12-11-02 PR5775 Wayzata Boulevard, Suite 555, St. Louis Park, MN 55416
Telephone: 952.595.9636 Facsimile: 952.595.9837 planners@nacplanning.com
MEMORANDUM
TO: Otsego Mayor and City Council
Otsego Planning Commission
Otsego Park and Recreation Commission
FROM: Daniel Licht
DATE: 11 November 2002
RE.: Otsego - Park Dedication Study
FILE NO.: 176.08 - 02.01
BACKGROUND
Our office has been directed by the City Administrator to prepare an evaluation of
Otsego's present dedication requirements for park and trails. This information is
intended to determine if Otsego's present requirements are fair to developers and
adequate for addressing the park needs of the community related to new development.
It must be emphasized that case law from Dolan v. Tigard requires the City's dedication
requirements be related to the benefit of the effected property.
The purpose of this study is to determine the relationship of the City's existing
dedication fees to actual land acquisition and development costs. The basis of this
analysis is raw land costs and projected improvement costs. The results of the study
will illustrate how the City's present fees should be adjusted, if necessary, to meet the
City's future park and trail needs related to new development.
Exhibits:
A. Sec. 21-7-18 Park Land Dedication
B. Park Dedication Survey
ANALYSIS
Existing Dedication. For both residential and commercial/industrial dedications, it is
the City Council's decision, with recommendation from the Park and Recreation
Commission, whether land, cash or a combination thereof will be accepted. Existing
requirements for Park Dedication are outlined in Section 21-7-18 of the Subdivision
Ordinance. The City last updated its park and trail dedication requirements in August
1995.
Residential park dedication requirement are 10 percent of the gross area being
subdivided or a $950.00 per unit cash fee in lieu of land. Commercial and industrial
properties are required to dedicate 10 percent of the gross area being subdivided or 10
percent of the fair market value of the property in an undeveloped state. Fair market
value may be based upon appraisals, purchase agreements, comparable transactions
or other records the City may rely upon.
Otsego also requires a separate dedication for City trails, which was established in 1995
as well. The requirements of Section 21-7-18 of the Subdivision Ordinance require that
any proposed trail conform to the City's bikeway plan. If no trails are proposed, the
developer must pay a $125.00 per unit fee in lieu of land. As such, Otsego's total park
and trail dedication fee in lieu of land is $1,075.00 per unit for residential uses.
Surrounding Jurisdictions. The table attached as Exhibit B illustrates the park
dedication requirements of several cities to the northwest of the Twin Cities. All of the
communities require a 10 percent land dedication for residential subdivisions. There is
significant variation between the communities in terms of cash dedications for parks in
lieu of land, ranging from $700.00 to $1,300.00. Eight of the twelve surveyed
communities, including Otsego, require commercial or industrial development to
dedicate land for parks. Most require dedication of a percentage of raw land or a
specified cash fee in lieu of land, as does Otsego.
In terms of trail dedication, only five of the 12 communities surveyed, including Otsego
required a separate trail dedication. Of these, Albertville requires dedication of trails
only when shown on their trail plan, which is then credited towards total park dedication
and Monticello requires sidewalks on one side of all new streets.
Park Land Acquisition and Development. The following paragraphs analyze the
costs of acquiring and preparing a parcel for development. The City would incur similar
expenses if it were to elect to accept fees in lieu of land and acquire park lands on it
own. As such, the following factors, based upon informal discussions with developers
active in the City, must be considered in evaluating a aper unit' park dedication fee in
lieu of land.
For comparison purposed only, Crimson Ponds, Heritage Hills, Pheasant Ridge and
Prairie Creek subdivisions were used as examples. Heritage Hills was developed with
one -acre minimum lot sizes and individual on-site treatment and water systems. The
other three subdivisions were all platted with urban sized lots within the East Sanitary
Sewer Service District and are provided municipal sanitary sewer and water services.
Raw Land Costs. In discussions with area developers, it has been determined
that raw land is selling between $10,000 and $16,000 per acre. In the following
analysis of raw land cost per lot, the $16,000 estimate is used.
