Winter Park Realities – No Need to Fear

January 18, 2010

The following details what I believe are important realities we must face in setting reasoned policies and priorities for Winter Park. I encourage comments as we all seek to improve our knowledge and understanding.

• We are essentially a no growth community.
• No growth does not mean no change.
• We cannot control growth around us.
• We cannot control traffic.
• Housing bubble is burst.
• Revenues are contrained.
• Expenses are ever increasing.
• Central park is not threatened.
• Central park is our commercial core.
• Commuter rail is an opportunity, not a threat.

No Growth: We have essentially been a “no growth” community and will continue to be a “no growth” community. The number of single family homes on the Winter Park tax rolls increased from 7,430 to 8,990 between 2000 and 2009, a 2.1 compound growth rate. The increase of 1,560 properties consists of Wind Song (310 lots, currently 235 homes) and several small annexations since 2001. With Wind Song developed there is no place for organic growth. Further annexations will only make sense if there is clear benefit for the existing residential base (e.g., includes park land, significant revenue net of marginal cost, compatible housing and demographics, etc.). See schedule one and schedule two for details.

The number of residential condominium units increased from 1773 to 2290 between 2000 and 2009, a 2.9% compound growth rate. The increase of 517 units can be seen in downtown and a few other areas.

All other properties in Winter Park (which includes: commercial, not-for-profit, apartments, and government) increased from 1,106 to 1,273 between 2000 and 2009, a 1.6% growth rate.

Residential properties constituted 72% of Winter Park taxable value in 2000 and 78% in 2009.

While we are and will continue to be a “no growth” community we cannot afford to be a “no change” community: Our quality of life depends on the revenues we collect and the efficiency of our local government to spend those revenues on maintaining and improving the character and quality of Winter Park. Our revenue base is directly related to our property values and uses. Our property values in turn are directly related to our quality of life in a competitive market. That is, we must offer tangible benefits that create demand for Winter Park real estate at higher prices relative to surrounding communities if we are to maintain our tax base. Both our property values and quality of life are threatened if revenues cannot sustain our public safety, roads, parks, trees, lakes, sidewalks and other factors that distinguish and maintain our character and appeal at the highest levels. (See: Letter from the Orange County Appraiser.)

Growth Around Us: We have no control over growth occurring around us. Winter Park cannot stop developments that will impact our city. A million square feet of development could take place East of 436 and Aloma, and West of Fairbanks and I4 and we could scream all we want, but we could never control the outcome or the impact. This means that any redevelopment we agree to for Winter Park will end up having an inconsequential impact on total traffic, given the existing and expected impact we cannot control from outside our city limits. If you are a no growth advocate, spend your time at the Orange County Commission meetings, not Winter Parks’.

Traffic: Given that Winter Park is near the geographic center of one of the fastest growing metropolitan planning areas in the country, you will not be satisfied with whoever sits on our City Commission if your priority is to reduce traffic.

We cannot control cut through traffic in any meaningful way. The State controls 426 (Fairbanks/Aloma) and 17/92 (Orlando Avenue) and we cannot deter or restrict traffic flow on these major corridors. The city has asked for jurisdiction over 426 and 17/92 in the past and has been denied. According to recent Orange County traffic counts 40,000 cars per day enter and leave Winter Park on Aloma at Lakemont every day, 37,000 cars cross Fairbanks at Park Avenue every day, 27,000 travel Fairbanks just East of 17/92, and about 37,000 cars travel 17/92 between Fairbanks and Lee Rd each day. Winter Park has no control over this traffic or its growth.

We had modest influence over the development of Baldwin Park to help reduce its traffic impact through control of Lakemont Avenue, but now that door is open permanently with connections into Baldwin Park.

Housing: The bubble has burst. Winter Park permits for new single family homes fell from 118 in 2004 to 19 in 2009. Winter Park real estate brokers will tell you that residential prices in Winter Park are off between 20 to 30% from their 2006-2007 highs. That is, if you can find a buyer. Single family sales in 2009 were approximately 225, off 57% from the 2005 peak of 525 sales, and condominium sales were approximately 40, off 80% from their 2006 peak of 207. (See this schedule.)

Revenues: The General Fund includes police, fire, roads, tree, parks and almost everything other than our water and electric utilities. (See this schedule.) General Fund revenues are down 6% since a 2007 peak and we have limited flexibility to increase revenues without the benefit of increasing property values (which are in fact declining). Real estate sales transactions reset a property’s taxable value based on the current price paid. If prices stay flat or continue to decline, our tax revenue can only go up if we increase the tax rate. I would hope none of us will accept an increase in taxes while the value of our property declines.

