The of Impact Fees IMPACT
'Catch of the Day' owner outraged at city's water, sewage impact fees
BY PAM BRANNON Gulf Breeze News news@gulfbreezenews.com

Patrick Welch and his partner are working to open a seafood sports bar and grill called 'Catch of the Day' in the new Sea Shell Collections shopping plaza in Gulf Breeze.

"If I had any idea before we started this project what the city was going to hit us with in impact fees alone, I never would have tried to open a new business in Gulf Breeze," Welch said.

"You will be seeing fewer smaller entrepreneurs like us opening businesses in Gulf Breeze from now on. It is killing small business here. I would have taken my business to some other community - or county."

Impact fees are assessments imposed by governmental agencies and utilities providers on new business and residential construction to generate revenue for infrastructure maintenance. Water and sewer utilities long have had impact fees - long known as tap fees. Highway impact fees are fairly new in Santa Rosa County.

The City of Gulf Breeze calculates the amount of increased water its treatment plant will have to process for a new business or home. It's the way the city determines how much to bill as water and sewage impact fees.

Welch said after he and his partner filed their plans for their new restaurant, they received a bill for more than $50,000 in water impact fees from the city alone.

"And the city won't (approve) your architectural plans and permits until you pay them the impact fees," Welch said. "Our architect had told us the impact fees from the city - for sewer and water - would be about $10,000 to $12,000.

"The city does not tell you what the impact fee will be until after they review your plans. When we got a bill for about $53,000, I was in shock. And that was in addition to more than $12,000 in impact fees that the Moultons, the developers of the shopping center, had already paid for us.

"That was an expense of about $40,000 that we had not planned for but had to come up with before we could even start our construction. That affects everything - from the number of employees you hire to the quality of tables you order," Welch said.

Welch said it also affected the timeline for opening.

"Between money issues and waiting for the city and county approvals - the county reviews and approvals are taking much more time than expected - we are not going to be open until late August or early September now, at least," Welch said. "That means we miss the whole summer season. We had originally planned to be open by July 4."

The partners also will receive a bill for additional impact fees from Santa Rosa County before the county's planning and zoning will sign off on final inspections on the business. But those will be billed over a seven-year period, with one-seventh of the total being due before the business opens.

"You begin to wonder, why are you doing this," Welch said.

Sea Shell Collections stores get a break

All news is not bad for Catch of the Day, however, because there was another business complex on the property where Sea Shell Collections now stands, each unit in the complex will get an impact fee credit from the county.

Darliene Stanhope of the Santa Rosa County Planning and Zoning Office said Catch of the Day restaurant would normally be billed $6,677 for every 1,000 square feet in the business. Since the restaurant is 3,000 square feet in size, it normally would have paid $20,000 in county impact fees divided over seven years.

But with this credit from the last business on the site, the impact fee bill will be significantly less.

"We cannot say exactly what the impact fee will be until they file with us and we see which units they are occupying in the plaza," Stanhope said, "but it will be much, much less. That whole plaza got a big break because of the businesses that stood before."

Publix Supermarket in Gulf Breeze, which is in the same plaza as Catch of the Day, paid a total road impact fee to the county for roads of only $2,722.98. In contrast, the Publix store that opened in Pace in November 2007 paid a county impact fee $398,928.84.

The county impact fee is revenue earmarked for roads only, Stanhope reminded.

"All new business in the county pays per thousand square feet," she said, "unless it is a bank or motel, because a bank pays per drive-through lane, for example. And motels are charged per room. It is all about the impact on the roads."

Stanhope said it does not matter if the business locates in Milton or Gulf Breeze or Navarre or Jay; they all pay a flat fee per thousand square feet.

The Wal-Mart that opened in Navarre last year paid $827,956.04 in impact fees.

"They had a huge impact on Highway 98 traffic and road maintenance, and they were brand new with no business on that spot before them," Stanhope said. Catch of Day faces $70K water fee

The Gulf Breeze City Planning Office confirmed that Catch of the Day did have to pay more than $50,000 in water and sewer impact fees to the city.

"They have 116 seats planned in the restaurant and are taking two of the units in the shopping center," Thomas Lambert, Gulf Breeze Assistant Public Services Director explained. "They have a lot of fryers and dishwashers. The Moultons - the developer - already had paid $12,000 in impact fees for those two units, which brought the total city impact fees for the restaurant to just over $70,000. The developer paid for a water meter for each unit and a sewer impact fee for office use, then anything over and above what they paid is for the individual business owner to pay.

"This is a one-time fee," Lambert said.

Smaller businesses pay significantly lower impact fees. The Starbucks coffee shop that recently opened in Tiger Point will dole out $15,197 over seven years to Santa Rosa County for the road impact fee. The water and sewer impact fee billed by Midway Water System for Starbucks was $8,755.

Welch said it's easier for a corporation like Starbucks to come up with impact fees.

"We don't have deep pockets like Starbucks," Welch said. "It is hard for smaller entrepreneurs like us to come up with impact fees like these, on top of all the other fees charged by the city and county.

"I would never, ever do this again, that is for sure. I hope, when all is said and done, we actually can afford to get this business open."