By Patrick McCallister
For Hometown News
Five cities are lining up to start new Community Redevelopment Areas, but the Volusia County Council is increasingly questioning their value.
At its Thursday, Feb. 28, meeting, the council directed staff to draft a new playbook for incoming CRAs to use, and to examine how far the county could apply it to existing ones.
"We've got to look at what we're going to be doing with CRAs and tighten up the rules a little bit," Councilman Pat Patterson, DeLand, said in an interview after the meeting.
CRAs are special zones that keep some county tax dollars in cities to spur property and economic development for eliminating blight. In a CRA, county taxes paid on property values higher than what they were the base year -- when the area was established -- go to the city to spend only in that district for economic development and blight elimination.
The word blight, however, is increasingly becoming a sticking point.
"You can define anything as blighted under the state's definition," Morgan Gilreath, property appraiser, told the council at the meeting.
The five cities wanting new CRAs are Deltona, Orange City, Ormond Beach, New Smyrna Beach and Edgewater. There are 15 existing CRAs in Volusia in Daytona Beach, Daytona Beach Shores, DeLand, Holly Hill, New Smyrna Beach, Port Orange, and South Daytona. Cities are keeping about $4.7 million county tax dollars a year through them. Some of the CRAs date back to 1991. So far, they've sapped about $80 million from the county's coffers. By 2036, that's expected to grow to about $144 million.
"When you look at the expenditures, you say, 'What is going on?'" Councilman Patterson said.
Under existing rules, cities have had wide latitude to use CRA funds for everything from infrastructure repair and grants to private interests, to funding special events.
For example, last year the Holly Hill City Commission, acting as the Community Redevelopment Agency, spent about $40,000 for a special event, Hogs on the Hill, aimed at attracting Bike Week business. More recently, DeLand businessman Mark Shuttleworth got $20,000 from a CRA grant for repairing a building that he bought from the city for $25,000, about $75,000 less than its appraised value.
Holly Hill Mayor, Roy Johnson defended his city's use of CRA funds for Hogs on the Hill. He said it was successful in attracting more motorcycle-related business to town. Mark Shuttleworth defended his $20,000 grant, noting he's paid more taxes than that into DeLand's downtown CRA over several years.
The council directed county staff to revise the application process for new CRAs to include an analysis by the property appraiser's office to determine whether properties in a proposed area are experiencing significant property devaluation that meets a common-sense blight test. Also, the council wants new CRAs limited to 10 years with a chance at extending it to 20, and greater control over bonds and expenditures. Currently CRAs can exist for 30 years.
The council also wants to exempt property taxes besides those that go to the general fund from contributing to CRAs. Instead of a wholesale contribution of the county's general-fund dollars to CRAs, the council wants a graduated system.
Under the proposed graduated system, if property values on average rise 3 percent one year, then CRAs would only get to retain tax dollars generated by property-value increases within them over that amount.
In an interview after the meeting, Councilwoman Pat Northey, Deltona, said cities may dislike the new rules, but will still apply for CRAs.
"If the CRA is successful, they will get dollars," she said.
In a previous interview, Mayor Johnson, said the county 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."