Panda Express swaps right-of-way for fees

Although the owners of the newly opened Panda Express restaurant previously stated they would be paying for development impact fees, City Council effectively eliminated those fees Monday by accepting a transfer of 1,225 square feet of land for future widening of Stockton Hill Road.

According to Ryan Pittman, regional real estate manager for Panda Restaurant Group Inc., the company made the decision to locate in Kingman several months ago without regard to the payment of impact fees. Although he was not directly involved in dealing with the city, Pittman said the city indicated that it would require the right-of-way dedication when the restaurant began pulling necessary building permits.

"When we were ready to pull permits, the city said, 'By the way, we want to take some of your land,'" Pittman said. "They sent over an agreement, and we said, 'Wait a minute, they're taking our land, which we paid market value for." We went to them with the proposal, 'We have these fees to pay, so why don't we make a swap?'"

Pittman explained, "It's often customary for businesses to be reimbursed for right-of-way acquisitions. In this case, a deal was struck using the fees, but it could have easily been a different arrangement."

According to the resolution drafted for the payback of development fees, Taylor T. Ross and Associates, an independent Kingman appraisal firm, valued the land at $34,300, or $28 per square foot. Rather than pay that figure to Panda Express in exchange for the land fronting Stockton Hill Road, the new arrangement involves the waiver of transportation impact fees, which were charged to the restaurant in the amount of $10,575.36, or the equivalent of $8.63 per square foot.

The owners accepted the proposal, which Council then approved on Monday.

Now, the city must transfer $10,575.36 from the general fund to cover the transaction. Pittman noted that since the land was independently appraised at more than $30,000, the city actually saved money by only waiving the impact fees.

In the past, it was common for Council to add conditions - such as land dedications - before it would approve subdivision plats, rezones and building permits. Since the advent of impact fees, that custom has largely given way to asking for right-of-way in exchange for fee waivers, essentially requiring the city to pay for land it used to obtain for free.

The transfers from the general fund are put into separate accounts to be used for long-term, growth-related capital improvements.

The city charged Panda Express $15,180.96 in total impact fees, which include fire, police, sewer, transportation and other fees, but only those relating to transportation may be legally waived for any reason.