For now, South Florida has avoided a catastrophic surge in COVID-19 cases. Still uncertain is whether the virus will prove catastrophic to local budgets.
The Great Recession was nothing like the virus-affected recession the country went into four months ago. In 2008, the real estate market and financial industry crashed. Because of the housing bubble, property values tanked.
Property taxes are the main sources of revenue for city and county operating budgets. Boca Raton and Delray Beach laid off hundreds of employees during the Great Recession. Both cities managed to keep the tax rate steady or raise it very little. So did Palm Beach County.
This time, housing prices are holding in Boca Raton and Delray Beach, according to Palm Beach County Property Appraiser Dorothy Jacks. Sales dropped in March and April after a strong January and February, but they have begun to pick up. Demand from New Yorkers is helping.
In a video to local officials, however, Jacks said, “The commercial market bears watching.” COVID-19 restrictions have heavily damaged the retail, hotel and restaurant industries. Even as they reopen, many South Floridians may not be willing to venture out as they did four months ago.
Cities and counties hold public hearings in September for the budgets that take effect Oct. 1. For next year, property values will reflect the world before COVID-19. Values rose 4.3 percent in Boca Raton and 7.2 percent in Delray Beach, compared to 5.5 percent countywide. Boca Raton still has the richest tax base of any city in the county.
Even if Boca Raton and Delray Beach don’t increase the tax rate, property owners will pay more because of the higher values. That’s been the practice for most cities in recent years, though Delray Beach has slightly dropped its rate. As a result, overall budgets have kept rising.
Jacks, however, is advising cities and the county to keep their 2021 budgets flat. When we spoke Tuesday, Jacks noted that it took almost two years for the effects of the Great Recession to hit local governments. Being conservative now, she said, could avoid massive cuts for 2022.
Consider Town Center Mall and the Boca Raton Resort & Club. They aren’t just the largest taxpayers in the city; they rank second and fifth in the entire county.
Both were closed for weeks. Town Center reopened in May, but crowds were slim and most stores remained closed. One forecast is that retailers will close 25,000 stores nationwide, most of them in malls. As for the resort, it has reopened and is touting what Executive Director John Tolbert calls Waldorf Astoria CleanStay.
The hotel sector, Jacks said, had been the fastest-growing commercial sector before the pandemic. Additions included the Aloft in Delray Beach. Boca Raton is expecting the state’s second Mandarin Oriental, but Jacks said the growth was across all brands, not just luxury.
Collapse in retail/hospitality property values would be “a perfect storm” for local budgets, Jacks said. She does predict that upheaval at least will not start this year in the form of a “back-end rebate” to commercial owners. The Legislature could allow that for 2020, but Tallahassee has not called a special session, and the budget year starts July 1.
Property owners could appeal this year’s assessment to the Value Adjustment Board. Again, though, time works against that. Preliminary tax bills go out in August.
Jacks and her staff are following trade publications that cover the most affected industries. By the end of the year, Jacks said, “We should have good data” about what cities can expect this time next year. Despite additional demands from the virus, elected officials in Boca Raton and Delray Beach probably will keep hearing that they should play it safe for now.
Mayotte and Rodgers
Boca Raton City Councilwoman Monica Mayotte publicly criticized colleague Jeremy Rodgers for causing “much confusion” through his actions and social media posts concerning the COVID-19 pandemic.
The exchange came during council members’ comments at the end of Tuesday night’s regular meeting. Though the council collectively has been cautious about reopening, Rodgers in April led a group of protesters calling for immediate access to beaches and businesses. The protesters included members of fringe groups that peddle virus-related conspiracy theories.
Mayotte pointed out that even as Palm Beach County pushes to enter Phase 2 reopening, cases are rising at a faster rate here than elsewhere in South Florida. Gov. DeSantis—who has been his own cheerleader on reopening—mentioned that unfortunate distinction this week.
Rodgers, Mayotte said, further sent “mixed messages” when he appeared before the county commission without wearing a mask. Though Rodgers regularly states that he is speaking for himself and not the council, Mayotte argued—and she’s probably right—that many members of the public don’t appreciate or understand the difference.