Per Unit Dedication. The City currently requires a cash dedication in lieu of
land based upon a per unit fee. This method allows for simple calculation of park
dedication fees in lieu of land from project to project based upon average raw
land values and the assumption of low density development. The analysis above
demonstrates that a flat park fee does not recognize the varying land values
and/or development intensities occurring in the community. The following
formula illustrates if the park dedication fee may need to be adjusted to reflect
the relationship and benefit between park development and raw land values:
Estimated
Area
# of Lots
Density
Cost of Raw
Cost of Raw
Single Family
Per Unit Cash
Raw Land
Land
Land Per Lot
Cash
Density Ranpe
er acre
Dedication in
Heritage
64.5 ac.
38
0.59
$16,000
$27,158
Hills
Lieu of Land
Acre
Crimson
120.0 ac.
180
1.50
$16,000
$10,667
Ponds
x
10%
$1,600
-
Prairie
62.7 ac.
118
1.88
$16,000
$8,502
Creek
$710
Pheasant
79.1 ac.
178
2.25
$16,000
$7,110
Ridge
Per Unit Dedication. The City currently requires a cash dedication in lieu of
land based upon a per unit fee. This method allows for simple calculation of park
dedication fees in lieu of land from project to project based upon average raw
land values and the assumption of low density development. The analysis above
demonstrates that a flat park fee does not recognize the varying land values
and/or development intensities occurring in the community. The following
formula illustrates if the park dedication fee may need to be adjusted to reflect
the relationship and benefit between park development and raw land values:
Estimated
Required
Per Acre
Single Family
Per Unit Cash
Raw Land
10% Land
Cash
Density Ranpe
Dedication in
Value Per
Dedication
Contribution
(units/acre)
Lieu of Land
Acre
$16,000
x
10%
$1,600
-
1.50-2.25
$1,070 to
$710
Notes:
1. Estimated raw land cost based upon developer interviews.
2. Average density estimates based on Prairie Creek, Pheasant Ride and Crimson Ponds Preliminary Plats
Based upon the above analysis, a park dedication fee in lieu of land between
approximately $700 and $ 1,070 is justifiable. This range of per unit park
dedication fees in lieu of land would adress Otsego's existing park and trail
dedication fee ($1,075 per unit), as well as being comparable to those of
surrounding Cities illustrated by Exhibit B.
Utilization of a fixed per unit fee does not automatically account for inflationary
land values, differences in land value in various areas of a community, or
variations in development densities. A final consideration not incorporated as
part of the City's existing flat fee is an expense for developing the park and trail
system, including land preparation, equipment, and construction. These factors
can be included within the fee but must be justified based upon reliable
estimates.
Improvement Costs. The City adopted a Comprehensive Parks and Trails Plan
in 2001 that outlined future park and trail locations to expand the existing system.
The Parks and Trails plan basically anticipates developing new neighborhood
parks for each square mile of new development and trails along all collector and
minor arterial roadways. The plan also programs the need to establish a second
community class park in the western areas of the City.
The City prepared plans and specifications for a neighborhood park to be
constructed adjacent to Otsego Elementary. This park, located within the east
sanitary sewer service district is intended to be the prototype for all future
neighborhood parks built in areas of new development.
The lowest bid price received for construction of School Knoll Park in 2002 was
$408,000. Assuming a one square mile service area with an average density of
2.5 dwellings per acre, these neighborhood parks would serve 804 households.
As such, development costs for construction of new neighborhood park facilities
would be equal to $507 per unit. Added to the existing $1,075 cash fee in lieu of
land to address land acquisition and development, an appropriate cash fee in lieu
of land would be equal to $1,700.
Medium/High Density Dedication. The existing park dedication requirements
do not distinguish residential dedication based upon density. As such, the park
land dedication for medium and high density uses is the same as low density
single family uses. Because there is a corresponding increase between higher
density and impact to the City's park system, many communities will establish
higher park land dedication requirements for medium or high density
developments with a corresponding fee in lieu of land.
The following table illustrates the impact in density changes for a hypothetical 40
acre development in terms of park land per household. As the present
dedication is based upon the impact of a development at urban single family
density, there is a diminishing return on net park land per household for medium
and high density developments. Therefore, the land accepted for parks from
medium and high density developments may not be adequate for actual park
demands generated by the concentrated households.
Land Area
Gross
Density
Households
Land Dedication
Land Land/H.H.
40 ac.
1.0 du/ac
40
4 ac.
0.1 ac.
40 ac.
2.5 du/ac
100
4 ac.
0.04 ac.
40 ac.
5.0 du/ac
200
4 ac.
0.02 ac.
