WINDHAM – Windham Economic Development Corp. Executive Director Tom Bartell and Windham Planning Director Ben Smith faced tough questions from local businessmen and town councilors about a proposed impact fee on development designed to fund road improvements on Route 302, at a March 5 breakfast meeting at Windham Weaponry conference center in North Windham,.

The subject of the breakfast, which was sponsored by the WEDC, was a proposed impact fee on future commercial and residential development in Windham that generates new traffic through the Whites Bridge and Anglers roads intersection with Route 302. If passed, the fee is designed to raise $300,000 toward a $2.875 million project that would realign Anglers Road with Whites Bridge Road and construct a new two-way center left-turn lane in the same area.

The Maine Department of Transportation would provide $1.65 million toward the construction.

At the meeting, several local businessmen characterized the fee as a disguised “tax” on future development, and expressed concern that if the fee passed, the town would increasingly look to fees on development as a source of revenue.

Bill Strout, the co-owner of Maine Flag & Banner, expressed disbelief when Smith described the proposed policy as a “fee on new development.”

“You’re mincing words,” Strout said.

“Perhaps,” Smith said. “I think that a tax is more of a broad base. It applies to everyone.”

Dan Hancock, who recently stepped down as president of the WEDC’s board, said that the town had potentially over-estimated the impact fee revenues necessary to fund the Route 302 road improvements.

“The WEDC’s been doing a lot of work, and we think there’s a decent possibility that that would be less than $300,000,” Hancock said. “My question would be, ‘What’s the hurry to do this now until we have a more firm idea of what that cost would actually be?”

“That $300,000 number is the latest number I saw,” Smith said. “I don’t know that there’s a hurry to implement it.”

Strout questioned why the town needed to conduct the road improvements at all.

“I’ve lived in this area all my life,” he said. “The road has always been there – the way it is. Now, I’m not saying ‘Good enough for my father, good enough for me.’ What is changing in that area that makes us feel that it’s important – high importance?”

“There are a number of accidents at that intersection,” Bartell said. “It’s been rated over the years as a problem intersection, and it is an opportunity to fix that problem.”

Roy Moore, a town councilor who owns Moore Chiropractic and SeaCoast Adventure located just north of the Anglers Road intersection, raised concerns about the town’s formula for calculating the fee, which is based on an estimate of how many “primary peak hour trips” a given business has generated through the intersection. According to the formula, a developer must pay $765.31 for each new primary peak hour trip generated by a proposed development.

Different businesses accrue different rates of profit for every trip through the intersection, Moore said.

“A business trip at the donut shop may only have a profit of two, three dollars,” Moore said. “The model’s fine, but it doesn’t take into account that all businesses are not created equal.”

Town Manager Tony Plante said that the impact fee would need to be applied consistently to all development.

“To Councilor Moore’s point that not all businesses are created equal, not all development is created equal, that’s true,” Plante said. “That may be something the council can deal with in terms of our economic development policies.”

Jay Hackett, owner of Windham Rental Center, characterized the proposed fee as an excessively complicated way of avoiding raising property taxes.

“It seems to me if we need this for the good of the town, then maybe just the taxes should go up,” Hackett said. “If you have to spend this much time explaining fees and trips and everything – it’s just another way of calling something a tax.”

Peter Godsoe, a commercial lender for Norway Savings Bank, expressed relief that the proposed impact fee has a sunset provision.

“It’s one time,” he said. “It’s specific to a project. It sunsets, goes away and you’re done.”

But Strout remained unconvinced that the fee would ever be repealed.

“The $300,000 estimated to do this is going to be a penalty to all new builders of anything within the town of Windham,” Strout said. “It can escalate from there as far as these fees because we’ve got our foot in the door and here we go.”