Modesto City Council members on Monday advanced an economic stimulus plan that would suspend certain building fees on business and commercial projects for up to 18 months.
The plan grew from a brainstorming session Monday on a plan to create jobs downtown. But council members Kristin Olsen, Brad Hawn and Dave Geer, who serve on the city's Economic Development Committee, thought Modesto should send a message it's willing to assist with business expansion and job creation anywhere in town.
They asked city staff to bring back a report to the committee on a six- to 18-month suspension of the public facility fees for business and commercial projects. Eligible projects could be anything from a new restaurant to a car dealership, or a business looking to expand.
The city collects the one-time fees to pay for public facilities such as fire stations or road improvements.
The plans could go to the City Council in July and, if they're approved, could take effect in September.
With joblessness of about 20 percent, committee members said the city should try to help the private sector create jobs. By suspending the fees, the city would reduce startup costs for new or expanding businesses. Fees can range from $12 to $25 per square foot, depending on the type of construction.
"I think there are some businesses now that are sitting on the fence waiting to see what happens with the economy," said Brent Sinclair, community and economic development director for the city.
No business people attended Monday's committee meeting at Tenth Street Place.
Niniv Tamimi, who owns a real estate and development firm, initially proposed the fee moratorium for the city's redevelopment area as a way to generate employment and property tax revenue.
If development were to pick up downtown, the city would not get an immediate surge in property tax revenue, because cities are losing redevelopment funds to the state budget fix.
A city task force is studying whether to reduce Modesto's public facility fees based on the decline in residential and commercial property values. The task force may focus attention on whether the fees are a burden for expansion-minded businesses, city staff said.
Almost 80 percent of the fees on commercial projects are for improving roads or interchanges, some of which may be across town from a project. The system could be changed so downtown projects would help pay for traffic improvements benefiting downtown.