastern boundary of the District. Realigned Red Bug Lake Road is presently under construction by Seminole County pursuant to a joint infrastructure agreement with Duda Lands, Inc. The agreement requires cost participation on that part of realigned Red Bug Lake Road which runs through the District. The District is expected to assume the developer's responsibility for that portion of realigned Red Bug Lake Road which runs through the District. The proposed District expects to purchase a truck and sprayer to assist in mosquito control within its boundaries. The District will be responsible for this activity, either by contract or by using its own staff. The proposed District currently plans to construct, operate and maintain facilities for parks and recreation. These facilities may include passive parks, playgrounds, pedestrian systems, bike paths, boardwalks and nature trails. With respect to the proposed District's current plans for security, in addition to gates, fences and similar installations related to security, the District may supplement security with additional staff and, where practical, may install automatic security devices. Exhibit 7 to the Petition shows the estimated infrastructure construction schedule and costs for the proposed District based on 1991 dollars. The anticipated schedule is for work to be performed by the Dovera CDD over the next twelve years. Unlike the DRI which has phases triggered by trips, the CDD phasing is premised on financing and construction engineering. However, the anticipated timetable in Exhibit 7 to the Petition is consistent with the schedule for development of the land. Based on his experience with special districts and DRI-related projects, Greene testified that creation of the proposed District will not constitute any change to the DRI development, its plan, its timing, its design, or anything else related to the DRI. Mr. Greene's unrefuted testimony established that the proposed District is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as a functional interrelated community. A large tract lying adjacent to a major expressway, having been planned as a DRI and approved subject to issuance of a development order, is developable as a functional interrelated community. In this instance, all of the infrastructure systems, including those serving nonresidential areas of the development, are interrelated and have been purposefully designed to function as a single system. Greene's unchallenged testimony established that the proposed District is the best available alternative for delivering the proposed services and facilities to the area that will be served by the District. Although property- owners' associations constitute one alternative for the delivery of community development services and facilities, they are unable to finance infrastructure. In addition, regional water management districts prefer to have CDDs provide services because of their stability and record for collection of assessments. Being units of special-purpose local government, CDDs are generally perceived as being more stable than informal associations. While private development is another alternative, it cannot provide the same guarantees as CDDs with respect to operation and long-term maintenance of community development services and facilities. It is Mr. Greene's opinion that the proposed District's community development services and facilities will not be incompatible with the capacity and uses of existing local and regional community development services and facilities. The project infrastructure will be designed and constructed to state or county standards for the various items of work and would therefore be consistent with the local development regulations and plans. The District will also be subject to all permit requirements and conditions of the development order. Mr. Greene testified that the area to be served by the proposed District is amenable to separate special-district government because the area is large enough to support necessary staff to maintain and operate the proposed system. The District also has specific authority and a specific mission. Based on his experience with other districts of this size and larger that have been in existence for more than twenty years, Greene concluded that the proposed Dovera CDD will prove to be a successful operation. Dr. Henry H. Fishkind, President of Fishkind & Associates, Inc., an economic and financial consulting firm, prepared and presented the economic impact statement which accompanied the Petition. In addition to providing economic forecasting services, Fishkind also provides financial advice to both public and private sector clients, including special districts. At the hearing, Fishkind was qualified as an expert in economics, financing and statistics, including infrastructure financing and the use of special taxing districts. In addition to preparing the economic impact statement (EIS), Fishkind has assisted The Viera Company in assessing the financial feasibility of the proposed District. Fishkind confirmed the accuracy of the information contained in the EIS. The EIS was prepared, in part, to meet the statutory requirements of Chapter 120, Florida Statutes. At the hearing, Fishkind summarized the findings contained in the EIS. Seminole County and the State of Florida were identified as the two governmental entities which would be affected by the processing of this Petition and ongoing review and oversight of the District. Seminole County received the Petition for review and was paid a $15,000 filing fee to cover expenses related to processing the application. This fee is expected to adequately cover those costs. The County will have the option of reviewing the District's proposed budget each year. Dr. Fishkind does not anticipate that the County will incur any other direct costs by virtue of establishment of the District. Dr. Fishkind testified that Seminole County and its citizens will also receive some benefits by virtue of establishment of the District. The District will provide a mechanism to facilitate the financing and ongoing operation and maintenance of infrastructure for the project. In Dr. Fishkind's opinion, the District not only restricts the costs for needed facilities and services to those landowners who benefit from them, but, because it is an independent special-purpose government, also frees the County from any administrative burden related to management of these facilities and services. In addition, the District should help to assure compliance with the development order conditions as they relate to infrastructure. With respect to the State, the Bureau of Local Government Finance in the Office of the Comptroller will review certain financial reports that all special districts must file. The cost of processing one additional