Hendersonville aldermen split over development impact fees; residential plan advances after amendment

After more than two hours of discussion at the Hendersonville Board of Mayor and Aldermen meeting on Jan. 13, the body voted down a first-reading ordinance that would have charged both commercial and residential developments impact fees, then approved a separate residential-focused ordinance on first reading after an amendment that reduced single-family fees.

The discussion began when staff summarized three draft ordinances derived from a Tishler Bice impact-fee study: a combined commercial-and-residential option, a residential-only option with a changing fee schedule, and a standalone credits ordinance allowing developers to receive credit by performing approved off-site or on-site work. City staff said the combined version would cap charges at 50% of the study’s statutory maximum. Staff estimated the gross annual fee potential for the combined option at roughly $424,000 from commercial and $1.4 million from residential permits but cautioned that vesting, planned-development exemptions and negotiated off-site work would likely reduce actual receipts to tens of thousands of dollars in the near term.

Aldermen split along familiar lines. Supporters said fees would place the cost of new infrastructure on the cost causer and help preserve the city’s general fund and property-tax stability; opponents warned the fee could discourage commercial investment and reduce the bargaining leverage that has produced negotiated off-site improvements in the past. "We didn't have to pay them to come here," Alderman Goodwin said of major commercial recruits, arguing that negotiated improvements sometimes produced more than an impact fee would. Alderman Robertson cited T.C.A. § 6-2-201(15) and framed impact fees as a lawful, targeted fee rather than a tax.

The combined ordinance (first-reading Ordinance 2025‑523) failed on a 4–9 vote. The board then considered a residential-focused ordinance (2025‑525). Alderman Collins proposed an amendment to the fee table that reduced the single-family charge from $5,000 to $3,500 and set multifamily per-unit fees at $2,500. The amendment passed 10–3, and the amended ordinance passed first reading 10–3.

Staff emphasized that planned developments would remain exempt under the ordinance language and reiterated that impact fees must fund incremental capital improvements for transportation and parks, not routine maintenance. City staff and the planning commission also highlighted the credit mechanism, which allows developers to get fee credit for agreed construction or improvements instead of paying into the city fund. The board separately advanced a standalone credits ordinance (2025‑526) clarifying credit rules and expirations; that measure passed first reading with a majority vote.

Mayor Robertson said the city will continue to refine the ordinances before later readings and cautioned that legal risk exists: "We stand a very likely chance to be sued on this," one member said during debate, and staff noted the need to create a strong record and a defensible nexus between fees and the capital projects they would fund. Planning staff said studies to justify fees typically cost tens of thousands of dollars and must be refreshed every five years.

The next procedural steps are additional ordinance readings and administrative work to codify fee tables and credit language. The board also directed staff to include retroactive-refund mechanics for a separate tree-bank waiver resolution (passed earlier in the meeting) through the midyear budget process.

Votes at a glance - Ordinance 2025‑523 (commercial + residential) — first reading failed 4–9. - Ordinance 2025‑525 (residential-focused, amended) — amendment passed 10–3; ordinance passed first reading 10–3. - Ordinance 2025‑526 (credits) — passed first reading (majority).

What’s next: The ordinances will return for subsequent readings and technical edits, including insertion of the credit language and final fee tables.