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1. Resolution 5269 - Kalispell Area Transportation Plan (Tabled March 17)RESOLUTION N. 5269 A RESOLUTION FOR THE APPROVAL AND ADOPTION of THE KALISPELL AREA TRANSPORTATION PLANT UPDATE) DATED FEBRUARY 1, 2008, AS PREPARED Y ROBERT PECCIA AND ASSOCIATES FOR THE PURPOSE O REPLACING TH1993E KALISPELL TRANSPORTATION PLAN. WHEREAS, the City of Kalispell retained the engineering firm Robert Peccia and Associates to analyze the transportation facilities in and around the City of Kalispell for the purpose of developing a Kalispell Area Transportation Plan to update and replace the existing transportation plan that was developed in 1993; and WHEREAS, the proposed Kalispell Area Transportation flan (2006 Update), dated February 1, 2008, developed by Robert Peccia and Associates addresses the transportation issues within the City of Kalispell, plus an area up to 3 n- les beyond the City limits, into those areas the City can reasonably expect to grow; and WHEREAS, the proposed Kalispell Area Transportation Plan (2006 Update provides an analysis of existing transportation conditions, transportation demand forecasting, a discussion of alternative travel modes within the area and identification of specific problem areas relative to crash occurrences, intersection capacities and street corridor capacities; and WHEREAS, the proposed Kalispell Area Transportation Plan (2006 Update) includes recommendations mendations for travel demand management and traffic calming techniques and further provides a series of recommendations for improvements to the transportation system including short term management changes, major street system improvements and miscellaneous upgrades to the existing transportation system; and WHEREAS, the proposed Kalispell area Transportation Plan (2006 Update)further includes a financial analysis of the capital improvements to implement the plan; and WHEREAS, S, n December 11, 2007 the Kalispell City Planning Board, after due and proper notice, met and held a public hearing to consider recommending the adoption of the Kalispell Area Transportation Plan an 200 Update). The Planning Board met again on January 8, 2008, after due and proper notice, and after fully considering the contents of the flan and all of the public comment received, both oral and written, voted unanimously to recommend approval and adoption of the plan to the Kalispell City Council; and WHEREAS, on February 19, 2008, after- due and proper notice and after- making the proposed Kalispell Area Transportation Plan (2006 Update) available to the public for its inspection, the Kalispell City Council held a public hearing to receive oral and written comment on the plan; and WHEREAS, it 1s in the best interests of the City of Kalispell and its residents that the existing 1993 Kalispell Transportation Plan be updated and replaced using current data and traffic engineering analysis for the purposes of updating its troth Policy as required by state statute as well as providing a more timely and functional analysis in the consideration of implementing transportation impact fees; and WHEREAS, after fully considering the contents of the Kalispell Area Transportation, Plan Zoo Update and all of the public comment received, both oral and written, the Kalispell City Council finds that the proposed Kalispell Area Transportation Flan (2006Update), dated February 1, 2008, developed by Robert 1 e cxa an Associates sufficiently provides the data and analysis necessary to update and replace the existing adopted policy or the 1993 Kalispell Transportation Flan. NOW, THEREFORE, T RESOLVED BY THE CITY COUNCIL OF THE CITY of KALISPELL AS FOLLOWS SECTION 1. That the Kalispell ,Area Transportation Flan (2006 Update), dated February 1, 2008, developed by Robert l eccia and Associates shall be and is hereby adopted and approved for transportation policy within the City of Kalispell. SECTION 11. This resolution shall be and is hereby effective immediately. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR of THE CITY of KALISPELL, THIS 2 1 ST DAY of APRIL, 2008. Pamela B. Kennedy Mayor ATTEST: Theresa White City Clerk HUTTON RANcu PLAZA AssociAs C 5 HuTToN RANCH R, SUITE 1 3 KALISPELL, MT 59901 April 16,2008 The Honorable Pamela B. Kennedy Mayor yor City of Kalispell o Box 1997 Kalispell, MT 501 Dear Madame Mayor: Because I any not as articulate as I would like when speaking before a group in an extemporaneous fashion, I am writing this letter to each of you With the hope that I can better express some of ray eoncers reardl your unpendin actions relating to the imposition o traffic impact fees and, In fact, many other impact fees already created and assessed by the City. While I ann not speaking for any other developers Within the City, I want to make it clear that I do not oppose the concept of impact fees as a matter'of personal or public policy. I am only concerned that a particular fee or ordinance establishing a fee comply with constitutional protections, and Mate ardor Federal