Submitted by Suanne Z. Thamm
Reporter – News Analyst
As its final item of business at their August 2, 2016 Regular Meeting, the Fernandina Beach City Commission (FBCC) discussed the creation of a conservation land bank with purchases to be made from funds collected as real estate transaction fees. Local resident Lynn Williams had previously presented this idea as a way to preserve undeveloped land via city purchase, suggesting that it be taken to voters as a non-binding referendum to judge public support.
The idea
Williams proposed creating a local real estate transaction fee on new construction that would go into a fund to purchase undeveloped land that would be conserved and maintained as open space.
He drew inspiration for this idea from programs that have been implemented on Nantucket, Martha’s Vineyard and Block Island. The Nantucket Land Bank, according to its website http://www.nantucketlandbank.org, is the first program of its kind in the United States. It was created in 1983 by Special Act of the Massachusetts Legislature “to acquire, hold and manage important open spaces, resources and endangered landscapes for the use and enjoyment of the general public.” Today almost “half of Nantucket is forever-protected open space.”
In Nantucket, a two percent fee is levied against all real estate transactions on the island. The Land Bank then competes in the open market to acquire lands that provide a variety of pubic benefits to the population.
Martha’s Vineyard began its land bank program in 1986 http://www.mvlandbank.com and has conserved 3100 acres to date, roughly five percent of the island, also imposing a two percent real estate transaction fee. Block Island has a Land Trust which it funds with a three percent real estate transaction fee http://www.new-shoreham.com/displayboards.cfm?id=14.
All three land trusts or banks are administered by boards and follow detailed procedures for levying and collecting the fees.
Williams initially proposed that voters be asked whether they thought adopting such a mechanism for Fernandina Beach would be a good idea. But while agreeing that the concept sounded intriguing, both commissioners and the City Attorney had questions, reservations and comments.
City Attorney presents options
City Attorney Tammi Bach raised questions as to whether such a funding mechanism would be considered a fee or a tax. She said that under Florida Law a fee is paid by those that are provided a service by local government in exchange for payment (aka “user fee”). In such cases, local government may approve the adoption of such a fee. A tax, however, may only be charged by local governments in Florida through the authority of the state legislature. Her opinion was that Williams’ proposal for a real estate transaction fee sounds like a tax, not a fee. Therefore, the city could not implement it without the legislature’s approval. She suggested that if the FBCC is interested in pursuing the idea, the city should bring in a fee consultant to analyze the purpose, use and collection of the proposed fee.
Bach offered some alternatives for the FBCC to consider.
She then concluded:
The public weighs in
Three members of the public spoke to support pursuing the creation of a land bank to purchase undeveloped land for conservation as open space: former mayor-commissioner Ron Sapp, Lynn Williams and Amelia Tree Conservancy chair Margaret Kirkland.
Sapp strongly supported the creation of a land bank, telling commissioners, “You have an opportunity to lead.” He reminded the FBCC that 16 years ago he served on a commission that had concluded that unless public action were taken, “every square inch of city land would be developed.” This realization led to the passage of a referendum in which the citizens agreed to spend $7M to acquire the land that today comprises the Greenway. He commended Lynn Williams for advancing the idea.
Lynn Williams claimed that the city could collect quite a bit of money by taxing—or placing fees on—real estate transactions. Last year, he claimed, that the city with a 2 percent fee could have collected $4M from all real estate transactions. He suggested that collecting money for this purpose via ad valorem tax “would be very hard on the people who live here” but that just charging people who are moving to the city would not affect current residents. He advocated putting simple language in a referendum asking people, “In general, do you approve of such a thing?” He acknowledged that a lot of detail would then need to be worked out.
***Note that according to reports produced by the city’s Building Department, in 2015 the city permitted 5 new commercial buildings and 90 new residential structures. For the first six months of 2016, the city has permitted 7 new commercial buildings and 65 new residential buildings.***
Margaret Kirkland, a non-city resident, spoke for the Amelia Tree Conservancy and said the organization was in favor of investigating the creation of a land bank or trust. She said that there would probably need to be multiple such items created on the island, “if we are to have any green spaces at all.” She agreed with Williams that a transaction fee sounded more reasonable than upping the property tax.
Commission discussion
Vice Mayor Robin Lentz began the discussion. She said that when people build a new home they are paying a parks and recreation impact fee, which is essentially a real estate transaction fee. She said that if the FBCC were to move forward with this idea, she would prefer to use the impact fee as a mechanism, rather than taxing the entire population. Bach agreed that using that fee would involve a study. She said that currently that impact fee is only charged to residential, not commercial or industrial construction. Should the FBCC decide to move in that direction, she suggested that they might consider adding impact fees for the types of new construction not currently covered.
Commissioner Len Kreger said that the impetus for this action was to protect the environment, adding that he believed that there was commission consensus on that point. He said that he had considered a concern raised by Commissioner Tim Poynter during an earlier discussion and agreed with Poynter that it didn’t seem proper to add such a fee to real estate re-sales. Kreger said he would consider using the impact fee as applied to new construction only. He suggested that newcomers would not oppose the fee because, “I think they would want to protect the environment, too.”
Commissioner Roy Smith also agreed with Poynter adding, “You have to be careful how you do it.” He said that he didn’t think it would be fair to impose such a fee on people who already live in the city who are building new homes. Kreger reminded Smith that in such situations currently people are required to pay impact fees.
Vice Mayor Lentz countered by saying, “At the end of the day, you have a new resident.”
