When the books are in the black and coffers are overflowing with tax revenue, cities hold sway over developers. In boom times, a steep upfront fee is a small price for potential commercial tenants to pay to do business within a thriving city. Well, times have changed.
At a Kalispell City Council meeting last week developers keenly used a budget shortfall, which may cost a few local firefighters and police officers their jobs, to argue against potential road impact fees that the city has considered implementing to offset future traffic costs surrounding developments.
While many local developers have said they are willing to pay the fees to help ease traffic woes, for two years they have wrangled with the city over how to implement them or how much they should cost. It’s time to flesh out a plan and one that, at least in the short term, favors developers.
What exactly that entails will be left to the council. One argument that rings true, however, is grandfathering in developments that have already begun to build out on the north side of Kalispell. In other words, exempt them from paying impact fees, at least substantial ones, since there is no solid plan in place anyway. Those that aren’t grandfathered in should immediately be told the price of breaking ground and that rate should be less than it would be, say, one year ago.
It’s subjective whether an impact fee is reasonable, but what’s clear is that the economic climate isn’t what it was over the previous three or four years. It’s refreshing that council appears to understand that. At the Nov. 24 meeting, Mayor Pam Kennedy conceded, “Right now, in these times, we should be knocking on other people’s doors to bring new jobs into this community.” It’s also a credit to the council that it continues to take on pressing issues even in the absence of a permanent city manager.
A sense of urgency on the part of the city is necessary at this time. The issue of traffic impact fees can no longer be kicked down the road. The hard-working and beleaguered Transportation Impact Fee Committee can grapple with the equations of traffic generation methodologies, but it falls on the council to enact policies letting developers and current taxpayers know simply how much the fees will cost, so projects can be financed and developers can be encouraged to start building when the ground thaws this spring. If some developers of shopping centers yet to be built opt to start construction a little sooner in order to take advantage of lower upfront traffic impact fees, well, that allows the city to exert direct influence to spur the economy.
Representatives from department store giants Wal-Mart, Kohl’s and PetSmart now hold stronger hands in this fragile economy. They can argue convincingly that the city can’t risk losing hundreds of thousands in property tax revenue by letting these developments slip away. Even ardent advocates of balanced growth can agree that Kalispell is in no position to discourage business, particularly in areas of north Kalispell already designated for commercial development.
Of course, developers and their representatives have a vested interest in how this plays out. But since they are holding the cards it behooves them to use them to their advantage. And they have. True, in two years time, more development may be on the brink of exhausting traffic corridors on the north side of Kalispell. Also true, someone will have to pay for the added infrastructure to support it.
But in the short term, developers hold the trump card, the economy, as the city is toying with the notion of pay cuts, or public safety layoffs to save general fund dollars. It’s time to compromise and determine a fee that urges developers to accept the terms so they can lock down financing.
The Flathead Valley, while hit hard of late by layoffs in the manufacturing sector, is obviously still an attractive option for retailers. We have an opportunity to put some construction laborers back to work and shouldn’t squander it.
I’m not a proponent of mindless sprawl. But when stores (even “big-box” ones) are shuttering across the country, Kalispell city officials should spur growth, any growth. After implementing a temporary or gradually phased-in traffic impact fee plan, the council can take its time to reach a sensible, long-term solution to traffic impact fees. Now is not that time.