By Ken Francis, Staff Writer

After a 90-minute debate Monday, the Clearwater City Council finally reached a resolution about incentives for new home construction.

The discussion began back in    November, when Denny Nelson of Progressive Builders approached the council looking for a possible incentive from the city for him to purchase multiple lots in the Cedar South development and begin building homes there.

That initial discussion focused on lowering water and sewer connection (WAC & SAC) fees to make home sales prices compatible with other cities. Nelson said it was difficult to attract home buyers to Clearwater because of the high WAC & SAC fees, which at the time totalled over $7,500.

At the time, the council agreed to entertain a $5,000 discount as part of an agreement with Progressive to build multiple homes. Nelson went ahead and purchased the lots and began building.

The discussions continued at subsequent council meetings,  and it appeared there would be some written agreement solidifying an incentive amount after a developers agreement was drafted and presented to the council.

In February they reviewed the document and made revisions to some of the terms and the language.

But when the revised agreement went before the council again at the next meeting, they were split on whether to move forward with the $5,000 incentive.

Mayor Pete Edmonson and Councilman Rollie Lange were in favor of the incentive. Councilman Richard Petty had recused himself because of a potential conflict of interest as a possible developer.  Council Members Kris Crandall and Andrea Lawrence weren’t. Crandall said he didn’t want to show favoritism to one developer or set a precedent for future developments. Lawrence felt there was a better way to assist builders, like creating a tax increment financing (TIF) district.

After a long debate at that meeting, the council opted for a different approach - reducing WAC & SAC fees on the fee schedule so everyone who built a new home would get a discount. The only debate was how much of a reduction they would give.

In May, Administrator Kevin Kress presented different options to consider for amending the fees. Members of the council agreed to go with an updated debt rate based on calculating the current sewer debt divided by the number of sewer capacity units remaining. The water fee remained the same at $1,975. But the new fee for sewer was reduced significantly from $5,607 to $3,295.

That satisfied members Crandall and Lawrence because it was a cut across the board for everyone. But it wasn’t the $5,000 reduction Progressive Builders had sought, and Edmonson asked members of the council if they would consider re-opening the discussion about an agreement with Progressive for an additional $2,688 reduction that would achieve the amount originally discussed at the first meeting.

Members of the council agreed to look at an agreement and an incentive policy. 

Monday, members of the council was still split, and the tie vote negated any developers agreement with Progressive.

The council, however, did pass the incentive policy, which could reduce WAC & SAC by a much as $2,688 more.

But under the terms of the policy, Progressive still didn’t qualify. One of the conditions required the developer to provide documentation to the city demonstrating that it would not be economically feasible to build and sell homes without assistance by the city.

The problem was, what type of documentation would prove that, and what profit percentage would the council consider feasible to a builder?

That was another discussion Monday before the council finally rescinded its vote on the economic assistance policy and changed it into a economic growth policy without any condition requiring proof of feasibility.

The new policy covers new homes built on existing vacant lots. The council agreed to review the policy during budget discussions and revise as necessary.