enabling laws. I have deep conees in five areas relating to the City's actions establishing and implementing impact fees in general, and the proposed traffic impact fee in particular. They are: Failure to comply with constitutional protection of due process . Failure to establish correlation between the proposed impact fee and the development to be charged; 3. The erroneous use of trip generation studies; . The failure to offset fees by the reasonable value of economic benefits derived; and 5. The erroneous use o 'Impact fees to cure existing infrastructure deficiencies* April 16, 2008 Page 1. Federal and State Due Process Due process, required and guaranteed under the Constitution of the United States and in all States under either their Constitutions or enacted laws, is a simple concept. It requires that before an individual or entity can be punished, taxed or otherwise negatively affected by any law or ordinance, he, she or it, must have notice of the existence of the law. Under the enabling Statute, Montana defines an impact fee a " a charge unposed upon development by a government entity as part of the development approval process [sic] to farad the additional service capacity required by the development from which it is collected." The development approval process in Kalispell is similar to that which exists in most cities, counties and states in the United States. It includes a, petition for annexation of property if necessary), a petition for zoning or modification thereof if necessary), an application for use permit or conditional use permit, and the execution of a development agreement in concert with creation of a Planned Unit Development. Once all entitlements have been secured under the above, or under other discretionary types of applications and/or petitions, the development process has been completed. At this point, the compliance phase begins. If a developer has come before the City, received all of the discretionary approvals necessary to allow the developer to move to the compliance phase, and been given notice that to construct a building there will be particular fees (of any nature, including impact fees) then the requirements of due process will have been met and the exaction of fees at that time, or at some future time, will be appropriate. On the other hand, if a developer receives all of its discretionary approvals, and executes Development Agreement, and at that time a particular set of fees (such as impact fees) have not even been publicly discussed, much less voted on, then the developer has had no notice, and cannot be charged the fees at a later date. As one example, Hutton Ranch Plaza completed the Development Process for its project in August, 2005. It executed a binding Development Agreement on January 5, 2006. The City Council did not create a resolution even to appoint an advisory committee until February 21, 2006 and no members were appointed until March 2006. Obviously, Hutton Ranch Plaza had no notice that enormous and potentially devastating fees could be later enacted and charged as a condition to receiving a building permit on land already having gone through the "Development Process". Even your own Consultant, randy Geoff, inadvertently deals with the above concept in section 2.5 of his report where he admonishes the Council not to believe developers that the creation and exaction of a traffic impact fee will create financial hardship since the developer of the land will pay less for it knowing that the fee will be assessed.. If err. Geoff is correct, then the developer would have to have known about the fee at the time he buys the land, makes concessions to the City for its development, and enters into a Development Agreement, obligating him to spend enormous dollars for public improvements. Since mutton ranch Plaza had no knowledge, that unpact fees were on the horizon, it was not able to take into consideration any of these fees in the acquisition of its property, its pricing of the project for itself or subsequent users of its space. Hutton Ranch Plaza is only one of several developments that have 406. 7SG.2771 (phone) 406.756.2777 (fax) April 16, 2008 Page 3 already been charged "look back impact fees' that have clearly violated the constitutional right to due process. . Correlation between Impact Fee and the Development to be Charged. Throughout Sections ---160 and 7-6-1603 of the Montana Code Annotated Zoo, the drafters require a correlation between any impact fee charged and the benefits to be derived. The law doesn't allow an advisory co=ittee or the City Council simply to male a finding that a correlation exists between a development and widening of a road miles away from the development, because, as was stated at an earlier workshop) "Kalispell is a small town" and therefore justifies a single service area. It must, in fact, demonstrate a direct and real connection between the road to be improved and the new development to be constructed. It is dear that if 1000 homes are to be developed and constructed at one end of a new road or newly widened road, there is a clear correlation between the cost to build or widen it and serving the basic traffic needs of the development. Mr. Geoff s report shows no connection between public improvement and new development. It simply assumes it. 