Gilbert’s plan to significantly increase its development impact fees for residential, industrial and commercial projects have stunned and angered many in the building community.
Brennan Ray, an attorney for the Home Builders Association of Central Arizona and other building concerns, questioned the accuracy of development impact numbers presented in the Town’s Land Use Assumptions and Infrastructure Improvements Plan.
The report was developed by LRB Public Finance Advisors and recommends increasing impact fees by more than 200% for some project types.
Single-family home development impact fees would go up by 129.5% to $20,220. Industrial developments would rise 210% to $7,704. Office development would soar 252.6% to $16,381, and commercial projects would go up 254.4% to $21,167.
The document puts the cost estimate to accommodate a projected population increase of more than 17,500 new residents by 2033 at nearly $108M. Ray said those residents would unfairly bear the costs for infrastructure and services predicted by the new growth, adding an estimated $122K to the cost of a 30-year mortgage over the life of the loan, since developers would have to pass fee costs on to the end-user.
He stressed that while no one is opposed to paying fair development impact fees, the inflation rate in the proposed fees would put Gilbert rates at double those of other Valley municipalities, even those that are considering increases of their own.
Ray also criticized the inclusion of improvements to existing roads as growth-driven items in the report, as those improvements benefit existing residents at least as much as newcomers.
Town staff and officials have said all the infrastructure in the plan is needed to serve new growth and maintain current service levels. They add that building permits are slowing and that growth over the next 10 years is expected to be slower than in recent years.
Budget Director Kelly Pfost said anything associated with new residents or businesses would have that portion funded with development fees, while portions associated with the existing population would be paid for through other sources.
Councilmember Jim Torgeson asked if the high costs of fees might stymie growth, which would then decrease the necessity for the new development.
Pfost said she hoped that would not be the case, but that it was a question worthy of consideration by the Town Council.
Council is expected to adopt the final version of the Plan in its Jan. 9 meeting, followed by a public hearing on fees on Feb. 20 and final adoption of the new fees schedule on April 2. Whatever new fee structure is implemented will go into effect July 1. (Source)