For the second year in a row, South Jordan ranks as the costliest city in Salt Lake County when it comes to securing a commercial office building permit, according to a Brigham Young University study released Thursday.
The study shows that South Jordan's office permits cost roughly three times more than neighboring cities like West Jordan and Sandy.
The 2006 Municipal Development Report Card, conducted by BYU's Field Study Department, said a developer proposing to build an 84,000-square-foot building in South Jordan would have to pay the city $386,948 in numerous fees in order to obtain a building permit.
"In downtown Salt Lake City, the same building in fees costs you roughly $150,000," said Michael Roderick, president of the National Association of Industrial and Office Properties, which commissioned the study. "If the developer has to pay higher fees, those fees go into the building. Therefore, we have to charge more rent. Therefore the retailer has to charge more for his hamburger or your Levi's.
"You and I as consumers end up paying those additional costs."
But Rick Horst, city manager for South Jordan, said the report is nothing more than a "good piece of fiction."
"They come in with young students who know very little about what they are doing and pretend to be a legitimate builder and give us a very simple drawing and then ask us to figure out what we don't have all the information we need to figure it out," Horst said. "You've got to know things like location. In a city that is growing you may or may not have sewer or water lines there already."
According to the report, the five costliest cities for office building permits are South Jordan, Bluffdale, Draper, Riverton and Salt Lake City. Midvale, at $28,561, was the cheapest city in permit and development fees for a single project.
Still, South Jordan's high-priced permits are delivered much faster than other cities. The report noted that a permit for a commercial office building could be obtained in two to three months, ranking South Jordan the fourth-best of 14 cities.
At six months, Riverton took the longest to issue a commercial permit. Murray and West Valley were the fastest at one month.
David Baird, economic development manager for Draper, said despite his city's ranking as the third costliest in fees and next to last in the time it takes to obtain a permit, commercial development in Draper is booming.
One of Salt Lake County's biggest office parks, The Pointe, is under construction in Draper. The complex is expected to encompass roughly 600,000 square feet of premium office space, which is more than downtown Salt Lake City's tallest office tower — the Wells Fargo Center — and larger than other suburban office centers like the Cottonwood Corporate Center.
"We believe that the market is desirable enough that it more than offsets these issues that were raised today," Baird said. "We have had double-digit growth on an annual basis for close to the last 15 years."
William Palmer, a BYU student majoring in finance who worked on the report, said there were many situations in which city staff could not or would not answer simple questions regarding permit fees.
"South Jordan said, 'Our fees are negotiable,"' Palmer said. "Which means, depending on what you're bringing in here, we're going to be willing to work with you more."
Horst agrees that the city's impact fees are negotiable.
"The truth is there is not a city probably in the country that if an office or retailer comes in that the cities aren't going to negotiate with them," Horst said. "If they are, for instance, a million-square-feet retail center that we are going to get a lot of sales tax, then we can help pay some of the infrastructure through sales tax."
Isaac Alldredge, also a BYU student who gathered information from cities, said most of the municipalities were cooperative.
"The one exception was South Jordan," said Alldredge, who added that after four visits and several weeks of verifying data, South Jordan's development fees as listed in the report are the "most accurate of all the municipalities."
But South Jordan officials aren't buying it.
"If you come and look at our city, we are growing fast-paced," Horst said. "Why does everybody keep knocking on our door wanting to come in if the fees are scaring them away? We've never charged a full set of fees in I don't know how long."
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