Joliet eyes ending impact fee for small projects

Fees for big projects would go up while rate for small projects goes down

Joliet is eying a reduction and possible elimination of development impact fees for projects of $50,000 or less.

The city is in the process of restructuring the fees after getting complaints and determining they are skewed too high for small projects. Fees would be increased for larger projects.

Councilman Larry Hug suggested eliminating the fee altogether for projects of $50,000 or less when the Economic Development Committee reviewed the fee proposal last week. Hug chairs the committee.

“What are you going to build at $50,000 that’s going to impact the community?” Hug asked.

Councilman Larry Hug voices his frustration at tabling a vote on liquor licenses on Tuesday, May 18, 2021, at Joliet City Hall in Joliet, Ill. The Joliet City Council discussed an amendment to allow for liquor consumption and video gambling at gas stations.

The fees are charged to commercial projects and other non-residential construction determined to have a community impact.

Staff had proposed reducing the fee on smaller projects based on a $3,100 impact fee now charged for a $25,000 project, which amounts to a rate of 12%. By comparison, a $28 million project paid a development fee of $63,000, or 0.2%.

“We said that’s not really fair,” Economic Development Director Derek Conley said. “Someone wants to go in and make some small improvement on their property. That’s kind of harsh.”

Staff reviewed the fees after “getting a lot of complaints,” Conley said.

The proposed restructuring would reduce the development fee on the $25,000 project to $1,500. The fee on the $28 million project would increase to $106,000.

Hug first suggested eliminating the fee on projects under $25,000, saying it generally hits small businesses with long standing in Joliet. Then, he expanded his proposal to projects under $50,000, saying such improvements will not have a community impact.

“There’s nothing you can add on a building for $50,000 that’s going to bring in a hundred people a day,” Hug said.

Conley said the city had 68 projects in 2020 that were charged a development impact fee. Nineteen of those were valued at $50,000 or less.

The proposed rate restructuring will go the the council’s Land Use and Legislative Committee for review before being taken to the council for a final vote, Conley said.