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On 5-4 vote, City Council denies proposed waiver favor for downtown residential builders

       A proposal to waive park and development fees for downtown residential developers lost at City Council July 22.
       The vote was 5-4 against on the park fees, after which City Councilmember Val Snider, who had made that waiver-favor motion, avoided an up-down vote on the development-fee element by getting a majority to approve postponing it indefinitely.
       Eddie Bishop, a Westside developer, who had opposed the concept at Planning Commission, spoke out again at council's hearing. He charged that giving the waiver just to the downtown “is unnecessary and sends a message of favoritism.” He pointed out that he is already achieving the same kind of results - infill or redevelopment in several older areas near the city's core - without asking for government help.
Westside developer Eddie Bishop speaks at City Council July 22. (The view is a snapshot from the city's televised coverage.)
Westside Pioneer photo

       “I was real surprised the other day when I read in the newspaper that we needed incentives for infill development,” Bishop said. “I must have missed the memo. I mean, this is what we've been doing. We just go to work.”
       To make the point about proximity, he told council he had walked the mile distance from his 20-unit Gabion apartments project in the 600 block of Monument Street to the meeting at City Hall downtown.
       Advocacy for the waiver plan at council came from downtown leaders, city staff (including the mayor's deputy chief of staff, Bret Waters) and two development companies seeking fee breaks to build residential units downtown.
       Their argument was that studies have shown that a geographically defined downtown area would benefit from more housing, but none has been built because of the costs, including city fees. The proposal was to try the waivers out as a kind of “pilot project” for three years downtown. “If we see in a year that it's going great guns, then we can look at applying it to the whole community,” Snider said.
       Robert Cope, principal analyst for the city's Economic Development Division, presented slides claiming that the loss of the fee revenue would be offset by property and sales tax revenues.
       Chuck Murphy, a long-time area builder based on the Westside, was among those in favor of the waiver, saying “we need infill for a healthy downtown and healthy community. It's time for us to really focus on the heart of the city.”
       In a curious twist, the 5-4 voting division on the park fees found the same councilmembers taking seemingly opposite sides in a simultaneous, separate proposal to eliminate or drastically reduce a wide range of business fees citywide.
       Voting no on the downtown waiver - and yes on the citywide business-fee cuts - were Keith King (the council president), Helen Collins, Don Knight, Joel Miller and Andy Pico.
       Their overall point was that any relief in fees ought to be citywide. Otherwise, it smacks of “social engineering,” as Miller put it.
       Voting yes on the downtown break and no on the business-tax cuts were Merv Bennett, Jill Gaebler, Jan Martin and Val Snider. They supported the city staff rationale on both matters.
       A big part of the staff opposition to the business-fee cuts was that they mainly pay the salaries of the people who collect them, explained Bret Waters, the mayor's deputy chief of staff, at the July 8 council meeting where both topics were discussed. “This would shift the responsibility to the taxpayers.”
       “You're talking out of both sides of your mouth,” Miller shot back. He added that, regarding the downtown fee waivers, city staff had been saying that any city revenue losses would be offset by economic gains. “I find it a very interesting dichotemy on two very similar issues and the arguments are diverging in how you justify one and not the other.”
       Waters defended himself by saying that the downtown plan was “targeted and time-limited to a residential area as part of a larger package. I contend they are two separate issues.”
City staff included this slide supporting a temporary waiver of development fees as part of its presentation to Planning Commission July 17 and then to City Council July 22. The full list of items in a "Development Application Fees" spreadsheet accompanying the resolution consisted of 38 such fees in all.
Westside Pioneer photo of city slide
       Collins, who had proposed the business-fee cuts, asserted, “We play favorites for some, and small businesses keep taking it.”
       As it turned out, the the business-fee cuts, approved July 8, were later denied by vetoes from Mayor Steve Bach. To override a veto requires two-thirds of the nine-member council, and the majority had five votes in favor, not six. An override effort fell short at the July 22 meeting.
       The veto statement included the mayor's comment that, “While the sentiment behind these ordinances of being 'business friendly' is laudable, the ordinances represent a piecemeal approach to a larger issue that will create a significant revenue loss for the city.”
       The statement elaborated that the “City Clerk is presently undertaking a comprehensive review of city licensing requirements and the appropriateness of license fees relative to the cost of administering such business licenses.” However, the statement did not indicate how soon that review might be completed.
       The debate July 22 included a lengthy discussion on the intent of the roughly 40-year-old park-fee ordinance, which requires developers to pay a fee or donate land depending on the size or unique aspects of the project. Cope and some other speakers insisted that it was only meant for new developments, usually in the suburbs, where no parks have been built yet. Thus, the fee shouldn't apply downtown, where parks exist already. Chris Lieber of City Parks, while not speaking in opposition, did point out that such fees are used by the department throughout the park system (not necessarily in the development they came from) for land acquisition and various new projects, and any monetary loss would be noticed.
       Before the matter came to council, The City Parks Advisory Board had voted unanimously for the park-fee-waiver ordinance plan, although with the caveat that the “sunset” on it be three years instead of five.
       The downtown park-fee waiver had also been recommended for approval at Planning Commission July 17 in a 4-2 vote that did not stipulate an amount of time.
       As for the downtown-only development-fee waiver, postponing the matter indefinitely means the Mayor's Office could resubmit the proposal at some point, but at least it will not have the stigma of a down vote, King pointed out.
       On that waiver proposal, city staff had not sought a recommendation from the Planning Commission. Asked about this by King at the council meeting July 22, Cope replied that a slide showing the request had been presented at the commission meeting (and the same slide was displayed to council).
       The slide presented six bulleted items under the lead-in: “Executive Branch proposing a temporary waiver of certain other fees for multifamily residential in the Imagine Downtown Master Plan Area.” (See graphic on this page.) However, a spreadsheet accompanying the resolution listed a total of 38 fees that a builder might have to pay (depending on the type of project) under the heading of “Development Application Fees.”
       “I don't understand what's in and out,” King said at one point.
       The savings for downtown residential builders on the park-fee waiver alone would be nearly $1,800 per unit in a high-density project of less than 8 units per acre ($1,264 if more than 8 per acre), city figures show. A similar type of breakdown was not provided for the development fees, although an “example” slide showed a potential savings of $3,937 on a one-acre lot.
       Assuming approval of the waiver proposals, city staff had been planning on coming back later this year with a similar proposal to waive school fees for downtown residential projects. It is not known whether that will happen now. King remarked at the meeting that he had talked to the chief financial officer for District 11, who said he was personally opposed to the idea, out of concern about losing revenue.
       The projected savings to a developer for waiving school fees would work out to $1,532 a unit for 8 units per acre or less ($368 per unit for more than 8 per acre), a city slide showed.
       To view the Westside Pioneer article on the waiver issue at Planning Commission, go to this link.

Westside Pioneer article
(Posted 7/23/14; Land: Development Issues)

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