Public Comment-Impact Fees from Brent BrownFrom:Brent Brown
To:Kalispell Meetings Public Comment
Cc:Dusty Emmert
Subject:[EXTERNAL] Public Comment-Impact Fees
Date:Friday, May 1, 2020 1:54:44 PM
Mayor and City Council…
I have written out some comments related to the upcoming council vote concerning the potential
reduction of impact fees in the city of Kalispell.
As property owners and multifamily developers with projects here in the flathead valley, we have
come to understand a lot about the need for impact fees. With what is anticipated to be significant
growth in and around Kalispell over the next several years, cities must consider all options as they
look at the existing water and sewer facilities. They must too, however, consider how to bring much
needed affordable housing to the market for its existing residents and those who want to move to
this beautiful area.
Our company, Greenway Development Group (formerly Greenway Capital), is well-versed in
planning, building and managing multifamily developments. Dusty and I have been very engaged in
discussions with various groups of people around the valley regarding the ongoing need for our
product. We are currently completing the final phase of our 180-unit development, The Highline
Apartments, down the road in Columbia Falls.
In the early goings and before we landed our project in C-Falls, there was much discussion about
how to narrow down and define what “affordable” housing meant to each community. While I
believe there are some municipalities that are still trying to navigate this, Columbia Falls took its
need for housing and our expertise in multifamily development, and we went to work. Based upon
the success of our project there, I believe we have our answer. At The Highline, we provided a
variety of unit types at prices people could afford. We wish to duplicate this in Kalispell with our
144-unit project, The Meridian Apartments.
The need for clean, affordable, workforce housing is paramount for sustainable growth in any
market. And, developers, like GDG, should contribute in building the necessary infrastructure to do
so. But, the entire community has to participate for this to work. So, we have been in meeting after
meeting with city staff, MWED and others to provide as much education and insight into our
business as possible so good decisions can be made on where to go with these costs.
Our asking for relief on impact fees isn’t an issue of whether or not we can make a project work…it is
and issue of our being able to make it work for your community. In essence, our need to keep our
costs at a reasonable level are so we can keep our rents at a reasonable level. If our impact fees are
higher, our rents have to be higher. Every business has its metrics for success and the development
business is no different. For us, it is return on capital. For the banks, it is DCR (DEBT COVERAGE
RATIO). So, we make our decisions on projects based upon these numbers. I would guess that every
developer with a project on your docket would say the same.
Specifically, our project in C-Falls realized roughly $2,400/unit in impact fees. As of today, our
project in Kalispell would add cost of roughly $5,400/unit for impact fees. Our average rent on
phase 1 of The Highline is $820/month. For us to maintain the same level of success using the same
metrics in Kalispell based only on the effects of the increased impact fees, we would have to push
rents to an average of almost $950/month. Keep in mind, these average rents are blended amongst
the different units types. But, you can see that the average rent increases by over $130/month
when you more than double the impact fees. It has been our experience that $130/month can be a
difference maker for a lot of people.
We were 100% occupied at The Highline before we opened the first two buildings and are currently
almost 50% preleased on phase 2 with an opening date of July 1. We believe we now have a proven
track record as to what people are looking for in terms of affordable housing and are excited about
moving our project forward here in Kalispell. We are asking for a vote in favor of lower impact fees
so we can provide a great product at the right price, or to table the vote for a minimum of 30 days so
developers have a chance to educate and voice our opinions to council.
Best Regards,
Brent T. Brown
Managing Partner, Greenway Development Group
417-818-3658