Volusia shopping centers add extra fee
Diners and shoppers at One Daytona pass small white placards stuck on glass doorways or placed near registers that alert them to a 1 percent charge on all purchases.
Most probably don’t even notice the signs — or the nominal amount tacked onto their bills.
The new shopping and entertainment complex across from Daytona International Speedway is one of only a handful in the state — but the third in Volusia County — to tack on such fees, which can reap millions of dollars for their owners over a span of some 100 years. Experts say it could be a growing trend.
But critics see the extra fees at One Daytona and the Daytona Beach Tanger Outlets as a cash grab and a way to shift risk away from influential and wealthy developers, who were also given millions in tax breaks and subsidies. They say the fees are just another advantage not afforded to local business owners.
There’s no law prohibiting the extra fees — any property owner can impose one, said Mark Watts, a Cobb Cole attorney who has represented the developers at all the local complexes. And the fees are not a tax, though a local circuit court judge had to rule that was so in one case.
Shoppers, however, would be hard-pressed to tell the difference — as such fees are masked in quasi-government language and charged after the sale, providing cover for these complex’s restaurants and nationwide retailers, which would otherwise have to raise prices because the ultimate responsibility for paying the fee falls on them.
At the Tanger Outlets, a 0.65 percent surcharge is dubbed a “public user” fee. At the Pavilion at Port Orange, hunter-green signs discreetly placed near bushes or trees call the 1 percent charge a “public infrastructure” fee. At One Daytona, it’s called an “enhanced amenity” fee.
Because the fees are private, there is no state or local agency to keep tabs on them. A search of news articles found only three other complexes in the state with this type of charge on all sales.
The fees at The Pavilion have already brought in nearly $4 million since it opened in 2010. The fee at Tanger Outlets could generate nearly $1 million annually, and One Daytona’s fee could soon rake in $2.15 million a year, according to retail sales projections made before the complexes opened.
To understand how these fees came to exist, it’s necessary to track back through a complicated series of public-private agreements and court filings. Understanding how the fee money gets spent is even more difficult.
What is clear, however, is the revenue from these fees will not benefit local governments that helped developers build the shopping centers by granting special entities, along with, in some cases, providing funds and tax incentives. City governments established for the developers what are called community development districts, which have unique powers to pay for and maintain infrastructure like roads, sewers and water management systems.
Volusia County and Daytona Beach also gave Tanger Outlets $4.5 million in grants. They gave One Daytona $40 million in grants and tax incentives. All the money flows through the special districts. The fee money that’s collected, meanwhile, goes back to subsidiaries of the malls’ corporate owners.
When asked why the money generated by One Daytona’s fee wasn’t being used to reimburse taxpayers, Craig Neeb, International Speedway Corporation executive vice president, said in an email that “the quality of the tenants and the property required both city and county investments, as well as the (enhanced amenity fee) to bring the center to market.”
“We have come off a very successful Speedweeks, and the feedback from our tenants, visitors and community was extremely positive about their experience at One Daytona,” he said.