Baltimore's Board of Estimates has approved the final variable of a formula that will dictate the amount developers in South Baltimore pay for road improvements.
The new formula replaces time-consuming traffic impact studies and ad hoc negotiations between developers and the city, which for years have determined what builders pay to mitigate the traffic produced by their developments.
"Sometimes [developers would] end up spending more on the traffic impact study than on the mitigation fees themselves," said Jamie Kendrick, the city's deputy director of transportation.
The new, fee-based formula should make developers' business expenses easier to estimate, Kendrick said.
Developers, frustrated by the delay and expense of impact studies, seem willing to give the new system a try.
"This may end up being a good thing," said Patrick Turner, whose Turner Development Group is developing the Westport waterfront in South Baltimore. "The more you know up front and can plan into your project, the better."
Real estate attorney Jon Laria, who was part of an independent group that reviewed the plans for the Baltimore Department of Transportation, said the new system was better than the old method, which could be drawn-out and contentious.
"Often it all came down to who had the better lawyer," said Kirby Fowler, president of the Downtown Partnership, which also weighed in on the new payment structure.
South Baltimore is the first of five areas that will be assigned traffic-mitigation rates, which the transportation department expects to establish over the next six months. The areas include neighborhoods in South, East, West and Central Baltimore.
The traffic mitigation zones were approved by the City Council in November. The ordinance requires the transportation department to establish a long-term plan for transit improvements in each zone, and to estimate the cost of those improvements.
For the South Baltimore zone, planners set the fee based on their estimate for the improvement plan's cost and the amount of development anticipated in that area. The fee is assessed based on one day's worth of vehicular trips created by a development. That figure was approved by the Board of Estimates last week.
When a developer applies for a building permit, that dollar amount will be plugged into a formula, which also takes into account the development's square footage and number of units, to determine how much the builder must pay for infrastructure costs.
"The idea is that, for smaller projects, the developer will be able to walk into the permit counter and write a check," Kendrick said.
Bigger projects may not be so simple, he said. For example, discounts may be offered for developments with features that encourage alternative means of transportation.
The fees will be assessed for residential projects with 10 units or more, as well as for warehouse developments of 100,000 square feet or more and for mixed-use properties that are 50,000 square feet or larger.
Fees for the other four zones will not be presented to the Board of Estimates until the city finalizes their long-term transportation improvement plans, Kendrick said.
The old system of conducting a traffic impact study and negotiating the cost of mitigation remains until a fee is finalized for each zone — as it does for all city areas outside the traffic-mitigation zones.
The five zones are projected to bring in tens of millions of dollars of revenue for the city.
From new construction and redevelopment in South Baltimore alone, the Department of Transportation expects that over the next decade it will bring in nearly $27 million in fees, which will go toward improving transportation infrastructure.