Sunday, December 11, 2005

A Paradise Paralyzed May be Poised for Rebirth

Brett Norman
Pensacola News Journal

This articles goes into depth about the issues which restrain Perdido Key as they try to keep pace with Gulf Shores and Orange Beach.


Many Perdido Key residents long have complained their beach community is treated like the red-headed stepchild of Escambia County, thanklessly producing millions in annual tax dollars for precious little in return.

The perennial complaint has grown louder as the key's snail-paced recovery from Hurricane Ivan has continued to stall.

To this point, progress has been so slow that only about 800 of the key's approximately 2,000 year-round residents have returned to the island, and tourism is virtually nonexistent, said Jennifer Wolfe, outgoing director of the Perdido Key Area Chamber of Commerce.

For nearly two years, new construction has been hamstrung because of furor over a tiny mouse. Since Ivan struck Sept. 16, 2004, redevelopment also has suffered because of the mouse and a state limit on beach dwelling units.

While the key has struggled, two Alabama beach communities down the road, Orange Beach and Gulf Shores, have boomed.

It's a source of rancor to key residents.

"We've got this glaring discrepancy," said Ann Griffin, president of the Perdido Key Association, which represents property owners.

"Do they just do it that much better in Alabama? Gulf Shores is months and months ahead of us in getting back to pre-hurricane condition. The thing that's been so frustrating out here is that we could visibly see progress a half-mile away, and there was no reasonable explanation why we weren't seeing it here."

But the tide finally may be turning.

On Thursday, Escambia County commissioners made two key decisions involving:

1. The endangered Perdido Key beach mouse: After months of negotiation, commissioners approved an agreement with state and federal wildlife officials to protect the beach mouse and allow development to proceed.

Under the agreement, builders will make a one-time payment of $100,000 per acre of affected beach mouse habitat and pay a recurring annual fee of $201 per unit.

The money will fund a conservation program administered by the county's Neighborhood and Environmental Services Department.

The long-delayed agreement was hailed as a step forward by most.

Commissioners successfully negotiated terms that are much cheaper than alternative proposals calling for developers to pay $198,000 per acre or to purchase land as a set-aside for beach mouse habitat.

The new permitting system is expected to go into effect in January, when commissioners vote on "housekeeping" measures associated with it, such as changing the land-development code to allow the county to charge the $201 fee.

2. The dwelling-unit cap: Commissioners adopted an amendment to the county's growth-management plan that would lift the state-imposed cap of 7,150 dwelling units on the beach in favor of county zoning, which allows an estimated 9,168 units.

As long as the cap remains in place, the county can't issue permits for any more units on a given piece of property than existed before Ivan.

The result is that many single-family homes and small condo developments remain in ruins, unable to attract buyers who want to build back bigger.

The commission's two actions aren't guaranteed to go into effect.

Some owners of private property oppose the beach mouse agreement, and some residents and potentially the state may oppose the dwelling-unit decision.

Randy Cudd, a businessman on the key, said commissioners are in "a tough spot" as they try to restart development.

"No matter what they did, they would probably be sued," he said. "We're moving slowly somewhat in the right direction. I guess the best I could do is say that I'm cautiously optimistic."

County Attorney Janet Lander said she's ready to defend the dwelling unit decision, and she doesn't believe the county faces serious legal consequences from the beach mouse agreement.

"What you're going to see now is what's called smart growth. So unless you're completely opposed to it, it's something you can get excited about it," she said. "It addresses traffic concerns, density issues, aesthetics and property rights. It's all there. I think it's a sustainable plan."

Alabama comparison

Perdido Key does not compare exactly to the Alabama beach communities because it's smaller both in population and land and sustained the brunt of the Ivan damage.

Nevertheless, the differences between the key and beaches to the west still are striking:

1. Gulf Shores and Orange Beach are "just a hair shy" of having 12,600 available condo and hotel units -- 100 percent of the pre-Ivan inventory, said Mike Foster, vice president for marketing at the Alabama Gulf Coast Convention and Visitors Bureau.

On Perdido Key, only 22 percent of an estimated 2,817 pre-Ivan units are usable, Wolfe said.

2. New condominium and hotel projects are springing up on the Alabama coast, which is projected to have 27,000 hotel and condo units in the next five years, Foster said. An additional 20,000 jobs to support the tourist industry will be required during the same period, he said.

On Perdido Key, about 2,200 units are expected to open in the next 12 to 18 months, Wolfe said.

