Title/Name/Summary
Build Orland - Impact/Permit Fees Reduction
History
The Village of Orland Park continues to foster and support economic development efforts in these challenging times. At the request of Mayor McLaughlin, staff has explored the creation of a new economic development program - Build Orland. The goal of this program is to encourage new growth and development through the temporary reduction and deferral of permit and impact fees.
In summary, Build Orland would offer certain incentives to eligible residential and commercial development projects in the Village. If approved by the Board of Trustees, staff recommends the following program guidelines:
1. Payment of Fees - Payment of fees deferred until Certificate of Occupancy (CO) Issued
Building permits fees are currently collected at the time a building permit is issued. Under this program, developers may choose to postpone payment until the time of CO. However, all remaining fees would be required to be paid to the Village prior to any occupancy. This assists the developer with cash flow during the construction period.
2. Incentive Period - March 15 to December 31st.
The commencement date corresponds to the annual construction season which typically starts on March 15th (exterior work stoppages are lifted on this date, such as concrete flat work).
3. Existing and New Commercial projects (retail, office and industrial) - 10% Reduction
Commercial projects would be eligible for a 10% reduction on permit and Village impact fees. This would include all plan review, inspection and traffic impact fees typically assessed on existing and new commercial projects.
4. New Residential Projects (single family, townhome and condo) - 25% Reduction
New residential projects would be eligible for a 25% reduction on permit and Village impact fees. This would include plan review, inspection and Village impact fees (road and parks). It would not include impact fees collected by the Village for other taxing bodies (i.e. library, schools).
5. Water Tap Fees - 50% reduction - Commercial and Residential
New commercial and residential projects would also be eligible for a 50% reduction on water tap fees. Water tap fees encompass the largest part of a permit application. A typical 5,000 sq. ft. commercial project pays more than $11,600 in water tap fees, which is approximately half of the total permit fees. A 20,000 sq. ft. commercial center pays over $41,000 for water connection. A single family home will pay $5,600 in water connection fees. The 50% reduction in these fees would have a substantial impact on new development projects.
6. Projects with Existing Inducement/Incentive Agreements - Not Eligible
Projects that currently are under existing incentive agreements with the Village would not be eligible for this incentive program. These projects are already receiving incentives from the Village that exceed the financial benefit of this new program.
Financial Impact
The estimated revenue decrease in the General Fund is $29,703. That cost is offset due to additional commercial permits being issued during FY2010 that will generate additional fees. The development related fees will be monitored closely through out the year to determine if any budget shortfall exists.
The estimated revenue decrease in the Park Development Fund is $15,299. The park impact fees are only paid on residential permits. Therefore, a budget adjustment to the Fund is required.
The estimated revenue decrease in the Water and Sewer Fund is $13,981. Many of the large commercial permits issued do not pay water tap fees since they are remodeling existing structures. Therefore, a budget adjustment to the Fund is required. The original projected fund balance for FY2010 for this Fund is $1,267,898 and the fee reduction will reduce the fund balance projection to $1,253,917.
The estimated revenue decrease in the Road Exaction Fund is $21,353. Many of the large commercial permits issued also do not pay the road impact fee since they are remodeling existing structures. Therefore, a budget adjustment to the Fund is required. The original projected fund balance for FY2010 for this Fund is $773,579 and the fee reduction will reduce the fund balance projection to $752,226.
Recommended Action/Motion
I move to approve the adoption of a new program titled “Build Orland” and the guidelines outlined above;
And
To direct staff to prepare all ordinances and documents necessary for final passage.