Paving The Way For Growth Post Falls Considers Impact Fees

Developers may be forced to spend thousands of dollars more to build in Post Falls after Jan. 1.

That’s when the City Council wants impact fees to go into effect. After that, each time a structure is built within city limits, it would be assessed a fee for the impact it will have on city services.

The money could mean about $1.59 million generated for parks, $1.52 million for infrastructure and $225,500 for the Police Department over the next five years, estimated Gary Young, planning and building director for the city.

“The idea (is) that any new development has an impact on the existing system,” Young said.

Any impact fees collected must be spent only on services affected by the new growth. Furthermore, there must be a rational relationship between the way the fees are charged and what they finance.

That means a new business can be charged an impact fee for building new streets or improving existing streets because it will generate more traffic.

However, a new home in Idaho cannot be charged an impact fee for schools, a state Senate panel concluded in January, because it will not necessarily create the need for more classrooms.

Some developers say impact fees will discourage businesses from building in Post Falls.

“A developer is going to say, ‘I can build it here or I can go to Hayden where I don’t have to pay impact fees,”’ said Monte H. Risvold, vice president of Tomlinson Black Commercial, a real estate firm. “Where do you think they’ll go?”

The state of Idaho enacted legislation enabling impact fees in March of last year. If Post Falls implements the fees, it will be the third city in the state to do so. Coeur d’Alene was the second, enacting them in January.

The added cost doesn’t seem to have affected development in Coeur d’Alene, said John F. Austin, city finance director. Coeur d’Alene has experienced a near-record amount of construction, he said, citing the new Eagle Hardware Store as an example.

“Their fee was (about) $129,000,” he said.

The store could have selected a different location where the fees would have been less, but “they wanted that location, that visibility,” he said.

In Coeur d’Alene, commercial businesses’ impact fees cost $24.74 for every 1,000 square feet of the building plus an amount that reflects the number of customer trips per day the business is expected to generate.

Depending on where the business is located, the city charges between $12 and $20 multiplied by the number of trips generated by the business. For example, a McDonald’s restaurant with 2,000 square feet will pay between $17,884 and $30,964 in impact fees.

Post Falls is considering fees that would amount to $1,036 per 1,000 square feet for commercial buildings. That same McDonald’s restaurant’s impact fees in Post Falls would cost $2,072 - between $15,812 and $28,892 less than in Coeur d’Alene.

An office or institutional building in Post Falls would have impact fees of $849 per 1,000 square feet and an industrial or agricultural building would have impact fees of $292 per 1,000 square feet.

The council and the Planning and Zoning Commission factored the number of customer trips and the number of police calls each type of business would generate into the figures.

The Post Falls impact fee on residential construction would be $1,025 per housing unit. Each home, each apartment in a complex and each dwelling in a duplex would count as one unit.

Many builders and developers support impact fees, Young said, including the North Idaho Building Contractors Association - one of the organizations that sued the City of Coeur d’Alene when it first enacted impact fees in 1993.

“They recognize that if the infrastructure isn’t available, then they won’t be able to build,” Young said.

After the NIBCA sued the city of Coeur d’Alene, it worked with the city to set new impact fees it could support, said Lori Barnes, the government affairs officer for the organization. “The reason we opposed them was because there was really no order to it,” she said.

When Post Falls originally proposed residential impact fees that were much higher, the NIBCA opposed them as well, she said.

“We have historically opposed impact fees because they hurt the entry-level buyer,” she said. “Now they’re down around $1,000 and we think that’s more reasonable.”

When the city council and the Planning and Zoning Commission first began working on impact fees at a workshop before the Oct. 7 city council meeting, the impact fees were higher than they stand now.

Diane Duncan, a member of the Post Falls Planning and Zoning Commission, worried that high fees would drive out developers.

“My fear is that it will stop commercial and industrial development, which is what we need the most,” she said, looking at the higher figures. “To me, what this is encouraging people to do is build in Coeur d’Alene and Hayden Lake and the county. I want them to build in downtown.”

By the end of the workshop, the city had lowered the commercial impact fees.

But some commercial developers still oppose the fees.

“In my opinion, a city that does this is not doing themselves any favors,” said Risvold. “Look at what the impact fees were for Eagle. That is scary!”

If Post Falls implements impact fees at the amount the city now is considering, Eagle would pay $214,452 in impact fees to build a store in there - $84,606 more than it did in Coeur d’Alene.

Young cautioned against using the Eagle store as an example of how much businesses would pay in impact fees because it is such a large store. The hypothetical McDonald’s restaurant, for example, cost much less in Post Falls than in Coeur d’Alene.

, DataTimes ILLUSTRATION: Color photo Graphic: New impact fees at-a-glance

MEMO: Cut in the Spokane edition

Two sidebars appeared with the story: 1. HEARING The Post Falls City Council will hold a public hearing on impact fees at its Nov. 18 meeting. The meeting begins at 7 p.m. in Oddfellows Hall, 200 E. Railroad.

2. NEW IMPACT FEES AT-A-GLANCE The City of Post Falls is working on setting impact fees that could go in effect Jan. 1. Coeur d’Alene enacted impact fees in January. Post Falls impact fees may change once the city council sets them.

Post Falls Residential $1,025 per unit Commercial $1,036 per 1,000 sq. ft. Industrial/agricultural $292 per 1,000 sq. ft. Office/institutional $849 per 1,000 sq. ft. Coeur d’Alene* Single unit residential $1,109.74 to $1,225.44 per unit Multi-unit residential $984 to $1,076.74 per unit Commercial/industrial $24.74 per 1,000 sq. ft., plus between $11.89 and $20.61 per trip generated * Fees will vary upon location SOURCE: Gary Young, Post Falls planning and building director, and John Austin, Coeur d’Alene finance director. Staff graphic: Warren Huskey