The building fees that Palm Beach County charges developers for commercial construction will go up for the first time since 2006, but not as much as originally proposed.
County commissioners on Tuesday voted 6-1 to increase the impact fees on commercial development by as much as 47 percent over the next two years. Impact fees on homes will drop this year but rise next year, commissioners decided.
Commissioners had considered a proposal that would have increased rates from 17 to 74 percent, depending on the type of construction. But they backed away from that plan after hearing from several industry leaders who argued large increases could hurt the already sluggish commercial real estate market.
Commissioner Jess Santamaria cast the sole vote against the hike. He has argued the fees are too low and don’t cover the county’s costs for providing services to new developments.
The county collects the fees to defer the cost of seven categories of government facilities or services needed to support development: public buildings, libraries, roads, parks, schools, law enforcement and fire-rescue. Beginning in June, fees for parks, law enforcement, fire-rescue and schools will decrease — and those for public buildings, libraries and roads will increase.
The commission agreed to increase those three fees by 25 percent this year. Fees for public buildings, libraries and roads will rise another 26 percent next year, the commission agreed.
The net result will be an overall increase in the fees for office and commercial construction. Fees on residential rates fall by 9.8 percent in June, but will rise by 2.8 percent in 2014.
Carol Bowen, a representative of the East Coast chapter of the Associated Builders and Contractors, told commissioners that those looking to build new commercial projects in Palm Beach County may look elsewhere if impact fees are too high.
“There is not a lot of commercial construction going on in Palm Beach County,” Bowen said. “The bigger picture and the bigger area of concern is the impact this might have on proposed future development.”
Commissioner Hal Valeche agreed. He urged the commission limit the increase and soften the blow to the building industry.
“The residential market has picked up, largely because of outside capital coming into it,” Valeche said. “The commercial market is languishing…. I just don’t want to put any more stumbling blocks in the way.”
Under the plan approved by commissioners, total impact fees charged for building a house ranging in size from 1,400 to 1,999 square feet would increase to $10,313 in 2014 from $10,029; the fees for a 10,000-square-foot office building would rise to $50,906 in 2014 from $35,392; and for a 10,000-square-foot commercial building, to $144,134 in 2014, from $97,866.
The county reviews its impact fees every two years. The next review is scheduled to begin next year.