Here’s why Fort Mill could soon lower the cost to build a business in town
A week after new school impact fees increased the cost to build homes in Fort Mill, separate fees could have the opposite effect on businesses.
Town impact fees for fire service and municipal buildings would be reduced by more than a third if the town approves a proposed update its fees. The change could mean hundreds of thousands of dollars difference depending on the business type and size.
The fee update would slightly increase the cost of a new home, but reduce costs for apartments. The town planning commission will review the updated fees Tuesday night. Fort Mill Town Council would make the final decision.
Didn’t Fort Mill impact fees on homes already pass?
A development impact fee is a charge on new construction that aims to offset growth costs. The state allows various kinds — including school, police or recreation fees. Fort Mill homes are impacted by two separate sets of fees.
York County charges a school impact fee on behalf of the Fort Mill School District. The county voted this month to increase those fees from more than $18,000 per home to nearly $30,000. Apartments went up from more than $12,000 to nearly $21,000 per unit.
Those fees apply in Fort Mill, Tega Cay and any unincorporated area served by the school district.
Fort Mill also charges fees that only apply to properties in town. Recreation, fire and municipal fees apply to new homes and apartments. The fire and municipal fees also apply to business construction.
The town fees are the ones still under consideration. Like the county’s school fee, state law requires an update every five years.
What would new Fort Mill impact fees mean for homes and business?
The Herald calculated new impact fees based on the town’s new five-year study, with a fee discount recommended by the town, and compared them to current rates. Fees for homes and apartments are fairly simple. Commercial fees vary widely based on square footage, acreage or room count.
Here are some examples of the changes:
▪ Fees on a new home would increase from $2,825 to $2,962.80. That 4.9% bump is a minimal change compared to the more than $11,000 jump approved by the county for school fees. Combined, the impact fees on a Fort Mill home would be $32,602.80 if the town approves its update as written.
▪ An apartment building would be charged $1,716.30 for each unit, down more than 20% from the current Fort Mill rate. With the town and county fees combined, each apartment within a new complex would cost a builder $22,512.30.
▪ Commercial impact fees would decrease nearly 34%. A 50,000-square-foot movie theater would pay more than $36,000. A new 100-acre amusement park — a quarter the size of Carowinds — would pay nearly $474,000. A 50,000-square-foot shopping center would pay nearly $58,000 while the same size supermarket would pay more than $35,000.
▪ Size matters with commercial development. A 100,000-square-foot light industrial building would pay more than $80,000 compared to more than $572,000 for a 1 million-square-foot industrial park. A 10,000-square-foot clinic pays a much higher rate than a 200,000-square-foot hospital by area. But, due to the size difference, the hospital would pay more than $279,000 compared to about $20,000 for the clinic.
▪ The layout matters too. At 100 rooms each, a hotel would cost less than a third of the nearly $95,000 for a resort hotel. A same-size supermarket would cost less than a quarter of what a sporting goods superstore would.
A 2,000-square-foot fast food restaurant would pay about $5,100 with no drive-thru, $10,200 with a drive-thru and $13,100 if it doesn’t have indoor seating. A 2,500-square-foot gas station would pay about $5,400 without a convenience store and $7,300 with one.
What’s next with Fort Mill impact fees?
The town planning commission will review Fort Mill’s updated fee study on Tuesday. Fort Mill Town Council would have to vote twice in favor of the new fees and hold a public hearing.
Each five-year study has a maximum amount allowed by law, but the town uses a 10% discount off of those amounts. The proposed new rule up for a planning commission decision Tuesday would keep the 10% discount.
Town Council could, though, approve the update and decide at any point afterward to charge a different amount. As long as it’s within the full amount shown as a possible charge in the study.
Though the new fees with the same discount rate would uniformly decrease commercial impact fees, that wasn’t a mandate from the town. It’s all based on the maximum amounts the town could charge.
“This amount is determined by several factors such as population size, employment levels and the overall value of town assets,” said assistant town manager Gordon Burnette.
Even if the town doesn’t discount rates, the new maximum amounts are below what the town charges now.
Fort Mill began charging impact fees in 2015. The town population has more than doubled since. Fees have helped pay for projects like the Elisha Park amphitheater, a new fire station, parks and two city hall moves.
“Impact fees have been an important funding source for key projects that have expanded and improved the town’s ability to provide services to our growing community,” Burnette said.
