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Beautiful Districts Are Blighted On Paper

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By CHRISTIAN M. WADE, The Tampa Tribune

Published: September 23, 2007

PORT RICHEY - Behind the iron gates of Harbor Pointe, the average house costs more than $1 million.

This is one of west Pasco County's most exclusive areas, home to physicians, lawyers and real estate developers who drive BMWs and Lexus coupes purchased with six-figure salaries.

It's not the kind of neighborhood that would be considered blighted.

But that's exactly what it is, at least on paper.

This subdivision at the water's edge - along with the rest of this 2-square-mile city - was declared blighted about four years ago, which allows the municipality to keep more than half of the county property taxes its residents pay each year.

That money is pooled with an equivalent portion of city tax proceeds and deposited into a special trust fund that can be used only for redevelopment - of neighborhoods and shopping districts, for example.

Port Richey is one of four such special taxing areas in Pasco County.

They're called community redevelopment districts, and in the last six years they have sucked more than $16 million from the pockets of county and municipal taxpayers.

Over the past fiscal year alone, redevelopment districts in Port Richey, New Port Richey, Dade City and Zephyrhills have collected an estimated $6.5 million. Next year, that figure is expected to rise well beyond $7.4 million.

Each pot of money is controlled by city managers, planners and redevelopment agencies, most of them consisting of city council or commission members.

CRAs use a funding mechanism called tax increment financing, which allocates a portion of the tax money generated from increasing property values within the designated area.

Officials in the four cities say the use of tax dollars for redevelopment has boosted property values and vastly improved long-neglected and economically depressed neighborhoods.

What's actually been done with the money varies from city to city.

New Port Richey, for example, has devoted CRA funds to pay off bonds sold to help finance the new $14.1 million recreation and swim center. To date, the city has leveraged more than $27 million in bonds and a line of credit.

Port Richey, meanwhile, has used a lion's share of its CRA proceeds for salaries and consulting fees, with plans to spend future funding on long-term projects such as dredging canals and redeveloping the waterfront.

In Dade City and Zephyrhills, which operate smaller redevelopment zones that receive less money, officials have focused on specific areas of their downtowns.

Calling For Accountability

State and county officials have little regulatory power over the programs and in most cases don't know how the local governments have been spending the money.

In December, the county commission sent a questionnaire to the four cities, asking for a detailed accounting of CRA spending.

The county received just one response, from Zephyrhills, said Pasco Budget Director Michael Nurrenbrock. And there has been little communication between county and the cities since the four redevelopment districts were established.

'We don't suspect that there's anything wrong, but we just don't how and where the money is being spent,' he said. 'We need to account for every county tax dollar.'

Tax watchdog groups say CRA districts are a recipe for irresponsible spending.

'There's no accountability and even less oversight for these redevelopment districts,' said Dominic M. Calabro, president of Florida TaxWatch. 'They're not good for the communities they serve, and in many cases the taxpayers don't know they exist.'

Calabro said the lack of checks and balances in the laws governing redevelopment has led to some cities using the fund like a blank check.

'It's a financial tool for cities,' he said, 'but like any tool, you have to use it properly.'

Carol Westmoreland, of the Florida League of Cities' Redevelopment Association, said CRAs are providing necessary financing to renovate aging housing stock, resurrect blighted neighborhoods and breathe new life into stagnant downtowns.

'In many cities across the state, the infrastructure is crumbling and the needs of these areas have gone unmet for many years,' she said. 'We're playing a catch-up game.'

Westmoreland suspects most of the criticism is politically motivated.

'Many of these CRAs were created years ago under partnerships between the cities and counties,' she said. 'Now, all of a sudden, county governments want to pull the rug out.'

Criticism Is Growing

Under state law, CRAs must submit annual financial statements to county taxing authorities, but state officials say those spending reports are often vague.

'A lot of times, these financial statements aren't detailed enough to tell where the money has been going,' said Marilyn Rosetti, with the Florida Office of the Auditor General.

There is also growing criticism in New Port Richey and Port Richey about using CRA dollars for staff salaries and benefits, for consultant fees and for other expenditures that some argue have nothing to do with redevelopment.

'There's a lot of CRA expenditures that are subject to interpretation,' Rosetti said.

Officials in the two west Pasco cities say redevelopment is more than just putting in new sidewalks and tearing down old buildings. They defend CRA spending on community policing initiatives and code enforcement hires, for instance, saying such expenditures are the first line of defense against blight.

While property values in Pasco's CRA cities have risen dramatically since 2000, officials say it's not clear whether the increases were the result of redevelopment or market forces.

'It's extraordinarily difficult, if not impossible, to measure the success of these programs on rising values,' said Property Appraiser Mike Wells. 'It would be speculative at best.'

For New Port Richey and Port Richey, the CRA has been a mixed blessing. At least half of the city and county property taxes collected each year cannot be used for anything but redevelopment. That has dried up general fund expenditures for police and fire coverage and other municipal services.

What's more, with statewide property tax reforms forcing cities to make due with less, scrutiny of redevelopment spending is expected to increase in coming years.

Local officials are mindful of the tightening purse strings. As Port Richey Councilman Dale Massad puts it:

'It's like a pot of gold. But we need to be very careful how we spend it.'

Coming Monday: New Port Richey rolls the dice on an aggressive redevelopment program.

Reporter Christian M. Wade can be reached at (727) 815-1082 or cwade@tampatrib.com.

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