If Osceola County and St. Cloud adopt their proposed sky-high mobility fees this month they will almost certainly face a legal challenge.

The city and county have tweaked the proposed mobility fees they would impose on new development to fund transportation initiatives, in the face of sharp opposition from the business community. But the new rates would still more than double and some are even higher than what was initially presented in June, according to a report in GrowthSpotter.

Even more confusing to many, the ordinance creates a new category for affordable housing that charges $1,202 more per unit than the standard fee for market-rate apartments. Critics say that would discourage a type of development governments should be trying to encourage.

“That doesn’t even make sense. It’s hysterical,” said Lee Steinhauer, government liaison for the Greater Orlando Builders Association (GOBA).

Advocates of the mobility fees in Osceola County and St. Cloud say they are critical to pay for the traffic impacts of new developments, in the form of new and improved roads and transit options. But the proposed fees would be the highest in the state. Many say it would discourage new building, and the costs would be passed onto residents and businesses that can’t afford them.

The revised ordinance was released Thursday. GrowthSpotter sought answers and explanations from Osceola County staff regarding the changes but did not receive any responses.

Four of the county’s leading business associations sent a letter to Osceola county commissioners Wednesday calling mobility fee study  “not legally defensible under Florida law.” The CEOs of GOBA, Osceola County Realtors Association, Apartment Association of Greater Orlando and St. Cloud Chamber of Commerce signed the letter asking commissioners to postpone Monday’s vote.

“While we fully recognize and appreciate the necessity of mobility fees to adequately and effectively fund transportation infrastructure, the current approach proposed is fundamentally flawed and we cannot support it in its present form,” they wrote.

The Board of County Commissioners is scheduled to vote Monday on the revised ordinance that now recommends increasing mobility fees on new homes from the current rate of $9,999 to $23,149 per home. That’s slightly lower than the $25,012 that was recommended on July 1, but still far too high, according to GOBA.

Some other categories were reduced from the earlier proposal. For example, the proposed mobility fee rate for apartments would go from $7,754 to $14,969. That’s less than the 132% increase that was recommended in June, though it’s still 93% above the current rate.

“When we have elected officials coming to us asking us how to fix the housing affordability challenge that they’re having. I think we can look right at this and say, Well, this is an issue,” AAGO government affairs director Johnmichael Fernandez said.

And several categories could see even higher increases than were recommended in the initial ordinance.

For example, the proposed rates for hotels would jump 74% instead of the relatively modest 9%.

Fast-food restaurants would be among the hardest hit. Those businesses were already facing a 578% increase, but now it would jump to 1,099%.

If approved, the new Chick-fil-A coming in on Old Lake Wilson Road would see its mobility fee go from $74,010 to $887,475.

“You know, I think there’s a misconception that might be out there in the general public that this just hits residential — whether it’s single family, multifamily,” Steinhauer said. “But this is going to hit your commercial development very hard.”

GOBA hired transportation consultant Nue Urban Concepts to analyze the county’s mobility fee study. The report cites nearly two dozen flaws in the study, including that the consultant overestimated the population growth rate and overcharged for construction.

The report concludes, “If the 2024 study cannot justify the calculated mobility fee, then the County and City cannot justify a finding of extraordinary circumstances. A finding of extraordinary circumstances requires a needs study that demonstrates a direct connection of rational nexus between the need for improvements and the impact of new growth.”

Because the city and county are claiming “extraordinary circumstances” to circumvent state regulations on impact fees, they must approve the ordinance by a super-majority. While some commissioners have cheered the higher fees, others have expressed alarm over the rates and what they could mean for housing affordability and the county’s business climate. If approved, the new fees would go into effect on Nov. 29, 2024.

“Impact fees have been challenged before successfully,” Steinhauer said. “But I believe you would start by seeking injunctive relief to put a hold on until it’s decided whether or not the study is legally defensible.”

Have a tip about Central Florida development? Contact me at lkinsler@GrowthSpotter.com or (407) 420-6261. Follow GrowthSpotter on Facebook and LinkedIn.