Pasco County is pulling out the stops in its fight against the state’s Live Local Act, which elected leaders say could have dire fiscal consequences for the county.
Board members and the executive director of the Pasco Economic Development Council Inc., rang alarm bells about the economic impacts the new law could have, during the county board’s Jan. 23 meeting.
The Live Local Act aims to increase workforce housing across the state by allowing the conversion of land zoned for commercial, industrial or mixed uses into multifamily developments — provided the project serves people who meet income criteria.
The law also preempts local government from blocking the developments and it allows a tax exemption for newly constructed or substantially rehabilitated developments that meet criteria for setting aside units for households earning 120% of Area Median Income (AMI).
The idea of the law is to make local housing available for a community’s workers.
In Pasco County’s case, however, elected leaders say the law undermines the county’s persistent attempts to bring more jobs to a county that has long played a bedroom community role for nearby jobs-rich counties. Seven out of 10 members of Pasco’s workforce commute elsewhere for their jobs.
The county board has been focused on efforts to bring jobs closer to home for its residents through its policy decisions that protect industrial and commercial lands from being converted to residential uses.
It also has worked closely with the Pasco Economic Development Council (Pasco EDC) on a program that seeks to identify sites and get them ready for future industrial development.
The county and Pasco EDC also work together to offer economic incentives to attract companies in targeted industries to locate in Pasco.
Consequences of law could be far-reaching
Pasco officials said they’re glad that Senate President Kathleen Passidomo, sponsor of the bill, has agreed to an amendment that would remove industrial land from being eligible for conversion.
But that doesn’t go far enough, they said.
Bill Cronin, president and CEO of Pasco EDC, said he’s not sure the Live Local Act will provide housing that’s affordable to workers.
“Honestly, I don’t think the way it is structured right now actually helps anybody, if they’re eligible at 120% of AMI,” Cronin said. “That is not affordable housing.”
“It is 100% (apartment rental) market rate and not only is it market rate, it’s high market rate. It’s not helping people it was intended to help,” he said.
Commission Chairman Ron Oakley agreed: “You know, you’d think Live Local is for affordable housing and it’s not at all affordable.”
Commissioner Kathryn Starkey also noted that Live Local doesn’t benefit local developers, but instead benefits institutional investors.
Cronin agreed: “There is not really local developers that are doing multifamily development, they’re all out-of-state. So, their allegiance to this area and their understanding, I would question, because they don’t have the same skin in the game as we do.”
Commissioner Seth Weightman highlighted another aspect of the new law that he finds troubling.
“There’s another clause in there where existing Class A (apartments) can apply and be reclassified as Live Local.”
There are two existing apartment developments that are seeking the Live Local designation.
Starkey said she and Commissioner Jack Mariano met with Senate President Passidomo.
Pasco officials are deeply concerned about the potential conversion of existing apartments to tax-exempt status, she said.
“We didn’t find one other county or city who knew that it was a possibility that existing apartments and future apartments can come off their tax rolls,” Starkey said.
Starkey added that she asked if a cap could be imposed on the number of developments that could come off the tax rolls and was told that a cap would be illegal.
The fiscal impact could be enormous, county leaders said.
David Goldstein, Pasco’s chief assistant county attorney, said “in theory, if these apartment complexes continue to qualify, they could be off our tax rolls for the next 35 years.”
The county did a calculation just for the two apartment complexes that have applied to convert to Live Local, and that turned out to be about $38 million in lost tax revenues, Goldstein said, adding that could just be the tip of the iceberg, if other apartment complexes seek the exemption.
Oakley said the county’s other taxpayers would bear the brunt of those lost revenues.
“Somebody has to make up for all of those services, and that’s the rest of our citizens who are going to be charged extra to pay for services in those areas where they’re not collecting ad valorem (property taxes),” Oakley said.
Goldstein said other taxing bodies, such as the school board, would also feel the impacts.
If law doesn’t change, county prepared to sue
Commissioner Mariano said he hopes lawmakers are paying attention to the potential ramifications.
If the law isn’t changed, the county board already has authorized its legal team to file a lawsuit challenging the constitutionality of the Live Local Act.
But Mariano said that may not go far enough. The county may need to impose a moratorium to ensure adequate protection for its citizens, he said.
Goldstein told Mariano that he’d prefer not to use a moratorium, but to use legal action and other county development tools, first.
“I can’t promise you a (legal) victory, but I do feel pretty good about some of our arguments,” Goldstein said.
“One of them is that we don’t think these rents are a charitable purpose.
“The whole way this law was orchestrated, the whole reason that the Legislature found it to be tax-exempt was under the theory that this was a charitable (cause).
“This is the first time we can find that the Legislature has given a tax break to a for-profit corporation under the theory that it’s charity, but in reality, in Pasco County, it’s not charity in my opinion.
“These are just market-rate rents. In fact, the two apartment complexes that came in first didn’t even reduce their rents, at all. These are the same rents they were charging prior to Live Local. The same rents they are charging now.
“So, they’re basically getting a tax exemption for doing virtually nothing,” Goldstein said.
He also noted there’s the possibility that Property Appraiser Mike Wells would read the county’s complaint and that could influence how he handles requested exemptions.
“So, that’s the first step, if we don’t get the law changed, go ahead and file against those two companies. We hope they go away, or if they don’t go away, we hope that Mike Wells reads our complaint and says, ‘I’m not issuing these exemptions. These may be unconstitutional, these exemptions, so maybe I should not be issuing them.
“I don’t know what Mike Wells will do when he gets them,” Goldstein said.
Published January 31, 2024
