Nocatee residents could face added expense 
Would be 'addition to the property tax'

COURTESY : First Coast Community - The Beaches Shorelines
BY Drew Dixon 
Published February 25, 2004 

People who purchase property in the massive Nocatee development could end up picking up much of the tab for roads, sewers and other infrastructure that the developers said they would pay for.
 

Officials of the planned 15,000-acre development that will straddle the St. Johns-Duval county line have applied to have the land designated as two community development districts, a state classification that allows for assessments to property owners to pay for infrastructure. One of the districts would be for the Duval County portion, about 2,000 acres in the southeast corner of Jacksonville. The other district would be in the remainder of the development in St. Johns County, west of Ponte Vedra Beach and Palm Valley.
In two state hearings last week, one in Jacksonville on Thursday and the other in Ponte Vedra Beach Friday, Nocatee developers argued they need to establish the community development districts to secure bonds to build the infrastructure.
   A regional development map shows the proposed
   community development districts. 

The St. Johns County Commission gave the Nocatee developers permission in November to re-configure County Road 210, a $100 million job that's scheduled to begin this year. The developers had said when asking to do that work that they would cover the cost. At last week's hearings, however, they said a community development district would eventually assess Nocatee property owners to reimburse bonds used to pay for the infrastructure.

"We believe community development districts are the best way to provide long-term stability needed for the construction and maintenance of the major infrastructure," said Gregory Barbour, president of the Parc Group Inc., the Nocatee developer.

Barbour said at the hearings that private property owners wouldn't be able to handle the start-up costs for building the infrastructure, and that a community development district would provide the opportunity to get 30-year bonds.

"These transportation projects are so significant and so large that financing through the CDD provides the ability to finance that multi-million dollar improvement," Barbour said.

But eventually, landowners moving into the area will pay for infrastructure, said Richard Ray, president of Parc Group Development, a subsidiary of the Nocatee developer.

"Over time, obviously the land starts being transferred to residents. Each resident will have their own proportion of that 30-year note that they'll be making payments on," said Ray, who did not testify at the hearings. 

Parc Group experts testified about the advantages of community development districts at the hearings; no one spoke against the quasi-government panels, which, in the case of Nocatee, would be appointed by the developers.

State Administrative Law Judge J. Lawrence Johnston wondered why the Parc Group didn't seek public hearings at venues with a higher profile and before local governments.

"I don't believe there was a public hearing before the city of Jacksonville," Johnston said. "I was wondering why not." 

Parc Group attorney Cheryl Stuart replied that local governments have "a pretty consistent history of not holding option hearings."

Johnston will forward the testimony and evidence to the Florida Land and Water Adjudicatory Commission in Tallahassee. That board will decide whether to establish community development districts. Johnston said that could happen within 30 days on the Nocatee proposals.

Community development districts are not uncommon in Florida. St. Johns County's Julington Creek Plantation and Marshall Creek developments have them. Duval County has none, according to the Florida Department of Community Affairs.

State law defines a community development district as a "special district" designed to fund infrastructure to meet "projected growth."

Barbour acknowledged after his testimony that the proposed Nocatee community development districts are akin to special taxing districts such as the Ponte Vedra Beach Municipal Service District, which levies property taxes earmarked for specific infrastructure costs.

But Ray downplayed any impact on taxes for future property owners that the community development districts might have.

"Every year, there'll be an assessment of whoever the landowner is at the time. If you can think about it as a 30-year mortgage, it's a 30-year bond," said Ray.

Asked if that meant an extra tax for future Nocatee residents, Ray said, "No, it's an assessment. ... It's a special assessment to the residents that benefit from the infrastructure. It's collected on the property tax. It's an addition to the property tax.

"I can't speak to whether or not 'tax' is the appropriate term, but it's an assessment levied by the community development district," Ray said. "The districts are established to do all the improvements. A portion of the financing is going to come from them issuing bonds that will be repaid by landowners over time.

"But a significant portion of the cash that's going to be generated by that community development district is going to be funded by the developer. That's the important piece," Ray said. 

The developers' and future landowners' shares of the cost is unclear, Ray said. "We have not yet determined [that]. We're still in the engineering phase and we'll have more understanding what the costs will be and the timing of the costs and how it's going to be financed." 

Advertisements for last week's hearings did not name Nocatee by name. Rather, they named the proposed "Split Pine" and "Tolomato" community development districts.

"It was a geographic reference," Barbour said after the hearings. "The village in Duval County is going to be called Split Pine and the Tolomato is obviously the Tolomato River," the St. Johns County portion of Nocatee. "We couldn't call them Nocatee because you've got two of them and it would create confusion."


 
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