A proposal to place a hefty special fee on residential and commercial construction in Aurora is being met with fierce opposition from builders and those who represent them, but supporters of the plan say the outcry is to be expected, and so is a compromise.
The pending proposal calls for a fee of $2,000 on each new residential unit and $6,000 on each acre of commercial or industrial development. Such fees would allow the city to capture immediately the average two-year property tax bill on new development to provide police, fire and public works services.
Finance Committee Chairman Robert O’Connor said, however, that the proposal was put forward only as a point of discussion, and Mayor David Stover on Thursday suggested that a much lower fee of $150 for each residential unit would be appropriate.
“I certainly don’t agree with the figures everyone is looking for at this time, but they weren’t real numbers to begin with,” Stover said. “Everyone is getting excited, frankly, about nothing.”
Nonetheless, they are getting excited.
About 100 people packed the council chambers Wednesday when the Finance Committee met to discuss the proposed transition fees, or charges on property developers to close the gap between occupation of new structures and property tax collections.
“It was not unexpected,” O’Connor said Thursday of the crowd. “These are profit-making businesses, and they perceive they are threatened.”
Developers, along with their lobbyists, public relations representatives and attorneys, are opposed to the fees, and they are backed by the Greater Aurora Chamber of Commerce and Greater Aurora Association of Realtors.
Neighborhood groups, however, from older parts of the city supported the fees, saying they could bring more resources to their areas.
“The crowd yesterday was a reflection of the opposition to government interference in the private sector,” Ald. Chris Beykirch said Thursday. His southeast side 8th Ward contains the most new development, and he opposes any fees. “A fee, no matter how small, could be the straw that breaks the camel’s back.”
“There’s undisputable evidence produced by the finance director of this city that the DuPage County portion of Aurora not only pays its fair share but also provides excess revenue for the city,” Beykirch said.
“These proposed fees are wrong,” said Bruce Deason, assistant vice president of the Homebuilders Association of Greater Chicago. “We ask you to look at it from the longer view, which takes into account increased revenue, new commercial opportunity and the diversified tax base that comes with new industry.
“We believe that if you do take this long view, you will see that housing is the cornerstone of a strong economy, and this proposed fee will have a negative impact on more than just house prices.”
O’Connor noted that lobbying on the issue has been fierce, but he said he still supports the concept of transition fees.
“My regret is that we did not push harder, earlier for some type of transition fee,” he said. “It is legitimate for us to enact a fee.
In talking about a fee of $150, Stover based his calculation on the results of a 1997 study conducted by David M. Griffith & Associates, which determined that a transition fee on properties in the Will, Kendall and DuPage County portions of the city should be about $465 an acre. It took into account services for those areas and infrastructure needs.
“I think that $2,000 might be too high, but I think the $150 fee might be too low, but I would agree to a reasonable compromise,” said Ald. Michael Saville. “It sounds like everyone is in agreement that we need some sort of transition fee.”
The fees would free funds for the older parts of the city, Saville said.
Chamber of Commerce President Steve Hatcher said property taxes in the DuPage portion of Aurora account for 44 percent of the revenue collected by the city while services account for only 17 percent of expenditures.
Hatcher derived his calculations from an analysis done by Bruce Goldsmith, an attorney for some of the city’s largest commercial developers. Ald. Chuck Nelson questioned the precision of the analysis.
Hatcher also noted that property taxes are collected for the previous budget year, characterizing a transition fee as “double taxation.”
“I don’t think it’s horrible that Aurora is considering some small increase,” countered Paul Stewart, chairman of the Near Southeast Neighbors Association.