Poynter said, “I’m all for saving the environment. My only rub to this whole thing is that we are putting the burden on newcomers.” He commended Sapp and the work to acquire property for the Greenway, stressing that all the people bought into the importance of the project and their need to contribute to it. “What we are asking now,” he said, “is walking away from the responsibility [of the entire community] and asking anyone coming in [to the community] to pay for it. That’s where my rub is. I have no problem with a fee raised to pay for [a land bank] but I feel the whole community should pay for it, not just people moving in.”
Lentz countered. “The new people moving in are reaping the benefits from the bond debt [to create the Greenway]. Just playing devil’s advocate—they didn’t pay earlier. It’s the same argument for the water system.”
Kreger continued to press for a referendum, but Poynter said that he did not believe that the city needed to waste time on a non-binding referendum. “We are not asking the citizens who live here to pay a nickel,” Poynter said. “Why wouldn’t they say ‘Sure! Let’s nail the next people!’” Commissioners seemed to buy Poynter’s argument.
Kreger asked, “So where do we go next?” Bach suggested that there should be a study to determine the best approach. Poynter said that it sounded like commissioners were leaning toward going with an impact fee. “If that’s the case,” he said, “we will have to set money aside to do a study in order to set the fee.”
Mayor John Miller asked Bach, “Would that study include how much developable land there is, how much it would cost, and how to separate this part of the fee from the money needed for Parks and Recreation?” Bach said it would.
PAB Chair Judith Lane was recognized. She advised commissioners to look at annexations in considering this issue. She said that new developments are being built in the unincorporated part of the island that request annexation into the city after development. Many of these areas have been clear-cut for development. Such actions avoid impact fees. “There’s a lot to think about,” she said. “Maybe you need to have someone put together a list of all the different possibilities. There are a lot of different ways people can come into the city without buying a new place.”
Commissioner Tim Poynter said that the only way to address Lane’s point would be to buy land outside the city and annex it before it is developed. “It will be interesting to see what the study reveals,” he said, “because there is only so much land left undeveloped in the city that we could generate the fee from. The area out 14th Street and along the Parkway is not in the city. We are not going to get a bite at that apple.” Poynter suggested, “If you don’t approach the project with the idea of using impact fees, you could ask all the citizens if they were willing to buy land outside the city to incorporate as conservation lands.”
Smith asked commissioners to remember that if the city buys land for conservation, the land is taken off the tax rolls. Lentz added that they city will also need to maintain it. “We run on taxes here,” Smith said, “that’s how the government can operate. It would be nice to have the land [in conservation] but we still rely on taxes to run and maintain the city. A lot of stuff has been built here without thought to maintaining it. You’ve got to think the whole thing out, because there are a lot of costs to it. If you take the land off the tax rolls, people are going to have to pay more taxes to take care of it.”
Bach said that there is time to work through details, but that if a referendum is to go on the ballot, a decision needs to be made by August 30. Commissioners showed no interest in proceeding with a non-binding referendum at this time. Kreger suggested that it would be better to ask the city manager to do a study of impact fees.
Sapp was recognized again. He opined that impact fees would not generate the kind of money needed to buy land in today’s market. He added that land taken off the market has a value to the community as well. Sapp said, “It’s a matter of what you want to do as a community.” He urged commissioners to look at the amount of revenue that could be generated by adjusting the impact fee by various levels.
Poynter said that in order to arrive at an impact fee, the city manager will need to take an inventory of what undeveloped land is left in the city that is buildable—not wetlands or other types of land that cannot be built upon. He said he did not disagree with Sapp’s assessment that the impact fee approach would not bring in sufficient money to purchase land. Poynter reiterated his belief that it is the responsibility of the community as a whole to decide whether indebtedness should be incurred to purchase certain properties. “Say it. Put it on the ballot. Just like they did with the Greenway, And take responsibility in front of the whole community,” Poynter said.
Lentz suggested that Poynter’s call for a referendum could be addressed after the study is done and more details are known. Bach agreed. She said that she and the City Manager could work together to come up with options and revenue numbers for achieving the commission’s goal of adding to conservation lands. She opined that much of this work could be done without having to spend money on a consultant.
The FBCC did not discuss purchase of particular lands or how it would be determined which lands should be targeted for purchase.
A complex issue when you start getting into all the different scenarios. Judith Lane had an excellent point about annexed lands especially when you consider the 160 acres of Crane Island. I agree with Tim that this cost should be borne by all property tax owners (like the Greenway bond) which would cover annexed property. To impose a real estate transaction tax will only make the costs to purchase a home or start a business more expensive. When I think of Martha’s Vineyard and Nantucket, I think of exclusive communities. Is that the image we want for Fernandina Beach?
Designating any property as “Recreation” would require voter approval before it could be sold and my interpretation of the City Charter would carry that restriction over to land designated as “Conservation”.
In some ways, I question how much additional land is really needed. Stormwater and conservation experts should identify any parcels that are vital for those reasons. When you think of the Greenway, existing parks, golf courses, fort clinch and AI state park, there is so much green space already existing – certainly much more than other coastal communities. I think back to when the City was looking to convert some existing land over by the golf course from totally wild to a passive park and there was such an outcry by residents (county, not city) in an adjacent subdivision because they enjoyed the privacy and “value” the wild nature of the land provided them. How much of that is driving this discussion?
lot of details to be worked out. but this could be a great idea
This strikes me as an excellent idea. Many people here are concerned about preserving the island and and avoiding overdevelopment. This could be an effective way to help do that.
The purchase of land with old growth trees needs to be a priority. The island is losing these legacy trees at a rapid pace now. My concern is that the City process of research and discussion will take years and invaluable trees, along with our island charm, will be lost forever.