Budget limbo affects private projects, too

Published May 13, 2007

What's happening in Oldsmar is an excellent illustration of how the state Legislature's threatened cuts in local government revenue would affect not just public projects, but private ones, too.

Last week, Oldsmar City Council members met to talk about Olds Square, a $100-million mixed-use project by a private developer that officials hope will be the centerpiece of their downtown redevelopment.

The developer, JES Properties, has asked for incentives from the city to assist with financing of the project, which probably will include a hotel, apartments, parking and a public plaza.

For example, JES is asking for a share of the increased property tax revenue generated by parts of the project. The developer is also asking for extra building height, and City Council members who object to the height request wondered whether the city could just provide some funding to the developer instead.

The whole discussion was truncated, however, by uncertainty about the city's budget. The Legislature has promised the public tax reform and has indicated it probably will focus on reducing taxes collected by city and county governments. However, legislators were unable to reach a decision by the end of their regular session. They will try again during a special session June 12 to 22.

Because of that delay, local governments, including Oldsmar's, have no idea how much money they will have to work with when the fiscal year begins Oct. 1.

"It's hard for us to do any kind of business because of the unknown, " said frustrated Oldsmar Mayor Jim Ronecker.

An official of the Upper Tampa Bay Regional Chamber of Commerce who watched the City Council meeting said he feared that the continued financial uncertainty could reduce Florida's attractiveness as a location for development projects that benefit the state's economy.

City Council members decided they would have to wait to make final decisions about incentives for Olds Square.

City and county governments hope the Legislature will not adopt draconian measures that will decimate their budgets. However, as the date to finalize tax millage rates gets closer, some officials just want an end to the uncertainty.