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Educational Impact Fees Alternative Impact Fee Analysis for 55 West The Paramount Verde.

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Presentation on theme: "Educational Impact Fees Alternative Impact Fee Analysis for 55 West The Paramount Verde."— Presentation transcript:

1 Educational Impact Fees Alternative Impact Fee Analysis for 55 West The Paramount Verde

2 Why are we here?  The Orange County Educational Impact Fee ordinance allows a property owner to calculate an alternate impact fee if the fees being charged are in excess of the impacts generated by the project  Impact fees MUST bear a rational nexus to the impacts created by the project or else be deemed to be an illegal tax-They must meet the dual rational nexus test

3 What is the dual rational nexus test?  It must make rational-or common-sense  There must be a “nexus” – or connection 1. Between the need for additional school capacity and the growth and population generated by the project that is paying the fees and 2. Between the money to be collected and the benefits accruing to the project paying the money

4 Official Response to Petitions From OCPS: Contrary to Florida case law and State Constitution Potential exists for conversion of impact fee to a user fee There are no legal restrictions prohibiting future students from residing in units Results in higher impact fees for other users From Orange County: Adopts OCPS position Alternative fee calculations not analyzed on a county wide basis

5 What are they?  55 West Under construction on Church Street 405 condo units 32 stories with structured parking Retail uses on ground floor $1.4 million in Educational Impact Fees paid

6 55 West

7 What are they?  The Paramount Under construction on Central Avenue 313 condo units 16 stories with structured parking Publix grocery store on ground floor $1.2 million in Educational Impact Fees paid

8 The Paramount

9 What are they?  Verde To be constructed on North Orange Avenue 484 rental units 35 stories with structured parking Retail uses on ground floor No Educational Impact Fees paid yet

10 Verde

11 Common Characteristics  Densities are all approximately 200 DU/A  All projects are high rise structures ranging from 16 to 35 stories  All projects have structured parking  All projects have ground floor retail uses  There are no family amenities in any project

12 What this case is NOT about  This case is NOT about establishing a new land use category for impact fees  This case is NOT about whether any of these projects received incentives or bonuses from the City of Orlando  This case is NOT about the proposed increase in impact fees  This case is NOT about the needs of OCPS for funding their budget  This case is NOT about imposing a restriction against children for each structure

13 So what is this case about?  Whether the impact fee fairly represents the cost to the school system due to the impacts of the projects  Whether the OCPS interpretation of your ordinance can be supported by the law  What the “permanent physical characteristics” of a structure might be to constitute grounds for using an alternative impact fee  What the appropriate amount of fee should be

14 Permanent Physical Characteristics  Why is that phrase in the Ordinance? Effort was made by developers to ask Orange County to establish a separate category for high rise structures Orange County made the decision not to establish a separate category Compromise was language in ordinance that would allow high rise developers to prove their position on a case by case basis

15 Our Analysis  We did not attack or question any component of OCPS methodology calculations EXCEPT for student generation rate  We took actual information from OCPS as to the present and historical facts regarding actual school impacts  Actual facts from school board unquestionably shows that actual impacts of ALL high rise structures is far less than what the school board would calculate

16 The Question to be Decided…  How much lower should the fee be in such circumstances?  Projects analysis reflects a fee of $922 per unit based upon a conservative student generation rate (“SGR”) OCPS SGR.248 students/unit Actual SGR*.017 students/unit Actual SGR**.001 students/unit Proposed SGR.060 students/unit * Units built within last 5 years **Units built more than 5 years ago

17 Comparison of Rates

18 Student Comparisons by Project 7 6 9

19 Total Student Comparisons

20 Fiscal Results of Analysis  The Paramount Amount Paid=$1,191,591 Amount Proposed=$288,586 Amount of Refund=$903,005  55 West Amount Paid=$1, 381,941 Amount Proposed=$373,410 Amount of Refund=$1,008,531  Verde Amount Paid=0 Amount Proposed=$446,248 Amount of Refund=NA

21 How we got there  Ordinance allows any one of three different methods of calculating alternative fee  Applicants used ALL three methods  All methods showed a much reduced impact on the school system by buildings having the characteristics of the applicants

22 So what did OCPS say?  Kept insisting that applicants wanted a new category of rates and that was a policy decision by the BCC  Our Response: No we don’t!  That we needed to undertake a County wide study instead of one concentrated in downtown Orlando  Our Response: This land use category only exists in downtown Orlando. Moreover, this case is about individual buildings and not about establishing a County wide category

23 What did OCPS say?  That our study was “just a snapshot in time” and was therefore inadequate  Our Response: All such studies, including the OCPS study itself, are “just snapshots in time”  That in the future, more families could move into the “permanent structure”  Our Response: Historically that is not true in Orange County. Common sense (as well as the facts) would dictate that these structures will, during their economic life, never result in the impact calculated by OCPS

24 What did OCPS say?  Kept arguing that only way to effect a limitation on impact was a child restriction  Our Response: This issue deals with permanent physical characteristics of the structure

25 Details of Our Study Section 23-144-Alternative Impact Fee Calculations (b) The alternative school impact fee calculations shall be calculated… (1) based on the data, information and assumptions contained in the Ordinance and Henderson Young Impact Fee {2000 Census comparison}; or (2) based on an independent source that is a generally accepted standard source of demographic and education planning {EASI Analysis}; or (3) based on a local study supported by a database adequate for the conclusion contained in the study performed to a generally accepted methodology of education planning {DDB Study}

26 What is the downside of a denial to Orange County and OCPS?  To be valid, school impact fee ordinance MUST contain a meaningful alternative impact fee methodology  Orange County’s ordinance, on its face, has at least three problem provisions impacting its validity: 1. Requirement that maximum possible impact be used 2. Requirement for a county wide analysis 3. Total lack of guidelines and standards for alternative study

27 What is the downside of a denial to Orange County and OCPS? Orange County’s application of the alternative impact fee calculation must be reasonable Suggestions that petitioner’s 3 forms of analysis are wrong without providing meaningful direction is unreasonable {Note that OCPS has ALL the data and has never provided any facts on high rise student generation rates to the contrary} Requirement that maximum impact be presumed over the fullness of time makes any alternative impact fee impossible

28 What is the downside of a denial to Orange County and OCPS?  Meaningful alternative impact fee opportunity is an absolute requirement of a valid ordinance  Severability clause does not save an ordinance where an integral component is found invalid  Real possibility that all school impact fees collected under an invalid ordinance must be refunded to all

29 We have proven our case!  The impacts from these three specific high rise projects, all of which have structured parking with densities of approximately 200 DU/A, are substantially less than the school impact fee presumes  So, either accept the $922 per unit calculated by applicant OR find a different fee based upon competent substantial evidence

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