Boom Time

Two sets of numbers last week showed how strongly Boca Raton and Delray Beach have come back from the Great Recession.

Palm Beach County Property Appraiser Gary Nikolits released his office’s estimates of the 2014 tax rolls for cities and the county. Higher tax rolls mean more revenue for local government, even if the tax rate doesn’t increase. Your tax bill is the millage rate multiplied by every $1,000 of assessed value.

Example: If you own a home in Boca Raton that for 2013 was assessed at $400,000, you paid 400 multiplied by roughly 3.7, or about $1,480. If your home increased in value for 2014 by, say, $25,000, you will pay almost $100 more. To give residents a tax cut, the city council would have to lower the tax rate. To figure the bill in Delray Beach, use 7.5 instead of 3.7.

As long as the increases are not bubble-driven, however, rising property values indicate a healthy economy. Values dropped sharply after the real estate bubble burst, but demand for good services didn’t. Local governments had to cut staff, reduce such amenities as library hours, raid reserves or do all three and more.

Three years ago, Boca Raton’s tax roll was $16.4 billion, which even post-recession was a whopping number for a city with fewer than 100,000 residents. The new estimate, however, is $19.4 billion—the largest in Palm Beach County. That covers all property not exempt from taxes, such as non-profit enterprises. Properties worth less than $50,000 also don’t pay property taxes if the owner has filed for the $50,000 homestead exemption. Government-owned property also is tax-exempt. Two of Boca’s largest employers—Boca Raton Regional Hospital and Florida Atlantic University—don’t pay property tax. Of course, their payrolls and spending help to drive the local economy.

Boca Raton’s tax roll thus has increased 18.3 percent in three years. That percentage would be impressive in a less-affluent city. In Boca, it’s staggering. One reason, of course, is the surge in high-end new construction and teardowns. Another, however, is all that activity downtown that many people criticize.

Delray Beach’s new tax roll also reflects the post-recession pickup in building. Property values have increased nearly one-third in three years, to $8 billion. As in Boca, neighborhood residential is a factor. But so is downtown construction, which will intensify the debate over the Delray Beach Community Redevelopment Agency. Under Florida law, revenue from higher property values within a CRA’s boundaries—Delray Beach is one of the state’s largest such agencies—must stay within those boundaries. It can’t go to the city’s general fund for services outside the CRA, and the city commission believes that Delray has many public-works needs citywide. The 2014 population estimates from the Census Bureau, which also came out last week, put the property valuations in greater perspective.

The count for Boca Raton was about 91,300. Boca remains the second-largest city in Palm Beach County, and from the recent percentages is gaining on West Palm Beach, which is at 104,000. West Palm Beach Mayor Jeri Muoio would note that her city also has a lot of downtown residential projects in the planning/approval stage.

Yet Boca Raton’s tax base is more than double that of West Palm Beach, despite that small difference in population. Indeed, West Palm’s tax roll of $9.9 billion is only about $500 million higher than Palm Beach Gardens’, and the Gardens is barely half as large.

The population estimate for Delray Beach is 65,000. For next-door neighbor Boynton Beach, it’s 73,100. Yet Boynton’s tax base is just $4.6 billion, an embarrassingly low figure compared to Delray’s $8 billion.

What’s behind all the numbers? IBM may be mostly gone in Boca Raton, but the company’s large operation three decades ago established the city as a corporate presence. Cities without a significant business tax base must ask more of their residents. Obviously, Boca has lots of high-end housing, which helps to fatten the tax base. (Palm Beach has the county’s second-highest tax roll.) But the main difference between Boca and West Palm Beach is the corporate component.

Let’s use that 30-year timeline to compare Delray and Boynton. The cities once were about equal. Through superior elected leadership and leveraging of unique assets – the public beach, Atlantic Avenue—Delray Beach left Boynton Beach behind. Boynton still is growing people, but the city isn’t growing enough business. Nor has it developed a downtown entertainment district. The commercial hub is Congress Avenue, west of Interstate 95.

