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Fee hike jeopardizes Providence
Jan 28, 2005 12:00 am
A developer representing one of Wilson County's largest residential developments – Mt. Juliet's 3,000-plus home Providence community – said Tuesday the county's newly tripled adequate facilities fee could jeopardize the project's future.
At its previous rate of $1,000 per home, the adequate facilities fee was expected to cost Providence developers just over $3 million. However, Monday night saw county commissioners approve plans to raise the fee to $3,000 per home, pushing Providence's total facilities fee above the $9 million mark.
"Business is about working together to find win-win solutions, and I'm afraid that this isn't a win-win solution … It will absolutely impact Providence, to what extent, I don't know," CPS Land partner and developer Dudley Smith said. " … It's a very much a possibility that we may lose it."
Smith noted CPS Land currently has 8 residential developments under construction in Wilson County, but he explained the ultimate impact of the adequate facilities fee increase on each project remains to be seen.
Wilson County, specifically the Mt. Juliet area, has lost its competitive edge over surrounding counties as a result of the increase, he said, adding, "Doing business in Wilson County today is different than it was yesterday."
The most immediate affect of the rate hike will involve "rethinking" the prices of homes inside the Providence development, Smith said. It was a comment echoed by a spokesperson for Cookeville-based Five H Properties, a company with tentative plans to build at least 800 new homes near the Tuckers Crossroads community.
Five H representative Greg Mabey said the newly raised fee is one that will undoubtedly be passed from developer to consumer.
"It will directly impact the price that a new home is going to cost … what a developer does is you just have to build that cost increase into your lot prices or into your finished home prices," Mabey said. "The person who is moving in, that's who ultimately pays. The developer is just going to pass that increase directly on to the buyer."
In preliminary meetings with Five H representatives, county officials had suggested the Putnam County developers set aside property in the project for a new elementary school and for an additional Wilson Emergency Management Agency (WEMA) station.
However, as funds generated by the adequate facilities increase are earmarked to fund school construction, Mabey said it is likely Five H will not donate property for a new school inside the development.
"They should not have to come to a private developer and ask the developer to give them land for a school. Now, they have money to go toward paying for it," Mabey said, adding Five H developers still intend to set aside property for a WEMA substation.
Such issues surrounding the fee increase, Smith concluded, may have been brought to light sooner had county leaders approached the business community prior to Monday night's vote.
"The risk that the county is making is that the facilities tax goes up more than the market can bare, and you start losing projects … The frustrating thing is they never approached businesses to try to understand from our perspective how this tax is going to affect our business," Smith said.
Staff Writer Brian Harville can be reached at 444-3952 ext. 16 or by e-mail at firstname.lastname@example.org.