'what Mr. Geoff has done in his report is to identify every road that reeds to be, or has needed to be improved over the past several years. He then uses trip studies for a hypothetical new commercial development, assuming that there is a 100% correlation between the trips on each of these roads and the new development. This is inappropriate because it fails to recognize that all developments, old and new, are benefited by road improvements. The framers of the enabling laws authorized cities to collect from new development its "'Proportionate Share" of costs to be incurred, not the entire cost. In fact., Section 7-6-1603 defines an Impact fee as "a fee for service payable by all users creating additional demand on the facility". It is inconceivable that a given new shopping center, office building, or stand alone restaurant could be responsible for creating t00% of the demand on a roadway located miles from its location. While the enabling laws do not allow you to charge back against already existing developments, they do restrict you from applying to a new development more than its proportional share of costs. 3. Use of grip Generation do Studies The use of trip generation studies to determine how to apportion Transportation Impact Fees makes a great deal of sense when determining whether a developer should contribute, and how much, to the widening of a road surrounding the development, or the creation of a new road, or the placement of a traffic light, or even the widening or creation of roads adjacent to or in the i mediate vicinity of the development to be charged nested service area). But ITE traffic generation studies are inappropriate when they are used in a setting where costs have not first been apportioned between all persons and developments benefited by the infrastructure construction. What has happened here is that your consultant has used this particular methodology to work backwards into a set of numbers that are aimed at paying for all of the costs associated with one 406.756.2771 (phone) 406.756.2777 (fax). April 16, 2008 Page particular capital improvement plan. This can be witnessed in the absurdity of some of the numbers. For example, last year the numbers proposed by Mr. Geoff would have applied a rate to a new movie theatre that would have resulted in the new Stadium 14 paying almost I1,0 , 00 in traffic impact fees alone. This inequity was so obvious that Mr. Geoff was asked to go back and reexamine his numbers. He did such a good job that he deleted movie theatres altogether in his latest report. While politically expedient, it is totally inappropriate. He has come p with a set of numbers that would have cost the new Mc onalds on Highway 93, over 100,000 in Traffic Impact fees; a cost that would have amounted to 25% of its building construction. This fee would have killed the project. Are examination of numerous other categories results in the same absurd results. When asked how the attached fee structure compares with other cities and towns of comparable size, Mr. Geoff stated that the residential fees were 115 to 1 of inost other towns. He stated that the commercial fees were comparable to other towns and followed up by saying that the proposed Kalispell commercial fees were also 115 to I of most fees in other towns. This statement Is ridiculous. If his comment were true,, to construct the aforementioned Me orralds in other towns would require the payment of a traffic impact fee of over $50 ,000. This is more than the cost of the building itself. 4. Requirement to offset Fees by Economic Benefits Derived Section -- -1 2 i1 states that any impact fee MUST consider system improvements Treasonably anticipated to be made by or as the result of the development in the form of user fees, debt service payments, taxes .... Nowhere 1n the report, t, or any report from staff` that I have seen, is there an analysis of the enormous property tax increment that will flow from any of the developments (residential or commercial) sought to be charged by this or other of your impact fees. You now have impact fees for virtually every serve to be provided by the City. Has staff considered that on full build out in the near future, property taxes generated by Hutton Ranch Playa and Spring Prairie, alone, should generate between two and tree million dollars each and every year? The City's proportion of just those taxes would enable bonding of between seven and ten million dollars. If you add an additional two to three million dollars in gross property fax increment from the Glacier Town Center project, the Cit 's incremental tax receipts would support bonding that would pay for all of the improvements in its Transportation flan. 5. The Erroneous Use of Impact Fees to Cure Existing Infrastructure Deficiencies The enabling