3. The beach-front road in Alabama -- State Road 182 -- has had four lanes plus turn lanes since the early 1980s. The state undertook the project shortly after Hurricane Frederic hit in 1979.

For years, Escambia County has asked the state to widen the same road on Perdido Key -- Perdido Key Drive -- to improve the hurricane evacuation route and provide infrastructure for greater development.

Only recently did the County Commission secure $3 million from the state to begin a planning and design study for widening the Perdido Key Corridor, which includes Perdido Key Drive, the Theo Baars Bridge and Sorrento Road to Blue Angel Parkway.

The total cost of the project, which would take several years, is estimated at $135 million.

Revenue possibilities

Even in its current state, and even after Ivan took $496 million in buildings off the tax roll, Perdido Key is generating substantial money for Escambia County.

It could generate much more.

"From a strictly financial perspective, there is no other resource in Escambia County that I'm aware of that has this kind of potential for growth," county budget manager Amy Lovoy said.

Seven percent of Escambia's property taxes for 2005 are projected to come from key, although less than 1 percent of the county's residents live on the island.

That translates into $14.5 million -- $7.2 million for Escambia County, $6.6 million for the School District and $615,000 for the Sheriff's Office.

The key's largest developer, WCI, plans to build 1,900 units over 10 years on its 430 acres of property, said WCI division president Wanda Cross.

But that depends on the dwelling-unit cap being lifted, the beach mouse issue being resolved and Perdido Key Drive being widened, she said.

The beach mouse agreement will cost WCI about $5 million, Cross said. But the company's new units will sell for a conservative $1.24 billion, almost 150 percent more than the 2005 taxable value of the entire key.

"I don't think Escambia County was prepared for the kind of development that they've seen on their beaches," Cross said.

She said the county "really needs to have a vision and a plan."

"They need to come up with a time-line and what you've got to do to meet it, then you've got to do it," she said. "You've got a lot of the old-timers who don't want things to change. Well, too bad. Not everybody's going to be happy."

She added the county is taking important steps in the right direction.

Building up

Lois Benson, whose Perdido Key beach house was damaged beyond repair by Ivan, calls the building situation "impossible."

"The key is going condo. It's just a matter of time," she said. "I don't want to rebuild my house and be the last little house in this wall of condos. But I can't sell it because of the dwelling unit cap and, of course, the beach mouse."

Benson and five neighboring property owners considered selling their land to an interested condo developer, but the Perdido Key's density restrictions, dwelling-unit cap and beach mouse problems sank the deal, she said.

"The developers I've talked to are developing in Destin, developing in Alabama, developing all over, but they're not coming here. Why would they?" she asked.

Benson, an Emerald Coast Utilities Authority board member and former state legislator who is active in government circles, said the situation "really is a dilemma for people."

"The county depends on the key as its cash cow," she said. "To treat the cash cow this way doesn't make good economic sense or good government."

Joe Gilchrist, owner of the legendary Flora-Bama Lounge on the state line, called the hurricane recovery "a very difficult and frustrating business."

Ivan devastated his lounge, which has reopened with improvised facilities.

"Economically, it's been a monster," Gilchrist said. "The county was knocked from the south to the north, to the east to the west. But I can't understand why governments wouldn't make every effort to get one of the main economic engines back up and running. The people out here are being held hostage by a system, and they are very slow to do anything about it."

Real estate agent Ron Herrington, who owns a home and condo on the island, is bitter.

"I think it's just a travesty the way it's just been forgotten," he said. "It doesn't make any sense.

"Millions (of dollars) are pouring into the county. I pay well above $10,000 in taxes, and I can't get a darn trash can out here. You can't say the same about Orange Beach, Gulf Shores. I just can't understand the apparent lack of interest."

Behind the beach mouse

The beach mouse controversy began when the U.S. Fish and Wildlife Service trapped one of the endangered rodents on private property in January 2004.

The federal agency subsequently declared 240 acres -- nearly all of the key's remaining developable land -- to be potential habitat for the mouse.

The result was effectively a moratorium on any construction not approved before the mouse was trapped.

The only approved construction since Ivan has been to replace -- on the exact footprint or a smaller one -- what already was there.

Escambia County commissioners have had to extend building permits for at least 19 projects so they wouldn't expire before a beach mouse agreement was reached.

The effect has been felt by big and small property owners alike.

