Impact Fee workshop generates objections

Pointed questions, comments and criticisms of many kinds greeted Clancy Mullen of Duncan Associates as he presented to a crowd of realtors and developers about his findings regarding a new town-wide Impact Fee for developers of new property Thursday, March 31, at Town Hall.

“It’s a welcome-to-Farragut tax,” Russell Rackley, president of Rackley Engineering and Consulting, said, arguing against Mullen’s statement that the fee was not a tax. Rackley said he might support Impact Fees if they were lower and only paid for safety improvements and only according to national standards.

“If this has to do with safety, I can understand it, but this doesn’t have to do with safety, this has to do with an ideal, and the Town has the right to come up with whatever vision or ideal they want, providing they can fund it,” Rackley said, adding pedestrian routes, cross sections and drainage should not be covered by Impact Fees.

“To me, $4,000 is not reasonable,” he said. He also said that a 10 year tax of $625 on all residents would be more fair and reasonable than a fee exclusively on new developments.

“That seems the most community type way to do it,” he said. In his opinion, the Town should pay to widen roads such as Union Road rather than making developers pay for improvements.

“Basically stifling growth in the town,” Alderman Bob Markli said, describing what he believed to be the Impact Fee’s effect.

“It’s the buyer of the home that’s ultimately going to pay that,” Brian Shugart, a general contractor and Farragut resident, said, regarding the cost of the fee.

Richard Levenson, chair of the government affairs committee for Knoxville Area Association of Realtors made a similar point, saying that he did not want the cost of building houses to rise.

“Are we ever going to build a house normal people can buy?” Levenson asked.

Mullen countered that based on studies of neighboring towns and counties in California with different Impact Fees that higher Impact Fees did not lower the number of building permits.

Doyle Well, real estate broker and general contractor, said the town was looking for the wrong sources of revenue.

“If you increase your rooftops, if you increase your tax base — I think your 60 percent on Sales Tax is how you’re making money — and your commercial fronts increased, helping fill those up, you’ll find you’ll make a lot more money than what we’re doing on impact with just the new buyers,” he said.

Jennifer Roche, governmental affairs director of KARR said she would prefer the Town hold a meeting on generating growth rather than on Impact Fees.

Mullen said revenue from the fee would support the collector road network, which includes several different roads that provide alternate routes to the more congested ones. The proposed fee also would fund pedestrian routes along them. It would apply to new developments throughout Farragut.

Under the proposal, per unit, developers would pay $4,013 to build single family detached homes and $2,522 to build multi-family units. For developments of 1,000 square feet, developers would pay $4,703 for commercial, $1,517 for warehouses or industrial development, $1,065 for mini-warehouses and $2,948 for public and institutional developments.