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Kalispell Criticized for Traffic Impact Fee Exemptions

By Beacon Staff

Kalispell Planning Director Tom Jentz defended his department Monday night against accusations that city officials had not been forthright regarding which developers would have to pay transportation impact fees.

Mayre Flowers, executive director of Citizens for a Better Flathead, criticized the city for an internal memo dated March 16 which listed the developments in Kalispell that would be exempt from paying transportation impact fees, so long as the developers received a building permit from the Planning Department by Oct. 1 – six months after the traffic impact fees took effect April 1.

“The public was led to understand that any business that did not have a building permit by April 1 would be charged an impact fee,” Flowers told the city council at a work session Monday. “Apparently our new Wal-Mart will now pay no impact fee.”

That’s, I think, a backdoor process,” she added. “I don’t think this is what the public expected.”

The new Wal-Mart Super Center, currently under construction in north Kalispell’s Hutton Ranch Plaza, is not obligated to pay the traffic impact fees. A planned Hilton Homewood Suites, and several other Hutton Ranch lots, are also currently exempt from transportation impact fees so long as they receive building permits before October 1.

A Kohl’s department store, which recently pulled out of building a new location in Spring Prairie Center, would have been exempt from paying traffic impact fees, Jentz said. While Spring Prairie Center developer Mark Goldberg said he would have paid the traffic impact fees for Kohl’s if necessary, uncertainty about the cost of the fees while the city debated adopting them held up the deal, and was a factor in Kohl’s decision to opt out of Kalispell.

Jentz explained the memo, saying it was a list of all projects in the city of Kalispell where developers had begun the application process to get a building permit – but may not have been issued one yet. These developers may have already taken steps to gain approval from the architectural review committee, or paid for a building site review, but had not yet undertaken the final step of having the building permit in their hands.

Any developer who does not have a building permit in hand by October 1 must pay the transportation impact fees for their projects. And any developer who does not break ground on their project within six months of receiving a building permit must re-apply. Many developers on the list were those who had taken initial permit application steps, Jentz said, but they probably wouldn’t begin construction any time soon due to the economy and the difficulty of obtaining financing for projects.

The Planning Department employed the same six-month “grace period” when other impact fees were adopted several years ago by the city, Jentz said, and this maintained consistency with how the department implemented the new traffic impact fee policy.

“The memo you see here is an attempt to honor the process of those working with the city,” he added. “What do you do with the projects in process? Do you encourage a lawsuit because someone feels that they’ve been wronged?”

But while most council members offered little reaction to Flowers’ criticism, some were surprised.

“I feel a little blindsided in a way,” Councilman Randy Kenyon said. “The mantra was ‘building permit’…now it’s architectural review, it’s site review, it’s all these other things.”

“I’m not comfortable with the way it was presented,” Kenyon added.

Nor was Flowers satisfied with the explanation, saying the list of developers exempt from impact fees represented a kind of de facto grandfathering of many of the same developers who lobbied so hard against paying the impact fees – and now many of those developers may not be paying the fees anyway.

“This is highly unfair to the public,” Flowers said. “The council debated grandfathering and they decided not to do it.”

“This wasn’t a fair and transparent process,” she added.