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Farragut doesn’t need an impact fee

The Farragut Board of Mayor and Aldermen have before them something that many in the town of Farragut have fought since the town’s inception in 1980 — an ordinance implementing a tax.

Called by its official name — Impact Fee — this method of generating revenue is nothing more than a veiled tax being levied on the Town’s lifeblood — new commercial and residential development.

Those who crafted the ordinance study argue that an impact fee is not a tax but a “one-time, up-front charge that is levied on new development, which would pay only for off-site capital facilities.”

A sales tax also is a one-time, up-front charge that is levied on new retail purchases, which in Farragut is 9.75 percent.

Funds generated from commercial impact fees would be earmarked for road improvements within the town. Funds from residential fees also would go to improving existing Town roads and also Town public parks. The town of Farragut currently maintains three parks within its boundaries with a fourth on the way.

Mayor W. Edward “Eddy” Ford III has questioned why the Town needs this ordinance and said he doesn’t understand why new home buyers are being singled out to pay for the privileges Farragut residents have enjoyed for years.

The mayor is in a precarious situation since he is in negotiations to sell about 70 acres of property to commercial developer Michael Bates and could be required to recuse himself from a vote on this ordinance — that would be a question for Town attorney Tom Hale to address.

According to Sperling’s Best Places, Farragut’s unemployment rate is 3.60 percent, with job growth of negative 0.98 percent (which is probably higher with the recent closing of EdisonPark Steakhouse and other eateries). Future job growth over the next 10 years, the listing says, is predicted to be 20.80 percent.

Will this growth prediction hold true with a $2.61 per square foot commercial impact fee?

One major Farragut developer currently in negotiations with national retail chains says he holds letters from retail sources stating they will consider looking elsewhere for available land if Farragut implements an impact fee.

What that would mean for the town of Farragut is less sales tax collected. Sales tax contributes about 40 percent of the Town’s operating funds.

As one developer told farragutpress, a 100,000-square-foot store would generate a one-time payout of about $261,000. How much sales tax revenue would be lost to the Town over time if that company chose to locate elsewhere, say in Knox or Loudon County?

The roads the Town wants to improve with impact fees consist largely of cut-through roads used it seems more by non-Farragut residents and ordinance-banned tractor-trailers avoiding scales — Kingston Pike is a state highway maintained by the Tennessee Department of Transportation — than Town residents. Plus, these roads are upgraded when developers build — examples are Evans and Everett roads.

Towns comparable in size with Farragut implement impact fees because of dwindling funds from state and federal government geared to improve schools, water systems, police and fire protection — none of which the town of Farragut funds or offers.

As many know, farragutpress is owned by a commercial developer and this newspaper derives its income from the sale of advertising to commercial businesses in and around the town of Farragut and thus has a vested interest in business growth in this community.

Regardless of this newspaper’s status, the town of Farragut should be doing all it can to develop as much of its remaining available space — about 35 percent — as revenue-generating commercial property and sales tax producing destinations.

This is not the time for Farragut to be implementing a barrier to commercial or residential development, but a time to attract sales tax producing businesses.

The Board of Mayor and Aldermen should vote no to an impact fee.


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