A major expansion of Mount Dora’s Northeast Community Redevelopment Area will generate millions of dollars in new tax revenue, but city and county officials can’t agree on how to divvy it up.

Mount Dora’s City Council and Lake County Commissioners have been meeting since March to debate methods for splitting CRA increment revenue, and now they’ve pushed the decision into February, according to a report in GrowthSpotter.

For years, the city and county have been sharing the revenue, with the city receiving 60% of the funds and 40% going to the county. During a joint workshop in Tavares last Tuesday, county commissioners asked for an even 50:50 split. If they can’t agree on the distribution, the matter could end up in court.

Created in 1989, the Northeast CRA generally includes the area south of Limit Avenue, north of 11th Avenue, east of Baker Street, and west of U.S. Highway 441. It was originally set to expire in 30 years, but the city has since extended the district to 2049.

The state’s Community Redevelopment Act allows cities to keep up to 95% of tax revenues generated by new development in the district, but they must spend the money for improvements within the district. Mount Dora CRA Administrator Adam Sumner said he expects the funds to end by 2045, given threats from state lawmakers eager to axe the special district. Under the current allocation, Sumner estimates the county would receive $5.9 million over the next 20 years, with $7.5 million going to the city.

In 2023, parcels from the Mount Dora Groves South project were added to expand the Northeast CRA. The inclusion in the district was critical in the city council’s decision to approve an annexation of the land into the city after previously voting to deny it.

Inside the Mount Dora Groves South PUD, Taylor Morrison recently opened its newest Yardly-branded rental community, which has 309 cottage-style homes. The homebuilder is also  planning to build its first Central Florida condo offering with the proposed 180-unit Southloch community.

A 15-acre commercial portion of the PUD fronting U.S. 441 — with entitlements for 150,000 square feet of retail, commercial and hotel uses — is already underway from One Oak Development and is expected to open in early 2026 with a Chick-fil-A, Texas Roadhouse, First Watch and Mission Barbecue among its tenants. The project will also have a Fifth-Third Bank and Heartland Dental.

The new development will bring an infusion of new revenue, but the Board of County Commissioners rejected the expansion ordinance under the current 60:40 split. For its part, the City Council rejected the county’s 50:50 proposed revenue share in June.

County Commission Chair Leslie Campione argued that the CRA funds are needed for important county road infrastructure projects and repairs that are being held up by a lack of funds.

“That’s like a $38 million project at [State Road] 44B, it’s a horrible situation, and it needs to be widened,” she said. “People are literally stopped in their neighborhoods in Loch Leven, they cannot get out and go southbound. They’re all going down the road, making U-turns in other people’s neighborhoods and it’s just a giant mess.”

Mount Dora Mayor James Homich said he’s worried the new money Lake County wants to keep from Northeast CRA would go toward things other than the redevelopment area, like the Eudora roundabout or other Eustis projects.

“Just taking the money to take the money and spend it elsewhere outside the city is not going to be appropriate,” he said. “…Cities are spending the CRA money that they’re getting for what is intended, which is to improve a neighborhood that is blighted. I’m worried that we’re completely undercutting what the purpose of our CRA is with this.”

Commissioner Sean Parks said he, too, supports the even split to help fund road improvements. “I understand your points well,” he told the mayor, “and I agree you’re going to be using the CRA money for something special for your city. Just practicing what I’ve been preaching and talking about these last couple of years, in trying to direct every dollar possible to roads, I’m still in the camp of the 50-50 split on that.”

Lake County Commissioner Kirby Smith suggested that a typical CRA is for blighted areas and that, in his assessment, the Northeast CRA doesn’t meet the definition.

“I don’t see the difference of 10% being all that much, but I do see the differences of it being blighted or not blighted — and, in my opinion, it was never blighted,” he told the city council members.

If no agreement is reached between Mount Dora and Lake County, according to Mount Dora City Manager Vince Sandersfeld, the city is entitled to 95% of the funds. However, Sandersfeld warned, anything can happen once the issue goes to the courts.

“I’ve talked through all the public meetings about what we think our legal decision is, and we think it’s strong,” he said. “But there’s always uncertainty with litigation. Under the statute, it would be split 95-5% in the absence of an agreement.”

County Attorney Melanie Marsh said the next step would be mediation if an agreement is not reached.

Failing to come to a consensus on the allocation of the Northeast CRA increment funds, both parties agreed to delay the conversation for 45 days to give their staffs a chance to reconvene before meeting again next year. Despite differences in perspective, both parties agreed that they would prefer to come to an agreement before resorting to mediation or lawsuits.

“It’s never a good look for a county or two governmental agencies to sue each other,” Smith said.

“I couldn’t agree more,” Mount Dora Councilman Cal Rolfson responded.

Have a tip about Central Florida development? Contact me at jwilkins@orlandosentinel.com or 407-754-4980. Follow GrowthSpotter on Facebook and LinkedIn.