Statutes at Section --1 023 provides "The amount of each. Impact fee rust be based upon the actual cost of public facility expansion or improvements or reasonable estimates of the cost to be incurred by the govemmental entity as a result of new development." t Section -- -1 02 5 c the Statute provides that "Costs for correction of existing deficiencies in a public facility may not be included in an impact fee." virtually every road intended to be 406.756.2771 (phone) 406.756.2777 (fax) April 16, 2008 Page improved as described in the impact fee report has an existing substantial deficiency. It is inconceivable that the reed to, and therefore, the cost of creating, widening or otherwise improving roads miles away from a particular commercial development could be created only by new development, Yet Mr. Geoff report suggests that only new development should pay, and pay l o% of its cost. This is not what Montana law allows. realize how hard the Impact Fee Committee has worked to provide you with recommendations regarding various impact fees. However, if you provide any group of bright, well meaning, civic minded individuals (the vast ma orit of ,Thor otherwise have little if any expe-deuce in the lave, public financing or real estate development) with bad or incomplete information, what will come out of the group is exactly what was fed into the group: bad information and bad results. As a member of the development community here in Kalispell, I am ready, willing and able to work with the Council and its staff to help solve the infrastructure problems that we face. As a property owner and developer I am willing to pay my fair and proportionate share of the costs associated with improving our infrastructure. In return I ask only that you take the time to consider the tough questions relating not to whether we reed to assess impact fees, but whether in so doing we are doing it correctly and in compliance with the law. Thank you for your time and consideration. i i ljp ar gs _ 4 r Y c Council Members Charles Harball, City Attorney ,lames H. Patrick, City Manager 406.756.2771 (phone) 406.756.2777 (fax) rage -i mi .i Theresa Whit From; Planning Department [planning@kalispell.com] Sent: Wed nesday, April 16, 2008 8 :11 AM To: Tory ent ; Theresa White Subject: FW: Impact fees From: Gateway Properties Inc, rnailto:gat way@cent rytel.net] Seat: Tuesday, April 1, 2008 4:22 P To: planning@kalispell.com Subject: Impact tees l have been following the events on the impact fees and I would like to let the council know I am against the current impact fee structure. I think this valley really needs the new mall right now for jobs as well as shopping dollars staring home. As well for the residential side the new fees make it harder for developer, builder, and buyer to achieve an affordable home. I know you are looking at information I have not seen yet and do trust you to make a sound decision in light of ALL the concerns. Please pass on to council members, bers, Brent Card 1P Gateway Properties, Inc. 1 8 r dgu I U1 I Theresa White From: jpress@centurytel.net Seat: Tuesday, April 15, 2008 3:01 P11 To: citycouncil@kalispel1.com Subject: Road impact fees Dear City Mayor and Coun ilr err ber : any writing in support of the proposed road -impact fees. I feel it is only fair that fees reflect the overall, present AND long-term impacts of new development. We already have a huge backlog of maintenance for existing roads. Any new development must be required to assume all the true costs associated with that development. According to the April o Inter Lake article, Wolfo rd Development is threatening to "pull their project" for the Glacier Torn Center due to the proposed impact fees. They feel that the fees, as proposed, are unrealistic. I feel the fees are not too high, but very realistic, given the significant impacts that would result from such a huge construction project. It would be extremely upsetting to me if a development as large as the Wolford Mall received building permits before these road -impact fees were in place and the city taxpayers were forced to assume the associated road costs. Thank you. Judith Pressmar POB 2063 Kalispell MT /1.6 2008 JAmEs H. CossiTT, Pc ATTORNEY & COUNSELLOR T LAW Board Certified Business & Consumer Bankruptcy Law MEMORANDUM To: Kalispell City Council From; James H. Cossitt 202 KM Building o 2nd Street East Kalispell, MT S o 1 R 6 Tel 06 -516 jhc@cossittlaw.com wwwosittlatw. corm e: Comments on Impact Foes for Transportation System, Fi aI Report dated March 2008 Date: April 14, 2008 The Kalispell Impact Fee Advisory Committee Y AC , of which I have been a member since , has proposed a variety of fees which have been adopted by you without controversy or fanfare. The propose Transportation System fee is not being met with the same welcome and various arguments have been advanced against adoption of those Fees. This memo will respond to some of those criticisms. No one has retained me to represent them on this issue and these remarks are mine, an solely mine. THE CITY