Cypress Village in Orange Beach Next to The Wharf

Published By Mobile Press Register
Sunday, August 13, 2006
By KATHY JUMPER
Real Estate Editor

The developers of the Cypress Village residential community on Canal Road in Orange Beach are banking on the off-the-beach market to keep them busy for the next 10 years.

So far, 80 of the 144 townhomes in Cypress Village have sold at prices ranging from $425,000 to $600,000, and construction is under way on the two-story units in the project, which is adjacent to The Wharf.

"Everybody has storm concerns," said Ross Easter, a real estate broker working with UCO Development on Cypress Village. "But we spent millions before construction started on building the roads, putting in utilities and building the foundation up 13 feet. We are fully committed to this project."

Easter, 35, and developer/contractor Paul Uter and his brother Colin are working together on several projects in Baldwin County. In fact, Paul Uter, 36, packaged the developments and pitched them to Colonial Properties Trust in Birmingham, and now Colonial is a partner in the real estate projects as well.

Colonial Properties is also the developer of Colonial Pinnacle at Craft Farms on Alabama 59 in Gulf Shores, which has a Target store and a Cobb theater.

The UCO list of projects includes 47 Canal Place with 1,300 front feet on the Intracoastal Waterway next to the Foley Beach Express toll bridge in Orange Beach. The owners have permits for 1,700 condo units, but that number could change depending on the U.S. Army Corps of Engineers' consideration of the developers' marina plans, according to Paul Uter.

Construction is under way on The Grander, a 30-unit project with 60-foot covered boat slips on Terry Cove in Orange Beach. The units are sold, Easter said.

The group is also developing Whitehouse Creek Plantation, a 2,500-lot subdivision off Bromley Road in Spanish Fort. The first 47 lots were sold to builders, and houses are under construction.

The 84-acre Cypress Village site will have almost 350 residences including 73 cottage-style homes, 102 single-family homes and 24 courtyard villas, according to Easter. The amenities feature a lazy-river-styled pool, fitness center, clubhouse and exercise pool. Cypress' property stretches almost to the Intracoastal Waterway, but the actual waterfront is owned by the Corps of Engineers.

The city of Orange Beach wants Cypress Village to connect or have easy access to The Wharf, Easter said.

The Wharf will eventually build 300,000 square feet of retail space along its property bordering Cypress Village, according to Beason Wilkes, project director for AIG Baker. The Wharf is a retail, marina, entertainment and 741-condo unit complex.

"We're committed to having a sidewalk along Canal Road" so that people can walk to The Wharf, Wilkes said.

Condo units on the Intracoastal Waterway and backwaters are less costly than Gulf-front units, according to agents. Still, a market slowdown after last year's hurricane season has caused a glut in inventory across the board, with 3,000 condo units listed for sale, agents said. Two condo projects on the Intracoastal were put on hold, Portage Crossing in July and Waterdance last February.

"You can get a better price on a unit there because land costs are less," said Bob Boles of REMAX of Orange Beach. "But frankly, I think everybody needs to use a lot of caution because of the supply and demand. There is ample supply. And that particular area is a little bit untested and unproven."

UCO developers are currently focusing on single-family or two-story units that can be built in phases, rather than high-rise condominiums, Easter said.

The Gulf Coast is just being discovered by many investors and end-users, according to Easter.

"Seventy percent of the money from second homes come from Baby Boomers," he said. "This whole region is catching on to this. A townhome like we're building here would start at $900,000 in south Florida."

Village features amenities such as a lazy-river-styled pool, fitness center, clubhouse and exercise pool.

PhotographerThe 84-acre Cypress Village site will have almost 350 residences, including 73 cottage-style homes, 102 single-family homes and 24 courtyard villas, according to Ross Easter, a real estate broker working with UCO Development on Cypress Village.

STUDY JUSTIFIES ORANGE BEACH IMPACT FEES

Published By Mobile Press Register
Wednesday, August 02, 2006
By RYAN DEZEMBER
Staff Reporter

ORANGE BEACH -- City leaders learned this week that they can justify charging builders of single-family homes up to $5,514 per house and high-rise condo developers $4,236 per unit under an impact fee law approved earlier this year by state legislators.

