Fort Mill impact fee decision pits bottom line vs. business friendliness

Top town goals are going to clash.

The Fort Mill Town Council will set a course on July 27 that could create away to have growth pay for growth, but could slow economic development. Or the council could yield to new business and ask existing residents to foot the bill for an expanding community.

“You’re going to have a conflict between two very high priority items,” said Joe Cronin, town planning director. “This is essentially going to be a policy decision over who pays for growth.”

The council held a workshop July 13 on impact fees, charges on new construction based on what impacts those constructions have on town services.

A recommendation from the town planning commission calls for charging fees for fire service, municipal needs, transportation and parks and recreation. The recommended fees would generate an estimated $8.32 million in the next five years, and $18.1 million in the next 10 years.

But the business and education communities oppose the fees, saying they will slow growth of new businesses.

The transportation fee, in particular, puts a much higher cost on business development than it does on residential. Other concerns include having to charge schools and nonprofits.

“You can’t hide it,” Cronin said. “You can’t sugar coat it. Impact fees will increase the cost of all new development.”

Pro-impact fee voices say money will have to come from somewhere. Town staff developed a needs list as a required part of the impact fee ordinance. None of the items have been approved by Council, though department heads say most of them are critical in the coming years.

The needs list includes $38.3 million in projects the next five years, well more than impact fees would generate. To get the $18.1 million impact fees would generate during the next decade from tax increases, the town would have to raise taxes 25 percent through public referendums.

Why now?

It took 142 years to reach the current population of Fort Mill, estimated at 13,087. It will take 10 years to bring another 13,637 new residents. Based solely on projects already in the works.

Fort Mill has between an 18 percent and 54 percent growth rate each decade since 1980. It was the fourth fastest growing municipality in South Carolina and the second fastest in the Charlotte metro region from 2010 to 2014.

“There really is no growth corridor anywhere in Fort Mill because really growth is going on everywhere,” Cronin said.

The next five years will bring 3,000 new homes. The following five will bring 2,400. New construction permits so far this year are up 145 percent compared to the first half of 2014.

The decision

Two public hearings await. One comes at first reading July 27. If the ordinance passes, another accompanies second and final reading Aug. 10. More concern than consensus emerged from the recent workshop.

“I never dreamed that we’d be talking about charging impact fees on churches, schools or commercial,” said Councilman Larry Huntley. “It never dawned on me.”

Impact fees aimed at residential construction face no resistance. But only the park and recreation fee would be limited to residential, with the other three affecting all development types. While large commercial developments could face fees in the six-figure range, the current proposal only charges up to $2,730 on a new home. Existing school and utility fees charge about three times that amount already.

Because businesses put more traffic on the road and require more fire and other services, law allows a higher charge than for residences.

“I think we’re going to drive commercial away,” Huntley said. “I believe that. And with residential, we’re letting them off scot-free, almost. And we’re punishing the people we don’t want to punish.”

Like Huntley, Councilwoman Guynn Savage said she many years on Council advocating for commercial growth. Anything restricting commercial development is short-sighted, she said.

“There is a detriment to be considered,” Savage said.

She also has reservations with the approach. Impact fees and a needs list seem like an effort, she said, to pay for a bigger community.

“My constituents are asking me how to curb the growth that we have, not how to accommodate the growth,” she said.

Councilwoman Lisa McCarley points to the donations from large developments, from school sites money for road improvements to about $1 million in land donated for parks and recreation, where the town wants to build a new recreation center with fields. McCarley can’t see such donations coming alongside impact fees.

“We are going to look at not having that in the future,” she said.

Councilman Tom Adams took a more scientific approach, informally polling developers at the Council meeting that followed the workshop. Developers unanimously said they would pay reasonable impact fees.

“I just want to see if these guys are in, if it impacts their decision,” Adams said.

Regardless the decision, Council needs to make it soon to help with town budgeting and other planning efforts, said Mayor Danny Funderburk. Impact fees, he said, are only part of a much larger picture.

“It’s not just impact fees,” Funderburk said. “There are other tools that need to be looked at. There’s a comprehensive approach that has to be taken.”

This story was originally published July 14, 2015 at 8:31 PM with the headline "Fort Mill impact fee decision pits bottom line vs. business friendliness."