Sylva’s Creekside Oyster House to expand
Sylva’s Creekside Oyster House and Grill will soon upgrade to a new building following the Tuckseigee Water and Sewer Authority’s decision to allow the owner an alternative to paying a large, upfront impact fee.
“That was a big hurdle,” owner George Neslen said of the fee issue, “and now that I’ve worked that out I’m continuing work toward the project, and hopefully I’ll be able to get it started before the end of the summer.”
Neslen’s plans to expand his business came into the public eye last month, when he told the Sylva Board of Commissioners that TWSA would require him to pay nearly $50,000 in upfront water and sewer impact fees before he could start construction on the 150-seat restaurant. Such a fee would be a deal-breaker, Neslen said, forcing him to either keep his business small or move it to a different county.
Sylva board members then approached TWSA during its Feb. 13 work session, presenting a letter on Neslen’s behalf during a public comment session that drew multiple other speakers, all expressing their belief that high impact fees were strangling Sylva’s economy.
Neslen agreed with that stance but also asked the board why his business couldn’t qualify for the allocation rental option. TWSA allows users at existing taps to pay a smaller, monthly impact fee rather than forking over a lump sum impact fee payment. While such fees must be paid in perpetuity, rather than stopping at a certain dollar amount as would be the case with an upfront fee, they are much lower and easier for a small business to budget. Neslen plans to build new, but the property in question has an existing building with a tap installed — why wouldn’t that qualify him for the rental option, he asked?
According to TWSA Executive Director Dan Harbaugh, the rental option hadn’t been discussed with TWSA before Neslen approached the town board and drove the issue to public discussion. After the Feb. 13 meeting, he said, Neslen met with TWSA staff, and during that meeting they identified a way to use the allocation housed at the existing buildings on the property as the basis for allowing allocation rental.
“When the restaurant owner (Neslen) ran to the Town of Sylva raising his concerns over ‘impact fees’ he hadn’t provided TWSA staff the information necessary to fully review the matter and advise him on all options,” Harbaugh said in an email. “He heard how much the impact fees would be for a new 150-seat full-service restaurant and stopped the conversation there. The option of a rental wasn’t discussed with TWSA staff to the point where it was or wasn’t verified as an option for him. His incomplete information on the matter led to the public outcry regarding this.”
Neslen remembers things differently.
“He (Harbaugh) said I ended the conversation there, but it took me a long time to even get somebody on the phone to speak with me, and then they just said, ‘Here’s a form. This is it. It’s a new building. You have to pay this sum.’ It was approximately $50,000,” Neslen said. “Because there was already water and sewer there I asked about that (allocation rental) and I was told no. Yes, I ended the conversation there, and I went to the town and asked them to help support me, and they all did. And then they (TWSA) were much more willing to sit down at the table and work something out.”
Under the rental policy, Neslen said, he will pay a $175 application fee plus a couple thousand dollars to install a larger meter. In addition to his monthly fee for water and sewer use, he will also pay a monthly fee in lieu of an upfront impact fee payment but doesn’t yet know how much that will be. He has to turn in the application before being given a number, he said, and he hasn’t done that yet because once the application is turned in the clock starts ticking to either start using the allocation or pay a monthly fee to keep it available. Neslen said he’ll turn in the application once he’s chosen a contractor.
The goal is to start construction this summer and have the new restaurant done by the end of the year.
While Neslen’s situation has been resolved, some believe that a more permanent policy change should be enacted to address future, similar situations that may arise.
“I did get my individual situation to where I think it’s going to work for me, and it will technically fall under that rental policy, but I think they should offer that for new construction anyway,” Neslen said. “High impact fees are a hindrance on our local economy.”
Last month, TWSA’s policy committee discussed a potential change that would expand the rental option to include new construction.
According to David Nestler, a Sylva commissioner who is on the TWSA board and its policy committee, most committee members don’t support such a change. The full board will have the opportunity to consider it during TWSA’s next meeting, 5:30 p.m. Tuesday, March 20.
“There’s three members of that committee. I’m one of them. I was the only one who voted to make that change,” Nestler said during a March 8 Sylva town meeting. “The other two members voted not to recommend that policy be changed.”
Impact fees have been a frequent topic of discussion over the last several years, with many holding them responsible for preventing growth in Jackson County. Others, however, point out that water/sewer system funding has to come from somewhere, and that if impact fees were to disappear rates on existing users would have to rise significantly.
A 2017 state law required all water and sewer utilities charging up-front fees to go through a prescribed process to evaluate the maximum such fee they can legally charge. TWSA received a preliminary report on its results last month and learned that its current fees are substantially lower than what would become the legal maximum, should the results of that preliminary report be adopted. A public hearing on the report will be held Tuesday, April 17.