If there is a caution behind these encouraging numbers for Boca and Delray, it’s complacency. Cities can get set in their ways when things are going well. Or they can embrace the opportunity and the challenge of going from very good to excellent.

Chabad on the docket

Wednesday night, the Boca Raton City Council will decide whether to approve the Chabad East Boca synagogue/exhibit hall on East Palmetto Park Road.

Some residents of the nearby Riviera and Por La Mar neighborhoods oppose the project—ostensibly for traffic reasons—and said so during a five-hour hearing three weeks ago before the Planning and Zoning Board. The board, though, voted 5-1 to recommend approval.

Similarly, City Manager Leif Ahnell’s memo to the city council recommends approval. Ahnell notes the many conditions designed to reduce the traffic impact. Chabad East Boca has agreed to those conditions.

Ahnell wrote: “Given that the location of the proposed place of public assembly abuts East Palmetto Park Road, which is designated, according to the city’s comprehensive plan, as an urban major arterial roadway, and given that the applicant is providing as a buffer a required 25-foot setback, a 6-foot-wall. . .along the adjacent residentially zoned district located on the south side of the subject property, and that the triangular portion of the subject property. . .will remain vacant, it is the opinion of city staff that the request for additional building height (10 feet for one building) is not injurious to surrounding property. . .”

Hotel at the Morikami

On Thursday, the Palm Beach County Commission will consider a zoning change to Morikami Park that would allow development of a hotel. Given how touchy this subject has been with neighbors of the park, the staff memo stresses that approval of the rezoning would not mean approval of a hotel.

The county owns the 173-acre park, which is west of Jog Road and south of Addison Reserve. The park’s best-known attraction is the museum and Japanese gardens, which are on a parcel donated four decades ago by George Morikami. The museum and gardens opened in 1977. Two years ago, the county commission voted to accept bids for a hotel that would feature a traditional Japanese design, in hopes of drawing even more tourists and getting them to stay longer.

The material for Thursday’s meeting does not say whether the county received any bids. The reference is to park “improvements” that would happen under an updated master plan. For a hotel to be part of any such “improvements” apparently would require a single zoning designation for all 173 acres. Now, there are two.

The Zoning Commission unanimously recommended approval of the change last month. According to the backup material for Thursday’s meeting, some neighbors expressed concerns about “lighting, noise, increased traffic and deforestation” that might come with a hotel. Members of the Morikami Board of Trustees spoke in favor.

Gary Nikolits

Just before his office released those tax roll estimates, Gary Nikolits announced that he would not run in 2016 for a seventh term as property appraiser. The public can judge the quality of Nikolits’ service by how little attention the office has received.

Few offices have more potential for corruption. Unethical appraisers could cut values in big voting blocs, such as condo communities. They could lower them for big contributors. One former Palm Beach County property appraiser, David Reid, went to prison for soliciting bribes: reduced property values in exchange for work on his home.

Like Reid, Nikolits is a Republican who regularly won elections in a Democratic-heavy county. The similarities with Reid, however, end there.

Nikolits has been scrupulously fair in his work. The same goes for the office itself. County Commissioner Steven Abrams chairs the county’s value adjustment board, which hears complaints from owners who believe that their property has been overvalued, thus raising their tax bill. “We track this county with others,” Abrams said, “and the rate of appeals is the lowest in South Florida. Abrams has served on the board for six years.

Nikolits has joked about his physical and personality resemblance to Elmer Fudd. But in a county that has seen plenty of corruption, Nikolits has been a model for how a public servant should operate.

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You can email Randy Schultz at randy@bocamag.com

For more City Watch blogs, click here.About the Author

Randy Schultz was born in Hartford, Conn., and graduated from the University of Tennessee in 1974. He has lived in South Florida since then, and in Boca Raton since 1985. Schultz spent nearly 40 years in daily journalism at the Miami Herald and Palm Beach Post, most recently as editorial page editor at the Post. His wife, Shelley, is director of The Learning Network at Pine Crest School. His son, an attorney, and daughter-in-law and three grandchildren also live in Boca Raton. His daughter is a veterinarian who lives in Baltimore.