- September 9, 2026
Palm Coast officials are considering a combination of city reserves, borrowing and revenues from the State Road 100 Community Redevelopment Area (CRA) to pay for the city's $17 million purchase of approximately 259 acres in Town Center.
The land purchase is part of a settlement resolving a lawsuit involving Palm Coast Holdings LLC and related entities and the city. The City Council voted 4-1 at its Aug. 19 workshop to approve the settlement, with Vice Mayor Theresa Pontieri casting the lone dissenting vote.
During the council's Aug. 25 budget workshop, city officials began discussing how to finance the purchase. Finance staff said the city manager executed the settlement agreement Aug. 20 and the city made a $1 million escrow deposit Aug. 24.
Finance staff presented several options, including temporarily lowering the city's General Fund reserve goal, establishing a line of credit of up to $15 million and eventually using tax increment financing revenues from the State Road 100 Community Redevelopment Area to help repay the cost of the purchase. The city could also direct future General Fund reserves above its target toward repayment and market some of the acquired parcels for sale.
The city's adopted policy calls for General Fund reserves of 10% to 20% of the following year's budgeted expenditures, but Palm Coast has aimed for a 25% reserve. Finance staff said the city's current reserve level is about 28.4%. Dropping the reserve to 20% would make about $5.7 million available, while reducing it to 15% would free up approximately $9 million.
Council Member Dave Sullivan favored using more of the city's reserves to reduce the amount Palm Coast would have to borrow.
"I think going to 15% at this point in the end will save us money in the long run," Sullivan said.
Pontieri, who opposed the settlement agreement, raised concerns about borrowing against the General Fund. She asked staff what the interest would cost if the city borrowed $12 million over three years. Assuming a variable interest rate of about 4.9% remained constant, staff estimated the interest at approximately $650,000.
Pontieri called borrowing $12 million against the General Fund "a terrible idea."
Mayor Mike Norris summarized Sullivan's approach as lowering the city's reserve level to 15%, putting approximately $9 million toward the purchase and financing the remainder. Sullivan said using more reserves would save the city money by reducing the amount it needs to borrow.
Pontieri, however, said she did not want the land purchase to consume money that could be used for other council priorities.
"What I am trying to make sure is that we are not putting all of our eggs in this one basket and casting aside everything else that we decided was important to us," Pontieri said.
She pointed to other needs discussed by the council, including road paving, public safety and funding toward a new animal shelter.
"There are other options besides using the entire fund balance towards this one initiative," Pontieri said. "And I am asking council to consider the other things that we had decided were important to us rather than putting every single penny into this purchase."
Sullivan disagreed that the approach would consume all of the city's reserves. He said using between roughly $5 million and $9 million from reserves would reduce the overall cost of the land purchase because the city would pay less interest.
"I think that going from 5 to 9 million dollars out of reserves significantly lowers the cost of what it's going to cost overall to do the purchase," Sullivan said.
Council Member Charles Gambaro said the acquisition fits with the city's economic development goals, particularly following Raydient's withdrawal of its applications for the proposed westward expansion. He said acquiring the Town Center properties could give Palm Coast land to pursue economic development opportunities.
The council ultimately gave staff consensus to move forward with seeking proposals for a General Fund line of credit of up to $15 million. That does not mean Palm Coast will borrow the entire $15 million. Staff said seeking proposals from banks would provide financing options, with the council able to determine later how much of the available credit to use.
CRA money could also play an important role in eventually paying for the acquisition. The State Road 100 CRA is scheduled to expire in 2034. Mayor Mike Norris said that because the properties are within the CRA, he believed it would be better to use CRA funds to help pay for the purchase.
The city's CRA plan would have to be amended to specifically allow those dollars to be used for repayment. Finance staff also said TIF revenues are expected to become available for land acquisition repayment beginning in 2029.
The council has not yet decided how much of the purchase will be paid from reserves and how much will be borrowed. Norris asked finance staff to bring back different scenarios so the council can compare the options before making a final decision.
