A mainland developer is proposing to build 106 units on an 8.7-acre piece of land next to The Wooden Spoon in Marathon. Formerly the Aloha, the badly deteriorated buildings were demolished a few years ago and now a developer has come forward with a new plan called Tarpon Harbor.

Marathon Ocean Housing LLC wants to build 44 market rate homes and 62 affordable homes. It passed the Marathon Planning Commission’s review and will go before the Marathon City Council on Tuesday, May 27 for final approval.

Mayor Dick Ramsay said he thinks it’s a good project. He said with the new hotels and planned hotels online, it creates an even larger demand for affordable housing.

“They need workers and those workers need somewhere to live,” Ramsay said.

What’s still needed, however, are building rights for some of the units. According to City Planning Director George Garrett, the developers have 25 market rate permits and 19 affordable rate permits it can apply to the project. That leaves a deficit of 19 market rate permits and 43 affordable permits the developer will need to secure in order to proceed.

Its likely the developer will ask the council to allocate the building rights — gratis — from the city’s “bank” of unused permits doled out by the state. It receives 24 market rate permits (used to build single family homes) and six affordable rate permits every year. The affordable building rights, sometimes called workforce permits, are deed-restricted meaning the owner must agree to certain value conditions if her or she ever wishes to sell. The city currently has 12 market rate and 85 affordable permits that have rolled over from previous years. According to Garrett, no one has applied for an affordable permit in the last five years.

“I am absolutely okay with transferring the city’s stock of affordable building permits for the project, we’re ‘rich’ in those, but I am totally against transferring any market rate units for several reasons,” said Ramsay.

In order to transfer 19 market rate permits, the city would have to borrow forward on its allocation from the state and brings its balance of available permits to zero. Plus, Ramsay said, those market rate permits have value that are intrinsic to the real estate market as a whole.

“I think they should have to go out and buy the market rate permits that they need,” he said.

Although the Tarpon Harbor project only deals with market and affordable building permits for residential purposes, it’s likely to provoke another council-level conversation about the building rights of hotel rooms, or transient rental units (TRUs). Currently, the City of Marathon has only 35 to award and the state has no immediate plans to furnish more. During the last allocation of TRUs, developers were able to apply for unit building rights on a 4-to-1 ratio — for every four units the developer already owns, he could apply for one free TRU permit from the city. Ramsay wants to change that.

“I am going to push the council to consider that for every TRU that is allocated, the developer ‘retire’ a buildable lot,” Ramsay said. He said that would ease over-development concerns and it would also help protect city government from reaching a crisis point where it must, by state law, issue a permit or compensate property owners who are not able to build for lack of a permit.

City officials have said that prudent planning is the best way to secure more TRU building permits from the state. Ramsay said if more TRUs are awarded, he would like to see no more than 25 issued every year.

“We can’t oversaturate [the hotel market],” he said. “At this point, Marathon needs to grow into things, relax a little bit.”

The Marathon City Council will meet on Tuesday, May 27 at 5:30 p.m. at the Marathon Government Center to discuss this and other issues.

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