05-01-2023 - 05-01 10:01 David AvenellCITY OF
Federal Way
Centered on Opportunity
Public Comment - Written
Meeting Type: LUTC - Regular Meeting
Meeting Date: May 1, 2023
Name: David Avenell
Resident/Business Owner: ❑ Yes ✓❑ No
Comment Topic: Predictability for School and Park Impact Fees to Support Housing
Development
Written Comment:
Land Use Transportation Committee
City of Federal Way
33325 8th Avenue South
Federal Way, WA 98003
Re: Predictability for School and Park Impact Fees to Support Housing Development
Dear Councilmembers,
As you know, Intracorp Real Estate is currently pursuing development of 133 market -rate townhomes at the site located at 32818 1 st Avenue South in Federal Way (Project). We
greatly appreciate the Council's approval of the development agreement to allow the Project to proceed forward in permitting. It is a high -quality development that provides new
housing for families and working professionals in Federal Way. Intracorp has invested over two years and hundreds of thousands of dollars in entitlement costs to date, including
securing the development agreement. So that our development may continue as planned, we are writing to request that the Council's adoption of impact fees, if approved, provide
an "onramp" to allow projects that are in the permitting pipeline to avoid the shock of such a large and unpredicted fee increase.
To our knowledge, Intracorp is currently one of few (or perhaps the only) market rate housing developer with a current complete land use application for multifamily development in
the City. We are aware that other developers may have pursuits or may also have become recently interested in developing in Federal Way. This is not a coincidence. While the
Housing Action Plan concluded that the City has seen underinvestment in housing, you will recall that one of the key strategies identified in the Heartland Study to encourage
development was to eliminate the historically very high school impact fees, which effectively discouraged development. The City Council should be commended for your leadership
in reducing the school impact fees in 2022. We also appreciate your work on updating the land use code to support more housing. If the City provides a stable investment
environment, as proposed below, we are confident that the other positive updates it is making to its zoning Code will yield results in the form of the desired missing middle housing.
Intracorp's recent decision to close on the land for the Project was due in large part to the City Council's decision to approve the development agreement and to reduce school
impact fees for 2023. The Project was underwritten assuming no school impact fees and no park impact fees. Imposing significant new impact fees now could threaten the viability of
the Project. We do not believe that outcome is good for the City.
We recommend the following solution. If the City is going to adopt these new fees, please provide an "onramp" safe -harbor for a certain allocation of new housing in the permitting
process or in the early stages of predevelopment. For instance, the first 1000 units of housing with a submitted land use application are guaranteed no school or park impact fees.
Once that "onramp" allocation is filled, the new projects after that time will be subject to the new impact fees. This provides predictability for projects already in the pipeline and
encourages new projects to submit their land use applications, while also allowing the City to gradually introduce their increased impact fees to the market.
Even after this 1000 unit "onramp" allocation is met, we encourage the City to provide for "vesting" to impact fees upon complete land use application. The effect of vesting to impact
fees is the same concept as vesting to land use code regulations; it provides for certainty as to the fee amount. It does not mean that a developer does not pay the impact fees, only
that they can plan for the required amount at the time when underwriting and investment occurs: at the beginning of a project entitlements as opposed to the end.
This "onramp" proposal will allow not only Intracorp, but other projects who underwrote a deal to zero impact fees and may be close to submitting a complete land use application to
continue with their projects. With this solution the City will maintain the current momentum towards housing development. It also allows for predictable implementation of impact fees.
We appreciate the opportunity to provide input and remain very optimistic about our investment in the City of Federal Way. Please do not hesitate to contact me with any questions
about this.
Sincerely,
David Avenell
Intracorp NW, LLC
Received: 0510112023 10:01