White River Junction
Hartford is one of a handful of towns in the state that charges impact fees to developers.
The fees are meant to go toward the costs of providing services such as wastewater discharge and roads to new buildings and developments.
Last year, Hartford charged Briggs “about $7,000,” he said, to receive a construction permit for his $700,000 Newberry Market project, an interior renovation at the site of the former J.J. Newberry five-and-dime store that will, among other things, expand the Tuckerbox restaurant and create a space for a year-round farmers market inside the Gates Building, which includes the Hotel Coolidge.
But Briggs, who first raised the issue before the Hartford Selectboard last month, says the town is only allowed to charge impact fees for new or expanded buildings; because the footprint of the hotel will be unchanged by the Newberry project, he says he should be exempt.
“Essentially, the thinking is we’re not creating any kind of new impact,” Briggs told the Selectboard during a May 10 meeting.
Rebecca White, vice chairwoman of the Selectboard, said square footage isn’t always the best determinant of whether an impact fee should be assessed.
“The spirit of (the law) is that we would expect him to pay the fees,” she said, shortly before the Selectboard heard a report on the issue on Tuesday night.
What should matter, she said, is whether Briggs’ project will increase the burden on the public infrastructure.
“The goal is to accurately account for that,” said White, “not just if you’re expanding the footprint of a building.”
In a May 24 memo to the Selectboard, interim Town Manager Pat MacQueen said Briggs’ argument seems to have merit.
“My reading of this language,” he wrote, “mirrors that of Mr. Briggs. … I would have to agree with Mr. Briggs’ assertion that his project as proposed is exempt from Impact Fees.”
The town ordinance covering impact fees says they apply to “the gross leasable area of any new nonresidential building” and “any new gross leasable area created by the reconstruction, alteration, modification or addition to any nonresidential building.”
Lori Hirshfield, executive director of the town’s Planning Department, referred questions about Briggs’ specific situation to MacQueen, but said the typical procedure is for a building owner to pay 10 percent of an assessed impact fee to receive a building permit, with a lien placed on the property for the remaining 90 percent. Assessed liens need to be paid in full in order to receive a certificate of occupancy, she said.
The fees assessed to Briggs, she said, were for water and wastewater impacts.
He paid 10 percent to the Department of Public Works.
Briggs said that, rather than delay the project, he paid the 10 percent, but he has since questioned the validity of fees that aren’t based on expansions to square footage.
After initial objections to staff did not result in a withdrawal of the fees, he made his public appeal to the Selectboard.
MacQueen has referred the issue to the town’s legal counsel for advice on how to handle the complaint.
In the memo, MacQueen also said that, after reviewing the town code and other references to impact fees embedded within other regulations, he sees other possible problems that “do seem to confuse it quite a bit.”
Different town regulations mention impact fees, but the references seem to contradict each other in certain ways.
A section on independent contracts, and a water ordinance written in 1989, seem to suggest that impact fees are assessed based not on changes in square footage, but on changes in use of town services — the ideal that White mentioned.
But even if this turned out to be a legal basis for assessing such fees, MacQueen wrote, it’s unlikely that they would apply to the Briggs building, because it predates the 1989 rules and would have been grandfathered in.
White said she was happy Briggs had raised the issue, and given the town a chance to examine its process for possible changes.
Briggs said he wasn’t trying to shirk his duty to pay his fair share.
“We’ll be happy to pay our freight in terms of increased real estate taxes,” he said.
William Ellis, the town’s attorney, weighed in on the topic in an email exchange with MacQueen and other town officials. The Town Code only provides for the town to collect impact fees related to changes in square footage, he said.
Ellis said that there are arguments to support the right of the town to assess impact fees based on an increase in wastewater discharge, but he recommended that the Selectboard update the Code to make that more clear. He suggested that it may have been omitted from the code by clerical error.
Ellis said no fee should have been assessed to Briggs under the Town Code.
“Whether or not a wastewater or water impact fee may be assessed will be determined by whether or not the proposed use will require an additional allocation of water or wastewater capacity,” he wrote in the email.
White said that, even if it turns out Briggs should not have been charged fees, that doesn’t mean the town will owe large sums of money to other developers who have paid such fees in similar circumstances.
“This is a pretty unique situation,” she said. “We don’t have a lot of businesses that renovate without expanding.”
Impact fees have become more common in the years since towns first began adopting them as a means to fund the public infrastructure, but they remain an unpopular tool for those who feel they aren’t being applied fairly.
According to the national municipal planning consultants Duncan Associates, impact fees became broadly popular in the 1970s, and are currently provided for in the laws of 26 states. In 1989, Vermont adopted an impact fee law “to enable municipalities to require the beneficiaries of new development to pay their proportionate share of the cost of municipal and school capital projects which benefit them and to require them to pay for or mitigate the negative effects of construction.”
When assessing impact fees, towns are required to use a formula that ties the development directly to the public infrastructure costs that accompany it; towns aren’t allowed to collect more money than the cost of the infrastructure, and unspent fees have to be returned after six years.
In Vermont, a lawsuit against the town of Hartford went to the Supreme Court when a group of residents objected to the 1987 implementation of a residential impact fee that charged new residences $600 per bedroom to underwrite the cost of an expansion to the town’s sewage capacity.
In 1993, the court found the town had acted properly, and upheld Hartford’s right to assess the fees.
A 2012 survey by the Vermont League of Cities and Towns found that, of 97 responding communities, only seven assess impact fees — Colchester, Essex, Georgia, Milton, Richmond, Shelburne and St. Albans.
White said that, in the bigger picture, it’s important to provide a regulatory environment that allows development to proceed in Hartford, where a series of large building projects have revitalized downtown White River Junction in recent years.
“What we’ve heard from developers in the community is that they want it to be a more understandable process,” White said. “I don’t know if we would want to change the spirit of the law, but we want businesses to come and expand, without feeling bogged down.”
Though critics of impact fees argue that they deter development, a 2003 study by the Brookings Institution, a nonprofit research organization, found that impact fees do not slow job growth, and help communities to target infrastructure improvements efficiently.
Matt Hongoltz-Hetling can be reached at mhonghet@vnews.com or 603-727-3211.