LARGO — A strong rental apartment market and the city’s suspension of some development fees appear to be driving one of the biggest waves of residential development this community has seen in decades.
Developers have more than 1,200 apartments and townhouse units planned or under construction in Largo, including the first market-rate rentals to be built here in more than 20 years.
The appetite for more housing in this community of about 77,000 has moved city commissioners to extend a moratorium on two development fees from 2014 into 2016 to keep the momentum.
A 342-unit apartment complex going in near a new Wal-Mart Supercenter at 2681 Roosevelt Blvd. and another 260 units planned for the former site of the Briarwood RV Park just north of Ulmerton Road on Seminole Boulevard are the largest.
Developers of the Gateway North apartments on Roosevelt were the first to suggest the city lower or suspend its parkland impact and capital improvement fees, which combined would run about $2,500 per unit.
“I was telling the head of economic development that I thought this fee was a burden that was really a disincentive for development in the city of Largo,” said Anthony Everett, director of the Pollack Shores Real Estate Group’s Central Florida office. “Other municipalities weren’t charging it. It was making them less competitive.”
The city had lowered the parkland fee in 2009 from more than $2,800 per unit to about $1,900, but commissioners in 2012 approved a moratorium on both charges to spur rental development as projects that all but died in the recession were being revived across the Tampa Bay area.
Downtown St. Petersburg has a half-dozen apartment projects in the works, and Dunedin recently gave final approval to a large mixed-use complex on the north edge of its Main Street district.
Since Largo’s moratorium went into effect in May 2012, six developments either have resumed construction or submitted plans to the city.
The dilemma for builders was that the city’s impact fees are levied at about the time permits are issued. The original moratorium would expire in 2014, before many projects could take advantage of it.
“The moratorium is really just now starting to take effect,” said Teresa Brydon, the city’s economic development manager.
Securing financing also was proving difficult as planning and construction of large projects can take years, she said.
“It was still difficult to put financial packages together and to do due diligence on these larger tracts of land that had been identified for apartment complexes,” she said.
Commissioners unanimously approved an extension of the moratorium on first reading at their meeting last week.
A public hearing and second reading are scheduled for Nov. 19, and commissioners plan to hold a work session next year to review the fees.
City staffers are looking at permanently lowering the fees.
As of September, the city had $1.5 million in its parkland dedication fund and about $667,000 in its capital facilities fund, which are used for buying public lands. The last purchase funded by the parkland fee was a plot on Fifth Avenue Southwest in 2009 for about $86,000.
Mayor Pat Gerard said keeping the waiver in place for several more years is key to keeping the city competitive with area communities.
“The moratorium will provide an incentive to developers to expand our housing inventory and provide new residential units that will strengthen and improve our neighborhoods,” she wrote in an email.
Everett, the developer, said rental apartment construction had been stagnant for several years, slowed first by a preference to convert rentals to condos before the housing bubble burst and then by the economic crash.
“When the economy went down the tubes, we stopped almost all development. For four or five years you had almost no apartments being built,” said Everett, whose company is also building the upscale NoHo Flats in Tampa’s Hyde Park.
“I think there’s kind of a pent-up demand for new apartments, and I think we’re seeing that across the whole bay area,” he said.
Gateway North will offer one-, two- and three-bedroom “luxury market rate” units ranging from about $700 to $1,400 per month.
The 153-unit Pinellas Heights off Ulmerton Road will offer affordable residences for seniors when it opens next year.
Jeff Rogo, government affairs director at the Bay Area Apartment Association, says he hopes a waiver in fees in cities such as Largo will encourage more affordable housing options for the working class.