Watertown’s first-ever linkage fee imposed upon commercial developments would be tied to inflation, beginning at $11.12 per square foot of gross floor area.

The state Legislature last year approved a home rule petition submitted by Watertown to authorize a new fee up to $18 per square foot, which would apply to commercial developments totaling 30,000 square feet or more. The fee would be adjusted annually and tied to the consumer price index.

The proceeds would go to a fund to support the Watertown Affordable Housing Trust, which was established in 2021.

But the Charles River Regional Chamber cautioned city officials that the change could drive away development and hamper attempts to revitalize Watertown Square.

“We respectfully caution the city to be thoughtful about implementing the linkage program given the serious economic headwinds – including rising interest rates, material shortages, weakening demand for life science and office space, layoffs in the tech sector, a labor shortage in the building trades and a looming recession – before us,” President Greg Reibman wrote in a comment letter to the Watertown City Council and Watertown Planning Board.

Watertown’s new fee follows a recent increase in Cambridge’s existing linkage fee and a proposal by Boston Mayor Michelle Wu to hike the city’s linkage fees, including a two-tiered system with higher fees for lab projects.

Wu proposes increasing Boston’s $15.39 per square foot fee to $30.78 for lab projects and $23.09 for other commercial projects, while reducing the threshold of projects subject to the fee from 100,000 to 50,000 square feet.

Cambridge City Councilors last fall approved a 66 percent increase in linkage fees to $33.34 per square foot.

The Watertown Planning Board will hold a hearing on the linkage fee March 8.

Watertown Seeks Linkage Fee Tied to Inflation

by Steve Adams time to read: 1 min