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Committee weighs plan to charge transportation impact fees on non-residential development starting Jan. 1, 2027
Summary
Staff proposed applying transportation capital impact fees to non-residential development, eliminating the three-zone system, phasing in discounts by land use over five years beginning 2027, and indexing fees to the CDOT construction cost index; committee directed staff to hold listening sessions before Planning & Zoning review.
Assistant City Manager Laura Perry presented a revised proposal to apply transportation capital impact fees to non-residential development and to eliminate the city's three-zone system. "Impact fees are 1 time charges on new development and these are assessed on, new buildings," Perry said, summarizing legal limits, eligible project types, and the role of the 2023 nexus study in setting maximum fees.
Perry described benchmarking, policy targets and a phased approach developed with Council Member Wiles: example policy targets include retail at 25% of the maximum fee, office at about 70%, and industrial at 75%, implemented with a five-year phase-in beginning in 2027. Staff proposed indexing the adopted fees to the CDOT Colorado construction cost index and noted the UDO would need an update (removing the word "residential") to allow non-residential fees to be set in the annual service fee schedule. Perry said the proposed start date for charging non-residential fees would be Jan. 1, 2027 if the council ultimately approves the change.
Council Member Wiles emphasized outreach to business partners and supported listening sessions before formal adoption. "They did a great job of coming up with different suggestions to try and make this more palatable," Wiles said, and said the city should use roundtables to gather feedback. Council Member Bergen raised competitiveness concerns for retail and hotels and asked whether special district financing plus impact fees could amount to double taxation for residents or developers; Bergen cited an example staff had shown of "almost 1000000 dollars for a 322 rooms," expressing concern about the effect on economic development. Consultant Brian Dufney responded that financing authorities and district bonds are policy choices that can accelerate infrastructure and that the issue involves trade-offs; he described the topic as "a difficult and complicated issue."
After discussion the committee directed staff to continue engagement with stakeholders, hold listening/roundtable sessions, take any UDO changes to Planning & Zoning, and bring the issue back to study session and council as appropriate. Staff emphasized several items remained "TBD" and that the committee was being asked for direction to proceed rather than a final vote.
