Council OKs new impact fees

COEUR d’ALENE —  The Coeur d’Alene City Council on Tuesday voted 4-2 to adopt new impact and annexation fees to support capital improvement projects.

Near the end of a nearly three-hour meeting with sometimes terse exchanges, the council voted to charge non-residential parks fees; charge multifamily by dwelling unit; charge accommodations by the room; escalate the fees at the five-year average of 3.9% and charge the maximum defendable fees.

The non-residential parks fees were a key point that was debated. 

Dan Gookin and Christie Wood opposed charging them for commercial development while Amy Evans, Kiki Miller, Dan English and Woody McEvers supported them.

The city has not previously charged park impact fees to commercial-type developments, as they have been applied to residential permits only. Post Falls, Nampa, Hayden and Twin Falls don’t charge commercial development parks fees.

“I think these fees are reasonable for hotels and other structures." Miller said, adding that hotel guests use parks

“I agree. I think it makes sense,” English said.

Gookin disagreed.

“What we’re talking about here is growth,” he said. 

“Commercial, I don’t see them having an impact on parks and apparently a lot of other cities don’t either,” Gookin said. 

Wood said she was concerned “how defensible” the parks impact fees charged to commercial projects would be in court. She suggested raising parking rates to fund parks.

“I’m more inclined to find other ways to fund the parks, rather than put it on the back of commercial entities,” she said. “I don’t really want to impact economic development that way.”

City Attorney Randy Adams said the fees were determined by a fair and reasonable methodology and he was satisfied they were defendable in court.

“I think we are being fair,” Miller said.

The city's impact fees haven’t changed since they were adopted in 2004.

In the past year, the city held workshops and meetings on impact fees and conducted a study with the assistance of Welch Comer Engineers, FCS Group and Iteris. 

The Planning Commission recommended Nov. 14 that the council adopt the CIPs and to adopt the "maximum defendable fees" as presented. 

They would be assessed on new houses, apartments, condos, hotels, assisted living and nursing homes, churches and commercial development.

Per the maximum defendable fees approved by the council, a single-family dwelling would pay about $6,430 in impact fees; a multi-family project will pay $4,953 per unit; assisted living would pay $2,755 per unit; a hotel of 50-plus room would pay $2,587 per unit, while those under 50 rooms would pay $1,932 per unit.

In some examples, the impact fees would cost an 89-room hotel $230,302; a new 2,235-square-foot restaurant would pay $19,931; a 6,144-square-foot office would pay $23,040 in impact fees; and an 18-unit apartment would pay $89,159 in fees.

Construction credits could lower costs.

The Coeur d’Alene Resort is proposing an addition that encompasses a multi-faceted structure, including luxury hotel rooms, a restaurant featuring a rooftop lounge, parking and spaces for retail and commercial offices. 

Bill Reagan, president of The Coeur d’Alene Resort, told the council on Tuesday that the total of the higher impact fees would increase the cost of their project substantially and could make it cost-prohibitive.

He said just with building permits, design fees and the new impact fees, their cost could be about $1.2 million.

“That’s a substantial amount of money,” he said. “And I think that substantial amount of money has caused these hotels not to be built. This our third time we’ve proposed building additional rooms.”

The impact fees are designed to fund capital improvement plans, described as a "wish list" on Tuesday.

Parks improvements in Coeur d’Alene in the coming decade are pegged at about $11.6 million with $9.6 million eligible for impact fees.

Transportation projects are estimated at $88 million, with $31 million eligible for impact fees.

Fire projects total $8.8 million, with 100% of those costs eligible for impact fees.

Police station expansion, substation construction and storage space come in at $6.7 million, with $4.8 million impact-fee eligible. 

Wood, Gookin and English opposed escalating the fees at 3.9% per year, and suggested the percentage be lower. At one point, Mayor Jim Hammond suggested the escalation percentage be determined later, but McEvers insisted it stay at 3.9%.

The annexation fee, the same since 1998, will increase to $1,133 from $750.