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Monday, August 25, 2008
Fees Not Slowing West Side Growth
By Michael Cadigan
West Side City Councilor
Recently one Albuquerque city councilor has called for a critical review of impact fees to examine whether they are stifling commercial growth on the West Side. The need for this review is justified by “anecdotal” evidence from a single developer who did not want to pay impact fees and used his political muscle to wrangle a $2 million taxpayer subsidy to build a Lowe's home center.
Anecdotal evidence aside, the facts show that commercial construction on the West Side, especially the Northwest, is booming even after impact fees became effective and despite difficult economic times nationally.
All one needs to do to confirm this is drive north on Coors or Eagle Ranch to see numerous huge new office buildings under construction, a brand new Costco, a new Smith's, an RV center under construction, and many other projects that will bring good jobs to the West Side.
All of this has happened even with impact fees, and with no politically manipulated taxpayer giveaways.
The statistical evidence, as opposed to anecdotal evidence, bears this out. West Side commercial building permits increased significantly in the three years after imposition of impact fees. Permit totals for the three years before impact fees became effective were 33, 22 and 33. The city issued 46, 40 and 44 commercial permits in the three years, 2005-07, since impact fees became the rule. It's also hard to see in permit numbers how lower fees in areas east of the river had much of an impact on building activity.
Many of our city's road, park, open space, public safety and drainage projects are funded by impact fees. The city has collected several million dollars in road impact fees in the past four years which will soon be used to build roads, including Unser, made necessary by growth. If impact fees are not there to pay for these projects, the only alternative is to have taxpayers pay for them.
At the time impact fees were adopted, the City Council specifically took into account a need to reduce the impact fees for commercial development on the West Side in order to ensure a reasonably good jobs-housing balance.
Under current law, West Side developments receive an automatic 70 percent reduction in roadway impact fees for industrial or manufacturing buildings, a 60 percent reduction in the fees for institutional (schools and hospital) buildings, a 50 percent reduction for office buildings and a 30 percent reduction for buildings intended for lodging, retail or restaurant use.
Those who call for a reduction of impact fees should be ready to offer alternatives for financing projects currently scheduled to be paid for by impact fees including Coors Boulevard from I-40 to Sequoia (estimated cost: $7 million) and 98th Street from Gibson to Dennis Chavez (estimated cost: $7 million) and numerous parks and drainage facilities.
Will those calling for reductions support higher taxes to make up the shortfall?
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