Small businesses hoping to move to Front Street may soon have that option.
The Land Use Committee last week recommended the City Council approve an agenda bill that would waive the city’s transportation impact fees for up to 10,000 square feet of commercial development.
Business owners and members of the Downtown Issaquah Association brought the struggle with impact fees to the city’s attention in October.
In many cases, the fees were so high that storefronts remained vacant and construction projects weren’t completed.
Impact fees are intended to help ensure that public facilities can keep up with new development. The fees are charged to developers of new projects, and to tenants who are changing the use of an existing building. In the case of transportation impact fees, they’re intended to offset the cost of new trips to the business.
Tenants who had hoped to turn the vacant Allen’s Furniture store into a restaurant backed out quickly when they learned a $100,000 transportation impact fee would be levied — just one example of a dropped Front Street deal.
But if approved by the City Council, businesses up to 10,000 square feet won’t be charged that impact fee. Additionally, a 30,000-square-foot space broken into three 10,000-square-foot spaces would qualify, said Planning Director Mark Hinthorne.
The proposed measure also reflects the removal of the Southeast Bypass project from the city’s fee schedule. Removing that project dropped the cost of transportation improvement from $93.4 million to about $64 million, said Hinthorne, which in turn dropped the impact fee rate by 32 percent, from about $4,800 to $3,300.
Before the removal of the Bypass, the city’s contribution to the Transportation Improvement Program had been $5 million. With the lowered improvement costs, city contributions dropped to $3.4 million; however, the proposed measure still budgets the entire $5 million and the extra $1.6 million could be used as a funding source to cover the impact fee exemptions, he said.
“I think the committee decision is spot on,” said Keith Watts, a member of the Downtown Issaquah Association and downtown property owner. “The city really needs to do something to support the businesses that are in town, or trying to come to town.”
Much of the attention regarding impact fees had been focused on the downtown core, but the proposed exemption will apply to the entire city, Hinthorne said.
It has, however, been proposed as a temporary measure while the economy is in a slump.
“In my mind, this is a short-term measure to help us keep business spaces in the face of an economic recession,” said committee chair John Rittenhouse. “I would like to see this exemption go away. Because it’s important that development helps pay the cost of growth.”
The agenda bill will be considered by the City Council at 7:30 p.m. Jan. 20 in the Council Chambers.
“I hope the council approves this measure, because it’s something we should be promoting,” Watts said. “It says, ‘Look at what the city is doing for small businesses. We want you to come, we want you to be here.’ It will send a loud, clear message.”
