Title
Discuss the Proposed Discount of Roadway Impact Fees as a Targeted Incentive to Promote Economic Redevelopment
Summary
MEETING DATE: December 6, 2011
DEPARTMENT: Development Services - Planning Department
CONTACT: Kevin Spath, AICP, Assistant Director of Planning
RECOMMENDED CITY COUNCIL ACTION:
• Discuss and provide feedback to Staff regarding how to proceed with drafting the necessary ordinance amendments for formal adoption by City Council in January 2012.
ITEM SUMMARY:
• At the September 26th special work session, Staff and the consultant team presented to City Council an update on the status of the creation of a coordinated Business Plan for McKinney’s Town Center (CC item #11-455). The presentation specifically included a discussion about the broader policy issue of roadway impact fees as a monetary disincentive to small-scale infill redevelopment in the Town Center. The presentation also included a discussion about the City’s possible creation of a targeted incentive to promote economic development/redevelopment in the Town Center through the reduction/elimination of roadway impact fees. The City Council indicated general support of the idea.
• Discussion on this topic continued at the October 4th regular meeting during City Council’s consideration of the appeal of roadway impact fees requested by Louisiana Street Grill (CC item #11-136M). At that time, City Council requested that Staff compile additional data on the broader policy issue.
• At the November 1st work session, Staff presented the requested additional data (CC item #11-508). Staff’s presentation also included a recommended approach for creating a targeted incentive specifically regarding the elimination of roadway impact fees in McKinney’s Town Center by building upon the City’s existing Neighborhood Empowerment Zone (NEZ) program. City Council provided additional feedback and requested Staff to compile some specific additional data in order to help guide the broader policy discussion.
• Based on feedback received during the November 1st work session, Staff is now providing additional data as requested (see attached).
• Generally, the data shows:
• Over the last 5.9 years (January 2006 to November 2011), the City has collected roadway impact fees on 226 non-residential projects.
• Of the 226 non-residential projects, 19 projects (8%) are redevelopment projects, and 207 projects (92%) are new development projects. Nearly all of the redevelopment projects have been located in the Town Center (primarily in Service Area K).
• Of the 226 non-residential projects, 161 projects (71%) paid roadway impact fee amounts less than $20,000.
• Of the 19 redevelopment projects, the average roadway impact fee amount was $6,707 per project.
• Based on feedback received during the November 1st work session as well as the analysis of the additional data, Staff is proposing the following policy framework for establishing a roadway impact fee discount:
• Offer a 100% discount (up to $19,999 per project) of roadway impact fees for commercial, industrial, community facility, single-family attached (townhome), and multi-family projects.
• Offer this discount in ALL service areas (i.e. city-wide).
• Offer this discount ONLY to redevelopment projects. Redevelopment projects would include either the rehabilitation and/or conversion of an existing building or the construction of a new building on an already developed site which has the effect of increasing the number of service units (i.e. vehicle miles) to be generated by the project.
• Require City Council approval for discount requests in the amount of $20,000 and above.
• Hypothetically, had this policy been in effect since January 2006, the City would have discounted approximately $17,930 per year in roadway impact fee revenue.
• Upon formal adoption of the necessary ordinance amendments in January 2012, City Staff would proceed with establishing an administrative procedure, including requiring an applicant to submit an application requesting a determination of eligibility for the discount prior to any building permits being issued and before any improvements are made to the property. In addition to the criteria above, Staff would also review for the existence of City taxes past due and City liens.