The URL can be used to link to this page

Home My WebLink About10.E.1. 2013 Park Dedication Fees IO.E.I. SHAKOPEE TO: Mayor and City Council Mark McNeill, City Administrator FROM: Jamie Polley, Director of P & R DATE: 01/08/2013 SUBJECT: 2013 Park Dedication Fees (B & C) Action Sought The City Council, if concur, adopt the 2013 Park Dedication Fees adopted by Ordinance No. 863, Fourth Series. Background Minnesota State Statute 462.358 allows cities to require park land dedication during the development process, or to "...accept an equivalent amount in cash from the applicant for part or all of the portion required... ". The city's Park Dedication ordinance specifies that the cash contribution amount must be established annually by City Council. The last time the City's Park Dedication fees were changed was in 2006. At this time they were increased to the current fees ($5,340 /unit for single - family /duplex residential, $4,450 /unit for multiple family /apartments and $6,930.00 /acre for commercial/industrial). The current fees were calculated utilizing the below formula: Single Family and Duplex Average Land Value / 25 units per acre (25 units per acre represents the equivalency between land dedication of 1 acre for every 75 people, and 3 people per unit in a development) Multiple Family and Apartments Average Land Value / 30 units per acre Commercial Increase Based on the Average Increase of the Single Family and Multi Family The 2007 Comprehensive Plan update reviewed the above park dedication formula and concluded that the current park dedication land requirements or cash in lieu of land fees alone would not support the future park system as proposed in the Comprehensive Plan. The recommendation is to find a recipe and balance of multiple funding methods that could support the future park, trail, and open space system. The Comprehensive Plan suggests revisiting the 2007 park dedication requirements to assess the potential to increase the level of service (1 acre per 75 people), assess the potential to increase both Residential and Commercial fees, document who is using the facilities and consider a separate trail fee. Recommendation At the time the 2007 Comprehensive Plan was being revised the number of land sales in the City of Shakopee were declining but the sale prices for residential lots were still at the high end and park dedication fees had been increased since 2002 as illustrated below: Type of Property 2002 2003 2004 2005 2006 - 2012 Residential Single family /Duplex (per unit) $2,200 $2,660 $3,615 $4,632 $5,340 Multi - family /Apartment (per unit) $1,900 $2,220 $3,012 $3,860 $4,450 Commercial/Industrial Properties (per acre) $4,080 $4,470 $5,344 $6,277 $6,930 Fees have not been adjusted since 2006 because of the decline in the number and value of land sales which provided the City with very little comparable data to base fee adjustments on. Currently there are still very few land sales to provide the City with comparable data and with the decline in the economy known land sale prices have decreased. With the current market recent developers have questioned the current park dedication fees. Staff was able to find one recent land sale within the City between the Sioux Community and a private land owner. The total sale was $13,821,250.00 for 112.21 acres or approximately $123,173.00 per acre. Putting this number into the formula above results in a reduction in the park dedication fees for residential development by approximately $400.00 or 7.75 %; Single Family/Duplex Res: $123,173.00 /25 units per acre = $4,926.92/unit Multiple Family /Apartments $123,173.00 /30 units per acre = $4,105.77 /unit Commercial/Industrial No increase or 7.75% increase or decrease to the current fees = $6,392.92/$7,467.08 per acre To assess where the City's fees are in relation to other communities, staff conducted a survey that compiled the fees of 16 communities within the metro area. The survey results are attached. The results indicate that Shakopee is among the higher rates for single - family residential and multi - family developments and approximately $1,400.00 over the average fee. Shakopee is however lower in commercial/industrial fees and approximately $2,000 under the average commercial fees. Many of the communities that responded to the survey have raised or lowered their fees along with the current market in their community. The current comprehensive plan indicated that fees should be increased while the current land sale information utilized in the park dedication formula indicates the fees would decrease. In addition, based on the information gathered from surrounding communities, staff recommended to the PRAB on October 22, 2012 the following 2013 Park Dedication Fees: Residential Single family/Duplex (per unit) $4,930.00 Multi - family /Apartment (per unit) $4,110.00 Commercial/Industrial Properties (per acre) $7,470.00 Reducing the fees for residential development reflects the current economy. The increase in the commercial/industrial fees is based on the recommendation stated