New Richmond’s land rush drawing to a close

Talk about it

Homeowners and businesses hoping to take advantage of New Richmond’s incentive package for new construction only have two more months to get started.

In August of 2011, the city approved a program dubbed the “New Richmond Land Rush,” which waived various impact fees in order to spark new development in the community. The program ends at the conclusion of 2012.

The city collects fees connected to new construction to help cover the cost of roads, services and infrastructure upgrades that may be required as the community grows.

Impact fees and sewer access charges total about $9,600 for a single-family home. The savings for a commercial building is significantly higher. As an example, the sewer access charge for a new restaurant building can be thousands of dollars.

Because of the nationwide recession, new construction in New Richmond had ground to a halt for several years, in stark contrast to the boom years when hundreds of building permits were issued annually.

Last year the New Richmond City Council decided that waiving its upfront fees might encourage some new home builders and businesses to pull the trigger on their previous plans to build.

“This is going to spur development in New Richmond,” Alderman Jim Zajkowski said when the council approved the incentive plan. “We’re trying to do something, instead of sitting on our hands.”

According to Robert Barbian, the city’s planning and community development director, the “land rush” effort was in response to New Richmond’s strategic planning goal of growing its overall assessed valuation by 1 percent each year.

“We didn’t care if we were in a recession, we wanted to grow,” Barbian said.

To accomplish that ambitious 1 percent goal, the city would have to see about $6 million in new, taxable construction in any given year, he estimated.

While the community has realized new construction well above that figure for many years in a row, a fair number of the new buildings have been constructed by entities that are not taxed (schools, churches, non-profit health facilities).

Thanks, in part, to the “land rush” promotion, the community has issued permits for about $5.7 million in new, taxable construction so far in 2012, Barbian reported.

“I think we have had some really good results,” he said. “I know we’ve done better in New Richmond than in many of the communities around us, and this program has something to do with that.”

Jeanne Bergman, who deals with the building permit process, said everyone who has applied for permits over the past year has mentioned that the “land rush” was a determining factor in their decision to move ahead.

Barbain added that he expects some additional projects to come in for approval in the coming weeks so that the developer can take advantage of the incentives.

“I would encourage people to get their plans together and submit the application,” he said. “They have time to complete the construction, but they have to apply (for permits) now to take part in the program.”

To get in on the city’s deal, however, time is of the essence, Barbian said. Building permit applications for any projects must be received by the city no later than Dec. 28 if a developer is hoping to take advantage of the incentives.

As approved, the land rush program waives fees if land for a home or commercial/industrial building is purchased by Dec. 31, 2012 and a building permit is secured by that deadline.

Construction on any structure would then need to be completed by Aug. 31, 2014 in order to qualify. If a building that qualified for the “land rush” is finished after that deadline, the impact fees and sewer access charges would be collected.

As the program draws to a close, City Administrator Mike Darrow said the community is not likely to extend the “land rush” concept, so he urged anyone still interested in participating to get moving.

“There are some significant savings that can be generated by signing yet this year,” he said. “It’s thousands of dollars for homes, and can be tens of thousands of dollars for businesses.”

For more information, contact Barbian at 715-243-0407.

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