Silencing The Impact Fee
In 2011, the legislature modified the development “impact” fee laws. First, a little “Impact Fees 101.”
Arizona has the policy “new growth pays for itself.” When a developer wants to build a project, the city requires that the developer pay fees for the municipal infrastructure to service the project. Infrastructure includes “hard costs,” sewer lines, water lines, streets and sidewalks. It also includes “soft costs,” infrastructure maintenance and public safety services.
The law requires a “nexus” between the fee and the project. Developer pay fees directly related to the “impact” of the project to municipality. Impact fees have been a constant issue between municipalities and developers. Valley Partnership has been very diligent in protecting commercial developers from unreasonable impact fees.
Commercial projects have generally not been charged fees for residential amenities. These are “Parks and Library Fees.” If you build an office or retail center, the workers and guests will not use parks or libraries. There is no “nexus” between the fee and the commercial project.
In 2011, despite opposition, laws were revised to require municipalities charge impact fees in all categories to all projects. Commercial developers were now responsible to pay parks and library fees. However, the “nexus” requirement still exists.
On behalf of the commercial development industry, as each city revises their impact fee program, Valley Partnership has been arguing that, if commercial projects must pay a parks and library fee, the lack of “nexus” requires that the amount of the fee would be little or nothing at all. People that use commercial projects do not visit parks and libraries. Developers should not have to pay for those amenities.
Working in partnership with municipalities, Valley Partnership has been successful with several cities to keep parks and library fees extremely low or at zero. This permits cities to comply with the law, but not charge an inappropriate fee to commercial projects. The collaborative effort between Valley Partnership and our municipal partners is a great example of fulfilling our mission as “The Valley of the Sun’s Premier Advocacy Group for Responsible Development.