Impact Fee Decision Postponed Critics Say Plan Too Expensive For Developers, Home Buyers

Spokane’s proposed impact fees would hurt home buyers and add hundreds of thousands of dollars to the cost of new commercial buildings, business representatives told the City Council on Monday.

“Fundamentally, impact fees punish new growth,” said Dan Kirschner of the Spokane Area Chamber of Commerce.

The council voted to wait a week before deciding whether to impose fees on new developments in seven of the city’s fastest-growing neighborhoods. The fees would be used to improve streets, parks and utilities.

Fees would vary depending on a neighborhood’s needs. In Seven Mile, for instance, a developer would pay $1,021. In Indian Trail, the fee would be $1,535 because the neighborhood needs more road improvements.

Fees for stores, gas stations, health clubs and other planned commercial buildings would be based on the number of trips customers are expected to make to and from the businesses each day.

Kirschner said the fee for a convenience store in the Qualchan neighborhood could top $120,000, while the developer of a supermarket could expect to pay more than $500,000.

Councilman Orville Barnes said his own calculations show the impact fee for a proposed grocery store near Latah Creek would top $1 million.

Irv Reed, city director of planning services, said there’s no way to verify those figures for commercial buildings because they would vary from project to project.

“He (Kirschner) could very well be right,” Reed said.

Proponents of the fees said it’s not fair to ask people in existing homes to pay for improvements required to accommodate growth.

“If development hadn’t happened, they (roads) would still be adequate for my needs,” said Five Mile resident Kathy Miotke.

Realtors and developers said new construction already pays more than its share in taxes, but that little of the money goes toward needed improvements in roads and city services.

The impact fees would put houses out of reach for some buyers, while providing too little money for needed improvements, said Rob Higgins, vice president of the Spokane Association of Realtors.

The fees also would drive developers into areas where construction is cheaper, contributing to urban sprawl, Higgins said. Instead of new fees, he said, the city should lobby for a bigger share of the real estate excise tax.

, DataTimes MEMO: This sidebar appeared with the story: GRAPPLING WITH GROWTH If approved, the fees would be levied against developments in the city’s seven highest-growth areas: Seven Mile, Indian Trail, Five Mile, Latah Creek, Qualchan, Moran Prairie and the Calkins area north of Francis and east of Division.