NEWBERRY – The Newberry City Commission is taking steps to stimulate economic development through refunds of commercial development fees.
At the July 13 commission meeting, Planning and Economic Development Director Bryan Thomas reminded the commission that the subject has been brought up previously and they had asked for staff to come back with real world examples of how an economic stimulus program might work.
Some of the purposes behind implementing the incentive program include “encouraging quality commercial development in Newberry, expanding the City’s tax base, providing additional employment opportunities and, hopefully, to encourage upgrading historical commercial buildings in the downtown historic district,” said Thomas.
The proposed development fee refund program will consider refunds reserved for new commercial construction or expansion of existing businesses. The actual amount of the refund will be negotiated between the developer and City staff, subject to approval by the Commission.
Refund consideration will be based on the development meeting or exceeding design standards, the number of new jobs the project will create, the capital investment on the part of the developer and whether renovation of historic commercial structures are part of the development plan.
According to Thomas, a developer may receive up to 100 percent refund on the first $10,000 in development-related fees, up to another 50 percent refund on fees over $10,000 and up to $50,000 for a maximum potential refund of up to $30,000.
Fees that would be eligible for refund are planning, building permits water and wastewater connection and development fees. All development fees would be paid in advance by the developer and then refunded after the project has been completed and reviewed for compliance by the Land Development Regulation (LDR) administrator.
The program is limited annually to $50,000, unless additional program funding is approved by the City Commission. “This program has been budgeted for this year for $50,000,” said City Manager Mike New.
Thomas reviewed pending projects and discussed ways in which reimbursement for refunds of commercial development fees might work.
Using the Fitness Center Project at Newberry Town Center as an example, Thomas said the total project value is just under $800,000. He listed each of the related fees and dollar amounts for a total of $23,432 for all development fees.
Applying the proposed qualification criteria to the Fitness Center Project, the developer would be eligible for fee reimbursement on three out of four criteria. Because the project will be built at Newberry Town Center, the project automatically incorporates the Florida Vernacular Architectural Style. The project will also result in new jobs in the city and the project will also result in a capital investment in Newberry at nearly $800,000. The one qualification the project does not meet is in the area of upgrading historical commercial buildings in downtown Newberry.
The developer in this case could be refunded development fees totaling $16,716, which some may consider a worthwhile inducement to build in Newberry.
The City would recoup tax revenues to reimburse City coffers in three to four taxable years.
The Commission will make the program retroactive to the beginning of this fiscal year as the funds were already included in this year’s budget.
A second amendment to the program provides it is not available to not-for-profit projects as the City would have no way to recoup the costs for its citizens.
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