Paved with Delays
Back in the fall of 2009, Steve Bond and Adam Zimmermann were considering moving their business. The owners of Water Wizard Pools were renting a small office space on Montgomery Street near the Will Rogers Memorial Center, and their landlord was talking about selling the property. They feared their lease would be cancelled.
So they began looking around for property where they could build a much larger office building combined with a showroom to display their pool and fountain designs. They found and bought a vacant one-acre lot on the corner of Marquita Drive and Rosewood Avenue, just east of Alta Mere Drive and south of I-30. It’s an industrial area full of mechanics’ garages and small office complexes.
“We liked the location, and we thought this would be a good investment for us,” Bond said. “But if we had known it would take this long to get city permits to do a fairly simple project, we would have bailed out on this a long time ago.”
In fact, Water Wizard Pools did not a get a building permit until last December, more than a year after the partners first began the process. Construction has begun, and the metal building is due to be completed by April.
The delay was caused by the city’s insistence that Water Wizards reconstruct portions of Marquita Drive and Rosewood Avenue that border the company property. City staffers deemed that the asphalt-paved roads were below city standards and required the pool company to foot the bill for reconstructing the roads up to the midline. Although the pool company has to provide money for rebuilding that half of the street, the work won’t actually be done until the city is ready to fund the work on the other lanes.
The city decided several months into the permitting process that Water Wizard’s project fell under the terms of the Community Facilities Agreement, a city program that passes infrastructure costs along to private developers. The CFA requires developers — mostly of housing developments — to pay the cost of infrastructure improvements associated with their projects: streets, sidewalks, street lights, and sewer lines, among other things.
The rules about what projects are covered by CFA specifications are not completely clear. The city web site says the CFA agreements are required “whenever the construction of public infrastructure is funded entirely or in part by a private developer.”
As part of CFA, developers have the choice of paying for the work themselves or just handing the money over to the city and letting them contract for the work. If the city does the work, the developer cannot control the timing.
Water Wizard and the city haggled for about six months over the CFA contract. “The city decided we were real estate developers, not just a small business looking to expand,” Zimmermann said. “It ended up costing us more than $60,000 for the infrastructure, which we didn’t think was even needed in that area.”
The reason the city decided Water Wizard was a real estate developer: The property the partners wanted to buy had been subdivided into three parcels in plat records, Bond said. But the three adjacent properties were all owned by one man. Even if Water Wizard had the land re-platted as one property (which the firm eventually did), the city ruled that they were still considered developers.
In explaining why Water Wizard had to satisfy CFA requirements, city spokesman Bill Begley forwarded answers from city planning and development staffers.
Water Wizard Pools “is a private company that invested in and platted property for development that will allow them to have a larger business on the property that they assembled, and that will likely increase profits for them,” the staffers wrote. “In other words, they anticipated a return on the capital investment that they were making in their business. Part of that capital investment that is required is the improvement of the street frontage and the associated infrastructure for undeveloped and newly assembled and platted property. … Essentially, they were acting as their own developer.”
The added costs and delays under the CFA began to mount for Bond and Zimmermann. Water Wizard had approached the city for permits in October 2009 but weren’t told of the CFA policy until January 2010. Then came the requirement to get approval from about 15 city departments, including urban forestry, planning and development, engineering, and the fire department.
“I sat in one meeting last spring with 15 different people, from all these city departments, all with their own agendas,” Bond said. “I came away from that meeting thinking the city was making a fairly simple project way too complicated. And expensive.”
Water Wizard paid an engineering firm $13,000 to study the roadway improvements. Last October, Bond sent the city a check for $48,471.76 for the roadway improvements to get the building permit. Still, that permit was not issued until Dec. 6, even though the city had been working with Zimmermann and Bond on it for about 14 months.
In addition, the city required a landscaping plan, which Bond said will cost about $25,000. Thus far, bills for the project, including land acquisition, construction of the building, and city requirements total about $350,000, or $100,000 more than Bond and Zimmermann had expected.
Under the CFA, Water Wizard did have the choice of doing the street improvements themselves. But to do that, city rules would have required the company, in effect, to find more than twice the money the street project would actually cost. The company would have been required to place funds equal to 125 percent of expected costs in a city escrow account and then pay for the work from other funds. Only when the project was finished and had passed inspection would the original 125 percent money be returned to the company.
“If we were do this ourselves, we would have had to pay more than $100,000 up front to the city and a contractor,” Bond said. “All this for a pool business.”
Water Wizard is more than a pool business, however. Though a bulk of their business is building and maintaining residential pools, they also do a lot of public fountains and other projects in the area. They helped design and build the Museum of Living Art water features for reptiles and amphibians at the Fort Worth Zoo. They helped design and build the Panther City Fountain at Hyde Park in downtown Fort Worth. The company has built similar fountains in Hurst, Arlington, and Fairview in Collin County.
Water Wizard brings in about $1.8 million in gross annual revenues and employs six full-time workers. Once their new showroom opens, they may add a few more employees, Bond said.
Though the city has their street money, Fort Worth is not required to guarantee when the construction will be done. “They could do it next year, five years down the road, 30 years, or never do it,” Zimmermann said. “They just took our money, and it will sit in the bank. With all the road projects that Fort Worth has to do, I doubt this one is even on their radar screen.”
The city staffers’ response: “Those improvements will be scheduled and constructed when other funds become available to complete the entire street project. There is no timeline specified.”
What really makes Bond and Zimmermann mad is the requirement for curbs, gutters, and sidewalks at the perimeter of their property. None of the streets in the area have these, and the other property owners are grandfathered out of paying for those improvements. “If they ever do the street improvements, which I doubt they ever will, our property will have curbs and gutters and sidewalks, which will end at our property line,” Zimmerman said.
The city staff said that “Sidewalks are a requirement of the subdivision ordinance. They would not connect today, but as the area developed the sidewalks would fill in, providing opportunities to connect the sidewalk network.”
Zimmerman said that kind of thinking results in far too much expense for private businesses like his. “There isn’t any foot traffic in that area because it is mostly industrial businesses,” he said. “But Fort Worth is making us build sidewalks that will go nowhere.”