City fees seen as barrier to downtown Bellingham growth

As the downtown Bellingham planning revision starts to take shape, talks over how to encourage new development in the district have dredged up old arguments.

Regulatory fees charged by city officials for downtown business owners who move, open new stores, construct or remodel buildings were identified as key barriers to growth in a 2011 survey conducted by the city along with community partnerships and nonprofit groups.

Local developers say the city’s fees are a burden to economic redevelopment.

“These fees are contrary to small entrepreneurs opening up their businesses,” said Jim Bjerke, owner of Pacific Continental Realty and a downtown property manager. “It’s hard for us to help that tenant get placed when the city looks for reasons to charge more fees.”

Fee amounts vary depending on the project and its valuation. There are a variety of fees that go along with obtaining a building permit, including traffic impact fees, building fees, fire permit fees and park impact fees.

The city uses fee revenue to pay for an array of civic services, including maintenance of transportation and infrastructure networks.

Cathy Lehman, a Bellingham city council member who also sits on the city’s planning and community development committee, said she supports the concept of impact fees, but said certain elements of their implementation by city officials could probably be improved.

“The difficulty is really where that balance is for the citizen benefit and the developer benefit,” Lehman said.

Negotiating the permit process

One of the major issues of contention is the very process the city uses to review and issue permits.

Property managers and business owners are urging an overhaul of the system.

Rob Camandona, executive director of the Downtown Bellingham Partnership, said he thinks there’s a great deal of misinformation surrounding the permitting process.

He said occasionally city permitting policies will change, but the changes will not always be communicated down the line to business owners and developers.

When mix-ups happen, developers get discouraged, believing that city officials are making it more difficult for any type of development to happen, he said.

“It’s more a sense that the goalposts get moved,” Camandona said.

Michael Smith, a principal at Zervas Group Architects, said when it comes to attracting new businesses downtown, city officials should adopt a stronger pro-development stance, possibly by considering a temporary reduction or suspension of impact fees.

Smith said the current economic state of downtown Bellingham is fragile, though that is likely due to financial and market factors not under control of the city or private development.

He does believe altering the impact fee system would be a positive change.

“I do believe the city could do more to bolster the downtown economy,” Smith said.

Lehman disagreed that the fees the city charged were exorbitant. She said from the research she’d seen, Bellingham’s impact fees are in line with fees charged by communities of similar size.

She said she is open to developing a smoother, more stable process for builders and property owners to obtain permits and navigate the roster of fees.

A clear system could be a major benefit, Lehman said. By examining the fee system, and being open to changes, the city could even use impact fees to help focus growth in particular areas or of the city, such as the downtown business district, she said.

“We can incentivize certain development in certain areas,” Lehman said. “It’s really worthwhile to look at how impact fees are restraining development here and how we can open it up a little more.”

Bjerke said one of his major problems with the impact fees was what he felt was the city’s stronger emphasis on making money rather than attracting business and new economic activity.

Having spent decades as a downtown business owner and property manager, Bjerke said he thought the city should make changes necessary to attract and retain business.

“They could try to develop a system of fees that doesn’t force small businesses to look elsewhere,” he said.


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