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FBMA rejects impact fee proposal


There will be no impact fees levied against new residential and commercial development in the town of Farragut.

The Farragut Board of Mayor and Aldermen decided, with a vote of 3-2, not to adopt an ordinance that would charge an upfront impact fee of $3,670 per new single family dwelling and $2,614 per every 1,000 square feet of commercial space developed at its Thursday, Sept. 27, meeting at Town Hall.

Former Farragut Mayor Bob Leonard shared his interpretation of ideals as Town founding fathers envisioned, which was met with a standing ovation from the packed auditorium.

“We decided,” Leonard said, “we would create a town that would be a beautiful town in which to live, a town that would not forget its rural heritage, a town that would pay off the debts that we had, because Knoxville had sued us and we had to hire an attorney. We had debt to start with, but we decided to create a town that imposed no taxes and no levies upon its citizens.

“We have lived for 27 years without imposing extra levies, fees or taxes upon the citizens and the business of this community and I believe we can continue to do it long after I have occupied my lot in Pleasant Forest [Cemetery].”

Leonard’s statements were made, however, to an audience that already knew the fate of the ordinance.

Prior to the motion, which was made and seconded, to approve the ordinance, Alderman Dorothy “Dot” LaMarche, announ-ced her intention to vote against adopting the ordinance.

“Three of the other aldermen have written articles in the farragutpress,” LaMarche said. “However, I am the only one who has not come out with exactly where I stand on the impact fees. Tonight I would like to make a few comments.

“I think the impact fees are another form of a tax and I do not think that we need them. Our town is debt free, it’s fiscally sound, and we have been very successful so far. I believe had we put these impact fees in [place] maybe ten years ago it would have been a much better situation.”

LaMarche added that with only 35 percent of the Town left to develop she felt that the Town should continue to work with its developers to negotiate cost shares in a fair and even manner.

“I really feel at this time that we do not need the impact fees, and I will be voting against it,” she said.

LaMarche’s announcement followed announcements earlier in the month by both Mayor W. Edward “Eddy” Ford III and Vice Mayor Michael “Mike” Haynes that they would be voting “no” on the ordinance as well, making

the majority vote

reject.

Alderman Tom Rosseel defended the ordinance by explaining that the cost to build one mile of road is between $2 million and $4 million.

“This year our budget calls for spending $11 million and our revenues are $7 million so clearly we are dipping into our reserves.”

Rosseel added that he did not believe an impact fee would drive away businesses, citing the fact that if business decided to locate in the City of Knoxville to avoid this impact fee they would, in effect, be trading a one-time impact fee for a city tax paid each year they remain on the

property.

Ford opened he floor for public discussion after emphatically stating the town of Farragut is in excellent financial shape.

“Any implication otherwise is absolutely wrong and we have the success stories to prove it,” he said.

Ford read into record letters from some commercial developers planning projects in Farragut.

W.O. “Bill” Vaughn, of The Shopping Center Group, LLC, said in his letter: “Other clients we represent who are considering the Farragut market are JCPenney, Costco, Best Buy and TJC Companies. It is my opinion they will be unable to successfully operate a store in this area in the event a $2.61-per-square-foot impact fee is imposed.”

Pamela Treacy, a Farragut resident and commercial real estate agent expressed her concerns on the subject.

“The concept of creating more government by adding an additional area of responsibility for the Town to manage is not more efficient,” Treacy said. “It is also not consistent with the principles the town of Farragut was founded on — limited government.

Doug Horne, local developer and owner of farragutpress, said, “We certainly need to continue to be investor-friendly. You have to remember, the people who make investments are risk takers, they are entrepreneurs, and they are gamblers gambling with equity and debt money. Any trepidation added to that equation makes people back away.”

Jim ford, president of the Knoxville Association of Realtors, read a letter from the association voicing its opposition to the fees, which stated: “Taxes of this nature would encourage developers to locate outside the Town, but the impact on infrastructure will continue to be stretched with no help from outlying developments.”

Tom Mason spoke on behalf of the Homebuilders Association of Greater Knoxville.

“This fee is not fair because it singles out a specific target, new homebuyers,” he said.

Steve Williams represented himself as a developer as well as a resident.

“We are providing roads and parks for folks who live outside the town of Farragut,” Williams said. “It appears to me that what we need to do is work toward establishing a good business hub in the town of Farragut so that the folks who are using our services will bring their money to the town of Farragut businesses, spend their money there, and the money flows back to pay for the roads and the parks that they are using.”

Farragut Municipal Planning Commission chairman Robert “Bob” Hill, speaking as a citizen, urged Town government to pay close attention to the differences between the Town’s wants and its needs.

Ed Whiting, a Farragut resident, said he felt the town should develop a clearly written policy governing the cost-share negotiations between developers and the Town, rather than implement an impact fee.

Michael Bates, of Michael Bates Homes, said, “The Farragut West Knox Chamber of Commerce Mission Statement reads: ‘to strengthen and support our community by promoting business growth and economic development.’ This proposed impact tax does just the opposite.”

Jim Nixon, Farragut Land Partners, said he concurred with Horne, Treacy, Hill and Leonard.

Bob Markli, a town resident, said, “We have been told with a straight face that this is not a tax. Anything that takes $3,500 dollars out of a citizen’s pocket and puts it in the hands of the government, ladies and gentlemen, that is a tax.”

Mike Stevens, previous president of the Homeowners Association of Greater Knoxville, whom Rosseel had quoted earlier from an old issue of Knoxville News Sentinel as saying the impact fees imposed by cities close to Nashville had no detrimental effect on home sales, rushed to the podium to set, as he said, the record straight.

“I apologize for coming late, I was doing homework with my 14-year-old when I was called and told that I was being quoted for the second time this week that I support these impact fees and that I said it does not affect growth. That is absolutely incorrect. That is a misquote, I am here to tell you and then I am going back to do homework. It does affect growth, it does affect residential construction and I oppose it.”

Ford called for a vote and the proposed ordinance was defeated with Rosseel and John Williams in favor and Ford, La March and Haynes voting against.

 

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