Businesses earn reprieve from city fee until March 2013

February 21, 2012

By Warren Kagarise

City leaders offered entrepreneurs a reprieve from a fee for another year, as officials attempt to entice businesses to relocate to or remain in Issaquah.

In a unanimous decision, City Council members agreed to exempt businesses from paying the transportation impact fee until March 2013. The exemption applies to the initial 10,000 square feet of floor area per project.

The council action continues a project initiated in 2009 to roll back the transportation impact fee and encourage entrepreneurs to consider Issaquah. In 2009, officials earmarked $1.58 million — money left over from the canceled Southeast Bypass — to offset the fee. City planners said $976,589 remains available for businesses.

The cost to the city so far amounted to $603,411 and, in return, developers received fee exemptions on the initial 10,000 square feet for Overlake Center, Issaquah High School reconstruction and the HighMark Medical Center. Developers, meanwhile, shouldered $547,200 in transportation impact fee costs.

Overall, planners said the 3-year-old program aided 39 projects. Though the program benefited large-scale projects, most projects — 29 citywide — amounted to less than 5,000 square feet, including the recent remodel from 2,000 square feet of retail space at the Issaquah Commons into the popular Five Guys Burgers and Fries restaurant.

Only a half-dozen projects involved in the program encompassed more than 10,000 square feet. The average per-project cost to the city is $15,086.

The measure attracted support from Issaquah Chamber of Commerce leaders, in addition to city officials, before the Jan. 3 decision to continue the exemption until 2013.

“This innovative concept has proven helpful for a number of businesses over the past few years, and we believe it represents a meaningful incentive to help attract and retain economic investment and economic vitality for the Issaquah community,” chamber CEO Matthew Bott wrote in a letter to council members.

The council also agreed to extend the transportation impact fee exemption in February 2010 and again last year.

The state Growth Management Act authorizes cities to charge impact fees in order for developers to shoulder the cost of adding infrastructure, such as roads. Developers pay the fees to build projects. The money offsets the additional cost the city pays to provide services to the development. If a tenant changes the use of a building, he or she also pays impact fees.

Issaquah officials adopted transportation impact fees in 1997; officials last updated the fees in 2006.

Warren Kagarise: 392-6434, ext. 234, or wkagarise@isspress.com. Comment at www.issaquahpress.com.

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