By Patrick McCallister
For Hometown News
The Volusia County Council is taking a magnifying glass to Community Redevelopment Areas, looking to tighten the rules for them.
The council conducted a workshop Thursday, Jan. 31, to discuss CRAs, special taxing zones that keep some county tax dollars in cities to spur property and economic development, along with eliminating blight.
But paying for street parties?
Uses of CRA funds for events, such as Holly Hill's Hogs on the Hill last year, are giving some of the council members heartburn.
"That's not what CRA funds are intended for," County Chair Jason Davis said in an interview after the workshop. "They are supposed to reduce blight. They're not for parties and this is the problem we're having, one of the problems."
Last year Holly Hill spent about $40,000 from its CRA for the Bike Week event at 327 Ridgewood Ave. complete with a vintage bike show, barbecue galore, vendors, a parade and Jimmie Van Zant rocking alongside Molly Hatchet.
Several citizens and local businesspeople had tantalizing tales to tell about the event to the Holly Hill City Commission at a meeting last year. Most included a cast of Jell-O shots, massage and bike-wash girls simulating sex acts with customers, and a few had cages with vulgar dancers.
Mayor Roy Johnson said the complaints were greatly exaggerated by election-year politics and Hogs on the Hill is exactly the kind of events CRAs help cities do that increase economic activity.
"Hogs on the Hill was an attempt to attract business to the area, not just a street party," he said. "It was meant to attract the motorcycle industry to Holly Hill."
It might have done just that. Larry Steele, owner of Steele's Wholesale Motorcycles, stopped by Hogs on the Hill last year. This year, the city isn't sponsoring the Bike Week event -- Mr. Steele's business is.
"I'm going to relocate my business in the near future, and Holly Hill is one of the places I might relocate to," he said.
Holly Hill's CRA started in 1996, with a 30-year sunset, along Ridgewood Avenue. Businesses and residents in the CRA district pay the regular county tax rates others do. However, county taxes paid on property values higher than what they were in 1995, the base year, go to the city to spend only in that district for economic development and blight elimination.
There are 15 CRAs in Volusia among eight cities, including Daytona Beach, Daytona Beach Shores, DeLand, Holly Hill, New Smyrna Beach, Port Orange and South Daytona. Mary Anne Conners, deputy county manager, told the council that cities keep about $4.7 million county tax dollars a year through them. She said the recent economic downturn and reduced property values have several cities looking at creating new or expanding existing CRAs.
"They are lining up," she told the council. "We are in a good base year."
The seven-member council has four new faces, including Pat Patterson, who served on the council from 1995 to 1998. He said that previous county councils should have put more rules on CRAs.
"Going back to 1995, I think we were pretty loose on how these things were going to go (with CRA expenditures)," Mr. Patterson said in an interview after the meeting. "Nowadays there's going to be some changes. We're going to really clamp down on a lot of this stuff."
But CRAs pay for much more than street parties.
For example, in 2011, Holly Hill bought the old middle school on Center Avenue using $1.5 million from its CRA. The city's CRA is now paying Smith + Murray Design Studios about $98,000 to study uses for the old Holly Hill Middle School.
The city commission, acting as the Community Redevelopment Agency, also spent about $108,000 to refurbish the Holly Hill Community Resource Center, which ended up being the new home for a chamber of commerce office and historical society museum. It also approved a $126,000 grant to Sunoco to buy the blighted Rollie's Court Motel, 118 Ridgewood Ave., and tear it down to expand a store and gas station.
Kurt Swartzlander, Holly Hill's finance director, said the CRA collected about $1.57 million in the 2011-2012 fiscal year. Those funds also help pay for six police positions, a community redevelopment coordinator, and a clerk at the Community Resource Center. Salaries and other expenses for those positions cost the city's CRA about $556,000 a year.
Mr. Johnson said the council would be foolish to tighten requirements and rules on CRAs too much.
"I think the cities need to have the flexibility," he said. "The main purpose was for cities to take the dollars and remove blight and get economic development. We know where it needs to be done and the county doesn't know exactly where it needs to be done."