Fee revenues for parks and affordable housing have dropped dramatically along with new home starts, additions, and alterations as would be expected. Parks impact fees have gone from $110,000 in 2006 to $4,000 in 2009, greatly reducing the discretionary dollars available to improve our parks on an annual basis. Further, direct annual park spending has been reduced by over 10% or $700,000 since it peaked in 2007. Affordable housing fees have dropped from $517,000 in 2006 to $103,000 in 2009. The city made a 10 year $100,000 per year commitment to an affordable senior housing project when this money was flowing in that now cannot be sustained through the fee payments.

Taxable values used to calculate your property taxes are virtually unchanged while sales prices have declined as much as 30%. Save Our Homes rules allow a maximum INCREASE in taxable valuation of no more than 3% per year, while they do not provide for any DECREASE. Save Our Homes protects home owners during periods of rising prices but protects local governments during periods of declining prices.

Expenses: The city layed off people and reduced spending as a result of the revenue reductions, but overall General Fund spending remains flat at about $45 million for the past five years. (See this schedule.) In real terms this is a reduction in spending given the increasing costs of doing business (we are spending the same and getting less). Rising costs are to be expected given State mandates, competition for talent, rising personnel/health costs, and now, both our firemen and policemen are unionized.

Central Park is not threatened: Central Park is defined by the borders of the 1911 Morse deed, through which runs a right of way for the railroad tracks. If the city uses the property for any use other than park the entire property reverts to the heirs of Mr. Morse, thereby assuring that Central Park remains intact in perpetuity. Not only is Central Park not threatened, it has been continuously improved with the aid of revenues to the city generated by the commercial buildings that border it.

The volatile politics of the last few years have been driven by a group of people who live in fear of changing what surrounds Central Park, not changing Central Park itself.

Central Park is the commercial core of Winter Park: Our unique downtown area was created as, and has always been a commercial center. (To confirm this look up a map of 32789 and ask why the train track curves into and then out of Winter Park.) Preserving both the uniqueness and commercial viability of our downtown requires a cooperative effort between property owners, store owners/tenants, preservationists, and the city. The need for and benefits of such cooperation has been lost in the fights over the former post office redevelopment and two four story buildings constructed in our downtown area over the past several years. Advocates of a broader commercial tax base downtown approved 4 story buildings along New York Avenue and were slandered for doing so. Now preservation interests have imposed sweeping controls that effectively prohibit anything over two stories from being built downtown while also unilaterally seeking to impose National Historic designation for much of the downtown area without support or input from commercial interests. Everyone is losing in this fight. Constructive resolution can only come if we all accept that commercial priorities must have a seat at the table. We simply cannot turn downtown Winter Park into Williamsburg as there will be no paying customers at the gate. If you want a viable downtown you must allow commercial interests to significantly influence the outcome as, by definition, they have interest in and thus understanding of what works and what doesn’t work.

Commuter Rail is an opportunity, not a threat: Now that Sun Rail has been approved by the State, those who have always opposed a stop at our downtown Amtrak station are claiming the commuter rail agreement between Orange County and the city is no good, too expensive, full of holes. Those calling for “renegotiation” are intentionally fabricating an excuse to terminate the agreement with Orange County in order to kill our participation in SunRail (there is nothing to “renegotiate”). No matter what they tell you, this is political posturing in a continuing effort to kill Winter Park’s commuter rail stop. If these people are elected to the City Commission the trains will be coming through Winter Park and never stop. We should carefully consider the impact such a reality will have on the relevance of our community, the impact on the competitiveness of our local real estate market, the resulting impact on property values and taxes, and ultimately the impact on our quality of life.

What the opponents don’t want you to know is that the city has the clear and affirmed right to back out of the agreement after seven years of operation. This right makes all concerns over projected costs and revenues irrelevant. At the end of seven years the city will have operating realities and leverage to renegotiate a new agreement, or back out. During the seven year period the city gets a complete full ride (paid for from State and Federal dollars).

If Sun Rail is a success, backing out now will diminish the relevance of Winter Park as the premiere residential community in central Florida. If Sun Rail is a failure we can walk away after seven years of operation with costs likely limited to repaying the $2 to $3 million cost of our station (which is being subsidized by State and Federal dollars). Finally, there are many working to secure a general funding source (county wide and regional taxation) to support mass transit initiatives that would remove local cost concerns for Winter Park.