After outcry, Springfield lowering development permit fees, by Susan Palmer The Register Guard

SPRINGFIELD, OREGON – The cost of doing development business in Springfield just got cheaper, thanks to a fee change passed by the City Council.

Beginning this month, the “impervious surface fee” associated with commercial, industrial or multifamily projects will drop by 80 percent.

The change comes in response to an outcry by developers, who have complained that the city’s fees are significantly higher than those of other Oregon communities and belie Springfield’s unofficial “open for business” slogan.

The city charges developers to recoup its staffing costs to make sure projects comply with local, state and federal regulations.

In overseeing what’s known as site plan reviews, the city scales costs so that small developments pay less and large developments pay more.

Under the old fee structure, a project with an overall footprint of more than 100,000 square feet (including both the building and parking areas) would have paid $108,341.

By far the largest part of the total was driven by the impervious surface fee: $93,198.

But after a couple of informal meetings with developers, the city staff recommended not only that the fee be reduced, but that the staff take a closer look at other fees as well as its overall development review process, which some argue is cumbersome and burdened with last-minute surprises.

The council voted in July to change the fee, and expects to hear recommendations for more changes in the fall, after additional meetings between city employees and local developers.

Since the new lower fee went into effect, just one project has come down the city’s development pipeline, urban planning supervisor Jim Donovan said.

The Eastside Baptist Church plans a 44,000-square-foot remodel. The difference between the old and new fee for this project: $14,300 vs. $1,700, Donovan said.

While the change is welcome, the city needs to do more, said Terry McDonald, executive director of St. Vincent de Paul of Lane County. The nonprofit agency has built several low-income housing projects in Eugene and Springfield.

“It’s not just in one fee area, it’s multiple and it’s surprise driven,” McDonald said. “You never find out what your fees are going to be until you’re committed, and that is a disaster for developers.”

McDonald said he has been hit with additional fees well after receiving a certificate of occupancy on new construction or signing a lease on a remodel project.

“The city staff in many ways have always been very supportive of the development community, nonprofit and for-profit. I believe they want to make it better, but at this point, the system is broken,” he said.

That’s about what other developers are telling Springfield Mayor Sid Leiken.

“Overall, the response has been positive, but clearly the development community wants more,” Leiken said. “I think of it (the reduced fee) as a confidence builder between the city and developers.”

The city’s development services budget will take a hit from the reduction.

A city report on the issue calculated that the $41,888 it received in impervious surface fees for three development projects in the 2008-2009 fiscal year, would be just $7,700 under the new calculation.

But while the 80 percent reduction seems large on its face, its just one of approximately 100 different fees that get assessed during development and permitting, and represents just 8 percent of the total fees the city charges, Donavan said.

While the reduced revenue might hurt in the short term, Leiken thinks it will benefit the city over the long haul.

“I’m trying to look at this from the 30,000 foot level,” he said. “To make adjustments now to encourage developers to want to do business here, we’re going to reap those benefits in the future.”