Committee approves exemption to transportation impact fee

January 12, 2009

By Jim Feehan

Change would make tenants easier to find for large storefronts

Vacant storefronts in the city could soon see some tenants after the City Council Land Use Committee approved an agenda bill Jan. 8 that would exempt up to 10,000 square feet of commercial development proposals from the city’s transportation impact fees.

Business owners said the fees were burdensome and prohibited them from finding tenants.

The measure also reflects the removal of the once-proposed Southeast Bypass from the fee schedule. The proposed update of the impact fee includes a $1.6 million reduction in the city’s financial contribution toward the roadway capacity projects list. With the adjustments, the impact fee rate declines from about $4,800 to $3,300, a reduction of 32 percent.

“This agenda bill is exactly what we need to help us move forward for getting a great tenant for our space, which is challenging in these times,” said Rebecca Knowles, owner of Front Street Market and the former Lewis Hardware store on Front Street.

About $40,000 in fees would have been levied on the operators of any new business at the hardware store site, she said.

“We actually had two tenants in particular who looked at our location and decided that those fees would be extraordinary, and they found other places,” she added.

The state’s Growth Management Act authorizes cities to charge impact fees to help assure that public facilities are available to serve new development. Issaquah’s transportation impact fees were first adopted in 1997 and updated in 2006. The fees are paid by developers of new projects to offset the city’s cost of providing additional service, but they are also charged to tenants who change the use of an existing building.

Greg Spranger, executive director of the DownTown Issaquah Association, applauded the committee’s action, saying it’s needed to help the vitality of the downtown.

“This issue rose up because the DownTown Association and many of the business owners said, ‘Our hands are tied,’” Spranger said. “We’re going to have empty spaces here or we’re going to get a business that is not appropriate for what we’re trying to do in the downtown.”

Mitigation fees are astronomical and stunt business growth in the city, he said.

“Somebody’s dream of coming forward and taking their grandmother’s recipes and starting a restaurant or whatever the business may be, it’s just blast out because of the initial cost of going in for the fees,” he said.

While most of the attention has been focused on the downtown core, Planning Director Mark Hinthorne said the agenda bill would apply to other parts of the city.  In addition, a 30,000-square-foot space broken into three 10,000-square-foot spaces would also qualify, he said.

“By dividing the lots up, it’s more likely you’ll have tenant improvements in smaller lots,” said Maureen McCarry, a member of the Council Land Use Committee.

Fellow committee member John Rittenhouse agreed that the agenda bill should apply citywide as a matter of fairness to all businesses.

“This will help our small businesses during these tough economic times,” he said.

Downtown property owner Keith Watts applauded the committee’s action.

“I’m glad they’re doing it citywide. Of course, my focus is Front Street. But this should be citywide,” he said. “The City Council is telling everybody, ‘We support you,’ and we don’t hear that enough from our City Council.”

The agenda bill now goes before the full City Council Jan. 20 for further consideration.

Reach Reporter Jim Feehan at 392-6434, ext. 239, or jfeehan@isspress.com. Comment on this story at www.issaquahpress.com.

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