Dan Savage, a consultant for condo developments on the Key and in Alabama, said one of his clients has paid $1.3 million in interest on money borrowed for a project that's been on hold for more than a year because of the mouse.

"It's cost a lot of money," Savage said. "It's also caused more uncertainty than anything else. We've waited almost two years to find out what the state, the county and the federal government are going to do. It's like dragging a rock up a hill with all the issues, but I think we're making headway."

Paul Fisher, 55, owner of Wave Lengths hair salon in Jackson, Miss., didn't know about the beach mouse when he bought a Gulf-front lot in 2004.

Plans were drawn for the duplex Fisher wanted, but he hasn't been able to get a permit to build it.

Meanwhile, Fisher is paying $25,000 annually in property taxes.

"Since I bought the lot, I've lost one member of my family," he said. "We had hoped to be having reunions and get-togethers down there by now, but I've been stuck for two years."

Along the Alabama coast, the beach mouse problem is not so critical.

The Alabama beach mouse, a cousin of the Perdido Key species, is holding up construction on two or three projects in Gulf Shores, but the beach mouse lives mostly in the unincoporated and less developed Fort Morgan area west of the city.

Larry Goldman, field supervisor for the U.S. Fish and Wildlife office in Daphne, Ala., said the Escambia County agreement marks a breakthrough.

"We're not nearly as far along," he said.

Removing the cap

The Florida Department of Community Affairs resisted efforts to remove the key's dwelling-unit cap when commissioners submitted an amendment to the county's growth-management plan earlier this year.

The department is expected to announce within 45 days whether it will approve the amendment, Lander said. After that, the public has 30 days to lodge any objections. If no agreement is reached, the matter will go before an administrative law judge.

"We hope the DCA will like what we've done," Lander said.

Many developers, residents and business interests on the key favor lifting the cap, but the Perdido Key Association and its president, Griffin, are against it.

The main concern raised by Griffin is that the county will allow more development than the infrastructure -- mainly Perdido Key Drive -- can safely support.

It's a concern echoed by the DCA.

County Engineer Richard Duane says the key's roads will be able to support construction up to the current cap of 7,150 units, since WCI has pledged to pay for some improvements.

The plan to replace the dwelling-unit cap with zoning also calls for establishing a Tax Increment Financing District on the key.

A percentage of the growth in tax revenue from that area would be used, in part, for road widening that would support growth over the 7,150-unit cap to the 9,168 allowed by zoning.

Even if the dwelling unit cap is lifted, 13 units per acre will be the maximum density allowed on remaining Gulf-front property.

Alabama has fewer problems with zoning because county zoning decisions, even for the waterfront, are not subject to review by state planning officials as they are in Florida.

Anticipating an onslaught of interest from developers, as happened after Hurricane Frederic slammed the area in 1979, Orange Beach and Gulf Shores formed committees after Ivan to determine what kind of development they wanted and implemented the appropriate zoning.

"That's a big difference," said Jeff Moon, city administrator for Orange Beach. "We settle it locally."

'Maximizing resources'

Collier Merrill of Merrill Land Co. in Pensacola is building The Verandas, a condo project, on Orange Beach.

Merrill purchased 20 badly damaged Gulf-front homes in Orange Beach after Ivan. He is replacing them with two towers, 35 stories each.

They're projected to sell for a total of $480 million, and construction is scheduled to be complete in 2008. A similar project in Escambia county would generate $8.4 million in annual property taxes.

"And (condo owners) are not going to need fire service, police protection. They're not going to use the schools," Merrill said of the owners. "Where you can, you need to maximize your resources."

Building departments along the Alabama coast have a reputation for accommodating developers.

"I've gotten cooperation from start to finish," said Merrill, who's also developing two Gulf Shores condos, Crystal Shores and Crystal Shores West. "It's been a joy working with them."

Commissioner Mike Whitehead said he speaks with developers frequently who wouldn't work in Escambia County because of a cumbersome permitting process.

Still, no one is calling for the same kind of development that's booming in Alabama.

"I think we should maximize the resource we've got, but I wouldn't want to see the same thing as what's going on in Gulf Shores and Orange Beach," said Whitehead, who generally favors development. "What we're missing is a vision."

Commissioner Bill Dickson, whose district includes the key, said the county's decisions last week will help get the key on the right track.

"For too long, improvements have not been made to the key," he said. "It's time for us to move forward in terms of getting rid of the cap and going with what's allowed under zoning."

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