Monday, Aug. 09, 2010 MODESTO BEE:
In an effort to stimulate a stagnant business climate in Modesto, city leaders have considered a temporary suspension of the capital facility fee charged to commercial development. City staff studied the idea and recommend no more than a six-month suspension. The city's economic development committee will discuss the fee waiver today. A report from Brent Sinclair, community and economic development director, says the city could lose $375,000 if fees are discounted by 50 percent for six months. The city uses the fee revenue to pay for roads, parks, fire stations and police facilities. The report says the suspension won't affect the funding of daily city operations but could delay projects that rely on development fees.The economic development committee first considered the fee waiver in May after receiving a written proposal from real estate developer Niniv Tamimi. The developer thought it might encourage business expansions and create jobs in a county where the unemployment rate tops 17 percent.
At the same time, city officials are reviewing the fees charged to residential, commercial and industrial development, because of the economic downturn and declining land values. The process could result in a 16 percent reduction in residential fees and 6 percent drop in retail project fees effective Aug. 22, based on the cheaper cost of buying land for parks and road improvements. Further fee reductions could go into effect by Jan. 1. Sinclair's report says the development fees could be reduced by an additional 20 percent or more.
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