The City Council voted to enroll a Linkage Fee ordinance for residential and commercial properties after many years of discussion – and some rather intense negotiations over the last two weeks.
The Council voted 10-1 Monday night to enroll the Linkage Fee ordinance, with Councilor Gerly Adrien voting against. Linkage Fees are a surcharge on, in this case, commercial and residential development, and for Everett, the money collected would only be able to go to funding affordable housing projects.
The matter came before the Council after having hit the agenda two weeks ago, and many legislators seeing changes for the first time made by Mayor Carlo DeMaria. That put a road block in the discussion, with the mayor advocating for quick action. After a Committee meeting last week that went into detail, the matter was brought forward on Monday night again.
This time, Councilor Michael McLaughlin moved to amend the ordinance fee structure, along with Councilor Fred Capone amending some language in the ordinance.
“Several hundred thousand dollars were brought in to fund affordable housing on Monday night by the Council’s actions and this compromise,” said McLaughlin. “It will bring millions to the City going forward and will entice developers to want to build more affordable housing on their own as well. It was a win-win for the City and for developers. Developers I talked to seem very satisfied with the compromise plan and don’t feel we’re being unfair with them.”
The compromise plan sets a $2 per square foot Linkage Fee for all commercial projects over 15,000 sq. ft. – both in the queue and coming in the future. The residential portion was what caused the most wiggle-power. As part of the new fee compromise, all projects that have received Board approval, but not a building permit (which is the cutoff) will pay $500 per unit, unless their project includes 15 percent affordable housing units. If there is 15 percent, the $500 fee is waived. The transition fee would have to be paid within five years. For projects coming after the ordinance is ordained, which is expected at the Feb. 22 Council meeting, the residential fee would be $1,000 per unit and developers would have seven years to pay the full fee.
That would apply even to small projects like the conversion of a one-family to a two-family. Such a conversion, which is quite common now in Everett, would result in a $1,000 payment under the new fee structure.
McLaughlin said there were approximately 3,000 units in the queue that would be affected by the $500 per unit transition fee.
The transition fee for projects in the queue was a major concern earlier on when Mayor Carlo DeMaria’s plan surfaced two weeks ago and it contained fees that would be assessed on many projects currently.
On Monday, Councilor Rosa DiFlorio said it was hard to agree with putting fees on those that have already gone through the Zoning Board and Planning Board process. She did, however, agree to the compromise.
“The Committee did not make a recommendation and that’s because there was a lot that we didn’t agree with,” she said. “We agree with establishing a Linkage Fee, but we didn’t agree with the retroactive part. That wasn’t fair.”
The new fee structure compromise from McLaughlin passed 9-2, with Adrien and Councilor Michael Marchese voting against.
Councilor Fred Capone moved to amend the ordinance to put the power to administer the program with the City Council and not Inspectional Services (ISD). Capone said he felt that’s a power that should remain with an elected body, and not be delegated to a City Department.
His revision passed 7-3.
Meanwhile, Councilor Gerly Adrien focused in on the history of the Linkage process, which goes back many years and includes a commissioned study done for the City in 2019. That process actually started in 2016 when the City got approval by Home Rule Petition from the State Legislature to create a Linkage Fee. However, in those five years, a local ordinance could never get accomplished. The 2019 study sought to get things moving, but again the matter stalled out until just recently – when the City, badly in need of revenues due to COVID-19 losses, began to hustle in order to collect some significant money from projects coming down the pipeline.
The 2019 study had not been widely discussed, and Adrien was able to learn from Attorney Jonathan Silverstein, a consulting attorney for the City, about the recommendations in the report.
The report cited Linkage Fees in Boston of $11 per sq. ft.; in Somerville of $12.46 per sq. ft.; and in Barnstable of $9 per square foot. The recommendation in Everett to remain competitive was around $4-$8 per square foot.
The current proposal came in at $2 per sq. ft. for commercial properties.
Some developers were not entirely happy with the process of hitting those that were already in the process of starting construction – but were still waiting on a building permit.
John Tocco, who is about to begin work on The 600 on Broadway, said he agrees with Linkage Fees in Everett, but felt it put developers in a tough spot to require them after Board approvals.
“Construction is risky and banks and investors look for certainty,” he said. “What happens when the rules get changed this late in the game when a project is still under review, but approvals have been achieved and a groundbreaking has happened, is that certainty the City should provide is eliminated. It begs a lot of new questions from bankers and lenders.”
The long-stewing ordinance could be ordained and become law if voted in at the Feb. 22 Council meeting, and then signed by Mayor Carlo DeMaria.