Public Improvement Fees are often part of the cost of a sales transaction at some retailers throughout the county. The PIFs are listed as a separate line item from the purchase and sales tax, and developers can implement the fees without municipal approval.According to coloradosprings.gov, public improvement fees are private fees that developers require from their tenants/retailers, who, in turn, collect a percentage of those fees from customers. The fee is collected as part of a sales transaction and is generally a percentage of the sales amount.A PIF can be used for any designated purpose, but is generally used to pay for infrastructure, on-site improvements and maintenance (curbs, sidewalks, streetlights, parking facilities, roads) within the developed area.One Falcon resident, who asked to remain anonymous, recently noticed the public information fee on his sales receipt. ìI honestly donít understand how PIFs can be legal,î he said. When shopping locally, he found the extra fee on his receipt, and he said it totaled almost 2% of the transaction. He talked to the manager and asked if he had to pay it; the manager told him patrons have to pay the fee if they choose to shop there. The manager told him that they (retailers) donít have a choice and consumers donít have a choice either. ìItís unethical,î said the anonymous caller.Russell Perkins, principal at Evergreen Devco (developers of the Falcon Marketplace), said there is a whole process they go through when determining whether to build a development. Is there adequate interest, is there a tenant demand and what is the initial cost of the project and the ongoing costs? Perkins said developers have been underestimating property taxes. He said they research other comparable properties to determine what the taxes will amount to in the future, as they know property taxes will increase after improvements are completed on the newly developed properties.For example, he said on a property in Aurora, Colorado, they projected that property taxes would be $9 a square foot charged to the tenants. They developed the property, opened it, the government raised property taxes and imposed new mill levies, etc., which resulted in an increase in property taxes to $14 per square foot instead of the $9 a square foot. The renters had to pay more, and some werenít making enough of a profit margin to handle the increase; a few of them ended up going out of business, he said.ìWe learned from that development that property taxes are going to be big, so we made an agreement with the tenants to set a 1% PIF, which their customers see on their receipts,î Perkins said. ìWe used that to offset some of the property taxes to get it down to a more reasonable level.î The tenants agreed it needed to be imposed for them to survive. They were willing to take the risk, knowing that a small percentage of their customers would notice it and no longer shop with them, he said.ìIf youíre buying a cup of coffee, itís not a big deal, but if youíre buying a big-ticket item, it can add up,î Perkins said. ìMost of the time, in the shopping areas we develop, it amounts to small transactions and the customers either donít notice or donít care.îPerkins said they rarely use a PIF; out of the hundreds of properties they have developed, they have only used a PIF four or five times. ìIf we donít need the extra financing source, then we donít use a PIF because there is a stigma attached to it,î he said.The PIF is meant to be used to fill any necessary financial gaps to make the businesses successful in that development ó maybe it would be used for marketing purposes, Perkins said. The gap determines what percentage to impose, he said.Perkins provided an update on the Falcon Marketplace. The community will hopefully see construction at the Falcon Marketplace in early March; they will not be placing a PIF on the businesses in that development, Perkins said.The New Falcon Herald reached out to the corporate office where the anonymous caller shopped, but did not receive a response. The manager at that store did not have any information about the developer or how the PIF is being used.All county commissioners were contacted for their input, but none responded.