COUNCIL HAS ALREADY SET A PRECEDENT BY ADOPTING TIN OL FIRL. WATER AND WASTEWATER IMPACT FEES y adopting other impact fees, the City Council has already confronted and dismissed the same criticisms that are being leveled at the current fee and has set a policy precedent for the City that "growth must pay for growth". The approval process, both explicitly in the prior HDR reports) and implicitly endorsed adopted the basic philosophy, justification, fairness and equity of impact fees for the full amount recommended by HDR and the IFAC. Were the council to act differently on this proposed fee it would: l be inconsistent with it's adoption of prior fees; 2 undermine the legitimacy, fairness and equity of the entire impact fee system; set a poor precedent for the imposition of future fees. What principled intellectual basis can any one of. you articulate for: l adopting and approving the earlier fees; an b not doing the same with the proposed transportation fee You've already adopted and agreed that the basic principles and methodology of impact fees are soured -- now some of you are balling at how they are applied in the real world. Business & Commercial Litigation, Secured Transactions, UCC, Bankruptcy & Workouts, Real Estate Law Admitted In Montana, Colorado, Michigan and Iowa To: Kalispell City Council From: James H. Cossitt e: Comments on Transportation System Impact Fees Date: April 14, 200 Page The basic problem currently confronting you is that; 1 roads are not cheap; 2) commercial development generates lots oftrips; 3) taxpayers currently subsidize way too mucky of the road growth. No wonder our local ground transportation grid is in a shambles and getting worse monthly. ONLY A SMALL BUT VOCAL MINORITY IS OBJECTING The primary objection to the transportation fees arises from a small, but vocal, minority of commercial developers. These persons are poised to tale advantage of the rapid growth in Kalispell for their own personal ._gain and that of the equity interests in the companies they control. Their voices, via their lawyers and others, drown out the voices of individual citizens. They will commit the resources to this effort because of the potential upside benefit. The average citizen, myself included, is not likely r to be willing to tale the time to offer comments. Thus, the voice of the developers speaks far louder than is representative. IMPACT FEES CREATE EQUITY AMONG USERS AND DO NOT RETARD ECONOMIC DEVELOPMENT 4R, IF THEY DO, S4 BE IT The March 2008 HDR report squarely addresses both the equity § 2.4 and hindrance of development § . issUes. From a citizen"s standpoint, both of'these sections are worthy of your close scrutiny. First, this issue is addressed in the comment about precedent above. Even if impact Fees do slow down development, they will do so only at the margins. By forcing development to internalize and bear the true cost (instead of skating on a taxpayer subsidy) it will raise prices for commercial development. Development providing marginal projected economic benefit will not proceed as the upside gain with the added impact fee cost will not be adequate to justify the risks s associated with development. However, as market et conditions charge to provide higher projected rates of return from development, even with impact fees, those development ent will absorb the costs. THE NECESSITY OF CRITICAL EVAULATION, ANALYSIS AND CRITY UE OF THE WOLFORD ARGUMENT /THREAT To: Kalispell City Council From: Jaynes H. Cossitt Ike: Comments on Transportation System Impact Fees Date: April 14, 2008 Page wolford alleges, without any substantiation, his market wont bear the proposed fee and it will make his project unfeasible. The wolford pre impact fee financial analysis obviously includes a rate of return or profit margin. The Council must critically evaluate and analyze these claims and not allow itself to be spoon feed or swayed by this "doom and gloom". What is really going on here ? wolford is most likely really saying instead of X ° rate of return, it will be 10% less or some such thing. _Doo't let the developers frame the debate* restate or mischaracterize it. The issue is not whether development is going to leave Kalispell -- given the history of this community, it borders on ludicrous to so assert. The issue is how much are the developers or their stockholders going to male and will they, or the taxpayers, bear all of the true costs of their profit making commercial ventures f wolford is serious about this assertion, it should be willing to put it's financials on the table to the Council, HDR or City staff, (under a protective order or agreement so competitors do not see it) in order to test the veracity of his assertions of unfeasibility. If he is unwilling to do so, it calls into question his sincerity, credibility and veracity and leaves the impression that these assertions are nothing more than a scare tactic. With all the publicity related to impact fees and wolford's intimate familiarity with the City's adoption of them, it is incomprehensible and implausible