Preparing for Impact

by MICK LLOYD-OWEN & r & & r & & lt;span class= & quot;dropcap & quot; & T & lt;/span & he fight is on. Hoping to raise $18 million in six years to build roads that can handle the extra traffic that goes along with new development, the City of Spokane is considering an impact fee requiring developers to foot 95 percent of the bill. Some developers have balked at the idea, claiming that the new charge will discourage commercial development and could ultimately be counterproductive. Advocates of the proposal want to see the new impact fee in place this spring, arguing that delays could cause the state to enforce a moratorium on new development until the city builds the new roads. On April 9 the city Plan Commission will gather input on two versions of the proposed ordinance.





"The [Washington State] Growth Management Act allows for impact fees and they mandate that capacity improvements must be made within six years of development or sooner (a concept known as concurrency), and the city is way behind on that," says Jim Bakke, a north Spokane resident and work group member who helped draft the proposal. "The main impetus for the impact fee is that the city sees it as the only way they're going to be able to meet the concurrency requirements."





State and federal funds for road and infrastructure improvements have been drying up. Per-gallon gas tax revenues are shrinking as fuel prices increase -- people seem to be avoiding the pump by driving less. At the same time, construction costs (asphalt, concrete, etc.) are climbing. The net result is that improvement costs are outstripping current sources of funding. The state has been diverting funds toward larger projects on the west side of the state, and the money that is available can't be obtained without local governments providing matching funds.





"If you don't have that match money, you don't have many possibilities," says Louis Meuler of the city's planning department. "This is what's driven us to looking at impact fees to begin with."





& lt;span class= & quot;dropcap & quot; & T & lt;/span & he way impact fees work is that developers are charged on a per unit basis for residential construction and per square foot for commercial uses. The fees are calculated using a complex formula that attempts to determine how many additional peak-hour vehicle trips the development will add to traffic. According to Washington law, impact fees can only be used for traffic capacity improvements related to new development -- they can't be used to fix existing deficiencies.





Under the city's original proposal, builders would be hit with a fee of $660 to $3,000 per home, depending on where in the city they build. The proposal divides up the city into four sections, with fees varying for each. Fees for commercial development could be anywhere from tens to hundreds of thousands of dollars, depending on the size and nature of the structure. Commercial uses that generate the most peak-hour trips would be hit the hardest: Banks, which now cost around $125 per square foot to build, would be taxed an additional $74 per square foot.





"Homebuilders and realtors normally do not support impact fees," says Steve Taylor, speaking for the Spokane Homebuilders Association and the Spokane Association of Realtors. "However, because of the declining revenues coming in to support roads, we've been willing to work with the city on crafting a reasonable impact fee."





According to Taylor, asking developers to pay for 95 percent of the targeted upgrades is not reasonable. The public benefits from any improvements to a greater degree than 5 percent, he argues. "We feel that the fees applied to commercial uses are going to be so high that it's going to create a disincentive for new commercial construction in the city of Spokane," he adds, claiming that developers might choose to avoid the fees by building in the unincorporated county or another jurisdiction. That would increase urban sprawl and cause the city to lose permit and sales tax revenue, Taylor says, defeating the purpose. In a letter to the city in February, Taylor said that the threat of a state moratorium on building is "outright false and maliciously misleading," claiming that the language of the law allows for numerous alternatives before draconian measures could be taken.





Taylor also thinks the city should wait until next year -- after it has completed an in-depth baseline traffic study -- before enacting any ordinance, or should at least phase the fees in gradually so the city can make adjustments as it gets better information about traffic. According to Meuler, the city has allocated $400,000 and two new staff positions to do this baseline study. It will also soon hire a private consultant to help.





Bakke says that the Plan Commission will probably adopt several recommendations -- including a revised fee structure that would shift some of the burden off commercial and onto residential construction, as well as combining the two south quadrants. Depending on the outcome of the public hearing, the commission may also make further revisions to the proposed ordinance or forward it to the city council for approval.





& lt;span class= & quot;dropcap & quot; & L & lt;/span & iberty Lake has been collecting mitigation fees -- which are similar to impact fees except voluntary -- since 1995. Doug Smith, the city's community development director, says the process works well. "We've had large-scale projects where developers have paid literally hundreds of thousands of dollars ... and were very pleased with the certainty of being able to just write the check for the mitigation as opposed to completing studies and start writing checks for the unknown," Smith says. He says the certainty factor benefits the city when budgeting for projects, too.





The Spokane Plan Commisson hearing on impact fees is at 5 pm, Wednesday, April 9, at Spokane City Hall, 808 W. Spokane Falls Blvd.