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mor 94 PAA 397 The primary problem relating to the ability to sell involves the requirements of Florida Statute 498, commonly referred to as the Land Sales Act. This Act sets forth the numerous requirements the owner of more than 40 lots must meet before a single sale can take place. In addition to available water, waste disposal and electricity, the main stumbling block, from a cost standpoint, is lack of paved streets and drainage. As recently as 1993, my firm undertook a study for Ro-Ed Corpora- tion to determine whether some of its lots could meet the State requirements to permit limited sales. We found the State require- ments to be extremely onerous, both from the standpoint of required documentation and demanded costs of improvement. Those costs were prohibitive when considering the public's demand for lots and the selling price for lots at the $5,000.00 level. The outlay of hundreds of thousands of dollars, with no return in the near future, could not be justified. As a result of this information, the project was dropped. It is true there has been an increase in building in this subdivi- sion within the last two years; but even if this rate of building is sustained, that amount is not significant when considering the total number of lots in the subdivision and the amount of time needed to absorb those lots in the market. If the water lines are installed as planned, the lots of Ro-Ed Corporation will be minimally benefitted, if=_at all, due to the restraints on 'their sale. A typical lot will be assessed for water construction purposes at $1,650.00 initially; and there is no way to recover this amount, since the lots are not available for sale at present. One could argue that the amount could be recouped if, in addition to the water supply, Ro-Ed Corporation somehow managed to have roads paved, draining installed and the other numerous requirements of the State met. The cost of this is simply prohibitive when considering the $5,000.00 lot sale range. Assuming paving at $1,200.00 to -$1,300.00 a lot and no additional provision for drainage, we have a lot cost of: Present lot price $5,000.00 Water cost 11650.00 Paving 1,200.00 Total cost $7,850.00 Add to this the $1,650.00 water tie-in fee when a residence is constructed -and the lots are now in the $9,500.00 range. This is an entirely different market then at present, when sales are at the $5,000.00 level. At $9,500.00, the lots of -Vero Lake Estates must compete with those of nearby -Sebastian Highlands and other developments that are in established communities, with many more amenities. Even if lots were readily saleable under some provision of the Land Sales Act, this water expansion project is questionable. Any assessment project must be shown to have a direct benefit to the property being assessed. Remember, we are typically dealing with $5,000.00 lots and the initial cost of the water project will be $1,650.00 a lot or one-third of its value. It borders on being confiscatory when one considers a like amount must be paid when the lot is sought to be used for constructing a residence. Essen- tially, two-thirds of the lot price is too high a price to pay. 22 February 21, 1995 - _M M