Boulder: The Price of Development

Recently the City Council members discussed revising the City’s impact fees and excise taxes during a study session. The discussion stems from a failed ballot initiative last year that claimed development does not pay its own way. Consultants provided analysis on capital facilities impact fees, transportation impact fees, development excise taxes and the commercial linkage fees that pay for affordable housing.

During the study session Council focused on methodology. For example, how can the City collect money for increased operational costs or more public transit from fees that are legally designed to offset capital expenses? Traditional transportation impact fees focus on increasing road capacity. Boulder wants to take a different approach focusing on the costs of implementing the Transportation Master Plan, which includes recommended spending on bike paths, bus pull-outs and sidewalks, not roads.

Council spent much of the meeting focused on the commercial linkage fee because because they believe workers commuting into Boulder increase demand on the transportation infrastructure. Consultants said the City’s current commercial linkage fee already places Boulder among the highest fees in the country except for resort communities like Aspen and Vail and cities in California. (Not surprisingly, Boulder’s office and retail rents are the highest in the metro area except for downtown Denver and Cherry Creek.)

Note: Another item included in the consultants’ memos related to a public art fee. The City adopted a Community Cultural Plan in 2015 which includes a public art component. The consultants provided analysis on jurisdictions in which developers pay a percentage of the building permit valuation to fund public art, most of which are in California. The consultants focused on the concept of requiring developers to install publically accessible works of art or pay a cash-in-lieu fee towards the Boulder’s Public Art Program for the oversight and installation of artworks elsewhere

Staff recommended the concept of a public art fee should be considered in the context of the overall Community Cultural Plan implementation efforts, separate from the development-related impact fees and excise tax project update. This would allow the funding tools to be considered after the development of the public art policy, and the establishment of goals and objectives for public art.

It will be a few more months before the Boulder City Council sees new specific fee and tax recommendations. In June the Council will continue its discussion at a study session; a public hearing could be scheduled for July.

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