Village Lowers Fees for Developers of Stalled Subdivisions

In an attempt to kickstart partially-completed subdivisions in the , trustees this week approved lowering the amount those developers would pay in fees to get building again.

And though the proposal divided the village board last month, when it was first presented, it passed 5-1 on Monday night, with only Trustee Pete Heinz voting against it.

The idea is simple – from now until April 30, 2014, developers of those incomplete subdivisions will see their village impact fees, traffic impact fees, water tap-on fees and permit fees lowered, by a total maximum of $2,000 per new home. The idea was inspired by a question from a developer, according to Jamie Belongia, assistant to the village administrator, and spurred on by Trustee Matt Brolley.

The hope is that the lowered fees will get crews working again on homes in partially-completed subdivisions, including Balmorea, Huntington Chase, Marquis Pointe, Orchard Prairie North and Saratoga Springs.

Residential development has not been stellar over the past few years, according to village records. Only 46 residential building permits were issued in 2011, down from 67 in 2010 and a far cry from the 559 permits issued in 2005, when the real estate market was booming. The tumbling market found developers with buildable lots, but no demand for new houses, so they stopped in their tracks, and some went bankrupt.

This reduction in fees does not apply to new annexation agreements for developments, only existing partially-completed neighborhoods. And it only applies to the village portion of the total impact fee a developer pays, which also includes payments to the school district, library district and fire protection district.

More residential development means more residents, which will increase property tax revenue for the village, and could bring Montgomery closer to the magic 25,000-resident mark that would grant it home rule status. As of the 2010 census, the village had 18,438 residents, an increase over the last special census that led to an additional $158,000 in annual tax revenue.

Brolley said the reduction would also help the village’s reputation among developers, and may encourage them to locate new projects in Montgomery. Finishing those subdivsions, he said, will also lead to completing public improvements there, including sidewalks, curbs and gutters.

Trustee Andy Kaczmarek, who was initially concerned that the rebated amount would not be passed on to new homebuyers, but rather pocketed by the developer, said Monday that the village should offer the same reduction to all existing businesses.

“We hope this program sends a message that we are ready for development and willing to work with builders and developers,” said Village President Marilyn Michelini. “Residential construction is a crucial component for the village’s overall development strategy.”