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Incentives would let developers avoid at least $4 million in system development charges.

OUTLOOK PHOTO: ZANE SPARLING - Dr. Steven Prom, a chiropractor and former city councilor, testifies at Fairview City Hall on Wednesday, March 21. Fairview City Council will breathe new life into a controversial package of development incentives set to effectively expire in March.

The council plans to offer builders another six months to qualify for the city's Vacant Land Development Incentive Program, which waives the fees intended to balance out the strain new construction puts on pre-existing infrastructure.

The program nixes all four of the city's System Development Charges — applied to parks, sewage, stormwater and drinking water — for projects investing more than $675,000. All but the parks charge is waived for construction valued under that threshold.

"What's really important for the property owners is something we need to zero in on," said Councilor Mike Weatherby during a city meeting Wednesday, March 21. "I wholly support it."

To date, just eight single-family homes, three duplexes on Northeast 208th Place and a 49-unit apartment complex on Northeast 205th Avenue have qualified for the program, amounting to roughly $161,000 in forgone SDC fees, plus another $15,000 in lost building permit fees.

Critics say those projects, which represent about $7.6 million in new investment, were already in the pipeline and would have happened anyway.

"We've had this thing for two years. It hasn't spurred much," noted Councilor Keith Kudrna. "Maybe it's the zoning of the land. Maybe the size of the properties isn't right for what the developers want. It could be any number of factors."

The incentive program is being extended because officials expect a slew of developers to submit their applications this year, creating roughly 550 additional apartments in Fairview.

If everything on the council's radar comes to fruition, the city will lose out on approximately $4 million in SDC revenue in exchange for projects that will generate a total of $160,000 in property taxes a year, according to back-of-the-envelope calculations by City Manager Nolan Young.

"We are giving away a huge amount of money in waivers that is rightfully the citizens' of Fairview," said Councilor Brian Cooper, a longtime opponent of the incentives. "To any citizen that asks us, 'Are you fiscally responsible,' the answer is this council is not."

The incentive extension is happening while certain city coffers dry up.

Fairview's stormwater fund is projected to reach a negative balance of $4.1 million by fiscal year 2022 based on the current capital improvement plan. The sewer fund will drop from $2.8 million to just $1 million in the same timeframe, and the water fund will plummet from $1.8 million to a little more than $24,000.

To stem the tide of red ink, city documents obtained by The Outlook also propose hiking residents' utility bills by about 1 percent.

"Currently, operations are eating into reserves," City Manager Young explained in a phone interview. "In order to meet the projected capital improvements, we will need to do a rate increase and potentially borrow money."

Ready to build

Who stands to benefit from the city's waiver of system development charges? Here's a breakdown of the four projects planned in Fairview.

• West Linn developer Jeff Parker wants to build about 180 apartments and 5,000 feet of commercial space on Northeast Halsey Street on a vacant parcel across from Bumpers Grill & Bar. Parker is in line to receive a $1.25 million waiver for the project that will cost $23.5 million.

• At least 200 apartments are planned for a roughly five-acre lot on Sandy Boulevard at the Fairview Marine Supply property. Tax records list Eugene Labunsky of West Coast Real Estate Holdings as the owner.

• After completing a Veterans Affairs clinic in 2016, Parker hopes to finish out the block between Halsey Street and Market Drive with another project.

• Also in Fairview Village, developer Garth Everhart seeks to build a three-story building with 22 residential units located above ground-floor retail on the southwest corner of Village Street and Market Drive. Residents would use a pre-existing interior parking lot between Park Lane and Village Street.

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