in the comprehensive plan. All the recommended fees bring Shakopee's fees closer to the average fee within the metro area. Please note that if reductions are considered the City Council should determine other sources of funding for the Park Reserve such as a levy allocation. If a specific form of funding is not defined, future park projects will not be adequately funded. The PRAB however did not feel the one land sale was an adequate comparable. They are recommending that the residential rates remain the same based on the comprehensive plan results indicating that even the current rates would not be enough to support the future development of the park and open space system. The PRAB is however recommending the increase in the commercial/industrial park dedication fee per acre. The PRAB's recommended park dedication fees are as follows: Residential Single family /Duplex (per unit) $5,340.00 Multi- family /Apartment (per unit) $4,450.00 Commercial/Industrial Properties (per acre) $7,470.00 Multiple Senior Living Facilities The City has recently approved the construction of a senior housing facility containing multiple units. The developer of the facility has requested that the City consider a reduction in their park dedication fee. The City Council has directed staff to determine the appropriate park dedication fee, if any, for senior housing. City Code Chapter 12, Sec. 12.34 states that the standards and guidelines for the dedication of land for park, playground, and open space purposes (or cash contribution in lieu of such dedications) in the subdividing and developing of land within the City shall be directly related to density and intensity of each subdivision and development. The developer is stating that the assisted living and full care units will not have any impact on the park system. Although the residents themselves may not utilize the park system to the extent of a multifamily development, there may be some impact from visiting family and friends. In addition, the facility itself will create a large number of jobs and the employees may utilize and impact the park system during their breaks and/or before or after work. Council also directed staff to contact other communities and inquire about their requirements for senior housing developments. Staff included a question on the recent survey given to 16 communities as to whether they have any special fee considerations for multifamily or senior developments. 12 of the 16 communities said no. 2 of the 4 remaining communities said no but may change the fee if a developer requests a reduction. Chanhassen charges independent living units the same as multifamily units. Units that provide care less than 24/7 are charged '/4 of the multifamily rate and units that provide care 24/7 are not subject to fees. In Lakeville senior apartments are charged the same rate as multifamily units but assisted living units are charged $500 /bed. Comparable community data is not a representative or reliable data in determining the impacts on Shakopee. In addition the developer making the request indicated that they have been charged a minimum amount in park dedication fees for their last few projects. Upon reviewing and contacting many of the communities that are locations of their facilities, many of the facilities are outside of the metropolitan area and these communities either charge a minimum amount for park dedication fees or do not charge park dedication fees. The parks may be funded through a different revenue source then dedicated fees, such as being part of the tax levy. Staff feels that the development will have some impact on the park system either directly through residents and staff or indirectly through visitors and events. Staff concurs that the intensity of use of the park system may be slightly less than if this development were a single or multi - family development however there will still be an impact on the park system. Staff is therefore recommending that the park dedication fee for senior housing be as follow: Senior Apartments or Independent living = Multi - family /apartment (per unit) rate Assisted living or full care senior housing = 3/4 of the multi - family /apartment (per unit) rate Budget Impact Park Dedication Fees make up the Park Reserve Fund. The Park Reserve Fund is utilized for the acquisition and development or improvements of parks, recreational facilities, playgrounds, trails, wetlands, or open spaces within the City. Relationship to Vision B. Positively manage the challenges and opportunities presented by growth development and change C. Maintain the City's strong financial health Requested Action The City Council, if concur, adopt the 2013 Park Dedication Fees adopted by Ordinance No. 863, Fourth Series. This requested action coincides with the fee schedule adoption previously addressed this evening. This action follows the request of the City Council to review and examine the current park dedication fees. Attachments: 2012 Park Dedication Fees Comparison � �� "� ' CITY Residental I�Olultifamily Comm/Indust