Entries Tagged 'Platting Fees' ↓

Are Developers paying too much in Platting Fees? Absolutely NOT!

If anyone has been paying too much for NEW infrastructure and development, it has been the tax payers of Sioux Falls. When the 2nd Penny sales tax was raised to a full penny over a decade ago to fund infrastructure expansion, the promise was developers would put in 40-60% into that fund in platting fees. That hasn’t happened, not even close. In fact, taxpayers at one point were putting in over 10x more into that fund then the developers.

Well apparently some developers are now crying the platting fees are too much (about $20K per acre on vacant lots in undeveloped areas). Sioux Falls City Councilor Greg Neitzert talked about it in a recent post on his Facebook page. He seemed to be sympathizing with the developer because they used the tired old excuse that they pass those prices to the consumer of the new development. Well duh. The consumer is getting brand new sewer, water, and roads, why shouldn’t they pay the cost? How is charging me extra in sales taxes fair? What do I get out of it except higher taxes and water/sewer rates?

In about 50% of US cities with populations of 25K or more they charge the developer a 100% of the cost of new development infrastructure, so current users are not subsidizing new growth. This makes sense, because as I have often argued, new growth without a plan to pay for it, makes no sense. Slow growth that is properly funded is fiscally responsible to taxpayers. When developers don’t have enough workers to build their developments, that should tell us that maybe the ‘growth’ isn’t needed. Who are you building and expanding for?

I think we should eliminate platting fees all together and have developers instead pay for the entire cost of new infrastructure. If the NEW development is really truly needed, it will pay for itself. That’s just common sense.

Don’t believe the platting fee ‘Ruse’

We were told a decade ago that when we increased our 2nd penny to a full penny (.092 to .100) that developers would kick in another 50-60% in platting fees to help build arterial roads. That never happened. In fact taxpayers have kicked in around 8 to 10x more (from the .08 increase) than developers have. It really doesn’t generate much at all. When you consider we spend well over $40 million a year on roads in Sioux Falls (it may even be higher than that) platting fees only kicked in around $2.4 million in 2017, most of which came from US in that tax increase.

But there are some that think developers are literally paying to build our arterial roads, they are not, they are contributing, but not paying 100%. That’s why I really don’t understand this statement;

Sioux Falls real estate developer Darrel Viereck was one of the early backers of platting fees a decade ago.  Many developers didn’t want to pay the additional cost.  But Viereck saw the city was poised for a building boom, despite the recession.

When in reality, developers are not really contributing much of anything to our roads fund. But they can keep telling that same old lie.

Makes you wonder if TenHaken’s new COS gently nudged Stormland TV to do this story, or if Darrel was just bitching about something again. Who knows?

City Government Time Machine; Platting Fee Boondoggle, 9/15/08

Last night at the regular city council meeting a citizen brought up the failure of the platting fee idea to raise money for arterial roads, and he ultimately said ‘It should be repealed’.

I couldn’t agree more, it has been a complete failure, the plan that is.

In reality when the plan was proposed on September 15, 2008 (watch the meeting here).

It may have sounded good. It was simple, they would raise the 2nd penny tax to a full penny to help pay for arterial roads. The second part of the plan was what made it attractive. While raising the penny would help pay for 40% of the arterial roads, the developers would chip in 60% in platting fees.

That HAS not occurred. In fact they haven’t even come close to probably 4-5%. And while over the past 6 years the citizen taxpayers were putting in their share, the developers have contributed very little. Heck even a few years ago, a developer complained at a council meeting that the city wasn’t holding up their end of the deal by not building enough arterial roads like they promised. This developer was told, and rightly so, once the developers hold up their part of the deal the city would chip in.

When ever this is brought up (the terms we were sold) the developers have all kinds of excuses;

• The economy took a dump

(at the meeting that night, one proponent brought up the economy tanking, in fact that day, the dow dropped a record amount. The economy downturn was ALL over the news, but somehow SF developers thought they were immune. Ask them today about that immunity)

• They claimed they never said they would put in 60%

(over the past six years I have heard this LIE. Repeatedly during the above meeting the proponents said over and over again they would put in 60%. There was even a taxpayer funded website the city put up called movingsiouxfallsforward.org that claimed this amount.

