Impact Fees Drive Away Conference Center And Jobs

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Most of us will remember that before computers and digital photography we had to take film into a store to have it developed.

The Eastman Kodak company was always used as an example for this: Do you want to sell the camera or the film? The obvious choice was the film.

You might buy a camera every 10 years, but film purchases were repetitive and were the significant driver of Kodak’s profits and livelihood.

The Roundup has reported on the impact of impact fees (sometimes called capacity fees or development fees) with a focus on the Northern Gila County Sanitary District whose commercial impact fees have had a significant effect on the opportunity for commercial real estate development and job creation.

One example of how non-competitive impact fees hurt us was the potential development of a hotel/conference center.

It was reported that the impact fees of the Town of Payson and the sanitary district were nearly $400,000. It killed the project.

Let’s look at the long term implications of the debilitating effect of excessive impact fees and not being competitive with other jurisdictions in Arizona.

When we lose a business, such as above, it hurts our tax coffers, which mean our real estate property taxes have to offset the government’s budgets.

With a larger tax base, our own real estate property tax bills, with proper fiscal management, would decrease.

Doing a little research, the approximate amounts of tax that would have been contributed to our local governments is almost $60,000 on an annualized basis had the above project moved forward.

The taxes would have been allocated as follows: Gila County, $21,600; School Equalization, $2,400; Town of Payson, $1,800; Payson Unified School District, $24,600; Gila Community College, $3,900; Fire District Assistance Fund, $500; Gila County Library, $1,000; Northern Gila County, $3,100 and NAVIT, $250. Commercial entities are valuable to a community because they pay double the rate of a home.

Ongoing, our community would have benefited by increased property tax revenues of $60,000 year after year. The ancillary benefits would have been job creation and increased sales tax revenue for the town. One could elaborate on the benefits of job creation, but for the real estate market it would create more able and willing home buyers.

Everyone needs to make their contribution to the infrastructure of our communities, but it has to be in a way that we look beyond the one big hit that has potential to run off good projects and look to the ongoing annuity that will benefit our town, schools, and way of life.

Ray Pugel is a designated broker with Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.

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