Attorney warns proposed impact fees could imperil apartment project; commissioners ask staff to draft exemption language

Cole Oliver, an attorney with Lowndes Law representing EKS Sooner Development, told the Cocoa Beach City Commission during public comment that the commission’s recently proposed impact fees could threaten a major apartment project at the city gateway. "Staff let us know today it's approximately $475,000 worth of additional impact fees being proposed on top of the approximately $1,900,000" already planned for the project, Oliver said, arguing the increase could derail the development.

Oliver said the development agreement for the site was approved in November 2023 and that the project remains in permitting with multiple agencies, including St. John's Water Management District, the U.S. Army Corps of Engineers, the city of Cocoa Beach, the City of Cocoa and FDOT. He said the site plan is before the city and the developer cannot obtain building permits until permitting is complete.

Oliver also questioned the legality of assessing new impact fees for what he characterized as replacement or renewal of existing municipal facilities, noting the draft report states expenses for normal renewal and replacement should be borne by all users or the municipality rather than by an impact fee. "The vast majority of the impact fees that are in this report are related to building this facility, which was replacement of a city hall that was built in, I believe, 1961," he said.

Commissioners took up the concern during the commission reports and debate that followed. One commissioner asked staff to look into exempting projects that have active development agreements from the proposed fees; the city attorney agreed to work with Community Development to draft precise language that could accomplish that exemption.

Commissioners discussed the fiscal tradeoffs of exemptions and the larger revenue picture. During the discussion the mayor and other commissioners cited percentages and dollar estimates: county impact fees of roughly 3.42% and the city’s proposed share of about 0.87% were mentioned; one commissioner said cumulative connection and impact charges could total roughly 7.7% on a $55 million project. Commissioners and the mayor noted that, under some assumptions, ad valorem taxes from the completed project could recoup the new fees in about 18 months, but they also warned that one percentage point can be decisive for projects operating on thin margins.

No final decision was made. Commissioners agreed to revisit the matter at the second and final reading, directed staff to provide the detailed numbers Oliver and the commission requested, and asked the city attorney and community development to develop draft exemption language for projects with existing, active development agreements.

The discussion concluded with staff commitments to return with clarifying information before the commission’s next vote on the proposal.