Frederick could reduce impact fees for new businesses -- Gazette.Net


Building fees that prevented celebrity chef Bryan Voltaggio from opening a new restaurant downtown last year would be eliminated under a proposal being considered by Frederick’s Board of Aldermen.

The plan, presented April 18, would not require businesses redeveloping existing properties to pay upfront fees related to the use of water and sewer. Instead, those businesses could be subject to fees later if their water and sewer usage exceeds the previous building’s by 25 percent.

The impact fees — which would have cost Voltaggio and his partner Hilda Staples $205,000 — have been discussed since October. In November, the Board of Aldermen voted to allow businesses to pay the fees in installments.

Voltaggio and Staples stopped plans to remodel the former Carmack Jay’s building, 341 N. Market St., after receiving the bill.

A post on the VOLT restaurant blog on Dec. 18 said the project has been put tabled because of the fees.

“We got some traction from our Mayor and Aldermen after fighting the good fight for six months, but not before we got restless and moved on to other projects,” the post states.

Calls to Staples and Voltaggio were not returned.

Under the current policy, when builders obtain a Frederick city building permit, they must pay an impact fee that the city uses to repay the debt it took on to build the water and sewer systems that allow for that growth. During the past 10 years, the city has borrowed $134 million to increase water and sewer capacity to accommodate growth. The city has collected $27.5 million in impact fees since adopting the policy in 2002.

A business that redevelops an existing space receives credits, but has to pay additional fees based on the number of fixtures — including drains, sinks and toilets — in the project, and the type of business that will occupy the space. Some businesses, like restaurants, use more water than retail stores. The fee is $10,391 per residence, but the amount goes up as fixtures are added. Each fixture costs a combined $1,093. The fees must be paid when the permit is granted.

The city collected about $2.04 million in water and sewer fees in fiscal 2010; $3.65 million in fiscal 2011; and about $2.55 million to date in fiscal 2012, which ends June 30.

On April 18, officials considered whether the cost of additional water and sewer use from new businesses should be paid by the businesses or all water users. The city’s policy requires new businesses to pay for their additional usage, which does not change under the proposed policy.

Richard Griffin, the city’s director of economic development, said the new businesses benefit all residents by offering services.

“All capacity is borne by new users,” Griffin said. “We all benefit some from the new business, the new restaurant.”

Alderman Shelly Aloi (R) agreed, and raised concerns about businesses being able to afford fees, even under the new schedule.

Mayor Randy McClement (R) disagreed, saying the impact fees were part of the process of opening a business, and something he faced when opening the Market New York Bagel and Deli, the restaurant he used to own.

When searching for a location, he looked at the 36 N. Market St. location, as well as 1420 W. Patrick St., now home to Woodsboro bank. Because the Market Street location had better infrastructure for his business, he chose to start there, saving money in impact fees.

“It was my business decision to go with the old bread company,” he said.

The proposal will be brought to a public hearing at an upcoming meeting of the Board of Aldermen. A date has not been set.