New development brings two main types of benefits: one-time improvements paid by developers and ongoing annual revenue after projects are built.
One-time improvements and fees (paid by developers):
When a project is approved, the City requires developers to fund or build specific improvements to not only serve their development, but often oversize infrastructure for the future. These are one-time contributions tied to that project.
They can include:
- Roads, utilities and drainage improvements
- Water wells and conveyance
- Parks, trails or open space
- Public safety facilities like fire stations or police expansions
- Development impact fees to help upgrade and renovate public facilities.
- Every new development pays its fair share as one time impact fee to offset its impact to parks, transportation, fire, police, wastewater, water, drainage and public works/administration.
Here are two examples:
- The Homestead project — as part of their approval and negotiation of the Development Agreement, was required to provide, in addition to the standard impacts fees, park dedications and other requirements for new development, the following additional benefits:
- 180 units of affordable housing
- Land dedication for the new fire station
- Enhanced parkland dedication beyond the minimum required for the development
- A flexible grant fee of nearly $3,600 for every new housing unit above the regular impact fees to be used for capital projects
- Railroad separation fee of nearly $5,000 for every new housing unit above, in addition to the traffic impact fee, to help fund the parkway overcrossing
- The Campus project — as part of their approval and negotiation of the Development Agreement, was required to provide, in addition to the standard impacts fees, park dedications and other requirements for new development, the following additional benefits:
- Increased detention basin to accommodate more drainage than required for the development
- Accelerated infrastructure phasing to ensure timely delivery of services to the northern portion of the site, supporting the advancement of approved industrial and research-and-development uses
- Oversizing the roadway along the Pedrick Road frontage beyond development requirements and advancing the construction of the new Professional Parkway to support the timely development of approved industrial and research-and-development uses in the northern portion of the site
- Contribution of $2 million dollars as a public benefit fee, above the regular impact fees to be used for capital projects
- Generation of nearly $59 million dollars in city impact fees
- Aggregation of all city impact fees, as a single per unit fee to allow the City more flexibility to invest those resources into capital projects. This agreement will allow the City to accelerate the funding of the new fire station #82 and police department second floor expansion
These benefits only happen if the projects are approved and built.
Ongoing annual revenue:
Once development is completed, it also generates ongoing revenue through property taxes, sales taxes and local fees. The City receives a portion of property tax and sales tax, while other government agencies receive the majority of those taxes.
The City also recently initiated a new citywide Community Facilities District (CFD) to offset the impacts of new housing development on City services and operations. The new CFD is required for any new housing development approved after 2023 and will fund the expected costs of City services and operations attributable to new development that are not otherwise funded through revenues the City collects in the form of property taxes, sales taxes and other similar revenue sources.
The annual fee was based on a fiscal impact analysis conducted to identify the funding gap between traditional annual revenues and the cost of serving a new housing unit. These ongoing revenue sources fund services such as police, fire protection, road maintenance, parks and general local government operations over time.