Updated 20131ncr? Plymouth $ 6,500.00 $ 6,500.00 $ 8,000.00 No Eden Prairie $ 6,000.00 $ 6,000.00 $ 11,000.00 2007 No Chanhassen $ 5,800.00 $ 3,800.00 $ 12,500.00 No $ 5,000.00 Shal<opee $ 5,340.00 $ 4,450.00 $ 6,930.00 2006 TBD Brool<lyn Parlc $ 4,600.00 $ 4,600.00 $ 7,600.00 2006 No Apple Valley SF $ 4,584.00 $ 2,841.00 Comm $ 1,248.00 /1000 sf 2006 No TH $ 3,509.00 Ind $ 100.00 /1000 sf Burnsville SF Rur $ 4,296.00 $ 3,720.00 Comm $ 16,500.00 2012 Decrease SF $ 2,574.00 Ind $ 10,500.00 DU $ 3,450.00 Inver Grove Heights $ 4,011.00 $ 3,950.00 $ 6,000.00 to 7000 2007 IVo Maple Grove $ 3,971.00 $ 3,177.00 Comm $ 11,000.00 2012 No Ind $ 6,500.00 Savage $ 3,656.00 $ 3,656.00 $ 8,504.00 2012 TBD Lakeville SF $ 3,532.00 $ 1,824.00 Comm $ 7,693.00 2012 TBD TH $ 2,403.00 Ind $ 4,558.00 Woodbury $ 3,500.00 $ 3,500.00 $ 7,000.00 2011 No Eagan SF $ 3,308.00 $ 3,212.00 Comm $ 1,737.00 /1000 sf 2007 TBD DU $ 3,258.00 Ind $ 473.00 /1000 sf TH $ 3,458.00 Blaine $ 2,557.00 $ 2,557.00 $ 7,378.00 Increase Hastings $ 2,200.00 $ 2,200.00 New Brighton $ 1,630.00 $ 1,630.00 $ 12,278.00 2012 TBD Fridley $ 1,500.00 $ 750.00 $ 1,000.00 NO Average: SF $ 3,839.00 SF(less bottom 2) $ 4,142.20 Multi $ 3,433.35 Comm $ 8,813.07 Ind $ 7,839.14 Shal<opee $ 1,501.00 $ 1,01G.65 Comm $ (1,883.07) SF(less bottom 2) $ 1,197.80 Ind $ (909.14) Shakopee Survey October 2012 *Residential Formula:10 acres of land required for every 1,000 residents brought in by the project.Commercial/Industrial Formula:5%of gross land area.An annual appraisal is conducted to determine average land value per acre for each of the various zoning districts. *Formula:Ave Fair Market Value x 10%divided by the Ave density in the city *(number of units)x(persons per unit)x(0.00955 acre)=total land area of dedication*$150,000/acre single family($175,000/acre Multi,$2G0,000/acre Comm,&$100000/acre Ind) *Formula:Acres required to dedicate x Land Value=Cash fee in lieu of land *Average land value divided by 25 units per acre SF(equivilent to 1 acre/75 people(3 people/unit))or 30 units per acre MF Do vau have any special fee considerations for multi family or senior developments? 12 of 16 said NO *The number of people per unit in our formula is based on the average population forthat dwelling unit type as established by the Metropolitan Council.-Burnsville *No,however the city ordinance has a provision that allows an applicant to request either an increase or decrease of dedicated(land)or payment upon determination by the Council that such dedication or payment is unreasonable or insufficient given the specific characteristics of the proposed subdivision and its inteneded use.-New Brighton *Yes,independent living equals the same as multifamily,facilities with care less then 24/7 are 1/4 of the multifamily rate and facilities that provide 24/7 care and nursing homes are not subject to PD fees.-Chanhassen *Assisted living facilities are$500 per bed.Senior apartment buildings pay the multifamily/apartment rate.-Lakeville Is there a dedicated or planned use of the park dedication fees? *Per City's Capital Improvement Program *Development of Neighborhood Parks *Parks Capital Improvement Program *Comprehensive Plan Items Do any other funds supplement these fees for projects? *General Fund *Grants *Predetermined levy supplement *Donation,bonds,liqourfunds *Heritage Fund If a developer requests a reduction in park dedication fees has this request been granted? 7 IVo 2 Yes *City Council may waive up to 2%of the fees if parl<and recreational faclilties are proposed as part of the project *This has been requested once in the last 5 years and the request was granted.The Council determined the scale of the project did not warrant payment of the full fee.The porject was as addition to an existing industrial building,which also required a subdivision,and not new development. *We have a special rate for affordable projects *Generally No....Possible reduction if the developer is providing additional amenties to benefit park system(example might be off road trail on property) *Never reduced park dedication fees for developers.Developer has negotiated previous year rates with City and was granted due to the large size of the development *The City has the option of requesting a land dedication for parlc or preservation purposes of up to 10%of the gross area in lieu of a fee,combinations are also possible.A partial credit may be considered for portions of the development that have a public or recreational value.Ex;playground in an apt complex Have vou made park plannin�chan�es based on fee adjustmerrts? 12 No 31(es *The Parks 5 year CIP is re-evaluated annually based on development fee revenues and level of general fund support available *The 5 year CIP may be adjusted as determined by the balance of the parlc dedication account and projected development.The new infusion of levy based fees is intended to stabilize the schedule *Yes.Pushed CIP non-priority projects out in years to accomodate the priority projects and Iceep the fund balance in the blacic Shakopee Survey October 2012