In response to unrest about Town Center development, Mercer Island enacted a moratorium on new building downtown and promised to look into the way it charges developers for adverse community impacts.
The School District submitted a letter to the city asking that the previous mitigation formula be updated to reflect the cost of a new classroom. The fee would be about $5,900 per unit, for two or more bedroom units. That higher fee went into effect immediately and will be applied to future developments, including the Hines project.
At their meeting on March 16, City Councilmembers asked why the fee was only applied one time, as a child entering the school system could potentially have an impact on all three levels: elementary, middle and high school.
Some citizens worry that the school district isn’t accounting for all of the students living in Town Center.
“We’re using 2012 enrollment data to predict what the ratio of units to student would be,” said Salim Nice, member of the Town Center Stakeholders group. “You have one facility in there – the 7700 building – listed as having one student, and it has nine.”
Recent developments have paid SEPA mitigation fees to Mercer Island schools. Last year, Legacy paid $90,556. In 2002, The Mercer paid $93,696 and in 2001, Island Market paid $43,244, Avellino paid $19,608.00 and Newell Court paid $17,160.
Other developments paid no fees to schools, including Aviara, 7800 Plaza, 77 Central and Aljoya.
“You could make a strong argument that incremental costs include middle school and high school. It’s a system,” said Councilmember Mike Cero. “Our present taxpayers are paying for growth, and that’s not the way it works. Growth pays for growth, and this is the mechanism that we have.”
The city has two alternative mechanisms. At its 2015 Planning Session, the Council requested information about the relative merits of State Environmental Policy Act (SEPA) mitigation fees and Growth Management Act (GMA) impact fees.
Mercer Island currently does not charge impact fees, as they must be used to support new growth and development. Because nearly all of Mercer Island is fully developed, the use of GMA impact fees for redevelopment is constrained.
For permits in the Mercer Island Town Center, SEPA’s “substantive authority” had been used to impose conditions on developments to mitigate for significant probable adverse environmental impacts, especially traffic impacts.
Projects have contributed money toward traffic signals – Starbucks paid $28,000, The Mercer paid $18,667, Island Square paid $3,645, 7700 Central paid $33,950, 7800 Plaza paid $9,143 and Aviara paid $35,500. Those funds paid for about 10 percent of the $1 million traffic signal improvement project.
In the last five years, the city issued 137 SEPA determinations. Of these, only five could potentially be subject to SEPA mitigation fees. The rest were for shoreline improvements, code amendments, public works projects, wireless communication facilities and replacement single family homes, said Development Services Group (DSG) Director Scott Greenberg.
A developer is required to submit a SEPA Environmental Checklist with the permit application and provide appropriate impact analysis, like a traffic study, and then come to agreement with city staff regarding mitigation.
A GMA impact fee may be imposed for “public facilities” owned or operated by government entities including: public streets and roads, publicly owned parks, open spaces and recreational facilities, school facilities and fire protection facilities.
The Council requested that staff, along with a potential consultant, continue a preliminary analysis of impact fees, and conduct an analysis for fees on single-family residences.
In the last five years, the city issued 190 building permits for new single-family homes and 138 single-family demolition permits. This is a net increase of 52 new homes for which GMA impact fees could have been collected. All of these houses were exempt from SEPA, so collection of SEPA mitigation fees was not possible, Greenberg said.
