Vengroff bemoans fees, regulations on affordable housing project

It’s been more than a year since city officials last publicly considered Harvey Vengroff’s plans for an affordable-rent apartment complex on Fruitville Road.

After an initial meeting with the city’s Development Review Committee in November 2016, Vengroff’s proposed 384-unit project at 2211 Fruitville Road hasn’t been on any agendas. The entrepreneur hasn’t filed an updated site plan for the development, first proposed in spring 2015.

Behind the scenes, though, there has been a continuing dialogue between Vengroff’s team and the city. At the heart of these discussions: Vengroff’s frustration with regulations associated with the project.

The city has attempted to accommodate some of Vengroff’s requests to waive fees or rules he claims complicate the development process. Other regulations Vengroff has targeted remain in place — largely by necessity, officials say.

Vengroff disagrees, calling Sarasota a particularly burdensome environment for building  affordable housing. Since he first proposed the Fruitville apartments, he’s successfully begun affordable projects in Bradenton, Kissimmee and Nashville.

“It’s just so much more pleasant doing business someplace else,” Vengroff said. “But we live here, and we’d like to see people here with affordable housing.”

Brace for impact

Still, Vengroff is preparing to file a site plan with the city. The project could go to the City Commission for approval early next year.

Vengroff and business partner Joe Barnette said the city has worked to address several issues the developers raised at the beginning of the year. They have made peace with the reality they will have to pay some fees and comply with some regulations they believe are unnecessary.

But Vengroff still takes issue with an attitude he believes he sees among top Sarasota decision-makers. City leaders have long called affordable housing a priority, but Vengroff said their actions suggest otherwise. He thinks the city primarily serves an older, affluent demographic.

“They’re not really considering the people who work for a living, who have to work for all those people,” Vengroff said. “Those people — they’re not getting a fair shake here.”

City Manager Tom Barwin disputed Vengroff’s characterization and said the city took whatever steps it could to help facilitate Vengroff’s plans. One thing he didn’t dispute, however, was Vengroff’s broader analysis of the obstacles to building affordable housing in Sarasota.

“We need to have a lot more low-income affordable housing, and our governmental entities have to come to the honest realization that the current marketplace is not providing it,” Barwin said “How do you jumpstart it? How do you advance this huge market and social need? You reduce the fees and the regulations whenever you can.”

Vengroff and Barnette said the impact fees associated with the development are one of the biggest challenges they’re facing. Municipalities collect impact fees to account for how a project affects public services.

Barwin said the city’s multimodal transportation impact fee includes a waiver provision for affordable housing projects. The city intends to waive the fee for Vengroff’s development.

Barwin said other fees are set at the county and state level, which means the city doesn’t have the unilateral ability to adjust them. He encouraged all policymakers to consider measures to reduce the fees charged to affordable developments.

“It requires some strategic thinking and some action to get moving on this,” Barwin said. “We in the city can do a little bit, but it needs to be regional.”

“How do you advance this huge market and social need? You reduce the fees and the regulations whenever you can.” — Tom Barwin

Vengroff spoke to the county about the possibility of mitigating impact fees. Tom Polk, the county’s impact fee administrator, said officials have to comply with legal standards that ensure new developments are treated equitably,  which makes it hard to give breaks to certain projects.

“To try to suggest affordable housing will have less impact on parks and libraries is a very difficult conversation,” Polk said.

Other municipalities that offer fee waivers have systems that otherwise account for the lost revenue. Because Sarasota does not, most fees remain uniform.

“We have to keep the impact fee system whole and equitable for all new development,” Polk said.

City standards

Vengroff has raised some issues involving regulations squarely under the city’s purview. His ability to get concessions on those issues has been mixed.

In addition to waiving the multimodal impact fee, Barwin said the city was relaxing its parking requirements. In January, Barnette said the required number of parking spaces was an obstacle to building an adequate number of apartments.

Barnette said the same thing about the city’s tree ordinance, but officials proved to be less flexible when it came to those regulations. Vengroff originally wanted to clear-cut the lot, but city staff worked with him on a plan that preserved the type of trees the city’s ordinance is designed to protect.

Barwin argued identifying certain trees that could be kept on-site likely saved Vengroff some money. But Vengroff and Barnette said the project is operating on thin margins to remain profitable, and city regulations required them to spend time and money indexing trees on the property.

“We have to categorize each tree, take a picture, describe it, say what we’re going to do with it, how we’re going to dispose of it, and replace it with another tree that’s nice,” Barnette said.

“It’s just so much more pleasant doing business someplace else.” — Harvey Vengroff 

Barwin said there are reasons the city has to uphold some regulations. It’s hard to carve out an exception for a particular project. Officials have to consider the long-term impacts of the development. The city doesn’t want to create vastly different conditions for affordable housing compared to other residential areas.

From the outset, Vengroff has said a private market-rate affordable housing complex would provide a benefit for the city. As a result, he believes, the city should be willing to relax its standards to make the project a reality.

The original April 2015 application for the apartment complex clearly outlines his philosophy on this topic.

“Mr. Vengroff is committed to building affordable housing that does not require public subsidy,” the development application said. “Therefore, every restriction or added requirement will result in an increase in the rent.”

Still,  the city has not hesitated to push back against Vengroff’s requests. Vengroff originally wanted to build up to 800 units; that number was scaled back to 384. In May 2016, Vengroff announced he would abandon the project after the City Commission approved a condition mandating annual inspection of the apartment complex.

The city eventually relented, instead establishing a condition that allows staff to examine the property’s insurance reports. The history has left Vengroff skeptical of the city’s commitment to affordable housing.

And yet, headed into 2018, Vengroff’s team and city officials are cautiously optimistic they’ve come to an understanding. 

“Joe and I are both hoping we get this project done before we die — or at least get it started before we die,” Vengroff said.