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http://www.omniture.com --> Oregon Road Conditions & Cams Advertisement Email Story to a Friend May 4, 2006 Phoenix development charges shoot skyward By Buffy Pollock for the Mail Tribune PHOENIX — Development costs in this city, already some of the Rogue Valley's highest, will go a lot higher this summer after the City Council voted to bump them up to pay the city's share of a Fern Valley interchange upgrade. While systems development charges SDCs were actually reduced, introduction of a new "interchange development charge" resulted in overall fee hikes ranging from 27 percent to 418 percent. Council members reluctantly approved the changes at a meeting Monday night; they take effect June 1. Community members in the audience voiced concern that future development would avoid the city's steep fees. Development charges are intended to compensate for the impact on city infrastructure roads, services, etc. caused by development. Public Works Director Jim Wear noted that while Phoenix has charged slightly higher SDCs than neighboring cities in the past, Monday's decision cut those fees by as much as half in most cases. But in keeping with a contractual obligation to fund some $7.2 million of a $40 million rebuild of the Fern Valley interchange, the interchange development fee will be tacked on until about $2.6 million is collected or until the agreement "sunsets" in 2023. The remainder of the $7.2 million will come from various state and local sources, including $800,000 from Home Depot, which is about to build a home improvement center near the interchange. Notice of the changes, and a lengthy presentation by a private consultant, FCS Group of California, caused some tense debate among audience members compo sed of residents, developers and business owners. Though Councilman Murray LaHue voted for the fee changes, he said he was "awestruck" by the size of the increases. Previously, transportation SDCs for construction of a single-family residence would have cost $3,700, Wear said. Based on Monday's plan, SDCs would be reduced to about $2,000, though a $2,700 IDC would bring total fees to build a home to $4,700. "I have to say right up front I had no idea what kind of numbers we were talking," LaHue said. "I'm not the smartest guy to come down the pipe, but I'm not the dumbest either." While information in Monday's council packet showed a steep increase in most instances, Wear on Tuesday told the Mail Tribune that numbers depicting existing SDC charges, prior to changes approved Monday, were incorrect in the council packet. Wear said increases in each of the last five years was not reflected in packet information, but he was unable to provide specific numbers on Tuesday. While information was requested from v arious city officials Tuesday afternoon and again Wednesday, correct numbers were not made available by staff until the Mail Tribune contacted Mayor Vicki Bear Wednesday afternoon. Of the bigger SDC increases, transportation fees for a 2,000-square-foot specialty retail shop would jump from $4,886 to $25,295, a 418 percent increase. Charges for shopping centers of 100,000 square feet would increase from $1.6 million to $2.1 million, a 31 percent increase. Developer Lenny Neimark, who owns 4.5 acres at Fern Valley and North Phoenix roads, said he would "actually be on the lower end of the scale" with an 164 percent increase in development fees for a self-storage business and coffee stand. "Based on the approval that I had for my project, I was looking at SDCs at a little over $72,000. Adjusted with the proposed now approved numbers, that goes up to about $80,000 for SDCs and I have no issue with that," he said Tuesday. "But once you put the IDCs into the mix, it gets really crazy ugly. That's where my total goes from $80,000 to essentially $190,000." Neimark, who initially supplied the Mail Tribune with a copy of the proposed fee schedule when city officials did not, called the changes "just really unbelievable." "They basically are not going to be able to attract the development they need to have happen," he said. Bear called the fee increases "the cost of doing business." "We do have a contract we've got to abide by," she said to council members nearing the end of Monday's 3.5-hour meeting. "We've got to pass it. If we fail to pass this ordinance, we will be in violation of the contract." Councilman Terry Helfrich supported the increase out of necessity, he said. He said he doesn't think the new fees will deter development in Phoenix. The fees can only be collected if development takes place in town. "A big reason I agree with the SDCs is just the cost of construction," Helfrich said. "That's why I think we're in line. And I believe those other communities are going to look at it and probably raise theirs, too. I just think it's the right thing to do." Business owner Tani Wouters said the city was being "held hostage by ODOT" and that being "the most expensive place to develop" in the Rogue Valley is "a disservice to Phoenix citizens." "It just really seems like they're going to be discouraging business development in our town," Wouters said Tuesday. "They just won't have any businesses who can afford to come to Phoenix, but hey, they'll have a nice interchange that's paid for!" Wear said revisions to the fees based on public comment are possible. Advertisement s Mail Tribune Home | Local News | Sports | Business | Obituaries | Life | Opinion AP News | Archives | Site Map | Community | Classified Copyright © 1997-2006 Mail Tribune, Inc. All rights reserved. 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