Stafford Supervisors Approve Transportation Impact Fees
These fees, the only one of their kind in Virginia, will be applied starting July 1, 2025, on residential, retail, and business development. Critics worry move could dampen economic development.
By Hank Silverberg
CORRESPONDENT
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If you want to build a home, a retail business, or an industrial building in Stafford County, you will soon have to pay a new transportation impact fee.
The county Board of Supervisors voted 5-2 this past week to revive the fee, which had originally been approved in 2003, and updated in 2014, but has never really been administered since then.
It originally didn’t apply to commercial or retail space. But the new fees, effective on July 1, 2025, will apply to all development projects approved after that day.
County staff estimate that the fee will bring in between $15 million and $20 million a year in revenue, which will be specifically dedicated to transportation projects.
Stafford County is the only municipality in Virginia with this kind of fee and some critics are concerned it will chase developers away.
One of those who voted no on the impact fee, supervisor Monica Gary says, “I did not think we should take this action yet. It’s not a practical way to build our tax base.”
The price tag could be hefty for anyone trying to build homes or businesses. Under the provision, a residential developer will have to pay a fee of $8,588 per housing unit, a sum that will likely be added to the cost of those homes for buyers.
Developers who want to build retail space will pay $18,090 per 1,000 square feet. Office space developers will be charged $11,584 per 1,000 square feet and those who want to build industrial space will be charged $5,899 per 1,000 square feet.
Charlie Payne, a land use attorney with Hirschler, is concerned that the fee may impact economic current development and future opportunities for the county.
For example, data center uses, which by nature are low traffic-generating industrial uses, will have to pay the same per 1,000-square-foot fee as a manufacturing or distribution industrial user which generates five to 10 times greater traffic.
This, Payne tells the Advance, would mean a data center user could pay up to $6 million per 1 million square feet. Yet, data centers, in addition to being low traffic generators, produce close to $18 million in gross annual tax revenues per 1 million square feet. “This seems inequitable to me,” Payne told the Advance. “And why would we disincentivize data center investment for this purpose?”
The Board’s vote came on a recommendation from the county Planning Commission which held public hearings on it, but Gary says the supervisors should have spent more time reviewing the impact of the fee before passing it.
The Fredericksburg Area Association of Realtors opposed the impact fee, which it says will place an “undue burden on purchases of new home construction.”
Stafford County has been challenged by growing pains over the last decade, stemming from a large number of housing projects and data center and warehouse proposals.
Gary says she does support the impact fee but feels the county could have negotiated a better provision with a more balanced approach. She says small businesses which want to come to Stafford may not be able to afford the fee and will go elsewhere.
Most roads in Virginia are built and financed by the state through the Department of Transportation, but localities will often provide some money under the SMART SCALE program to increase the likelihood of getting state funding.
Stafford hopes to use the revenue generated by the impact fee for that purpose.
The fee will have no impact on projects already approved.
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There are two Transportation service districts, North and South.
The fee for residential in the Southern service district is $6,758 per house. Developers or businesses that pay for road improvements will get credits that are deducted from the fees.
Shouldn't you quote both sides of the story?
Here is my speech. The Board did cut the proposed fees by 50%
I believe the public wants an all-out approach for road improvements to be done sooner.
Currently some development projects pay zero fees toward transportation, but they create a demand for Transportation Improvements. Some developers are paying $15,000 per house Transportation impact fees while others pay nothing. That's not fair to those that pay.
The County is currently losing significant transportation revenue from the houses and businesses that are exempt or paying reduced fees.
The proposed Transportation Impact Fee ordinance levels the playing field, so almost all new development will pay towards Stafford's transportation Infrastructure.
A survey done last year showed Stafford citizens want Better Mobility with 98% saying that mobility should be the top or medium priority.
The 2020 survey shows bipartisan support with 85% agreeing that the construction of public facilities to serve new development should be funded by those developments.
Broad support was indicated for fiscal responsibility and responsiveness in public policy, with 92% agreeing that roads and utility improvements should be provided before development is allowed to occur and 85% agreeing that the construction of public facilities to serve new development should be funded by those developments.
I believe the proposed fees are too high and should be reduced to 50% of the proposed amounts. The bases for the 50% reduction in the fees is from VDOT cost sharing of the Transportation projects. Most Transportation projects are funded with multiple sources of revenue from the State, Feds and Stafford County, so I believe a 50% reduction to all the fees is warranted.
When the proffer guidelines were eliminated after the proffer legislation was approved in 2015, almost all of the rezoning applications paid impact fees instead of the recommended proffer guidelines. This ended up significantly reducing the amount of Transportation dollars proffered for each rezoning.
The current fees are only 17% of the 200
There are many commercial rezonings that have proffers for transportation improvements that have high triggers that might never be pulled, but the proposed Transportation Impact Fee Ordinance will give an incentive for the developers to follow through with the proffered improvements and could get the improvements done faster.
Other recommendations.
1. The TIF ordinance should include an escalation clause of about 3% annually to keep up with inflation.
2. A grandfather clause for Family subdivisions should be included to lock in at the current $2,999 impact fee.
3. Some commercial projects have already been built and are not subject to the impact fees. Those projects particularly at Centreport have increased the demand for new transportation infrastructure. To help fund the needed projects I believe the Board should consider implementing a Transportation service district.
4. The Board should consider Tax Incremental Financing (TIF) to help pay for road improvements that will need done in the Centreport and the Route 630 areas. The TIF will set a portion of the increased tax revenue that the businesses generate aside in an account specifically for road improvements.