AGENDA #3
BUDGET WORKING PAPER
TO: W. Calvin Horton, Town Manager
FROM: Kay Johnson, Finance Director
SUBJECT: Request for a Development Fee Waiver for Façade Improvements by the Chapel Hill Downtown Partnership
DATE: June 7, 2006
At the Public Hearing on the Recommended Budget on May 17, 2006, the Council received a request from the Chapel Hill Downtown Partnership for a development fee waiver for those property owners in the Downtown Service District that undertake façade improvements on their buildings.
BACKGROUND
The Partnership adopted a Façade Incentive Grant Program on April 26, 2006. The purpose of the program is to encourage downtown property owners and businesses to invest in the street facing facades of their properties by offering financial assistance in the form of a $1,000 grant. The Partnership has allocated $10,000 for this program in 2006-07 to fund five to 10 façade improvement projects. The Partnership believes that simple changes such as adding or replacing awnings and signs and the proper choice of materials when repairing or replacing windows have a beneficial economic impact that the structure has for the businesses that are housed there and the overall economic to the District.
In conjunction with the Façade Incentive Grant Program, the Partnership has requested that the Town waive any applicable development fees related to façade improvements as a means of encouraging improvements in the District. Currently, the Town only waives development fees for Town projects and 100 percent affordable residential housing projects.
DISCUSSION
If a property owner or business wanted to improve a building’s façade with a new sign or awning with lettering, the project would be subject to Sign Plan Review and would require a fee of $150 for an individual sign. A façade improvement also may require a Zoning Compliance Permit with a fee of $200. In addition, a façade improvement may require a Community Design Commission review ($300 fee) to ensure adherence to any special use permits; however, Community Design Commission reviews are rare for Downtown District projects. In addition to Planning Department fees, if a property owner were to install a new sign a $28 Inspection fee would also be required. However, a property owner making cosmetic changes to their building or business by replacing windows or doors would not be required to pay any Inspection fees.
We expect most façade improvements would involve a fee of $150 to $350.
The Council policy has been not to grant development fee waivers, because the fees collected reflect the cost of performing the reviews. The fees are small relative to the building values. For example, for a building with a taxable value of $200,000 the fees would represent less than one percent of that value.
As an alternative to waiving the fess, the Partnership could pay applicable fees as a part of their program.
RECOMMENDATION
We recommend that we continue the policy of charging businesses for the cost of performing reviews and inspections except in the case of Town projects and 100 percent affordable residential housing.
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