Monday, June 24, 2024

Developers in Somerville will face larger linkage fees after a June 22 vote by the City Council. (Photo: Marc Levy)

Although there were reservations from officials on Somerville’s Planning Board and developers, the Somerville City Council was confident the time had come to hike developer “linkage” fees to benefit the Affordable Housing Trust Fund. On June 22, councilors voted unanimously to double this fee to $22.46 from $11.23 per square foot.

Linkage fees are a tool used by some cities – including Somerville and Cambridge – to mitigate the impact of large developments on the community by charging developers. In Somerville, money collected from the fees goes to the Somerville Affordable Housing Trust Fund and Job Creation and Retention Trust Fund. The linkage fees for jobs, which stand at $2.75 per square foot, remain unchanged from the June 22 vote.

Councilors also introduced a graduated linkage charge for smaller projects. In all cases, the first 15,000 square feet of a development are exempt from the charge. The developer would need to pay half the fee for every square foot between 15,000 and 30,000 square feet. The full fee applies only when the square footage exceeds 30,000. This graduated approach now applies to both funds.

Somerville’s approach differs from those of its neighbors: While Cambridge exempts developments under 30,000 square feet, its fees have stood at $33.34 since October. In February, Boston approved  a fee hike targeting life-sciences developers with fees of $26, while charging $19.33 for other developments of more than 100,000 square feet.

Nick Barker, who is on the development team for the nearly 2 million-square-foot Boynton Yards development, spoke against the rise in fees during a May 18 session of Somerville’s Land Use Committee. “It’s been widely reported that employment growth and funding has been negatively impacted in the last few months,” he said.

Before the vote to approve the fees, city councilor Jake Wilson referred to such statements as “bad faith arguments.”

“We keep hearing how we risk killing off the new growth in the city with this … we’re already seeing a slowdown before we’ve done anything with this. If and when this slowdown does fully kick in, it’s got nothing to do with linkage fees. It’s going to have everything to do with global market conditions,” Wilson said.

Karl Seidman, the consultant hired to conduct the “nexus” study on linkage fees, conceded that economic circumstances such as increased interest rates had changed since he completed the study in 2022. But linkage fees were usually not a major deterrent to development, he said. While acknowledging the price of development had increased, Somerville director of economic development Tom Galligani – who advised the city on this amendment with Seidman – supported increasing the fees.

Seidman and Galligani said the fees remained relatively conservative: Seidman’s nexus study says Somerville could have increased the fee to more than $50, but an increase by $10 to $20 would allow the city to stay competitive with neighbors such as Cambridge and Watertown, particularly by keeping the price of development below Cambridge’s.

The fee is generally triggered with the issuance of a special permit, master plan special permit or site plan approval, meaning that many large projects, such as all but two of the Boynton Yards buildings, will not be affected, city councilor Beatriz Mouakad said.

In a map provided to the council by Galligani tracking areas potentially affected by the change, only five of the 68 listed properties are marked as likely to be affected; 59 are listed as unaffected.  “It just shows us how tight we are for commercial space,” Mouakad said. “This is why this linkage fee is so critical for us.”