A loophole in state law has allowed Osceola County to label an area “slum and blighted” so it can create a special taxing district to fund road projects even though it’s never had higher property values.

County commissioners unanimously and without discussion Monday voted to set aside 65,000 acres to create the Southeast Infrastructure Improvement Area.

Osceola property appraiser records show the area has seen steady growth in property values over the last five years and will be home to some of the county’s most expensive master-planned communities.`

The district is made up of land that runs south and east of Lake Tohopekaliga, north and south of US 192 and includes the Royal St. Cloud Golf Links — advertised as the region’s premier “resort style” golf course. The move allows the county to use tax increment financing — a method of encouraging development by collecting increased property taxes because of the development projects within the specified area — to fund road improvement projects in that same area.

The county plans to fund $315 million in roadwork using the district’s financing methods, records show. Those projects include road expansions on main thoroughfares such as Cross Prairie Parkway, Old Canoe Creek Road, Hickory Tree Road and others.

The district encompasses massive master-planned community Waterlin, which will bring 17,000 homes to the area with construction beginning next year. Developer Wheelock Communities paid hundreds of millions to build the over 6,000 acre multiphase community just off Florida’s Turnpike and cut deals with companies which bill themselves as “luxury” single-family homebuilders.

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It’s not the first time the county has used this method to pay for road improvements. In 2022, the county created the Northeast Infrastructure Improvement Area to fund road improvement projects that led to master-planned community Sunbridge.

In neighboring Orange County, a similar taxing district siphoned about $160 million in property taxes over the past 20 years out of the main county budget where it could have been spent on anything from affordable housing to public health. Instead it funded transportation projects around the International Drive area — like the new road Universal Orlando will build to its Epic Universe theme park set to open in 2025.

Local governments were granted the ability to redevelop areas within their jurisdictions with the passage of the Community Redevelopment Act of 1969. The act entrusts local governments to identify slum and blighted areas based on state definitions.

A study published by Florida State University in 2009 authored Heather Khan found a “deep disconnect between slum and blight conditions cited in the blight study (by governments) and the content of the redevelopment plan.” In the study, Khan highlights that the stated conditions in the areas where agencies want to put the special districts are generally different from the actual conditions in those areas.