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Almost all the new building in Fort Mill is homes, not business. Why that matters

Fort Mill building boom is mostly new residences. Why does that matter?

Fort Mill, South Carolina, impact fee numbers show almost all new construction the past year was residential. Fees can be used for parks and recreation, fire and municipal service.
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Fort Mill, South Carolina, impact fee numbers show almost all new construction the past year was residential. Fees can be used for parks and recreation, fire and municipal service.

It doesn’t take eagle eyes to see there’s home building going on in Fort Mill. It’s almost all home building.

For the fiscal year ending Sept. 30, Fort Mill collected $1,714,097 in development impact fees, according to the town’s planning department. The fees are charged on new construction to pay for the services that come with growth.

More than 96 percent of the impact fees collected came from residential building. A year earlier, residential was about 80 percent of collections.

“There was kind of a shift in where those monies were coming in, primarily,” said Chris Pettit, town planning director. “And that’s really due to a change in the makeup of development that we saw.”

While impact fee collections were down 1.5 percent from a year earlier, the total construction value of all the permits approved by the town went up 1 percent. Of that $332,257,288 in permitted construction value, more than 97 percent came from residential work compared to 85 percent the year prior, according to the planning department.

The 788 new home permits at almost $282 million in construction value for 2017-18 is up from 766 units the year prior, and 567 units two years ago.

There were no permits for apartments the prior year, however, the town approved 255 units valued at almost $42 million in 2017-18. Two years prior, 336 apartments brought in more $43 million.

What hasn’t changed much is the portion impact fees take up of total budgets. Impact fees accounted for .51 percent of the total building cost for residential projects in Fort Mill this fiscal year. For commercial work, it made up .69 percent of the building cost.

“These have remained generally consistent every year,” Pettit said.

A large project or two can skew numbers year-to-year, he said. A major senior apartment project this year boosted residential numbers, while there wasn’t a commercial project on scale with the Lash Group expansion the year before. Still, residential and construction growth percentages mean more to the town than just demographics.

The town parks and recreation department receives the most money from impact fees because only residences are charged the fee. Fort Mill Town Council set up the fee to charge homes at higher rates than commercial projects. Fire service and municipal impact fees charge residential and commercial, so they have lower rates.

The town has a transportation fee to pay for roads, but there isn’t anything charged for it. That fee hits commercial hardest, something Council was reluctant to do when impact fees began in 2015.

Parks and recreation got almost $1.2 million in the recent fiscal year, up more than 19 percent from the prior year. Fire service got about $177,000, down 48 percent in a year. The municipal fee at $377,000 is down more than 12 percent.

Impact fees aren’t enough to cover all costs for parks, fire, municipal or other uses. Fees also go toward projects improving those services.

This year the town spent $415,000 on land acquisition near Dobys Bridge Park and $142,000 for Banks Athletic Park, the park donated as part of Waterside at the Catawba.

For the year that started in October, potential spending includes $500,000 for Banks Athletic Park, $400,000 for Walter Elisha Park and $2.2 million for an amphitheater at Elisha Park.

Almost $253,000 went toward a second fire station in the past fiscal year. That station in the Dobys Bridge Road corridor still has $3.8 million needed from the new fiscal year, some of it coming from impact fees.

Council last year voted to put municipal fees as they come in toward the recent move to a new town hall. That plan will continue with whatever fees are collected this year.

Some items to receive impact fee funds would need an amendment to the capital investment plan that came along with fees in 2015. Items have to be on that plan to be eligible. That plan has to be updated by 2020 for the town to continue charging fees.

Additions in 2016 include the second fire station, police substation and town hall relocation and expansion.

“We still had some growth, but not as much as we’ve had in the past,” Mayor Guynn Savage said. “We’re making good use of the funding that’s collected.”

Commercial construction isn’t drying up, however. There were eight commercial projects this year, the second most in eight years. Yet the square footage and commercial building value were the lowest in six years.

“We still have commercial development going on, it’s just this year we had smaller projects,” Pettit said.

A bigger picture

Fort Mill isn’t alone in the impact fee discussion. The Fort Mill school district began its per residence fee in 1996. Rock Hill has fees. Tega Cay added fees this year. Lancaster County is looking at fees for Indian Land, Chester County for its higher growth areas and York County for unincorporated areas.

The school district fee changed when the county voted in July to up the $2,500 per home or apartment charge to more than $18,000 per home and $12,000 per apartment.

From August through November, the school district collected impact fees on 474 new residences in Fort Mill, Tega Cay and unincorporated York County. Those properties brought in $4.9 million.

That money is tied up in litigation. The state and county home builders associations, along with Shea Homes and Soni Construction, filed suit against York County and all seven York County Council members claiming the impact fees harm the construction industry and are prelude to an all-out moratorium on building.

The case now sits in civil court in York County. Case records show no activity on the case since its filing Sept. 11.

The fees collected at the higher rate aren’t being used because the pending litigation. A decision in that case could impact other municipalities charging or considering impact fees.

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