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Avondale OKs $2M Impact Fee Incentive

Photo credit: The Arizona Republic

Source: City of Avondale

The Avondale City Council has approved the creation of a development impact fee incentive program that would be used to help spur residential development and commercial growth in the city.

At its regular meeting on Monday, June 1, the Avondale City Council approved a resolution that would set aside $2M in FY 2015-2016 for a development impact fee incentive program that would be used to pay 20 percent of all development fees for new residential and commercial construction in Avondale.

Development fees are one-time payments made to the city that are used to pay for new growth’s share of capital costs. Development fees are assessed on both residential and non-residential growth, and are used for construction of capital projects such as roads, bridges, parks, public safety facilities, as well as other capital improvements.

The resolution adopted by the City Council on Monday night creates a Development Impact Fee (DIF) Incentive program, using fund balance from the General Fund, in the amount of $2M. Any property for which a building permit is issued after June 1, 2015, is eligible to receive a 20 percent discount on the development fee due.

The discount is available on a first-come-first-serve basis until the funds run out, and does not apply to property previously eligible for discount as part of the Infill Incentive Program. The DIF incentive program could be funded annually up to three years at the discretion of the City Council. The incentive fund would be replenished from the additional building permit and construction sales tax revenue the following year.

According to City Manager David Fitzhugh, the $2M in funds would accommodate 450 new homes, and leave approximately $400,000 for commercial development. Each year, the fund would be evaluated as part of the budget process.

Read more at City of Avondale

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