Whitefish City Manager Chuck Stearns is proposing a “local construction stimulus program” that would eliminate impact fees for four months on construction projects within the city’s tax increment district, an area comprising downtown and portions of the outlying neighborhoods.
The Whitefish City Council will vote on the proposal at its regularly scheduled Feb. 1 public meeting, which begins at 7:10 p.m. at City Hall. The issue was originally slated for the council’s Jan. 19 meeting, but was postponed due to time constraints.
In early 2009, the city was forced to lay off a building inspector, largely due to a decline in building permit revenues. At that point, Stearns began researching ways to generate demand for building permits. One original idea was a building permit sale. But as the city was looking at revisions to its impact fee ordinance, Stearns came up with the idea of his current proposal.
Under Stearns’ plan, the city would use its Tax Increment Fund (TIF) to reimburse applicants’ impact fees for any construction project – commercial or residential – within the tax increment district between March 1 and June 30. Other fees, such as building permit fees, would not be reimbursed.
There are three limitations on the impact fees: a reimbursement cap of $50,000 per project; an aggregate cap of $500,000 if reached before June 30; and tax-exempt properties would not be eligible since part of plan’s purpose is to build up the tax base of the district.
In another aspect of the incentive program, city staff would prepare and ask for the passage of a resolution to reduce other fees – such as building, mechanical and plan review – by 40 percent for residential remodels outside of the tax increment district during the same time period.
If the plan is approved, Stearns said property owners will save money on fees, building permit numbers and revenues will increase, and contractors will have more jobs, among other benefits. Also, Stearns added, residential and commercial properties will gain value, which will increase the tax base.