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Osceola School Board agrees to 9% impact fee hike with no discount for studio apartments

The latest revision shows a 9% increase for single family homes. The studio apartment category was eliminated.
The latest revision shows a 9% increase for single family homes. The studio apartment category was eliminated. (Tischler Bise c/o SDOC)

For months, the Osceola County School Board and its consultants have debated how much of a reduction to offer apartment developers for studios and one-bedroom units.

With each workshop, the proposed 95% discount got whittled down to fewer units. In June, the board agreed to extend the discounted rate only to studio apartments less than 600 square feet in size. In a meeting Tuesday night, the board scrapped the discount altogether.

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That means every rental apartment unit and converted hotel room would be charged the recommended rate of $12,165 per unit regardless of size.

Carson Bise with Tischler-Bise said he eliminated the recommended $355 rate for studios because the team didn’t have enough U.S. Census data on studio apartments in Osceola County to calculate the student generation rate for that housing type. The reversal didn’t sit well with Board Member Jon Arguello.

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“So are we punting on the studios?” Arguello asked Bise. “It’s coming, right? So you guys don’t have any expertise in-house to tell us some kind of advice or some kind of answer? You’re just going to give us some fancy words and tell us you don’t know. To me, that’s a lack of advice, which is why you’re here — to give us advice.”

SDOC and Tischler Bise still have meetings planned with the county’s Growth Management Task Force and other stakeholders, including the Greater Orlando Apartment Association, before the board votes on the impact fee ordinance.

Board Chairman Clarence Thacker defended the decision to eliminate the studio apartment category. “I just want to add that I would not consider this a punt — I would consider it transparent because we don’t know what is generated,” he said. “We know that other communities have it. We know that we don’t necessarily look like other communities. So until we have the data that we can offer something factual, we’re not going to address it. We’re going to leave it as multifamily.”

While studio apartments have always been a limited offering among most new-build apartment complexes in Osceola, largely because of the impact fees, they constitute the bulk of units proposed by most developers looking to do motel conversions on the W192 corridor.

New York-based CSC Coliving was in negotiations to buy the long-vacant Orlando Sun Resort & Spa near Disney for $35 million and plans to convert all 960 rooms into studio apartments. Co-Founder Sal Smeke told GrowthSpotter he was counting on the $355 studio rate, but without the discount, the impact fees will likely be a deal-breaker.

“It’s already a difficult project, and now you’re talking about nearly $12 million in school impact fees,” he said. “This will kill it.”

Bise also gave the board two options for the new impact fees: one based on actual construction costs since the last update and one based on escalated construction costs.

The board unanimously agreed to go with the higher rates. Single-family homes would be the most impacted with rates going to $12,923 — a 9% increase on what is already the highest school impact fee in Florida. They factored in the new state law that changed the timeframe for counties to update their impact fees from three years to four years.

“If we’re going to lock it in for four years, we should try to get as much as we can so we can ensure financial stability,” Board Member Julius Melendez said.

Under that proposal, apartment developers would take another big hit, seeing their impact fees go up 7%, from $11,362 to $12,165. The proposed rate for townhomes would increase 9%, to $8,262. The latest chart also shows a potential 10.8% increase in rates for condos.

Have a tip about Central Florida development? Contact me at lkinsler@GrowthSpotter.com or (407) 420-6261, or tweet me at @byLauraKinsler. Follow GrowthSpotter on FacebookTwitter and LinkedIn.

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