Council passes developer stimulus

March 4, 2010

By Tim Pfarr

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The City Council has unanimously passed a developer stimulus ordinance that will help certain development projects in the city withstand the economic recession, by deferring fee collection and allowing more time to obtain permits and city approvals.Specifically, the city will defer the collection of city impact fees for certain projects, offer two-year extensions to final plat approval periods and offer extensions to approved engineering review permits that are scheduled to expire this year.

Director of Community Development Steve Roberge said the ordinance, passed at the council’s Feb. 2 regular meeting, will be helpful for developers, because it will allow them to keep building and avoid repeating the permitting process.

Sammamish, Kenmore, Redmond, Issaquah, Bothell and Federal Way have already taken similar developer stimulus action.

City impact fees are fees the city charges to offset the impacts of development, and they are typically collected when the city issues a building permit or gives a plat its final approval.

With the ordinance, parks and traffic impact fees will automatically be deferred until when a building is ready to be occupied. Roberge said this allows developers to earn more money before paying the fee, and as a result they can borrow less money. The opportunity to defer fees ends at the end of this year.

Any project that brings more people to the city is charged with a transportation impact fee, and any project that could bring more people into the city’s parks is charged with a parks impact fee.

Roberge said it is difficult to estimate how much money the city will miss in fees this year through the deferral.

“It’s really hard to tell, because it just depends how much development occurs,” he said.

However, he said the benefits outweigh the deferral of the revenue.

“If it can encourage things to be developed, in the long run, it will really be a benefit to folks, because it will get things on the ground,” he said.

Plat approval extensions will only be granted to plats that have received or will receive preliminary approval from the city between 2005 and this year. Plats that have received preliminary approval are typically given three or five years — depending on the type of plat — to receive final approval from the city. The extension gives these plats two additional years to obtain final approval from the city.

There are 10 plats in the city that are eligible to receive these extensions, and the plats’ developers may receive the extension by request. The city will grant the extensions as long as the project has not undergone substantial changes since the preliminary approval.

Engineering review permits authorize developers to start construction. These permits are valid for one year once they are approved, and two one-year extensions may be given to a permit. With the stimulus, a third one-year extension will be available to permits expiring this year.

Developers will receive the extension upon request if there have been no substantial changes to their projects.

The Planning Commission recommended the City Council adopt the stimulus ordinance, and members of the City Council predominately spoke in favor of it.

“I think we’ll be better off and we’ll see more construction sooner,” Councilwoman Lisa Jensen said.

Councilwoman Carol Simpson spoke about what construction can do for the city.

“Growth is what pays our bills,” she said. “Let’s grow, Newcastle.”

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