report will be minimal. In addition, the Department of Community Affairs ("DCA") also has certain reporting requirements with which the District must comply. The costs to the DCA are partially offset by a required annual fee imposed on all special districts. The EIS also analyzed the expected costs and benefits to the citizens of Florida and the state at large. According to Dr. Fishkind's testimony, Chapter 190 encourages planned large-scale communities such as that within the proposed District, and the Dovera CDD would satisfy this legislative intent. The District is also intended to serve as a way to ensure that growth pays for itself, and that those who receive the benefits absorb the costs. Dr. Fishkind testified that, in addition to providing an improved level of planning and coordination and ensuring long-term operation and maintenance of needed facilities and services, the District would also promote satisfaction of state and local requirements for concurrency. Dr. Fishkind's unchallenged and unrefuted testimony in this regard is accepted. Dr. Fishkind also analyzed costs and benefits to the Petitioner. The costs include preparation of the Petition and all of the underlying analysis devoted to the project by team members. Dr. Fishkind testified that, in addition, the Petitioner, as landowner, will be the largest single taxpayer for some time, and will bear the largest portion of the donation of certain rights- of-way and easements. The Petitioner is also expected to provide certain managerial and technical assistance to the District, particularly in the early years. Benefits to the Petitioner include the District's access to the tax exempt bond market and other capital markets which would otherwise be unavailable. Another benefit to the Petitioner flows from the assurance that concurrency requirements will be met and that a stable, long-term entity is in place to maintain necessary infrastructure. Because any other similarly-situated landowner could also petition for establishment of a CDD, the granting of the Petition does not give this developer an unfair competitive advantage. The anticipated costs and benefits to persons who ultimately buy land and/or housing or rent commercial space within the proposed District ("Consumers") were also analyzed. In addition to city, county, and school board taxes or assessments, Consumers will pay certain assessments for the construction and maintenance of necessary infrastructure. The consumers should, in turn, have access to first quality public facilities and high levels of public service in a development where the necessary infrastructure will be maintained even after the developer is no longer involved. Ultimately, the statute provides a mechanism where Consumers may control the board of supervisors and determine the type, quality and expense of essential district facilities and services, subject to County plans and land development regulations. The EIS analyzed the impact of the District on competition and the open market for employment. Although there may be a transitory competitive advantage because of lower cost financing and access to capital, any advantage is not exclusive to The Viera Company. Although the CDD itself will not have a measurable impact on the open market for employment in Seminole County, Dr. Fishkind believes that access to capital markets may nonetheless have some positive effect on the development of employment. According to Dr. Fishkind, the District's potential effect on the open market for employment will likely be enhanced when compared to private development because CDDs are subject to government-in-the-sunshine and public bidding laws. Similarly, while anticipating no measurable impact on small and minority businesses as a direct result of establishing the Dovera CDD, Dr. Fishkind testified that such businesses may be better able to compete in the development because the District must operate according to government-in-the- sunshine and public bidding laws. Data supplied by The Viera Company and Gee & Jenson was used by Dr. Fishkind in performing his economic and financial analysis. Based on the result of his financial studies and analyses, Fishkind concluded that the proposed District is expected to be financially sound and able to fulfill its economic obligations. The expected general financial structure of the proposed District is based on a system of special assessments to defray the costs of its infrastructure. These special assessments would be imposed pursuant to Chapter 190, using the procedures outlined under Chapter 170 or Chapter 197, and would be pledged to secure bonds issued for the necessary improvements. It is not anticipated that the District will use any ad valorem taxation. This proposed financial structure for the Dovera CDD is very similar to that used successfully in many other CDDs in Florida. Dr. Fishkind testified that the financial structure is significantly different from that employed by a Tax Increment Financing District or TIF. A TIF is a dependent district the financial structure of which is premised on a "frozen" tax base of a particular area. TIF bonds are then repaid by the increase in real estate value within that area. This structure usurps certain taxes that would otherwise accrue to the local general-purpose government at large. TIFs are sometimes used in community redevelopment areas. Unlike a TIF, a CDD is actually an independent district with limited powers set out in the statute. A CDD's assessments and taxes do not in any way impact the County's taxing or assessment powers. Although a CDD may borrow money, the debts of a CDD cannot become the debt of any other governmental entity without its consent. In addition to the proposed District, there are several other available alternatives for the provision of community infrastructure, including private development, homeowners' associations, county provision, and dependent districts such as MSTUs or MSBUs. Dr. Fishkind testified that, from a financial perspective, and based on an analysis of other options available, the proposed District is the best available alternative for delivering community development services and facilities to the area that will be served by the District. According to Dr. Fishkind, of these alternatives, only a CDD allows for the independent financing, administration, operation and maintenance of infrastructure while permitting residents to exercise increasing control over the District's governing board. Although independent of the county commission and enabling district residents to exercise control as a governing board, a homeowners' association would not be capable of undertaking the financial responsibility necessary to pay for the required infrastructure. Private developers do not have access to the tax-free bond market, and cannot