EDITORIAL: Open for Business? Part Four
As the Town Council discussed a possible moratorium of the impacts fees — instituted by a very different Town Council, in 2006 — a few questions rose quickly to the surface. One question related to whether Council would apply the moratorium to the development of residential property, in addition to commercial property. Much of the discussion had focused exclusively on commercial projects…
But here is newly-seated Council member Clint Alley:
“I like the idea of possibly seeing where this [moratorium] might lead, but I see where the proposal says, ‘commercial or also residential’… I feel like we could possibly include residential in this… I’ve heard from a lot of people who are looking for ways to make housing more affordable.
“My neighbor below me, down on 6th Street is building a home… it’s not very big, maybe 400 square feet. He’s doing most of the work himself, and I bet the impact fee is adding 5 percent to the cost.”
I’ve spoken to the builder of this small house, mentioned by Mr. Alley, and I believe the impact fees have added more like 8 percent to the cost of the home.
When the smoke cleared and it was time for a motion, Council member John Egan had the floor:
“I move to direct staff to bring back [at the May 18 Town Council meeting] the first reading of an ordinance implementing a temporary moratorium — and I’m going to add, of not less that one year — including both commercial and single family residences, consistent with the discussion and direction of the Council.”
Mr. Egan subsequently amended that motion to include not merely ‘single family residences’ but rather all residential projects. The motion passed 4-2, with Council members David Schanzenbaker and Nicole DeMarco voting ‘No.’
Presumably, this issue will become an action item on the May 18 Council agenda. So we can sit back, with that vote behind us, and look at some of the deeper issues that were not fully discussed by the Council on May 2.
If I were to build a home for myself and my family in downtown Pagosa Springs, it’s quite possible that I’ve already been living in Archuleta County for a period of time… maybe for many years… maybe in an RV, in Aspen Springs?
Thus, while I may have built a new house, I’ve not actually contributed in any way, shape or form, to “growth.” I’ve merely provided a more satisfactory home for my family. Nevertheless, my Town government will assess an ‘impact fee’ amounting to a few thousand dollars, as if I were causing some type of negative impacts on the community.
I can easily avoid those fees, however, by building my new home outside the Town limits. As we’ve noted, the County government does not collect impact fees.
So maybe I locate my family in the Lake Hatcher area… seven or eight miles from downtown?
Does a family living in Hatcher have less impact on the community’s infrastructure, than a family living in downtown Pagosa? Quite the contrary, seems to me. My impact on the community’s roads depends largely on how often and how far I have to drive my vehicle. My impact on the community’s fire district depends at least partly on how far my home is from the fire station. My impact on the school district depends, to some extent, on how many miles the school bus must drive to deliver my child.
By encouraging residential construction farther away from the downtown core, the Town actually causes greater impacts to our infrastructure. Charging an impact fee for the privilege of living downtown… and thus, making less of an impact on the community’s infrastructure, is… well, it’s just kinda crazy, in my book.
How about commercial development? As we heard from real estate broker Mike Heraty (in Part Three,) the lack of commercial development in Pagosa since about 2009 has resulted from numerous factors, including the arrival of Walmart — a development that has seriously deflated anyone’s interest in building new retail square footage.
But we heard from Council member Tracy Bunning, during the May 2 discussion, that he’s heard complaints from three local developers about the barrier impact fees present for commercial development.
Mr. Bunning did not identify the three developers, but I’ve personally heard about complaints coming from two local developers, whose projects are apparently on the back burner at the moment. Kelly Dunn has a large indoor storage building on hold. Developer Bob Hart has reportedly mothballed a proposed paintball venue.
Judging by Council member Bunning’s comments, that would seemingly leave one more developer pushing for a moratorium on impact fees.
The only other large commercial development I’ve heard discussed, in the past year or so, is a proposed 110-room hotel on property owned by the Springs Partners. The Town impact fees for that hotel, according to last year’s EPS economic impact study, would be about $135,000. That same impact study projected completion of the hotel in 2019.
I don’t think anyone would embrace the idea of a temporary moratorium that benefitted only three local developers. As Council member Schanzenbaker had implied on May 2, such a short-term moratorium could easily take on the appearance of a ‘special favor’ designed to benefit a few ‘Good Ole Boy’ developers in Pagosa Springs.
If our Town Council is interested in the perception of equity and fairness — knowing that perception is reality — a temporary moratorium is possibly the worst possible decision they could make at this point in Pagosa’s development.
There are two sensible routes to achieve equity in the community. One is to leave the impact fees in place, and convince the Board of County Commissioners to begin charging the same fees. Reaching such an agreement with the County would no doubt entail some serious (and extended) negotiations.
The other convenient route to fairness is to simply repeal the Town’s impact fees, permanently. Pagosa Springs existed for 115 years without impact fees, and was, at one point during that period, one of the fastest growing counties in the U.S. The Town and County budgets also grew at a rather astonishing rate during that same period — without any need for impact fees.
But I understand the difficulties inherent in the ‘repeal’ solution. Once the government has become accustomed to sticking their hand in your pocket and extracting money… it’s so very hard to stop.