Mayotte accused Rodgers of “blatant disregard” for council protocol and of being “reckless.” She concluded by saying, “My issue is not personal. I consider you my friend.”
Andrea O’Rourke, who with Mayotte has been the most cautious on reopening, agreed that Rodgers had overstepped. She pointed out that Rodgers’ Facebook page includes pictures of the other council members.
Rodgers responded that he “appreciated” Mayotte “voicing your concerns,” but basically was unrepentant. Many people in the community had asked him to express those thoughts, Rodgers said. “I consider it my responsibility to speak out on what is right.” He did suggest that he might alter his Facebook page to remove those photos.
Hospitals on the rebound
It’s been about a month since hospitals could resume elective surgeries. DeSantis banned such procedures to save space for a wave of COVID-19 cases.
I asked a Boca Raton Regional Hospital how the public has responded. A spokesman said, “We are encouraged to see patients are returning to seek the care they need. Boca Regional has always maintained high standards of safety, and now we’ve added new measures to help keep our patients well. The community has embraced our new policies knowing the changes were made with their best interest in mind.
Several weeks ago, I wrote about the hospital’s acquisition of Abbott Labs analyzers, which advertised COVID-19 test results in five to 15 minutes. In mid-May, however, the Food and Drug Administration warned about the machines’ accuracy after a study found many false negatives. Here is Boca Regional’s response:
“We are aware of recent reports regarding the sensitivity of the Abbott ID NOW. At Boca Regional, we use two different platforms to test for COVID-19: the ‘point-of-care’ Abbott ID NOW and the GeneXpert by Cepheid Diagnostics.
“The ID NOW can produce a result in 15 minutes and performs one test at a time, while the GeneXpert can batch a number of samples at the same time, but takes about 45 minutes for the first test to be resulted. The ID NOW has been extremely helpful in quickly testing patients needing an urgent or emergent procedure and with obstetric deliveries.
“These test results, as the result of any laboratory procedure, must be evaluated considering the overall presentation. If a patient has the classic signs and symptoms of COVID-19 and a negative nasopharyngeal swab result, the patient is treated as COVID positive, and re-tested as appropriate.”
Ag Reserve troubles—again
The push to suburbanize the Palm Beach County Agricultural Reserve Area continues.
On Friday, the county’s planning commission—an advisory body to the county commission—will consider several proposals for added development. One would involve a deal between Faith Farm Ministries and GL Homes, the most prominent builder in and around the reserve.
County staff recommends that the commission deny recommendations for most of the proposals. But staff recommends approval of the Faith Farm deal, even though it clearly violates the intent of voters who in 1999 approved $100 million in bonds to buy land and keep as much farm-related business in the reserve as possible. Faith Farm has been able to keep operating because the 87-acre property as presently operated doesn’t threaten farming.
The Coalition of Boynton West Residential Associations had asked the county delay the meeting until in-person meetings can resume, thus to allow more public participation. I’ll have an update after the meeting.
In another sign of reopening, vacation and short-term rentals got approval yesterday to resume business. To ensure guests’ safety, they must follow guidelines set by the Centers for Disease Control and Prevention and the industry. For more information, visit https://www.cdc.gov/coronavirus/2019-ncov/community/reopen-guidance.html
DDA, Boca grant programs
The Delray Beach Downtown Development Authority has announced a $30,000 COVID-19 grant program for small businesses.
A maximum of 30 businesses could get grants of $1,000. Applicants must have 25 or fewer employees, must have been around for at least five years within the DDA boundaries and must be locally owned and operated. Applications open at 8 a.m. Monday and close at midnight Tuesday.
Meanwhile, Boca Raton’s loan/grant program bumps along.
During Monday’s city council workshop meeting, City Manager Leif Ahnell said 104 applications had been received. Of those, 20 percent “might be eligible” for grants of $5,000. Ahnell said the rest failed to meet eligibility requirements. “Some failed in multiple categories.” The program could dispense as much as $500,000.