Cost of doing business in Palm Coast

Jerry Masiello, left, and Mort Duggan, co-owners of Farley’s, a new bar in European Village.
Jerry Masiello, left, and Mort Duggan, co-owners of Farley’s, a new bar in European Village.
  • Palm Coast Observer
  • News
  • Share

How the city deals with its own perception.

Before Panera Bread finalized its Palm Coast opening schedule, it had to fix 23 things that weren’t up to the city’s landscaping code.

On the March 22 final landscaping inspection, item No. 9 read: “The parking lot lights need to be adjusted so that they are horizontal and not angled. We understand these fixtures are temporary, but they must be adjusted to meet our lighting code.”

This is one example that contributes to the perception that Palm Coast, as a city, is difficult to do business with.

Palm Coast Mayor Jon Netts agrees that perception exists. But he said when things don’t go right, it’s always someone else’s fault — and for the businesses, the city usually takes the blame.

Netts said the city’s Land Development Code “very much reflects the desire of most of our residents.”

“We uniformly enforce the codes, and I think that’s a good thing,” Netts said.

Another business, Farley’s, a bar in European Village, opened about a month ago.

The opening was delayed because of failed inspections, said Jerry Masiello, co-owner.

Masiello said he and the other two owners, Mort Duggan and Michael Chiumento III, wanted to expand on the existing electricity and plumbing. The city required them to hire an architect for the work, which cost them “thousands of dollars,” Masiello said.

It set the opening back by about 20 days, and every day a business isn’t open, money is going out the door, rather than coming in.

“Time is money for the small business owner,” Masiello said. While Masiello thinks the city is pro-business, he said: “I would say there is a process to go through. Can it be frustrating at times? Of course.”

According to City Councilman Jason DeLorenzo, the costs to do the larger, commercial projects are prohibitive unless pockets are deep. “It’s a little easier for them to swallow,” he said.

DeLorenzo said he talked with Panera’s public relations department, which confirmed the company is interested in opening a second location in town.

“But they need to sit down and talk to the city first because the process that took place to get this done was too cumbersome,” DeLorenzo added.

Despite paying more than $65,000 in impact fees and several thousand dollars to meet the city’s landscaping code, DeLorenzo said cost wasn’t the issue for Panera.

“It was regulation that made it so difficult to get done,” he said. However, the city doesn’t deserve all the blame, he added. Panera’s site plan didn’t match the building plan.

“Why it wasn’t caught at city review — someone could ask that question,” DeLorenzo said.

Joe Roy, area manager for Palm Coast’s Business Assistance Center, said clients come into his office and, while they feel the city is tough to do business with, they aren’t exactly sure why.

According to Roy, out of four recent businesses that came through the Business Assistance Center en route to opening their doors, one passed through the process flawlessly. The other three experienced obstacles in the inspection and permitting process.

The main reason the one went through without any problems, Roy said, was because the owner hired a general contractor.

“(The general contractor) had done work in Flagler County and understood the code and requirements,” Roy said. “(They) filed all the correct applications and drawings — did it the way it was supposed to be done.”

The three businesses that had some hang-ups experienced problems mostly in the code and permitting process.

“(The business owner’s) goal is to get started as quickly as they can, and the city’s goal is to make sure the business is falling under the code,” Roy said.

Most of the problems opening up a business go away if the business owner has a contractor, Roy noted.

“It’s typical that most small business owners aren’t technically oriented,” Roy said. “That’s usually where the gap is. When the city gets ... the label that they are hard to work with, it’s usually because something along the way hasn’t been done properly.”

While Palm Coast’s code might be stricter than that of other municipalities, Roy doesn’t think there’s a glaring issue the city needs to fix. “I don’t see anything as a showstopper,” Roy said.

Impact of impact fees
Many factors contribute to the cost of doing business, including impact fees, price of land, construction materials and tax rate.

Palm Coast slashed permit costs by 90% about two years ago, saving permit-seekers more than $1 million since then. The city also has one of the lowest tax rates in the state for a city its size.

According to the National Impact Fee Survey: 2011, conducted by Duncan Associates, Palm Coast charges $7,445 in impact fees per 1,000 square feet of retail space. Daytona Beach charges $5,165; DeLand is $3,080; Deltona is $7,053; Ormond Beach charges $4,227; and Port Orange is $5,270.

Of the 58 municipalities listed, 17 have fees higher than Palm Coast’s.

Most cities charges more in impact fees than their counties. A few months ago, Volusia County enacted a moratorium on most impact fees, and St. Johns County reduced impact fees for all commercial development.

DeLorenzo said that because the Palm Coast Panera Bread is categorized as a “quality restaurant,” fees are slated at $15,996 per 1,000 square feet. If it were to be built in Flagler County, the fees would have been $5,251 per 1,000 square feet.

The city fees for restaurants categorized as “fast food” total $34,863. The county charges $14,931.

Keeping SCORE
Roger Leverton, Flagler County SCORE manager, said small businesses trying to open in Flagler have complained that the process is complicated and expensive.

Of some small business owners, Leverton said: “I think they weren’t very well informed, quite frankly.”

He said the perception that the city is difficult to do business with is changing.

“Since the Business Assistance Center got set up, it seems to have quelled a lot of that comment because they go to one source and they’re able to explain everything they’re going to need,” Leverton said. “I think there has been a change, quite frankly.”

On Dec. 14, 2011, a story titled “The rise and fall of commercial rent in Flagler” detailed the roller coaster of commercial rent prices in Flagler County.

During the economic boom about five years ago, commercial rent in Palm Coast and Flagler County was considerably higher than the state average.

Since, the prices have crept back to the state average.

To read the story, search “commercial rent” on

Palm Coast gains position, thanks to Census

If you’re reading this article, you likely live in the metro area known by the U.S. Census as Palm Coast-Daytona Beach-Port Orange. That might not sound like a big deal, but City Manager Jim Landon sees the possibilities.

For the past 10 years, Palm Coast wasn’t even mentioned in the metro area. Now, it’s got top billing in a region of 350,000 people.

Site selectors who might be interested in looking at Census data on Daytona Beach will have to go through Palm Coast first, he suggested. Those who might not have heard of the city in the past will now see it as the second largest city to Jacksonville in Northeast Florida.

“I think it’s a game-changer,” Landon said, “but it doesn’t change anything overnight.”

— Brian McMillan

The unemployment rate in Flagler County hit a high mark of 17.1% in January 2010. The current rate, as of February 2012, is 12.7%.

The unemployment rate does not include workers who are employed but at fewer hours than they desire.

“There is no official definition of underemployment; however, estimates of labor underutilization are available for the state as a whole,” said Rebecca Rust, director of labor market statistics for Florida’s Department of Economic Opportunity, via email. “If discouraged workers, those working part-time involuntarily, and others marginally attached to the labor force were added to the ‘official’ state unemployment rate, it would be 7.6 percentage points higher.”

Unemployment numbers are determined using unemployment claims and other statistical models, in addition to a monthly survey of about 2,300 households in Florida. The surveys are conducted by the U.S. Census Bureau, under contract with the U.S. Department of Labor, Bureau of Labor Statistics.

The labor force has remained about the same in this span. In February 2012, out of a labor force of 283,272 in Volusia and Flagler counties, there were 28,056 unemployed residents in the region. In January 2010, out of a labor force of 286,125, there were 38,610 unemployed residents.

— Brian McMillan


Latest News


Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning local news.