1.5 billion dollar project fees

[BSSTG]

Greetings,

We have a possible project coming in that is valued at 1.5 billion. It will be a F1 and will encompass about a 100 acres. I don't know how many buildings and so forth. My question is this. Is it normal for the permit and plan reviw fees to be negotiated from what is in the local ordinances? Also, a project of this type with varied building etc will take a lot of site infrastructure. How is that typically handled? We do have a requirement here that sites of over 1 acre have to be reviewed and approved by the county drainage district. Of course that's just for retention, drainage and so forth.

I'm of the opinion that the entire project should be handled 3rd party both for review and inspection. I expect that will happen. We shall see.

Happy New Year!

BSSTG

 

[mtlogcabin]

Is it normal for the permit and plan reviw fees to be negotiated from what is in the local ordinances?

No only city council can reduce fees in our jurisdiction

We base our fees on the building only, no site work, no equipment that is not related to the building, Example would be an assembly plant we would allow the cost of the equipment used on the assembly line to be deducted from the price of the building

 

[jpranch]

It has been my experience that you have to charge for the permit(s) and plan review(s) in accordance with adopted ordinance without exception. Now with that said city councils, county commissioners, etc... will sometimes waive the fees, give a multi-year tax breaks, etc... as part of a way to get businesses to locate in their jurisdiction.

 

[BSSTG]

Greetings,

Yea, it would ultimately be up to city council here to amend the fees also. I'm just wondering if it's ever done anywhere. I've never been involved with anything like this. This is a production facility that would bring a lot of jobs and revenue to the area. As a result, I would expect council would consider all of the above.

Happy New Year!

BSSTG

 

[texasbo]

We've certainly done it, several times. The mechanism we use is a development agreement, adopted by City Council. We amend fees and/or taxes, and they must meet certain performance requirements. In every case, we've hired an economist from Austin to run the numbers to show that it's to everyone's benefit to adopt the agreement.

Greetings,Yea, it would ultimately be up to city council here to amend the fees also. I'm just wondering if it's ever done anywhere.

Happy New Year!

BSSTG

 

[High Desert]

We have something called the Enterprise Zone that gives tax breaks and reduces fees for these type of projects. They have to meet certain criteria such as producing jobs with a certain minimum wage among other things. This is a local process that is promulgated by the state.

 

[High Desert]

Just a quick calculation if I had that project at full permit and plan review fees, it would be close to $7 million. I'll third party it for $4 million.

 

[mtlogcabin]

Mine would be $11,560,192.00 for permit and plan review

Yes that would be excessive. One or two percent of the value should be the maximum amount charged IMHO

 

[High Desert]

2% of $1.5 billion is $30 million.

 

[mtlogcabin]

2% of $1.5 billion is $30 million.

My calculator does not work at those high numbers.

30 million would run this department into the next century and beyond

 

[Mark K]

In California the fees associated with building permits, when averaged over the year, cannot exceed the cost of running the department. If this is the case where you are there would be a need to pass an ordinance adjusting the fee structure.

Definitely the time to upgrade the training of your staff, purchase new software, and purchase equipment for your department.

 

[fatboy]

We have economic development incentives in ordinance that for a project that brings in enough new decent paying jobs, it usually offsets building and plan check fees. But the road and drainage impact fees on something that large would be mind boggling here.

 

[TJacobs]

We use an amended form of the ICC BVD chart so our new building permit fees are calculated by square foot, type of construction and use group to get valuation. We charge valuation x .0075. At 1.5 billion our fees would start at 11,250,000. Plan review is by cubic feet of interior bldg area.

The wheeling and dealing would be at the impact fee level normally.

 

[Frank]

Our few billion dollar semiconductor plant project fees paid for 1/3 of our budget that year. And yes they got special service. When some other contractors and owners asked why do they get special service the answer was when your permit fees get over 1/2 million you too will get special service. Our fees and codes exclude production equipment as well.

 

[steveray]

Agree with most of the others above...we have no authority to waive or modify, done by ordinance and therefore town council.....of course they take anything that comes in over our budget and use it for their pet projects. We look at it as some of the good ones like that offset all of the sub $100 or so ones we don't make any money on.....

 

[tmurray]

In California the fees associated with building permits, when averaged over the year, cannot exceed the cost of running the department. If this is the case where you are there would be a need to pass an ordinance adjusting the fee structure.Definitely the time to upgrade the training of your staff, purchase new software, and purchase equipment for your department.

Same here. It's the difference between a fee and tax. Fees can only be used in the department that generated the fees, but taxes can be used on anything.