TUCSON, AZ - Developers will be allowed to defer paying some impact fees if they contribute part of what the deferral saves them to the Affordable Housing Trust Fund, the City Council decided Tuesday. The deferral of parks, transportation and city-facilities impact fees, which total $6,217 for a 2,000-square-foot house, is already an option for the council to consider on a case-by-case basis, said City Attorney Mike Rankin.
The council's unanimous vote to delay payment of those fees from when a permit is issued to when the home or business is occupied allows the developer to save money by not financing the impact fees, Councilwoman Regina Romero said. Developers will still have to pay nearly $2,400 per home in public-safety and water fees at the time they would normally be due.
If a deferral is granted, the city would require the developer to give 50 percent of the interest saved by avoiding financing the impact fees to the Affordable Housing Trust Fund, Councilwoman Shirley Scott said. Though deferrals are already allowed, the council's vote makes it clear what the city will ask for in exchange, Rankin said.
The issue stemmed from a proposal last month to suspend or waive impact fees for one year to encourage development. Council members criticized Councilman Rodney Glassman for the proposal and created a committee to consider what to do with the fees, and other ideas to create jobs in the city.
Glassman said last month his proposal was meant to spur development and create jobs.
He asked members of the citizen committee whether deferral would stimulate the economy and encourage building. Committee Chairman Michael Guymon told the council job creation, as related to deferring impact fees, was not discussed.
However, Romero said each $1 million collected in impact fees creates about 30 jobs, and the contributions to the city's Affordable Housing Trust Fund could also create jobs for real estate agents by providing down-payment assistance.
Mayor Bob Walkup praised the deferral. "We did this because we wanted to see things move in commercial and selective residential development because we need jobs today," he said.
The council also decided 83 commercial and residential development plans already approved for construction will be eligible for a two-year extension of the time they have to develop. That allows them to wait until the economy improves.
The extension gives the developers up to three years after their plans are approved to start building, instead of the normal one-year limit. "The concept is to extend the life of that project so that when the economy gets better, when it's financially viable for that developer, they will be ready to go," Romero said. "If it weren't for the economic reasons we've cited before, they would not be siting on these plans." When the economy improves, developers will be ready to start construction sooner if they don't have to reapply for permits on their projects, said Development Services Director Ernie Duarte.
In other business, the council also decided to wait for more information about the leases it provides to for-profit and non-profit groups at below-market rent value. The council heard a presentation on the potential options for raising the rent or ending these leases to bring in more than the $1 a year several non-profit groups pay.
Councilwoman Nina Trasoff said she would like to ease the financial burden placed on the non-profit organizations, which are already making budget cuts. Councilwoman Karin Uhlich said she would like to end leases the city pays to other landlords and move those tenants into city-owned buildings.
Source: azstarnet.com