County and City Square Off Again, this Time Over Control of Proposed Airport Commons Development

Forced annexation, water & sewer service, and impact fees are at the heart of this latest county vs. city kerfuffle.

Palm Coast, FL – May 8, 2018 – Palm Coast and Flagler County have squared off again, this time in a battle to control the proposed development of a commercial center located within the county at the southeast corner of SR 100 and Aviation Drive. Forced annexation, water & sewer service, and impact fees are at the heart of this latest county vs. city kerfuffle.

AIRPORT COMMONS LOCATION

Airport Commons is carved out of a 15.8-acre parcel between SR 100 and the Flagler County Airport. Although It lies within unincorporated Flagler County, it is within the city’s water & sewer service area. The city has taken the stance that properties outside the city seeking city-provided water and sewer must annex into the city. Therefor, says the city, the Airport Commons Development should be subject to the city’s regulations; including design, permitting, and impact fees, plus city property taxes going forward.

The county basses its objection on a 2007 Settlement Agreement that seems to exclude the subject property from non-voluntary annexation. Further, the county points to a 2015 Interlocal Agreement which clearly states that developmental control of certain land surrounding the airport property should remain with the jurisdiction in which the property is sited. In this case, the project is in the county.

After several weeks of joint meetings, seemingly without undo acrimony, the city took a sudden tack in a different direction, by adopting a Resolution approving immediate litigation action against the county. They claimed that the county was seeking to illegally serve the development with water and sewer via the county airport, which already has city services (although the airport was not annexed into the city).

At yesterday’s Special Meeting, the BOCC returned the city’s serve with a solid ground stroke. I attended the meeting. It is best described by Flagler Live (see reprinted article below and at Flagler Live.

Flagler Live’s portrayal of the meeting and underlying facts are accurate in my opinion. I’ll add that in a May 1 letter, Coffey alerted Landon of the county’s May 7 Special Meeting and invited the city to attend. As Flagler Live notes, the city did not attend.

The city did attend an April 18th county Technical Review Committee meeting that addressed the Airport Commons project where an individual representing the city attorney’s office verified that the project review was in the correct jurisdiction, namely the county (per the 2015 Interlocal Agreement).

The 2007 Settlement Agreement is vaguely written. The city has had two separate occasions to clarify the agreement language; the Palm Coast Plantation lawsuit (which the city did not win) and the 2015 Interlocal Agreement in which the National Guard parcel was not annexed into the city. In my opinion, the scale of facts heavily favors the county’s position.

From Flagler Live:

Accusing Palm Coast of Making ‘Blatantly False’ Claims, County Talks Mediation and Litigation Over SR100 Development

You won’t see it, but a yet another trench is deepening between Palm Coast government and the County Commission, this time over the proposed development of a small commercial strip called Airport Commons. The development is planned along State Road 100 and at the edge of the county airport, one of the boundaries between city and county that form a political San Andreas Fault Line between the two governments.

The development of a few shops on 57 acres hangs in the balance, with a developer already disenchanted enough with the city’s hard line that he may just walk away, a blow to county economic development efforts. But if the battle is focused on the development, both sides are pulling all their legal stops because they see the outcome as defining their rights—the city’s right to annex or levy fees on properties that seek its services on its periphery, the county’s right to resist annexation and stand by property owners who want to remain on county land.

The issue goes even further: the fault line is unraveling brewing conflicts between city and county that affect not just a development on a city corner, but could potentially affect every resident in the county, especially in emergencies: the building of a new emergency communications network. The two governments are supposed to cooperate on that project based on a 2009 joint agreement. Palm Coast is not holding up its end of the deal, the county claims. And there’s a further issue brewing in the Hammock over a city waterline the city is supposed to move there to help with a drainage project, and money the city owes. It’s not done either, according to the county.

So a lot more than a development is at stake. County and city identities are, as are their authority, as are egos: City Manager Jim Landon and County Administrator Craig Coffey are on either sides of the battle. Landon defined his version of the battle by framing it to the city council last month as a question of sticking by the rules. If the county wasn’t willing, the city should sue. Landon got the council to go along with the threat, even though the city heard only a one-sided interpretation: Landon, who’s known for presenting only the evidence he likes. (One of the more startling moments of today’s meeting was a statement by Charlie Faulkner, the developer’s representative, who said Landon misrepresented him in an April 5 email to the city council. “It has to do with liars lying,” Faulkner said, assuring his audience that he was trying to stay professional. “But I’ve been called essentially a liar. I’ve never had anybody call me a liar in over 40 years of my development career, and I didn’t take it very well.”)

The county administrator today responded in detail at a special meeting of the county commission, and without city voices present. He gave Landon as good as he got, the 90-minute presentation ending with a unanimous vote by the commission that essentially dares the city to sue: the county is willing to do battle, but would rather mediate the issue.

So the formal resolution concludes with mediation first. But only after five and a half pages of whereas-type recitals that accuse the city on two occasions of making “blatantly false” statements, alludes to dishonesty on two other occasions, blame the city for not holding up its end of formal agreements, blame it for potentially losing the developer, and providing a brisk history lesson whose subtext seemed to be that the city either has a short or flawed memory, or is intentionally choosing to reinvent the past and moving goal posts.

“Annexation is really the domino that triggers all of those other items,”  Coffey told commissioners. “We’re not trying to pick a fight with the city,” Coffey said. “We have issues too to protect,” meaning county and property rights interests.

