Vail Daily column: Could impact fees have chilling effect on development? | VailDaily.com

Vail Daily column: Could impact fees have chilling effect on development?

Vail Homeowners Association
Valley Voices

Editor’s note: The following is an excerpt from a report by the Vail Homeowners Association board of directors. The association keeps a close eye on economic and political trends in and outside of the Vail community. The electronic version with links to supporting documents is available at http://www.vailhomeowners.com.

As we reported last month, the town of Vail currently has three major planning initiatives underway — a review of Vail’s Open Lands Plan, a sustainability assessment and a master plan for West Vail. But that is not all that is going on. The town of Vail is also moving to implement a major Transportation Impact Fee; it has a Transportation Task Force that is charged with developing transportation plans, and the town is considering additional regulations for rent-by-owner properties.

And the Vail Recreation District is eyeing either usage fee increases, increased taxes or both. Like the three initiatives we reported on last month, if adopted, these additional initiatives will also shape the growth and development of Vail for decades to come. In this issue, we examine these other initiatives.

• Transportation Impact Fee: For years, the town of Vail has assessed impact mitigation fees for transportation improvements on large-scale commercial and residential developments that produce substantial off-site impacts; see, for example, the frontage road improvements associated with the Solaris Plaza and Lion projects. In the same fashion, the recently approved Roost Lodge redevelopment is expected to fund frontage road median improvements and connecting walkways. The Town Council recently approved the measure over substantive objections raised by Vail Homeowners Association.

Those large-scale development fees have been determined on a site-by-site basis, with other public works transportation projects being funded through the capital improvements budget. But that budget has not kept pace with Vail’s growth, and Vail has now found itself facing a $95 million list of so-called needed improvements over the next 20 years — $23 million of improvements to pedestrian walkways and $63 million in roadway improvements, primarily to North and South frontage roads (roundabouts, medians and left turn lanes) — with only an estimated $20 million to be paid by large-scale development.

Facing a $75 million funding shortfall, the town of Vail is about to impose a new set of “impact fees” on all residential and commercial building, including some remodels. This is not the first time the town of Vail has tried to impose an impact fee to fund its capital transportation budget. Town officials in 2009, as published Vail Town Council records can show, and even before, made efforts to promote an impact fee, but those efforts failed because of the chilling effect such fees would have on development, which was in recovery from the 2007 recession.

Now, the impact fee idea is back again, this time backed by a consultant’s study, which as reported by the town was quietly commissioned last year. Such studies tend to become self-fulfilling prophecies, and it is no surprise that the study recommended imposing an impact fee. Done out of public view and with very limited public input, the study recommended imposing the “maximum supportable” fees that the law would allow on all future development.

For most residential building this would be a new fee — up to $10,000 per home. For commercial building, it would be a substantial increase in fees — up to $14,000 per 1,000 square feet of retail space. Once again, Vail faces the issue of whether such fees would have a chilling effect on future development. That is especially so since the proposed fees would be much higher than the national average and, also, higher than all comparable areas listed in the study.

The town of Vail has explained that these impact fees are necessary for “growth-related” infrastructure needs, i.e., the projected proportionate share of future transportation infrastructure improvements due to new growth. According to the study, the proposed impact fees are estimated to raise $21 million. Large-scale developments will still be subject to project-mitigation fees, in addition to the impact fees, and the plan predicts those “project fees” will provide an additional $20 million. That would leave approximately $55 million to be funded by the town of Vail.

The Vail Homeowners Association board is Gail Ellis, president; Judith Berkowitz, secretary; Rob Ford, treasurer; and directors Jamie Duke, John Gorsuch, John Lohre, Andres Nevares, Trygve Myhren, Larry Stewart and Doug Tansill.