that it would have entered into Fetters of Intent or Leases with potential tenants that did not contain clauses that allowed it to pass on these (and other) added costs. At the end of the clay, if any project is not commercially viable, then don't commit the investment capital to build it. If it is not economically feasible to do the deal with all the true costs imposed, then don't do it. When and if conditions change that make the project, or some other project, feasible, the market will respond. This is how capitalism works. Congress, the legislature and local governments enact lags daily that alter the economic fusibility of all kinds of marketplace conduct. The risk of legislative or regulatory action is one that all marketplace players must take into account. Changes in tax law, land use law or zoning can have a profound impact on economic conduct but that is one of the risks that developers must bear. Consumer Confidence Index ..y Y ... J FK Kalispell City Council Jams H. Cossitt. nents on Transportation System Impact Fees April 14, 2008 THE TRANSPORTATION IMPACT FEE IS BECOMING A SCAPEGOAT FOR DETERIORATION of OTHER FACTORS AFFECTING THE FEASABILITY of THE WOLFORD PROJECT It is important to place this discussion, and the W l ord assertions, in the larger context of the current economic climate and the multiplicity of factor that may affect the feasibility of the Wolford project. The current economic climate is terrible, the Conference Board reports: The Conference Board Consumer Confidence Index Declines Almost 12 Point March 25, 2008 The Conference Board Consumer Confidence Index, which had declined sharply in February, fell further in March. The Index now stands at 64.5 (1955=100), down from 76.4 in February. The Expectations Index declined to 47.9 from 58.0. The present Situation Index decreased to 89.2 from 104.0 in February, The Consumer Confidence Surrey is based on a representative sample of 5,000 U.S. households. The monthly surrey is conducted for The Conference Board by TICS. TINS is the world's largest custom research company_ The cutoff date for March's preliminary results was March 1 th. Says Lynn Franco, Director of The Conference Board Consumer Research Center: "Consumers' confidence in the state of the economy continues to fade and the Index remains at a fire -year low (March 2003, 1.4). The decline in the present Situation index implies that the pace of rowth in recent months has weakened even further. Loo in ahead consumers' outlook for business conditions the job market and their income prospects is quite. -pessimistic and sug-gests further weakening,may be on the horizon. The Expectations Index, in fact is now at a ear low(Dec. 1973, 4 .2 levels not seen since the Oil Embargo and Watergate." Consumers' assessment of present-day conditions weakened further in (larch, Those claiming business conditions are 'bad" increased to 25.4 percent from 21.3 percent, while those claiming business conditions are "good" declined to 15.4 percent from 19.1 percent.Consumers' appraisal of the job market was also more pessimistic than last month. Those saying jobs are "hard to get' rose to 25.1 percent from 23.4 percent, while those claiming jobs are 'plentiful" decreased to 1 -8 percent from 21.5 percent. Consumers" short-term expectations also deteriorated further in March, Those expecting business conditions to worsen over the next six months increased to 25.4 percent from 21.6 percent, while those anticipating business conditions to improve declined to 8.1 percent from 9.7 percent in February. The outlook for the labor market was also more pessimistic. Consumers expecting fewer jobs in the months ahead increased to 29.0 percent from 2 -0 percent, while those anticipating more jobs declined to 7.7 percent from 8.9 percent. The proportion of consumers expecting their incomes to increase declined to 14.9 percent from 18.0 percent. tp: ww_w.coat~ot- n e-1 oai.�..or(-Ye ii nii s `onSL[i r otifid ii .ofni To: Kalispell City Council From: James H. Cossitt Fie : Comments on Transportation System Impact Fees Date: April 14, 2 0 Page How much of the alleged infeasibility is really attributable to the transportation impact fee ? Or other factors such as consumer demand 'here is the data from Wolford that back up the alleged nexus ? CONCLUSIONS I will end where I began l . roads are not cheap; . commercial development generates lots of trips; . taxpayers currently subsidize way too much of the road growth. The Council has endorsed the equity, fairness and methodology of impact fees. Intellectual honesty and consistency compels the adoption of the proposed transportation fees. It is not enough to engage in a knee jerk reaction and say "these cost too much". There is no logical or principled justification or basis upon which to alter city policy. Thank you for your consideration of my views. JI:chj cc: file CADocuments and settings\jin My Docurnents\Temp\08 04 14 MT Connell re trans f e.doe Devised 4/ 14 0 JH • AcCEPTABEE LOS X • IMPACT 4 # IMPACT FEE OK t R • EXISTING LOS - 2008 PROJECTED LOS WITHOUT IMPACT FEES - 2013 TEEN A. KAL I ken@kalviglaw.com angie@kalviglaw.com MA.RSHALL MURRAY a s all9kalvi law,eo ERic S. HumMEL eric(Pkalilglaw,com KALVIG & Duc, P.C. ATTORNEys AT LAw Southfield Tower P.O. Box 167 KALISPEL , MT 59903 PHONE: 6- 7-6 01 A:406-257-6082 KALI5PELL TRANSPORTATION IMPACT FEES - INFORMATION YOU MIGHT WANT TO KNOW The value of the new residential construction in 2007 was $40.8 million. The value of the new commercial construction in 2007 was $37.5 million.' 