Developers say Mayor Ed Gainey's office throws up roadblocks to economic growth (Pittsburgh: flat fee, apartment)

[erieguy]

Developers say Mayor Ed Gainey's office throws up roadblocks to economic growth

https://www.cbsnews.com/pittsburgh/n...onomic-growth/

[szug-bot]

would someone want to cut/paste the article, or its most pertinent parts?

sorry - cannot disturb the ad blocking here lest you rile up the IT savages from their slumber and online gaming......

[jea6321]

Basically, the city most likely did an illegal move by increasing zoning review fees by an astronomical amount.

"Faced with rising interest rates and a slowdown in the local economy, Walnut Capital has scaled back its ambitious Oakland Crossings development. But Walnut Capital still wants to move forward with transforming a city block into a hotel and apartment building and has been looking to the city for help.

"It's difficult out there," said Todd Reidbord of Walnut Capital. "The markets are tough, the office markets are tough, the interest rates are difficult and this is a time when government really needs to step to the plate and encourage development."

But instead, the Gainey Administration is slapping developers with much higher fees. The price for Walnut to get a zoning review from the city has jumped from $15,000 to $255,00, an increase of nearly 600 percent. And that's just one of more than a half-dozen other city reviews it will need."

"Sheehan: "Is it the right message to be sending out when we're losing population and jobs in the city?"

Jonathan Kamin: Not only it's it the wrong messages, it's illegal."

Kamin, Walnut's attorney, said he got no response after sending the city a letter demanding the fees be rolled back, saying they violate Pennsylvania law by exceeding the city's actual costs of review and will stymie all development in the city.

Millcraft Development says it will be paying in excess of $400,000 for a zoning review of its proposed Esplanade North Shore redevelopment project."

""Everybody is getting sucker punched the same way by these fees," Kamin said.

"We're talking about fractions of overall project value that this city is charging for a fee," said Maria Montano, the mayor's press secretary.

In reviewing its old fee schedule, the city says it found it was actually losing money in its review process. By increasing the fees, Montano says the city will increase its efficiency and speed up the reviews and actually help foster development.

"Pittsburgh is open for business," Montano said. "We want folks to come here, we want more businesses here, we want more development here. But what the city also needs to do is ensure we have the capacity and the staff to go through the changes on an efficient process."

The developers don't see it that way.

"We expect to have to file a suit in the near future because this is an illegal act by the city, and it's essentially putting all development stuck in the mud," Kamin said"

[szug-bot]

thank you for posting that article.

the question is - WAS the city losing money w/ each review? was the increase justifiable?

the city person says: "We're talking about fractions of overall project value that this city is charging for a fee," said Maria Montano, the mayor's press secretary.

either this is bullcrap by the city, or not, or maybe they implemented something needed but did it w/ overkill. if its option #3, that certainly isnt surprising in a city like this, where there is just about NO voice of opposition against tax and spend bureaucrats.

tell me that this doesnt affect a homeowner hoping to improve his/her property, too, and not just a developer.

from that article:

The price for Walnut to get a zoning review from the city has jumped from $15,000 to $255,00, an increase of nearly 600 percent

Millcraft Development says it will be paying in excess of $400,000 for a zoning review of its proposed Esplanade North Shore redevelopment project

well, maybe thats money that can hire 2 or 3 bodies for the police force.

[gg]

Wow, what a moron. He clearly doesn’t understand business at all. Time for developers to send a message in unison. Don’t people realize we are trying to recover from a pandemic? Idiot!

[jea6321]

Originally Posted by szug-bot

thank you for posting that article.

the question is - WAS the city losing money w/ each review? was the increase justifiable?

the city person says: "We're talking about fractions of overall project value that this city is charging for a fee," said Maria Montano, the mayor's press secretary.

either this is bullcrap by the city, or not, or maybe they implemented something needed but did it w/ overkill. if its option #3, that certainly isnt surprising in a city like this, where there is just about NO voice of opposition against tax and spend bureaucrats.

tell me that this doesnt affect a homeowner hoping to improve his/her property, too, and not just a developer.

from that article:

The price for Walnut to get a zoning review from the city has jumped from $15,000 to $255,00, an increase of nearly 600 percent

Millcraft Development says it will be paying in excess of $400,000 for a zoning review of its proposed Esplanade North Shore redevelopment project

well, maybe thats money that can hire 2 or 3 bodies for the police force.

As someone who has paid a few zoning review fees over the past couple years, I can say my most recent one increased substantially on my small scale single family review. Nowhere near what these numbers are showing, but still overall a big increase as a percentage of what it was previously.

[eschaton]

I read a little more about this in Pittsburgh Business Times. Essentially the city shifted from the old system, with a flat fee for service regardless of cost, to a percentage-based system. Thus all residential projects are now charged 0.1% of total build cost, and all commercial projects 0.3% of total build costs.

Obviously this is a huge increase for the biggest developments, but depending upon how the fee structure is set up, it could be a big cut in fees for ordinary people.

[jea6321]

Originally Posted by eschaton

I read a little more about this in Pittsburgh Business Times. Essentially the city shifted from the old system, with a flat fee for service regardless of cost, to a percentage-based system. Thus all residential projects are now charged 0.1% of total build cost, and all commercial projects 0.3% of total build costs.

Obviously this is a huge increase for the biggest developments, but depending upon how the fee structure is set up, it could be a big cut in fees for ordinary people.

Thanks for the clarification. My most recent one was deemed commercial even though its a residential single family house. Now the cost increase makes sense from the last time I had one done.

[wpipkins2]

Originally Posted by eschaton

I read a little more about this in Pittsburgh Business Times. Essentially the city shifted from the old system, with a flat fee for service regardless of cost, to a percentage-based system. Thus all residential projects are now charged 0.1% of total build cost, and all commercial projects 0.3% of total build costs.

Obviously this is a huge increase for the biggest developments, but depending upon how the fee structure is set up, it could be a big cut in fees for ordinary people.

Do you consider this to be a barrier for future development projects in the city? Is this change in line with other cities? Is the cost difference reasonable? Pittsburgh is currently experiencing a building boom with additional projects in the pipeline. We will see if Walnut and Millcraft will hault development because of this. I doubt it.

[eschaton]

Originally Posted by wpipkins2

Do you consider this to be a barrier for future development projects in the city? Is this change in line with other cities? Is the cost difference reasonable? Pittsburgh is currently experiencing a building boom with additional projects in the pipeline. We will see if Walnut and Millcraft will hault development because of this. I doubt it.

There's two different issues here in tension.

On one hand, I do think it's generally the case in Pittsburgh that the fee schedule was high enough that it made a lot of the smaller-scale projects not feasible. Only big developers had the deep pockets needed, which heavily tilted infill development towards 100+ unit buildings. On balance, I don't think changing the fee schedule a bit to disincentivize bigger buildings is bad, as long as enough additional units in smaller buildings are coming on line.

On the other hand, I cannot say for the life of me what the best relative level for these fees would be. It could be the city shot a bit too high overall. Time will tell.