By Sandy Barnes
Offering incentives to developers is a critical issue for trustees who believe they are essential to growth and additional revenues for the Town.
However, how generous the Town can be without compromising its financial stability is a tough decision the Town Board and staff grappled with at the Tuesday, Jan.20 meeting.
While helpful and attractive to developers, Trustee Michael Patrick pointed out that giving them too much of a break could harm the Town’s lean financial resources. On the other hand, without incentives, the Town also stands to lose revenue if no building occurs this year, as Mayor Pro Tem David Gregg noted during the discussion.
“Certainly staff is aware of the current financial status of the Town,” said Planner Tim Katers while presenting potential development incentives to the Board.
According to the figures Katers included the proposal, building permit fees for a 3,000 square foot home in Mary’s Farm would total nearly $33,000.
Katers also noted there is a general perception that it is expensive and relatively difficult to develop property in Berthoud, and some developers believe the Town still has a building moratorium.
To remedy the situation, Katers proposed delaying payment of all building permit fees until the Certificate of Occupancy is issued, waiving the density transfer fee and reducing the Letter of Credit for public improvements from the present 115 percent to a more appealing 30 percent of their value. Included in his proposal were fee reductions totaling $5,867.
Another possibility Katers offered would be for the Certificate of Occupancy to be delayed until after the closing, making the owner responsible for the fees. He also noted that a revision to the Town’s development code is a part of the effort to encourage growth.
“From a practical standpoint, the onus needs to be on the builder,” said Trustee Jeff Hindman, who supported the idea of delaying permit fees to help contain upfront costs. “Do we know that actual costs are [to the Town] for average building permits?” he asked.
Katers replied that a general average would be approximately $600.
Trustee Glen Buckingham and others on the Board said they would like to see an additional $2,000 taken off building permit fees. However, Buckingham said he was “very nervous” about delaying payment of fees until the Certificate of Occupancy was issued. “I think this is suicidal to the community,” he remarked.
“The C.O. is a powerful tool to set payment of fees,” Hindman said.
Trustees also discussed the wisdom of imposing a sunset on building completion ranging from one to two or three years.
Developers who came to the meeting offered suggestions for incentives that were more aggressive than those the Town Board was considering.
“I think you can whack the crap out of these fees,” said Larry Bebo. “It needs to be a big, bold thing,” he added. However, Bebo said he didn’t agree with a sunset clause for development or delaying the C.O. “I disagree with the whole notion of the Town in the banking business,” he remarked.
“Waive the whole thing,” said Scott Sarbaugh. “You’ve got to be better than the surrounding towns … It’s a win-win with the development community.”
Near the end of the meeting, Gregg, who was acting in behalf of absent Mayor Tom Patterson, sought a consensus of opinion from the trustees.
“It’s absolutely essential that Berthoud develop a stimulus,” said Hindman, while also asking for more information from the Town about the financial implications of suggested incentives.
Trustee John Bauer said he supported delaying payment of permit fees and further fee reductions—a measure with which Trustee Dick Shepard agreed.
Shepard and others on the Board stressed the importance of deciding on incentives as soon as possible and getting the message to builders. “I think we should try to implement this quickly,” Shepard said.
In his remarks, Town Administrator Jim White advised caution in making decisions about development incentives. “We have to protect the Town financially,” he said. “Our general fund is our weakest. What we can absorb is a more important question.”