Construction costs are rising so dramatically that the builder of a massive Downtown DeLand apartment complex came to the City Commission Nov. 20 to ask that its tax subsidy be increased.

After about 30 minutes of discussion, commissioners made it clear they weren’t interested.

The soon-to-open complex is impossible to miss. On Woodland Boulevard in DeLand, the large unfinished edifice of DeLand Commons, the 180-unit apartment complex approved by the DeLand City Commission earlier this year, can be seen from blocks away.

What’s especially noticeable are the wood shells outlining the buildings. Originally, the plan was to use more concrete, but DeLand attorney Mark Watts, representing Atlantic Housing Partners, said the developer had to switch to the lower-cost wood as materials costs kept rising.

So Atlantic Housing Partners came to the DeLand City Commission to ask for a little more support in getting the project over the finish line.

In 2022, the Downtown DeLand Community Redevelopment Agency agreed to rebate up to $3.5 million worth of taxes that would have ended up in the CRA’s coffers, as an incentive to build Downtown DeLand’s first apartment project.

Bread and eggs were cheaper then, and so were construction materials. Scott Culp, a principal partner with the Winter Park-based development company, said those cost increases have hit developers hard.

“We’ve seen an unprecedented increase in construction costs like we’ve never seen in the entire time I’ve been in the business since 1985,” he told the City Commission. “I don’t know that it’s ever been as high of an increase as we had in the past few years.”

Atlantic remains committed to completing the project, Culp explained, but with construction costs ballooning from $30 million to around $37 million since they began, he and Watts hoped the city would throw them a bone. Of that $37 million, $1.6 million are fees Atlantic is paying to the city, including impact fees.

Atlantic had already gotten a break. The city agreed the development company would have to pay taxes on only 10 percent of the increase in property value the apartment project will create — up to a cap of $3.5 million.

Watts asked the City Commission to consider increasing that $3.5 million cap, but the City Commission wasn’t buying it.

“I don’t have an appetite for increasing it,” City Commissioner Dan Reed said.

City Commissioner Charles Paiva said he was confused. If the point of the original tax break was to incentivize the developer to build apartments Downtown, why increase the tax credit when the incentive has already worked?

“What would be our further incentive at this point since it’s already 30 percent built …” Paiva asked. “… [W]hat is our incentive to move forward?”

Culp made his case.

“As we’ve stepped forward with the city, toward trying to make this a reality and we’ve been impacted by reality — the reality of construction cost and reality of insurance cost and true expenses — we’re asking for just a share, not out of the city’s revenues, not out of the general revenues, not out of the cash that’s on hand, but out of money that we will be paying in on an annual basis to the city,” he said. “We’re asking for a little more of that to come back to us to help us with this significant increase in cost and significant increase in expenses.”

Instead, the City Commission opted to take no action, keeping the handout for the developer capped at $3.5 million.

DeLand Commons still has a way to go — Watts said the developer is on track to obtain a certificate of occupancy for the project’s first building by summer 2024.