Clovis is offering developers 70% off many of its fees in the hopes of attracting new business to older parts of the city.
Fresno might not be far behind with a similar discount program.
But while Fresno still works on structuring its deals, Clovis already is making them to entice commercial and industrial developers to older city areas for infill projects.
Clovis City Council members will discuss tonight the sale of two parcels covering 26 acres in the city industrial park on Villa Avenue south of Ashlan Avenue to Diversified Development Group, which will take advantage of the new incentives.
City leaders reason that many of the fees are unnecessary because infrastructure already is built and can accommodate new projects.
Developers told city officials that high fees have impeded Clovis from having more industry, businesses and housing. It led city officials to consider reducing those expenses.
"The whole fee issue has perplexed us for some time," said Tina Sumner, Clovis community and economic development director. "Our fees have been higher than other jurisdictions, so we have been taking a look at them."
The target area is south of Sierra Avenue, west of Locan Avenue and to the southern and western city borders within those boundaries.
The city says there are 730 acres of vacant property there. If all that land is developed, city officials estimate it will bring $1.5 million in property and sales taxes and add jobs.
Among the discounted fees are "major sewer," parks, police, fire and some road fees. By steering development to the target areas, public safety services are not stretched and new parks are not required for the city's fringe, Sumner said.
Under the new fee structure, the average expected fees will be about 70% less. For one industrial project, Sumner said, fees were reduced from $785,000 to $195,000.
"Sometimes that's the difference in making a project feasible," she said.
Industrial developer John Brelsford, president of Fresno-based Diversified Development Group, said the city's discount makes Clovis more attractive to developers. He built shopping centers in Clovis during the 1970s but has built little there since.
In the past, he said, the Clovis fee structure was cost prohibitive for his projects, but the discounts will make the city more competitive.
"That's really smart," he said. "Finally, there are some staff and politicians that are really thinking. They have properties that are sitting there and aren't going to develop, so now you have incentives to create more economic benefit and tax base."
The incentives will remove some of the financial barriers to complete neighborhoods, Clovis Mayor Lynne Ashbeck said.
"We had some response to incentives so there was experience that it works," she said. "Creating incentives in these small areas is an important part of the development puzzle."
Filling existing vacant parcels with incentives is a practical solution as long as additional infrastructure is not needed, said Kenneth N. Hansen, an associate professor of political science at California State University, Fresno.
"If you want to encourage infill you have to give some sort of incentive, because the tendencies of developers is to sprawl out," he said. "If there really aren't any added expenses, I guess they can justify it."
Hansen, who wrote a research paper on impact fees, said older areas already have public safety services, such as police and firefighters, so providing fee reductions makes sense. Incentives also are good for the environment.
"It does save money on services because you're not spreading everything too thin," he said.
"If you don't have the sprawl, you have less air pollution and it's closer to one-stop shopping than you would have if you had to drive all over town."
But some issues still need ironing out, said Mike Prandini, president of the Building Industry Association of Fresno and Madera Counties.
Some vacant properties are oddly shaped or improperly sized to meet city development codes related to parking, fitting buildings on properties or setbacks from the street, which would require zoning variances, he said.
"Fees alone will help on some properties, but it won't help all of them," Prandini said. "We are working on some options to take back to the City Council."
It's not the first time the city has waived or reduced fees to attract businesses.
During the recession, Clovis gave sales-tax rebates for new commercial venues and eliminated fees for businesses going into vacant buildings in Old Town Clovis.
A fee reduction for commercial and industrial land expires in November.
In 2010, the city reduced sewer and water facilities fees for two years for industrial and office development that was instrumental in spurring the Clovis Community Medical Center expansion and construction of a state claims processing office near Peach and Herndon avenues, Sumner said.
Fresno also has a series of incentive plans, two that target downtown Fresno and a third that waives fees for rebuilding on vacant property that was once occupied by a home or building.
The Fresno Mayor's Infill Development Task Force is making recommendations this week to encourage more infill projects in established areas of Fresno where infrastructure already is built, said Jennifer Clark, Fresno's director of development and resource management.
"There are a lot of existing neighborhoods that would be considered a really great place for infill and take advantage of the existing city services," she said. "It also improves the property values of the neighborhoods as a whole."
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