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Mount Pleasant approves huge hike in development impact fees

Mount Pleasant Town Council (copy)

Mount Pleasant Town Council member Jim Owens (right) authored the initial plan to sharply raise development impact fees. Councilman Mark Smith (holding documents) has urged restraint. Both pictured here at a March 14, 2017 Town Council meeting. File/Grace Beahm/Staff

MOUNT PLEASANT — From single-family homes to shopping centers, the costs of building in this fast-growing town will start soaring in less than three months, quadrupling in some cases as freshly-approved fee hikes are fully phased in.

Diane Sancho, director of a proposed daycare center in the north end of town for people with Alzheimer's disease, said the higher impact fees could result in the facility's having to charge clients more per day. 

For that center, it could be a question of whether they can get a building permit before July 1, when the first big rate hike kicks in.

Some town residents will be celebrating the change. Dunes West resident Catherine Bernard urged Town Council members Monday to impose the highest impact fees allowed by law on all development, and to also temporarily halt all development.

"People are telling me they plan to move when their kids graduate from high school due to the traffic and overcrowding," said Bernard, who lives in Mount Pleasant's largest subdivision.

The town of more than 80,000 is among the fastest-growing in the eastern U.S., and a backlash has developed. The Town Council has twice imposed moratoriums on new apartment developments, passed other growth restrictions and Monday voted 5-4 for sharply higher impact fees.

The impact fee decision was a victory for those who believe the town's taxpayers have been subsidizing growth because the town hasn't charged enough to pay for the new services and improvements a rising population demands. In South Carolina, impact fees must be designed to pay for anticipated growth-related needs rather than be a source of funding to fix existing problems.

Among opponents of the fee changes, some were upset they won't increase even more and faster. Others thought the increases went too far and will make homes less affordable and businesses feel unwelcome.

"The fact is, we haven't raised them in decades," said Councilman Jim Owens, who proposed the fee-raising plan the council approved. Owens said he received help from an economist, who the councilman declined to identify. 

Councilman Paul Gawrych, one of the four who voted against the plan, said raising impact fees seems politically popular but it's not right. He noted that many towns and cities in South Carolina have no impact fees. The town's existing fees already are among the region's highest.

"I think we should have left them where they are," Gawrych said.

Councilman Mark Smith also opposed the plan, saying it wasn't fair to small businesses. The other two "no" votes came because councilmen Joe Bustos and Will Haynie didn't think impact fees were being raised enough.

"I am looking, today, for the most relief we can get, to get the subsidy for new development off the backs of the taxpayers," said Haynie, a first-term councilman who is running for mayor later this year.

The Town Council vote was unusual in that it happened at a mid-day special meeting, and no one knew exactly what the council would be voting on until the meeting took place. That's because an earlier version of a plan to raise impact fees received initial passage in February but was considered a place-holder that was expected to change. The changes came Monday as an amendment, followed by final approve of the ordinance.

Just that morning, the council's Finance Committee was unable to agree on a recommendation for impact fees, reflecting the divided council. Mayor Linda Page later cast the tie-breaking vote to approve the increases. Along with Page and Owens, councilmen Bob Brimmer, Elton Carrier and Gary Santos also voted for the measure.

Impact fees for home construction will more than triple by the summer of 2018, but it's business that will see the big numbers. The impact fees to build a 50,000-square-foot medical office building will increase by more than $500,000 by July 2018.

Here are some specific examples of how the town's impact fees will soar for several types of development, starting with a large increase July 1, then two more increases on Jan. 1 and July 1, 2018. Fees in 2018 could be higher due to an inflation adjustment.

  • Single-family home: From $1,860 now to $3,850 July 1, then $5,005 Jan. 1, then $6,161 July 1, 2018.
  • Restaurant (7,500 square feet): From $57,716 now to $127,808 July 1, then $166,082 Jan. 1, then $204,432 July 1, 2018.
  • Shopping center (100,000 square feet): From $328,000 now to $706,101 July 1, then $918,431 Jan. 1, then $1.13 million July 1, 2018.

Delaying the first large increase until July 1 was a concession to some council members and concerned businesses who said an immediate increase would be unfair. Planned businesses that don't have building permits could have been caught unprepared.

Local attorney Brian Hellman, representing a client with development plans in Mount Pleasant, said if a fee increase took effect immediately, it would be like driving across the Arthur Ravenel Jr. Bridge only to find, upon reaching Mount Pleasant, there's a $50 toll that didn't exist yesterday.

The big increase July 1 will raise impact fees to 50 percent of the cost of the actual impacts, calculated in a town-commissioned study.

Reach David Slade at 843-937-5552 and follow him on Twitter @DSladeNews.

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