Commerce City council asks staff to revisit development, building and impact fees to improve competitiveness

Commerce City councilors on Tuesday reviewed the city's user fees, building permit fee structure and recently updated impact fees and asked staff to return with specific, revised options intended to make the city more competitive with neighboring jurisdictions.

Staff presented how land-use application fees are calculated under a cost-recovery model, explained the building-permit valuation approach (tied to standard valuation tables and local use tax), and summarized impact-fee methodology and recent updates. Jeff Bridal, director of community development, said the city's impact fees had not been updated for roughly 20 years prior to the 2023 revision and that the 2023 package added three new government impact fees (police, public works and general government) in addition to existing roads, drainage and parks fees.

Bridal explained how a nexus study assigns a share of systemwide infrastructure costs to different land uses and presented comparative figures: the city's current combined impact-fee charge for a single-family dwelling runs roughly $20,000 per unit; Castle Rock, he said, charges about $32,000 to $33,000 per unit. Bridal said the 2023 updates reflected a long list of systemwide projects; staff also presented an alternative 'maximum supportable fee' approach focused on projects plausible within a 10-year horizon, which would lower the parks and government-related components and reduce the single-family fee by about $3,000 per unit under that narrower list.

Council members repeatedly asked for ways to balance infrastructure funding with the city's need to attract grocery stores, retail and housing. Council member Ford said Commerce City risks losing retail and grocery prospects to neighboring cities with lower fees: "If we stay at maximum fees... we'll never see build out," he said. Several council members said they want staff to present options to reduce fees and to consider phased or targeted incentives to attract desired development.

Staff outlined several options for council consideration: a targeted simplification of some land-use application fees (for example smaller or routine applications), implementing an annual inflation adjustment tied to a Denver-area index (to avoid steep, infrequent jumps), and lowering certain impact fees (parks and government facilities) by focusing on a shorter, more affordable project list over a 10-year horizon. Bridal said that lowering those fees, based on the revised study, could reduce single-family impact fees by approximately $3,000 and multifamily fees by roughly $2,300 per unit, while some commercial categories would rise or fall modestly depending on the land-use type.

Councilors also discussed fee philosophy: whether the city should pursue full cost recovery for charge-for-service planning reviews, or partly subsidize those fees to keep landing costs lower for builders. City Manager Rogers noted fee choices create trade-offs: lower developer fees can attract investment but put higher demands on other revenue sources or require subsidy from the general fund.

After discussion, council asked staff to continue work on all three areas'land-use application fees, building permit fees and impact fees'and return with detailed options for revisions, including fiscal impacts and recommendations aimed at boosting competitiveness with neighboring cities. Several members said the upcoming land development code update will be an opportunity to realign fee structures and make application types and their fees more consistent with new processes.

No formal ordinance or fee change was adopted at the meeting. Staff said next steps include presenting refined fee alternatives, quantifying the fiscal implications, and proposing a schedule for any ordinance or fee adjustments. Council members also asked staff to engage stakeholders (developers, HOA representatives and regional partners) while refining proposals.