• Public Works Director, Mark Cotter even repeated the plan

(He told Staggers in the meeting (1:06) that the plan was that the CIP would put in $35 million, the 2nd penny raise would put in $20 million and the developers would put in $30 million over the following 6 years. That has not even been a reality, not even close.

• As one opponent points out during testimony, there was nothing in the proposal to ‘legally bind’ the developers to put in what they promised. Nothing.

• And now that the economy has turned around and building is booming in Sioux Falls, will developers give us back pay on these platting fees to at least match what taxpayers had to put in (during an economic downturn) Of course not, just more excuses.

• The vote went down 4-4 with Munson breaking the tie and voting for the increase. Councilors Staggers, Costello, Beninga, Anderson voted against the increase and Councilors Brown, Knudson, Litz and Jamison voted for the increase.

• Even though this plan did fail, and the developers haven’t put their fair share in over the last 6 years, it hasn’t stunted growth at all. Why? Because once again, the taxpayers of SF have been bailing out the developers.

Some ‘Other’ highlights of the meeting;

• Mayor Munson gaveling me at the beginning of the meeting during public testimony when I made the accusation that the ethics commission were puppets for the administration. After he chews me out and tells me they are independent, I asked him, “But you appointed them? Correct?” He answered yes.

• Vernon Brown flipped his vote. When this first came up months earlier, Vern voted against it, this night he voted for it.

• Kermit points out that they weren’t following the proper state law to pass the platting fees (taxes) and should not even been voting on it.

• All the Proponents got to go first to testify, while the opponents had to wait almost 2 1/2 hours, instead of alternating speakers.

• Another funny moment was when Bill Peterson told Staggers that people weren’t flocking to move to Minot, ND to live anytime soon.


My KELO interview a year after the tax increase

DaCola Links

Platting fees way under prediction and November sales way down from 2008

As you can see the city now is down -4.1% from last year. I suspect that number may rise a little in December because of Christmas sales, but not much.


And as you can see, taxpayers have put in over 8x more to the arterial road fund then developers have. I found out Monday why this is. Developers used a loophole in platting fee collection. They called their plats ‘Minor’ plats instead of ‘Major’ plats. There should be more about the platting fee story in the SF MSM over the weekend, keep your eyes peeled.


Is the City of Sioux Falls scrambling to fix a big freaking mess?


I have held off on this story for awhile, but I will give you a tidbit today, until I hear more. It was no mistake that platting fees came in way under projection this past year, but it’s not because of developers but because of the city. According to rumors I have heard the city started looking into the low numbers and discovered that developers found a loophole in the fee collection and the city just became aware of it recently, now the city is scrambling to fix it and the developers are not one bit too happy about it. I could give two-shits either way, my concern is since taxpayers were forced to pay their fair share by only one vote by our mayor we should either get a refund or put the money in a savings account until the platting fees catch up, or suspend the tax all together. We were duked into the tax increase by the city’s planning office and I don’t think it is fair that we pay a tax that was based on a lie.

More of this story to come. I’m assuming the City Council will have to vote on any changes and I guarantee their will be a shitstorm when that happens. I’ll keep you posted.

Platting Fee interview 6 PM today – KELO TV

I got interviewed this morning about my feelings on the platting fees being so low in comparison to the taxes collected for arterial roads (see graphic below). I touched on many topics, but here’s a summary

– I think it is unfair to mandate retail taxpayers to pay an extra tax when the developers are not

– I thought it was pretty obvious the night the council approved the tax increase that we were going into a recession

– I think the tax increase was just a ploy to max out our taxes to what state law allows so that it will be easier for the SF Event Center Task force to ask for another tax increase next year from the legislature.

– I think arterial streets should be built on a DEMAND basis. If developers start moving dirt, we start moving dirt.

– I pointed out that councilors Knudson, Jamison, Litz and Brown all had their campaigns funded by the very special interests that supported this tax increase.

Obviously not all of this will make it into a 3 minute news spot. KELO also interviewed Theresa Stehly and they were planning on an interview with Craig Lloyd, the main developer who was pushing this tax increase. Mark Cotter, city planner, may also be interviewed.

I guess we are only in a recession when it is hurting the developer’s pocketbooks, not the rest of ours.

City of Sioux Falls