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Shopping Center Revenue Idea: User Fees?

Here's a fascinating idea--it looks like CBL & Associates Properties and Benchmark Group are charging shoppers a 1.06 percent "public user fee" on purchases at the Hammock Landing project in West Melbourne, Fla., that the two firms recently opened.

The companies are using the fee to offset investment made into the local infrastructure that were part of the project construction. Shoppers, not surprisingly, aren't so keen on the idea. But I think the case the developers are making has some merit. They're looking to get paid back for investments that benefit of the public. The only question I have is whether the firms got some kind of incentives on the front end of the project from the city or county, as is sometimes the case.

These fees finance road, water and sewer infrastructure expenses for the sprawling 78-acre shopping center at Interstate 95 and Palm Bay Road. The first stores opened there last week, and a ribbon-cutting ceremony takes place April 1.

The 1.06 percent fee on taxable merchandise is charged by a Hammock Landing community development district, which has the power to enact special assessments.

Fee revenues are collected by the developers of Hammock Landing, CBL & Associates Properties of Tennessee and Benchmark Group of New York.

...

CBL spokeswoman Katie Reinsmidt defended the public user fees. She said the complex would not have been built without them.

The developers have paid more than $29 million for roads, water and sewer lines, stormwater upgrades during the first construction phase, DeLand attorney Mark Watts said.

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