Homeowners in Avenir, a 3,250-home community being built off Northlake Boulevard, will likely pay roughly $1,800 in fees on top of their regular property taxes.
The question: Will it be financially beneficial in the long run?
The developers say there’s an initial savings and a long-term benefit to having professionally managed infrastructure. They’ve asked Palm Beach Gardens to allow a special taxing district to pay for roads, drainage, water distribution, recreation, common area landscaping and conservation.
If approved, homeowners would be required to pay a to-be-determined annual fee in addition to standard property taxes. The average homeowner will pay about $1,800 per year, according to early estimates. Commercial property owners will pay by the square foot.
A community development district would allow the developer to issue tax-exempt bonds to build and maintain infrastructure for Avenir, which also includes roughly 2 million square feet of commercial space.
Such a district will allow “growth to pay for itself,” said Ken Tuma, a planner for Avenir and principal of Urban Design Kilday Studios.
“It is a financing tool and also a maintenance tool,” he said.
Florida law requires each contract for the initial sale of residential property in the district contain a statement disclosing the fees in bold, conspicuous type immediately before the signature line.
The developers pay the fees until the homeowner takes over, Brian Seymour, an attorney representing Avenir, said.
The Palm Beach Gardens City Council gave an initial approve to Avenir Holdings’ request to establish the district. It will require a second vote for final approval at a future council meeting.
There are more than 600 community development districts in Florida, but only one in Palm Beach Gardens. The district for Old Palm was approved by the City Council in 2002, according to the city.
The initial price for property owners within a community development district is generally lower because of deferred infrastructure costs, according to a city report on the proposal.
Homeowners also benefit from professional management of the infrastructure, Tuma said.
The housing crash hit some of the special development districts hard. Florida’s auditor general in 2011 urged lawmakers make it harder for community development districts to borrow after finding almost one-third were behind in bond payments. Others were using reserves to pay their debt.
Tuma acknowledged some of districts struggled. In the case of the weakest community development districts, bondholders could refinance, he said.
Seymour said the investors are usually institutions with experience.
A board of five elected supervisors will oversee the district. Just like other local government entities, they must operate according to the Sunshine Law, Tuma said.
The slate of supervisors initially will be Avenir executives, he said. Control of the board will begin to transfer to property owners when the district is in its sixth year and at least 250 qualified voters live there.