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Home My WebLink AboutItem #09 Proposed Road Impact Fee Settlement Agmt. center of Good [" Im~~ 00-. AGENDA ITEM COVER SHEET Meeting Date: 10/16/07 Item # 9 Contact Name: Contact Number: Robert D. Frank 407 -905-3110 Reviewed By: Department Director: City Manager: ///IJk- ~ Subject: Proposed Road Impact Fee Settlement Agreement Between the City of Ocoee and Ocoe,LLC/Fountains West Background Summary: The developer of the Fountains West project on the corner of Ocoee-Apopka Road and West Road has disputed the method of application of the City's Road Impact Fee Rate. Ocoe, LLC, the project developer, contends the City's Supermarket Impact Fee Rate of $19,181.45/1 OOOsf applies only to stand alone supermarkets and should not apply to those supermarkets located within a retail center. Staff disagrees with this position but does believe Ocoe, LLC moved forward with the project based on financial projections using an incorrect lower impact fee rate based on the City's retail impact fee rate. Ocoe, LLC asserts that they originally submitted the application for annexation and rezoning prior to the addition of the City's "supermarket" road impact fee rate and that their estimates for the project were based on the regular retail rate, which would have been the correct calculation at that time. Ocoee adopted it's Supermarket Road Impact Fee Rate on March 15, 2005. Application for annexation and rezoning were made four days prior on March 11, 2005. During the development review process Ocoe, LLC agreed to contribute $200,000 to the construction of the turn lanes on West Road and made cash payment to the City for the turn lanes. Ocoe, LLC has advised that they were willing to contribute this amount in part because they believed that their impact fees were to be based on the lower retail rate not the higher supermarket impact fee rate. In order to avoid any administrative challenge, litigation or appeal the City has worked out the attached agreement with Ocoe, LLC. The agreement provides that Ocoe, LLC will be credited Road Impact Fee Credits in the amount of $392,953.17, which is the difference between the Supermarket Impact Fee Rate of $19,181.45 and the highest retail rate of $9,258.39. In turn, Ocoe, LLC agrees not to seek a refund of the $200,000 paid for the development of the West Road turn lanes and also agrees not to further dispute the Supermarket Impact Fee Rate of $19,181.45 or the high turn-over restaurant rate of $25,893.39. Even with the Road Impact Fee Credit taken into consideration Ocoe, LLC will pay $ 811,937.75 in Road Impact Fees and road improvement contributions ($611,937.75 road impact fees + $200,000 contribution West Road turn lanes). Issue: Should the City of Ocoee approve the Road Impact Fee Settlement Agreement with Ocoe,LLC? Recommendations Staff recommends approval of the agreement. Attachments: Road Impact Fee Settlement Agreement between City of Ocoee and Ocoe, LLC/Fountains West Project Financial Impact: $392,953.17 of Road Impact Fee Credits Type of Item: (please mark with an "x'1 Public Hearing _ Ordinance First Reading Ordinance Second Reading Resolution Commission Approval x Discussion & Direction For Clerk's DeDt Use: _ Consent Agenda Public Hearing _ Regular Agenda _ Original DocumenUContract Attached for Execution by City Clerk _ Original DocumenUContract Held by Department for Execution Reviewed by City Attorney Reviewed by Finance Dept. Reviewed by 0 d1 ~ If- N/A N/A N/A 2 THIS OUTLINE IS WRITTEN IN CONTEMPLATION OF THE COMPROMISE OF CERTAIN DISPUTES BETWEEN THE CITY OF OCOEE AND OCOE, LLC. THEREFORE NEITHER THIS OUTLINE NOR ITS CONTENTS SHALL BE INTRODUCED AS OR REFERRED TO AS EVIDENCE IN ANY PENDING OR SUBSEQUENT ADMINISTRATIVE APPEAL OR LITIGATION, AND SHALL BE SUBJECT TO ALL APPLICABLE SETTLEMENT PRIVILEGES CONTAINED IN FEDERAL RULE OF EVIDENCE 408, FLA. STAT. 90.408, OR ANY LIKE OR SIMILAR STATE OR FEDERAL, STATUTE, REGULATION OR RULE OF LAW. Road Impact Fee Settlement Ae:reement between City of Ocoee and Ocoe. LLC / Fountains West Proiect 1. Recitals a. Dispute between City and Developer over the applicability of the "supermarket" road impact fee rate to the proposed Publix to be located in Fountains West Shopping Center. b. The City Staff position is that "supermarket" road impact fee rate of $19,181.45 per 1,000 sf applies to both a "standalone" supermarket and a supermarket located within a retail development, as reflected in a Memorandum from 1. Antonio Fabre dated August 28, 2007. c. The Developer position is that supermarket rate applies only to a "standalone" supermarket that is not part of a retail development and that the applicable road impact fee rate for a supermarket in a retail development is the general "retail" road impact fee rate. d. The Supermarket rate was added to the Road Impact Fees with the 2005 Update adopted on March 15,2005. Prior to that time, supermarkets were charged the general retail road impact fee