The two governments have been there before, namely in 2007 and 2010. A 2007 settlement agreement, signed the same year Landon and Coffey each took their jobs locally, was supposed to end the conflict. It has only served as a map to the fault line, not as its bridge.

In yet another attempt to resolve conflict in 2015, the two governments agreed to a “Joint Development Review Area” in the region surrounding the airport on three sides. Both governments get to review and make recommendations on development proposals, but the recommendations are not binding except for the government that has jurisdiction on the property in question.

The two sides implemented that system regarding the Airport Commons property. There was good will on both sides and all items were worked out, according to Coffey, with one exception: the transportation impact fees the city levies on all new developments within the city. Revenue from the fees is intended to defray the cost of the “impact” of new development, such as the need for roads. If the Airport Commons developer were in the city limits, he would have to pay $180,000 in impact fees, not including other required costs. To him, that breaks the viability of his development. That, among other reasons, is why he wanted to stay out of the city to start with.

The county doesn’t require transportation impact fees, nor do Flagler Beach or Bunnell—at least not at the moment. They did away with the fees during the Great Recession, to spur development. If the county doesn’t impose them, a developer building in the county should not pay them, Coffey said.

The city offered a solution: let the county sewer line from the airport provide sewer service to Airport Commons, the same way the sewer line currently provides that service to the Chamber of Commerce building in the next block, along State Road 100. Whether the city or the county services the properties in the area with water, the city gets its money for the water, plus a 25 percent mark-up, since it’s outside the city limits. So the city would make money on the deal.

As Coffey presented it to the commission today, the negotiations had gone well enough to conclude that whatever issues remained to be worked out could be included in a pre-annexation agreement and presented to the Palm Coast City Council for review, with input from the county at whatever meeting the issue was to be discussed.

That’s not how Landon and City Attorney Bill Reischmann presented the matter to the county on April 10. Instead, Landon submitted a proposed resolution—which the council approved, without a vote—that threatens litigation against the county if Flagler goes forward with the development, absent agreement on payment of the impact fees. The city then submitted what Coffey described as a “sweeping” public records request for any imaginable communication relating to the Airport Commons property and anyone involved in it.

Coffey felt ambushed. “I characterize this as a discovery type thing as you prepare for litigation,” Coffey said. “It’s a very aggressive public records request.”

County Attorney Al Hadeed said the request will be honored, but he wondered what it had to do with mediation. “This kind of public records request doesn’t signal to me an interest in mediation,” he said, describing himself as “taken aback”: when he read it. “There are ways to meditate, and there are ways to not mediate. This is not one of those tools when you’re attempting to resolve issues. That’s why I want you to get the full flavor of the attitude that’s reflected in this request.”

The resolution the county drafted and the commission approved today was not without its own form of counter-attitude, including at least four “whereas” clauses where the city, the city manager or the resolution he and the city attorney drafted are essentially described as contradictory, misleading, or making “blatantly false” statements, words used twice in the recitals. And in one case, the county’s recitals also call out the city’s resolution for a legally incorrect reference—the parry of one lawyer dueling another, as if to let him know the limits of presumption.

That’s before getting to the heart of the legal matter: the 2007 annexation settlement agreement controlling contentious annexation issues where the county and the city limits meet. The agreement recognizes the right of the city to annex properties that seek water and sewer service. But it also excludes properties from having to comply with that condition, and does so in several regions, including the Hammock, the airport, and areas around the airport. The agreement was tested in 2010, when the city tried to annex an area at the south end of the airport before allowing for water and sewer lines to serve the coming National Guard facility there. The city was rebuffed, the county prevailed, as did the 2007 settlement.

If Palm Coast has been going ballistic in “weaponizing utilities,” as county officials have become fond of saying recently when faced with such conflicts, the settlement agreement is its anti-ballistic missile.

“The city may wish it said something else,” Coffey said. But the words to him are clear: they spell out boundaries where the city may and may not annex, even where it’s compelled to provide services. The Airport Commons property falls in a zone where the city may not annex, according to the county’s reading of the settlement. The city sees it differently. It excludes that property from its reading of the agreement.

Coffey today needed the special meeting to formalize his response to the city, to potentially arrange for a joint meeting between the county and the city elected officials if necessary, but also to set his version of the record straight, and attempt to come out still looking more magnanimous than the city.

The county’s resolution “doesn’t authorize litigation, it authorizes mediation,” Coffey said. But he had little hopes for mediation’s success.

“The city wishes to control this corridor, would like to compel this annexation and has plans, but just because I wish it or I desire it to be that way doesn’t mean I have the right to compel that, and that’s the difference between what the words say and don’t say. And that’s where I’m not sure we’re going to reach a compromise, because we have a basic disagreement that’s complete opposites of forced annexation.”

Toby Tobin: REALTOR®, SRES®

I am a REALTOR® licensed by the State of Florida and Seniors Real Estate Specialist, SRES®, with Grand Living Realty, where 'The GoToby Team'  helps fellow aged 50+ buyers and sellers achieve improved outcomes in real estate transactions by integrating real estate decisions with other age-related decisions/plans through my broad network of respected service providers; financial, wills, trusts, probate, insurance, healthcare, home services, recreation, lifestyle, estate planning, and adult living facilities.

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