1 See P.9, table 5. 2007 Construction, Subdivision and Annexation Report - Kalispell, Montana I In 2007, 322 residences were built in K IiSp ll. The 322 residences consisted of: 146 single family residences 14 duplexes 7 townhouses 95 multi -family units Kalispell is proposing transportation impact fees as a condition for approval of any building permit.' The proposed fees are: $989 per single family detached dwelling $757 per rented townhouse/duplex $606 per residential condoAownhouse under single family ownership $ 95 per rental dwclling with at least 3 units If the 322 residences built in 2007 had been subject to transportation impact fees, they would have generated: 146 single family residences 14 duplexes 7 townhouses 95 multi -family units $9 9 = $14470 0 $ $ 101000 $606— $ 4,00O $95 — $ 66P0 $260,000 Source - 2007 Construction, Subdivision and A ne ation Report - Kalispell, Montana, pA Available online at: http://www.kalispell.com/downloads/kal07finalreport.pdf 3 l - Revised Final Draft Report -- Impact Fees for the Transportation System. 2 In 2007, the City of Kalispell approved 16 new commercial construction projects. According to the transportation impact fee report, impact fees for most commercial buildings are based on leasable area (or floor space) and the type of commercial building. Hotels and motels are assessed based on the number of rooms. If the commercial structures built in 2007 had been subject to transportation impact fees, they would have generated approximately $1,140,652. TE Address Name/Description hnpact Square feet Total code fee(per per unit thousand) 493 190 Meadow The Meadows $3695 4.948 $18 5283 Vista Loop Clubhouse 931 2340 Hwy 93 N Famous ave's 5187 8.840 $45,5853 Restaurant 851 2910 Hwy 93 S Town Pump $29,757 4.115 $122,450 Tavern/Casino 310 1680 Hwy 93 S. Econolod e S63558 ff units Hotelfotel unknown 814 125 Sutton Glacier Quilts $37 7 5.820 $21,8 Ranch Store 933 110 Hutton Hutton Ranch Food $37,013 6.600 $244,28 Ranch Ct. Restaurants 814 284 N. Meridian Universal Athletics 3757 1 .85 $4 ,774 Retail Store 841 2545 Hwy 93 N. Eisinger Honda $2827 22.700 $ 49173 Car dealership 841 2545 Hwy 93 N. Eisinger Chevrolet $2827 42.90 S 120,84 Car dealership 912 120 Hutton Flathead Ban 13107 6.429 $ 8 , 83 Ranch Bank 814 145 Hutton Sportsman Ski FIaus 37 7 5 .8' 4 $2215190 Ranch Retail Store 817 2320 Hwy 93 S. Murdoch's 4348 7.560 21871 Greenhouse/store 934 2310 Hwy 93 N. McDonald's 2 , 74 3.253 $83142 Restaurant 814 35 5t Ave. West 5h Ave. Salon 377 3.432 $127894 Hair Salon 841 2310 Hwy. 93 S. Penco $2827 4.000 11,308 Sore/warehouse 47 2792 Hwy. 93 Sem's Car Wash $4913 2.800 $13,756 Car wash Total 114052* * Does not M'clude Econolodge In 2007, the City of Kalispell approved 16 new commercial construction projects. According to the transportation impact fee report, impact fees for most commercial buildings are based on leasable area (or floor space) and -the hype of commercial building. Hotels and motels are assessed based on the number of rooms. If the commercial structures built in 2007 had been subject to transportation impact fees, they would have generated approximately $1,140,652. ITE AddressName/Description Impact Square feet Total code fee (per per unit thousand) 493 190 Meadow The Meadows $3 695 4.948 $18,283 Vista Loop Clubhouse 931 2340 Hwy 93 N Famous Dave' $5187 8.840 $45, 53 ran Restaurant 851 2910 Hwy 93 S Town Pump $295757 4.115 $122A5 Tavern/Casino 310 1680 Hwy 93 S. Econolodge $63 $58 ft units Hotel Motel unknown 814 125 Hutton lacier Quilts $3757 0 $2118 5 Ranch Store 933 110 Hutton Hutton Ranch Food $37,013 6.600 $244528 Ranch Ct. Restaurants 14 284 N. Meridian Universal Athletics $3757 10.853 $40,774 Retail Store 41 2545 Hwy 93 N. Eisinger Honda $2827 21700 $64,3173 Czar dealership 841 2545 Hwy 93 I . Eisinger Chevrolet $2827 42.69 $1207 84 Car dealership 12 120 Hutton Flathead Bank $135507 6.429 $867836 Ranch Bank 914 145 Hutton Sportsman Ski Haus $3757 58.874 $221,19 Ranch Retail Store 817 2320 Hwy 93 S. Murdoch's $4348 7.5 $3 ,871 Greenhouse/store 34 2310 Hwy 93 N. McDonald's $25f 74 3,253 $8334 9 Restaurant 814 35 5 Ave. west Ave. Salon $3757 3.432 $1 1894 Hair Salon 841 2310 Hwy. S. Penoo $2827 4.000 $11938 Sore/warehouse 947 2792 Hwy. 93 Sem's Car Wash $ 913 2.800 $131)75 Car wash Total 194 # 5 * Does not include Econolodge Kalispell proposes to raise as much in traffic impact fees from all residential development in 2007 ($260,000) as only two commercial developments selling athletic/outdoor gear and apparet, Examples: ITE code Description Impact fee per Square feet total unit (per thousand) Universal 814 Sinall strip $3757 10.853 $4 1774 Athletics shipping center Sportsman 814 Small strip 3 7 5. 