VENICE – The Venice City Council will consider Tuesday whether to settle a 2022 lawsuit filed by developer Pat Neal over excess building permit fees for $1.6 million.
Neal originally asked for at least $1.45 million.
Funds collected through the fee were used to pay for a 7,000 square-foot expansion of the city’s building division, as part of a $12 million expansion of the City Hall campus.
The proposed settlement was reached June 10, the day before a trial was to start over the dispute.
The council met in executive session on June 11 to discuss the deal.
Approval is a formality, as 12th Judicial Circuit Court Judge Danielle Brewer issued an order to close the case on Jan. 11.
The council decision is scheduled for the routine consent agenda without discussion but can be spotlighted for review by any of the seven council members. The board meets at 9 a.m. in chambers at Venice City Hall, 401 W. Venice Ave.
Why did Pat Neal sue the city of Venice?
Neal and his company Neal Communities started doing business in the city of Venice in 2014, after the Great Recession. The building fee formula challenged by the lawsuit was adopted in August 2012 and bases fees on the percentage of a project’s value, instead of the cost for enforcement of regulations.
That distinction was discovered by Neal’s staff in February 2020.
The $1.45 million sum at issue reflected excess fees Neal and his associates paid between Sept. 5, 2014 and July 12, 2021.
A 2019 report by MGT Consulting showed that Venice was making a profit on its building fees, while charging too little for planning.
That put the city in conflict with a state law that took effect in December 2020 that capped the amount of money a building department can have in reserve as the average of its operating expenses for the four previous fiscal years.
The study showed that, at that time, the city exceeded a state cap by 41.4%.
The city has refunded $4.3 million in excess building fees through the 2023 fiscal year and currently has more than $4.4 million in the building fund, prior to the proposed settlement, which will be paid for out of the building fee fund.
This is the second fee-based lawsuit Neal has won vs. the city. The first involved agreements signed by previous landowners to pay the city “extraordinary mitigation fees,” created in 998, when the city annexed Henry Ranch.
What does the settlement say?
The settlement calls for Venice to pay $1.6 million into a trust account at Moore Bowman & Reese – Neal’s Tampa-based attorney on the matter – on behalf of Neal Communities of Southwest Florida and Neal Signature Homes.
That payment must be made within 30 days of the council’s approval.
Once both sides sign a satisfaction and release form, Neal will stop paying fees with a notation of the payment being “under protest.”
This article originally appeared on Sarasota Herald-Tribune: Venice to settle excess building permit fee lawsuit filed by Pat Neal
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