Mount Pleasant Town Council considered an ordinance that could increase more small business development while postponing transportation projects during last week's meeting.
At the July 14 council meeting, the town held a public hearing to receive comments on the proposed changes to the town's discount rate on Developmental Impact Fees.
The proposed changes were to take Transportation Development Impact Fees current discount rate of 20% to 50% and the Recreation Development Impact Fee current discount rate of 20% to 5%.
Josh Dix, Director of Government Affairs, Charleston Trident Association of Realtors spoke during the public hearing stating that the proposed changes would promote commercial operators coming into town to promote small business.
"A lot of the deals that we have make it difficult with the impact fee as it is. So a reduction would allow us to recruit and retain small businesses coming here instead of losing them to other smaller towns like Georgetown, Beaufort and Bluffton," Dix said.
He said it would be a good step to make Mount Pleasant a business-friendly environment to yield more revenue for the town.
During the council's discussion on first reading of the ordinance to amend the impact fees, Mayor Will Haynie requested that the item not pass first reading until the Transportation Committee had a chance to review how infrastructure products would be impacted. Haynie serves as the chairman of the Transportation Committee.
Councilmember Kathy Landing explained the Economic Development Committee thoroughly reviewed numbers at their July meeting. Landing explained the discounted impact fee rate would allow smaller businesses the ability to open in Mount Pleasant, instead of only big box stores that can afford high impact fees. She said adopting lower rates would help the town generate more long-term revenue.
Councilmember G.M. Whitley asked if the council were to move forward with the reduced impact fee rates, would the town be able to handle the short-term bottom line reduction in addition to existing losses from COVID-19 while the town waited for the long-term revenue from the impact fees to come in.
Town Administrator Eric DeMoura explained they would have to delay transportation projects due to the impact fee schedule. He said impact fees are built out for a community based on prior activity and what is expected to happen on every parcel in terms of development or redevelopment and that transportation is also considered.
"If the rate is a certain rate today and that rate is dropped, likely you will get less money. The opposing argument is going to be that it will spawn and trigger greater activity thus delivering more money," DeMoura said.
Councilmember Jake Rambo shared that based on trends over the past two years following an increase in impact fees, he thinks that lowering the fees would create more economic development.
"The fees are so high, they're so punitive, that people are refusing to do any sort of commercial projects," he said.
Rambo shared that when he was campaigning last fall, most people were concerned about residential over-development and not as concerned about commercial development. He said a common concern he heard from residents on the north end of Mount Pleasant was only large corporations can afford the impact fees to develop.
"All we're doing is pushing out the little guy in favor of the corporation and that doesn't sit right with me," Rambo said.
Landing said lowering the impact fees would allow more childcare centers to come into the town. She explained there is a dire need for these to be built in Mount Pleasant and that there may be a traffic impact if young parents cannot find care within a reasonable distance from their homes.
Councilmember Howard Chapman asked DeMoura what specific transportation projects for the next fiscal year would be impacted by reducing the impact fee discount.
DeMoura said potential impact from this could move the funding for the Billy Swails and Patriots Point Gateway project to 2022. Other projects on the Transportation Impact Fee document that may be pushed back included the Stockdale intersection, U.S. 17 at Anna Knapp Boulevard, the All-America Boulevard project, the Mathis Ferry and Lauda Drive intersection and several others.
"Essentially all the projects we have coming up within the next five years get slid at least by one year," DeMoura said.
Councilmember Tom O'Rourke said the council doesn't have a crystal ball to determine if the impact fees are hurting commercial development and revenue. He said that if it were to spur more businesses in Mount Pleasant that paid fees and taxes, it could potentially yield more revenue for the town. He explained he believed everyone on council would like to help small businesses and that it was a difficult decision.
Haynie explained that impact fees are to maintain the level of service the town provides for taxpayers. He urged that the council not change fees during an economic crisis and create uncertainty by changing something he believes needs more time to study. He also said the transportation projects listed were throughout the entire town and would benefit all residents.
Councilmember Gary Santos shared his concerns with the impact fee adjustment pushing back transportation projects. He explained most residents are upset with traffic and that he does not want to do anything that would delay traffic projects.
A motion to approve first reading of the ordinance to amend the impact fees failed 3-5 with councilmembers Whitley, Landing and Rambo voting in favor. Councilmember Brenda Corley was not in attendance at the meeting. The council's Recreation and Transportation Committees will further review adjusting the town's impact fees in August.
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