74 $221 189 us Ski �- shipping center 'dotal $261.3963 Or one food court: ITE code Description Impact fee per Square feet total unit (per thousand Hutton 933 restaurant $37M 3 6.600 $244,296 Ranch Food Ct, Total$2449286 r� In 2007, the City of Kalispell approved 4 new office buildings.4According to the transportation impact fee report, impact fees for office buildings are based on leasable area. If these office buildings approved in 2007 had been subject to transportation impact fees, they would have generated $58,904. ITT code Address Name/Description Irnpact fee Square feet Total er unit er thousand 770 125 School House Glacier Investment $1 19 12.934 171059 Loop Offices 715 3430 Hwy 93 N. S1lverbroo Sales $11 1 1.380 162 Offices 720 1050 N. Meridian N. Meridian Dental $3735 4.200 $155687 Dental Office 750 723 5 Ave. East Eastside Brick $11 1 20.751 $ 4,5 6 Office/Coffeehouse Total $58,904 In 2007, the City of Kalispell approved 7 other buildings (schools, warehouses, hospitals).5According to the transportation impact fee report, impact fees for these buildings are based on square footage. If these buildings approved in 2007 had been subject to transportation impact fees, they would have generated $91,662. ITT code Address Name/Description hn act fee Square feet Total per unit er thousand) 53 6644 4 Ave. W. School Dist. #5 $133 18.953 $516 High School Addition 715 650 Yoltack way USDA 1196 28.120 $3351 150 1 34 1' Ave. W. City of Kalispell $513 3.600 1 46 'warehouse 5-0 171 School House City of Kalispell $513 1.0 13 soap Warehouse 610 Ryan Lane City of Kalispell $513 13.500 $6925 Aircraft Hanger 10 1 S nnyvi w 1c"C $1 1 .1 $1 18 Cancer Treatment Center 610 310 Sunnyview 1RMC l 17 5.760 $ l 05 465 Hospital Total$919662 Source - 2007 Construction, Subdivision and Annexafion Report - Kalispell, Montana, p. . 1d. z The draft transportation plan bases transportation impact fees on the type of commercial development. The type of commercial development is decided based on its description from the 2007 ITE Trip Generation Manual. Can you decide what category the following permit would be? TOWN PUMP ---- TAVERN/CASINO City descriptions: 24 hour convenience market? (sells convenience Foods, newspapers, magazines and often beer and wine, open 24 hours per day). Proposed rate per 1000 square feed - $29,757 High turnover sit-down restaurant? (sift down eating establishment with turnover rates of less than 1 hour). Proposed rate per 1000 square feet - $7,362 Gas station with convenience market? (sells gasoline and may also provide vehicle service and repair. May also contain a convenience market). Proposed rate per 1000 square feet - $7,405 There is no separate category for a drinking establishment. PENCO — STORE/WAREHOUSE City desetipt iolls ., Specialty retail? (small strip shopping centers containing a variety of retail shops that specialize in apparel ...) Proposed rate per 1000 square feet - $3757 Car dealership? New and used car dealership with sales, service and parts. Proposed rate per 1000 square feet - $2,827 - The City's response is to require a property owner to prepare a traffic impact study at its own expense. R There is a disparity with the amount of traffic impact fees depending on the building type* Compare: Hilton Garden Inn 144 rooms Restaurant Bar Convention space North Bay Grill addition of second dining room 771 square feet Famous Dave's ITE code Impact fee per unit Units Total or per 1000 square feet Hilton, 310 $63 144 roams $9,072 Garden Nosh Bair 931 $5.187 771 $3,999 Famous 931 1 7 8.840 $93 Dave" s Restaurant h The Aspen Group is planning to build up to 3000 units in its Starling Subdivision. Up to 10% of the 3000 units can be commercial.6 Assuming 2700 of the residential units are single family detached dwellings, with a transportation impact fee of $989 per unit, over the lifetime of the Starling Project, in current dollars, the Starling Subdivision will pay $2.67 million in transportation impact fees. Source - The Aspen Group, April 8, 2008, See also Kalispell Planning Board Minutes dated May 22, o. N Areas of immediate concern: 1. Has the City adequately considered whether more than one service area is necessary for a fair ff*npaet fee regulation as required under 7- -1 o l ? 2. How has the City ensured that none of the projects in the CIP are really "existing de eieneles" and therefore ineligible for impact fee use? . After reviewing the CIP projects to ensure that none of the project -represent "existing deficiencies" the CIP must then he updated to ensure that all appropriate projects are included. For example, despite being located in a soon -to -be -annexed area, the Rose Crossing Project is still listed as a 1 0% county project. 4. The City should develop a process to calculate and unsure that all appropriate credits are factored into the impact fee assessments as provided in '-- -1 03 .