provide the stability of long-term maintenance of infrastructure. Provision by the county or by a MSTU or MSBU would require the county to administer, operate and maintain the needed infrastructure. Dr. Fishkind testified that, from a financial perspective, and based on a review of the applicable plans, the CDD is consistent with the State and Seminole County Comprehensive Plans. Although CDDs are not directly mentioned in the Seminole County Comprehensive Plan, the proposed District is consistent with the plan's intent that growth should pay for itself. Based on his familiarity with the design of the proposed District and his experience with other districts of a similar size and configuration, Fishkind concluded that the area to be included in the District is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as one functional interrelated community. All the infrastructure for the proposed development has been planned as a unit and so should be expected to function as an interrelated system. It was also Fishkind's opinion, after reviewing the availability of the existing community development services and facilities in the area to be served by the proposed District, that the community development services and facilities expected to be provided by the District are not incompatible with the capacity and uses of existing local and regional services and facilities. The current assistance provided by the developer with respect to the development of Red Bug Lake Road and the Seminole County Expressway provides an example of infrastructure compatibility. Finally, taking into account the governing structure of the proposed District and the experience of other special districts in Florida, Fishkind concluded that the area that will be served by the proposed District is amenable to separate special-district government. It is Dr. Fishkind's opinion that an interrelated community created in compliance with a comprehensive master plan and specific infrastructure requirements represents an ideal circumstance within which to foster development of a CDD. Petitioner also presented the testimony of Gary L. Moyer. Moyer is President of Gary L. Moyer, P.A., a firm engaged in providing consulting and management services to special districts. He provides numerous services to approximately 33 special districts, 25 of which are CDDs. These services include planning of infrastructure, financing, implementation and the award and oversight of construction contracts. Upon completion of construction, he oversees the day-to-day operation and maintenance of the infrastructure. He has provided these services for approximately fifteen years. At the hearing, Moyer was qualified as an expert in special district governance and management. Moyer has been involved with CDDs ranging in size from only 28 acres to as many as 13,000 acres. Moyer testified that the proposed Dovera CDD would be an average size district among those providing primarily commercial and industrial land uses. CDDs operate pursuant to statute and must comply with requirements similar to those imposed upon general-purpose local governments. CDDs issue bonds to finance necessary infrastructure and typically repay this bonded indebtedness through imposition of non ad valorem assessments. The collection of these non ad valorem assessments has been accorded equal dignity with the collection of property taxes. Comparing other alternatives for the provision of community infrastructure, such as private development, property-owners' associations, and provision of services and facilities by local governments, Moyer testified that the proposed District is the best alternative for providing the contemplated services and facilities to the area that will be served by the District. The singular purpose of a CDD is to provide infrastructure to new communities. Although other entities may provide such facilities and services, none of them possess the focus which is characteristic of CDDs. Moyer also concluded, based on his familiarity with the land area that is to be included in the proposed District and his experience with several CDDs having similar land use characteristics, that the area is amenable to separate special district governance. Moyer also expressed the opinion, based on his experience as manager of other districts of similar size and configuration, that the area of land to be included in the proposed District is of a sufficient size, is sufficiently compact, and is sufficiently contiguous to be developed as one functional interrelated community. The District appears to have the ability to provide the necessary infrastructure in a cost-effective manner to the lands to be included within its boundaries. With respect to the proposed District's anticipated use of County services, agreements with the tax collector and property appraiser for the collection of special assessments under Chapter 197, Florida Statutes, may be used. Such agreements are commonly used by other special districts. To the extent these services are used, the County is compensated by the District for these expenses.
Conclusions On March 12, 1992, a public hearing was held in this matter. The hearing was held in the Chambers of the Seminole County Commission, 1101 East First Street, Sanford, Florida, before James W. York, Hearing Officer of the Division of Administrative Hearings.
Conclusions Having considered the entire record in this cause, it is concluded That all statements contained within the Petition have been found to be true and correct. That the creation of the CDD is not inconsistent with applicable elements or portions of the State Comprehensive Plan and the Clay County Local Comprehensive Plan, as amended. That the area of land within the proposed CDD is of sufficient size, is sufficiently compact, and is sufficiently contiguous to be developable as one functional interrelated community. That the CDD is the best alternative available for delivering community development services and facilities to the area that will be served by the CDD. That the community development services and facilities of the CDD will be compatible with the capacity and uses of existing local and regional community development services and facilities. That the area that will be served by the CDD is amenable to separate special-district government. DONE and ENTERED this 28th day of 1989, in Tallahassee, Leon County, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of July, 1989. COPIES FURNISHED: Elizabeth C. Bowman, Esquire Post Office Box 6526 Tallahassee, Florida 32314 Patricia A. Woodworth, Secretary Florida Land and Water Adjudicatory Commission The Capitol Tallahassee, Florida 32399-0001 James Vaughn Office of Planning and Budget Environmental Policy Unit Room 404 Carlton Building 501 South Gadsden Street Tallahassee, Florida 32399