rate. e. The Fountains West Publix supermarket is the first supermarket within a retail development to apply for a building permit since the 2005 Update of the Road Impact Fee Ordinance and the establishment of the supermarket rate category. f. The Developer began discussions with the City staff regarding the Fountains West project in 2004 and submitted its application for annexation and rezoning on March 11,2005, prior to the adoption of the supermarket road impact fee rate category. g. The time schedule for the Fountains West project took longer than anticipated by the Developer due to issues related to the West Road realignment h. The Preliminary/Final Subdivision Plan for Fountains West PUD and Preliminary/Final Site Plan for Lot 6 was approved by the City Commission on July 11, 2007. ORLA_597304.1 i. At the time of approval ofthe P/FSP, the Developer agreed to contribute $200,000 towards the West Road Turn Lanes, which cash payment to the City has been made by the Developer. j. At the time the Developer agreed to pay the City $200,000 towards the West Road Turn Lanes, the Developer was under the belief that the road impact fees for Publix would be $250,772.15 (based on $6,127 per 1,000 sf) rather than $759,585.42 (based on $19,181.45 per 1,000 sf). k. The Developer's proforma presented to Publix was based on the $6,127 per 1,000 sf rate and Publix has advised the Developer and the City that it will not pay the supermarket road impact rate set forth in the Road Impact Fee Ordinance. 1. The Developer has advised the City that it would not have agreed to pay $200,000 to the City towards the West Road Turn Lanes had it realized that the Road Impact Fee Ordinance established a rate of $19,181.45 per 1,000 sf for Publix. m. The Developer has also disputed the staff position that the restaurant road impact rates set forth in the Road Impact Fee Ordinance apply to restaurants within a retail development. n. The Developer has threatened litigation with the City regarding the Road Impact Fee Ordinance and its application to supermarkets and restaurants within a retail development. o. Litigation between the City and the Developer will be costly to both parties, involve substantial risk to both parties, and potentially delay the construction of the Publix supermarket at the Fountains West Project. p. In the event the "supermarket" road impact fee rate applies to the Fountains West project, there is a possibility that Publix will abandon its plans to proceed with the Publix supermarket at that location. q. City and Developer have mutually agreed that it is preferable to resolve their dispute without litigation. 2. City and Developer will enter into a Settlement Agreement which will include the above Recitals and such other recitals as may be mutually agreed upon. 3. The Developer agrees not to appeal the City staff determination of the road impact fees for the Fountains West project, which includes charging Publix based on the supermarket road impact fee rate of$19,181.45 and restaurants based on the high turnover (sit-down) restaurant rate of$25,893.39. 4. The Developer agrees not to institute any administrative challenge, litigation or appeal with respect to the validity of the City Road Impact Fee Ordinance, including but not limited to the applicability of the supermarket and restaurant rates to the Fountains West Project. 2 ORLA_597304.1 5. The Developer agrees not to seek a refund or credit with respect to the $200,000 previously paid by the Developer towards the West Road Turn Lanes. 6. In consideration for the foregoing, the City agrees to provide the Developer with Road Impact Fee credits in the amount of $392,953.17 which has been calculated based on the difference between the supermarket rate of $19, 181.45 per 1,000 sf and the highest general retail rate of$9,258.39 per 1,000 sf. The credit will be provided at the time the building permit is issued for the Publix supermarket and only in the event such building permit is applied for and issued no later than December 31, 2007. 7. Developer will provide the City with a general release of all claims arising prior to the date of the Settlement Agreement which the Developer may have against the City and the City's elected officials, employee's, consultants, agents and representatives; provided, however, that such release shall not modify any of the obligations of the parties under any prior written agreements (i.e., the PUD Agreement, the West Road Realignment Agreement and the Fountains West Turn Lanes Agreement). IN WITNESS OF THE FOREGOING, the parties have set their hands and seals this day of ,2007. OCOE, LLC CITY OF OCOEE By: By: S. Scott Vandergrift, Mayor Tom Vincent, Vice-President ATTEST: ATTEST: Beth Eikenberry, City Clerk FOLEY & LARDNER LLP APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON , 2006 UNDER AGENDA ITEM NO. By: City Attorney FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA; APPROVED AS TO FORM AND LEGALITY this day of ,2006. 3 ORLA_597304.1