The law was written to give Baldwin County and its 13 municipalities a way to force builders to pay directly for services -- police and fire protection, roads, parks and even library books -- needed to accommodate rapid growth. Signed into law by Gov. Bob Riley in April, the law went into effect July 1.

The maximum impact fee that local governments can charge builders and developers is 1 percent of a project's fair market value, according to the law. But before cities and the county can start collecting a flat 1 percent on every new home, shopping center or apartment building, each government must figure out how the money will be allocated to sustain and expand services.

In the case of Orange Beach, which is on track to become the first Baldwin city to implement an impact fee, a study was commissioned from the Maryland firm TischlerBise that breaks down the justifiable maximum fees according to the development's demands on services and the cost of maintaining current levels of service.

According to the study, Orange Beach won't be able to charge the maximum impact fee laid out in the state law on certain, typically expensive, developments.

Say, for example, that a new $1 million house is being built. The most the city could justify charging for an impact fee is $5,514, according to the study, even though state law would allow a fee of $10,000, or 1 percent.

But as the prices of fire trucks, bridge construction and park land go up, Orange Beach can "recalibrate" TischlerBise's study and formulate new maximum fees, Mayor Pete Blalock said.

"Over the next five years, the city would collect approximately $13 million in revenue that you don't have today," Carson Bise, vice president of the firm that did the study, told city officials Monday afternoon. "Obviously if you're updating the impact each year, that revenue amount would likely increase."

Unlike residential development, commercial projects, which lead to no impact on the city's library or parks, aren't assessed for such. But shopping centers, warehouses or office parks can be charged impact fees to support police and fire protection and roads. The maximum fees for commercial development vary between $675 and $12,216 per 1,000 square feet, according to TischlerBise's report.

"This is a very systematic approach to recoup costs for new growth," said Jim Lawson, Orange Beach's director of community development. "The theory is new growth should pay its own way; citizens who live inside the city shouldn't have to pay for new growth."

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The study predicts that Orange Beach -- with about 5,300 year-round residents and a peak-season population of around 20,000 -- will add an average of 477 housing units a year through 2020. Year-round population will exceed 9,000 while peak-season residency is expected to top 33,000 that year, the study says.

The toll that each type of development takes on city services was taken into account in the study, and impact fee revenue must be spent accordingly.

For example, an impact fee charged on a new single-family home should be spent in the following way, according to the study:

43.5 percent for parks and recreation.

33.1 percent to transportation.

14.7 percent for fire protection.

4.4 percent for the library.

4.3 percent for police protection.

According to the state law, however, the fees cannot fund all of the costs of particular services. In the police department, for example, impact fee revenue could be used to buy new cruisers or add on to the jail, but couldn't be spent on officer salaries.

"Basically, what this does for us is it reduces our need to find capital for buildings and stuff like that and it helps us free up money to run these projects," Blalock said.

Added Bise, "And it frees up money for retrofit and maintenance, which is the area that every community in the United States is letting fall by the wayside because they're spending so much time providing growth-related services."

In mid-May, the Orange Beach City Council agreed to pay $68,100 for the TischlerBise study -- an amount that is eligible for repayment through impact fee proceeds, Blalock said. Gulf Shores in late June also contracted with the firm -- which specializes in drafting impact fee laws and reports -- and awaits its still-under-way study.

Some Orange Beach officials expressed concern Monday after Bise explained the report that the impact fee, combined with rising building costs, skyrocketing insurance rates and other city taxes might be too much for individuals wishing to build a home in Orange Beach.

In addition, several said they didn't want to discourage so-called "work force" housing and other projects to accommodate low- to middle-income buyers by overtaxing their developers.

The state law allows for local governments to create credit systems for developers of affordable housing as well as those who propose donating land in lieu of paying the fee in cash. Also, City Attorney Wanda Cochran said that implementing an impact fee wouldn't prevent developers from donating land or building public facilities as part of planned unit developments.

City officials said they would work on developing a credit system as they tinker with their impact fee ordinance starting at the City Council's work session Monday and the Planning Commission's meeting Tuesday.