City of Grand Junction eyes fee hike for commercial projects
There’s a tricky balance between requiring new businesses to pay their fair share to accommodate growth and luring new business to town.
That’s the conundrum Grand Junction city councilors plan to tackle tonight during a public meeting.
For years, new commercial business has been required by the city to pay about 25 percent of the costs needed to build the web of transportation infrastructure required to access those businesses. In some cases, councilors have honored developers’ requests for the city to altogether absorb those fees, called transportation capacity payments, or TCPs. Councilors also sometimes waive developers’ fees for other services such as water, school impact fees and parks.
TCPs are required for both new commercial and residential development, and fee schedules vary by municipalities in the Grand Valley.
In 2008, councilors planned to increase rates for commercial and residential development. After push back in part from the Grand Junction Area Chamber of Commerce, councilors raised rates only for residential development. A base rate for residential homes was increased from $1,589 to $2,554, but commercial rates were left untouched.
Tonight, councilors plan to debate whether to raise commercial rates. One tentative plan calls for increasing the base rate by $322 each year for three years.
After three years, the commercial base rates would be at 37 percent of the cost of transportation infrastructure needed, thereby creating more equity between costs to the taxpayers and developers.
Additionally, councilors will consider creating a district roughly outlined as the greater downtown area and North Avenue, where TCP fees would not increase as part of a philosophy to encourage infill in and around the city’s core. Furthermore, developers who create multi-story buildings would not have to pay fees on a level above the first floor.
Councilor Jim Doody has backed raising fees, noting that under the current TCP schedule, the city is on the hook to spend $3.4 million in TCPs for realigning 22 Road to accommodate two new truck stops slated for the interchange off Interstate 70.
If a new payment schedule were in place, the city’s contribution would be less.
“We’re just short-changing our taxpayers if we don’t change our TCP fees,” Doody said. “I think they should be raised incrementally.”
However, the Chamber of Commerce is again expected to protest, Chamber President Diane Schwenke said.
“It’s very fast,” she said. “Anything that is hurry up and make a decision, there’s always a better way to make a decision.”
Schwenke said raising the rates for new commercial development could be the trigger that scares companies away. While the proposed rate increases seem minimal—an additional $322 a year—that’s the base rate. Base rates are fine for residential homes because those costs are static, she said. Developers of every new home, no matter its size, are charged the same TCP rate.
But for commercial structures, the increased base rates are multiplied by a building’s square footage. Increases of several thousand dollars may have a company doing business elsewhere, opponents contend.
“We don’t argue that there may need to be some adjustment,” she said. “We’re worried that they are equating it to the residential TCPs, particularly at a time when we are in a recession.”
Also, Schwenke said, the idea that certain areas of Grand Junction should have free or reduced TCP rates is akin to playing favorites.
Councilor Tom Kenyon worked with city staff to develop some TCP incentives for infill development. New projects in well-established areas already have major transportation infrastructure in place, he said. Reducing or eliminating TCP rates for those businesses could encourage business to locate in existing buildings.
“I think in some blighted areas like Pitkin (Avenue) and Ute (Avenue) there should be no fees there,” he said. “If development wants to go there, we want you. When you’re talking about brand new stuff, that’s different. We wouldn’t have been out as much if they would have paid a little bit more. The taxpayers could have gotten something else.”
Kenyon acknowledged that councilors probably will take heat regardless of whether they raise the fees or keep them in tact.
Taxpayers pay a bigger share of the TCPs fee if councilors don’t raise the rates, he said. For instance, if City Market went ahead with construction on a new grocery store on its property on the southeast corner of 12th Street and Patterson Road, the city would have to contribute $4.1 million in improvements to the intersection to allow for the growth.
“We’re going to get criticized,” Kenyon said. “If fees go up at all, they’ll say we’re anti-business. When we got elected, we were elected to represent everybody.”