By Erika Webb
Volusia County Property Appraiser Morgan Gilreath told County Commissioners that Community Redevelopment Areas are noble, but they inequitably shift the tax burden.
At the regular council meeting June 6, the property appraiser presented a CRA blight analysis titled "Using Property Appraisal Data To Assist in Analyzing Blight."
Its purpose: to present an objective view of real estate information to aid city and county decision makers in addressing CRAs.
"This is not a blight study," Mr. Gilreath said. "This is looking at some of what I call blight-related building characteristics and some other information."
He discussed blight related characteristics, effects of CRAs on countywide taxation and outcomes -- as in, are there any?
"The Florida statutes have been amended to the point where, according to the statutes ... you could define a tile floor as blighted," the property appraiser said.
The purpose of legislation for CRAs is to fix a blighted area, he explained.
"When is it fixed?" he said.
There are 16 existing 30-year CRAs in Volusia and $10 million annually funding them; over half of that is from the county's general fund.
"To my knowledge we have the most CRAs of any county in Florida," Mr. Gilreath said.
He explained 57 percent of money going to CRAs is "shifted into the city" by taxpayers from all over Volusia County.
"If you have a blighted area, a CRA performs a noble purpose. Fixing a blighted area is a good thing," Mr. Gilreath said.
But, he countered, "tax shifting inequities" occur when a designated geographic area is not blighted.
Those also occur when there is blight and CRA monies are targeted so city operating budget funds are re-directed as a result of "extra outside funding."
"Taking money from citizens outside of a city and, through budgetary shifting from one account to another, covering (even indirectly) costs which would be city costs, is what I call 'Tax Shifting Inequities,'" his report stated.
"Taxation of people across this county is what CRAs do. That's a serious deal in my mind," he told the council.
In his "building blight" analysis Mr. Gilreath separated residential from commercial/industrial land use and identified two items in the data base for qualifying buildings: quality of construction and historical value changes for the past 20 years.
The analysis indicated residential and commercial properties showed different building "blight characteristics," and concluded there "appears to be more residential than commercial "blight" at this point in existing CRAs."
In addition to separating residential and commercial data for analysis, Mr. Gilreath proposed a "land use mix analysis" for decision makers to examine whether or not CRA project funding illustrates the areas showing the greatest blight are receiving the greatest project funding.
"These statistics should be measured against the same data countywide and citywide," his report stated.
"It is possible that you could have a blighted area residentially and you put money into commercial properties in that area and continue to appear blighted," Mr. Gilreath said in a phone interview after the meeting. "In terms of CRAs, you should be able to say, 'How much did you get and where did you spend it?'"
Rental rates should be part of every CRA study, he advised the council, noting lower rental rates may be indicative of blight.
To determine blight-related characteristics for buildings Mr. Gilreath recommended establishing a "minimum level" point 15 to 20 percent below countywide and citywide averages for quality of construction and building depreciation.
The property appraiser cited DeLand's Spring Hill CRA as having "the highest blight characteristics of any (of the CRAs) we have."
"That was a good one," he said.
Count y Manager Jim Dineen recommended the council utilize Mr. Gilreath's data as an elemental resource in the CRA application review process.
Mr. Dineen suggested it would be beneficial to have Mr. Gilreath take a "laser view" of a community, "in terms of what they supply" along with physical characteristics to provide a more valid picture of needs and projected outcomes.
"I do believe this will help the community when they submit an application," Mr. Dineen said. "I think they will be better focused themselves."
Councilwoman Joyce Cusack said she's in favor of seeking the property appraiser's input as leaders proceed with CRAs. She asked if she understood correctly that "money can be used from outside the CRA."
Mr. Gilreath reiterated that 57 percent is already coming from the general fund, that cities are indirectly taxing citizens who don't live in those cities.
He called using tax revenues generated outside of the CRA a "questionable practice."
Councilwoman Pat Northey said she was getting emailed questions about whether or not infrastructure determines blight.
Mr. Gilreath said those "intangibles" may be considered. "But when you look at blight, it's about buildings," he explained.
"If you're doing one to raise economic development money ... I would call that not a noble thing," Mr. Gilreath said. "One might call that tax shifting shenanigans."
Council member Doug Daniels said he has a different view.
"This is a poor county," Mr. Daniels said. "Having CRAs is one of the very few economic development tools we have, and we have to use it, but we have to use it wisely."
He said just analyzing properties as they are, is a static way of looking at things, not the right way.
Looking at potential CRAs in terms of end result -- return on investment, employment potential and the likelihood that financial circumstances of citizens within the community would improve as a result of establishing a CRA -- is what decision makers should be looking at, he said.
When commercial circumstances within a CRA improve, residential will follow suit as a result, he added.
"As far as urban counties in Florida, we are, let's face it, the sick man of Florida," Councilman Daniels said.
Finally, Mr. Gilreath noted establishing CRA success criteria -- "non-existent at present" -- is important.
"There is simply no existing written criteria to suggest when blight is over," he noted.
He proposed creating definitions for quantifiable statistics that will cure the blight in terms of businesses, new employment, increased prices, increased rentals and other factors.
"You can't be successful if you don't know what success is," he said.