40 ac.
7.5 du/ac
300
4 ac.
0.01 ac.
Based on this information, the following graduated scale can be used to
determine park land dedication requirements. Except for the lowest density
subdivisions, the graduated scale provides more a more equal land to household
ratio. It is recommended that the Subdivision Ordinance be amended to include
this graduated park land dedication requirement.
Gross
Density
Land Dedication
Requirement
40 ac. Example
Land
Land/H.H.
0>3 du/ac.
10%
4.0 ac.
0.10-0.03
3>6 du/ac.
13%
5.2 ac.
0.04-0.02
6>10 du/ac.
17%
6.8 ac.
0.03-0.02
10 du/ac. and over
20%
8.0 ac.
0.02 - NA
> Trail Dedication. As noted above, Otsego is one of a few area communities that
require a separate dedication for trails. Our office and the City Attorney have
discussed whether separate exactions for parks and trails are justifiable. In
consideration of applicable case law, it would be our recommendation that the
exactions be combined into a single dedication fee in lieu of land. Further, the
provisions Albertville has provided for in terms of providing trails where indicated
on the trial plan and deducting the cost from the park dedication would also be
appropriate.
Commercial/Industrial Dedication. The City of Otsego currently requires a park
dedication from commercial and industrial developments. The basis of such an
exaction is that employees of a business within the City may benefit from the
location of parks, trails and/or recreation programs. The present requirements
provide for dedication of 10 percent of the gross land being subdivided or a cash
fee of 10 percent of the fair market value of the undeveloped property in lieu of
land.
However, because the City typically would not plan for park facilities in areas
planned for commercial or industrial development, the cash fee in lieu of land is
most often accepted. Because the value of commercial or industrial property is
significantly higher than residential land prices, the cash fees can be significant.
This large amount for park dedication is potentially burdensome from a economic
development standpoint. Given the importance of developing commercial and
industrial land uses to support the local tax base and use of reserved sewer and
water capacity, the City may consider eliminating the fee or reducing the present
requirement for either or both commercial and industrial land to five percent.
CONCLUSION
Because of the Dolan case law, the City needs to evaluate its park and trail dedication
requirements regularly to verify that they are equitable and related to the benefit to the
impacted properties. This is a good practice to because it also helps determine if the
City's park and trail dedication requirements are adequate to cover the costs of
developing a park and trail system to serve new development.
Based upon the analysis outlined herein, the present combined fee is likely an accurate
indicator of the land costs the City would incur to acquire parkland. However, the
present fixed per unit fee does not account for development costs. As such, the
following changes to the City's current park and trail dedication requirements are
recommended:
The cash fee in lieu of land for residential uses should be raised to $1,700 per
unit to account for land acquisition costs and development of neighborhood parks
to serve new development in accordance with the City's park and trail plan and
specs for a prototype neighborhood park. As plans are finalized for
improvements to Prairie Park and a future second community park, these costs
may also be incorporated as part of the cash fee.
2. The existing cash fees in lieu of land for park land and trails should be combined
into a single fee, with credits for construction of any facilities shown on the City's
Parks and Trails plan.
3. A graduated scale for park land dedication should be adopted to ensure a
consistent land to household ratio for residential developments with varied
density.
4. Consideration is given to eliminating or reducing park dedication requirements for
commercial and industrial developments in support of economic development
goals.
PC. Mike Robertson
Judy Hudson
Andy MacArthur
Ron Wagner
runoff rate existing prior to development except as may be approved by the
City Council.
C. The City shall have the authority to remove the topsoil for its own purposes
from all dedicated streets within its corporate boundaries. Said topsoil shall
be utilized in the development project from which it is taken unless otherwise
specified as part of a development agreement.
21-7-17: PROTECTED AREAS: Where land proposed for subdivision is deemed
environmentally sensitive by the City, due to the existence of wetlands,
drainageways, watercourses, floodable areas, vegetation, or steep slopes,
the design of said subdivision shall clearly reflect all necessary measures of
protection to ensure against adverse environmental impact.
Based upon the necessity to control and maintain certain sensitive areas,
the City shall determine whether said protection will be accomplished
through lot enlargement and redesign or dedication of those sensitive areas
in the form of outlots.
In general, measures of protection shall include design solutions which allow
for construction and grading involving a minimum of alteration to sensitive
areas. Where these areas are to be incorporated into lots within the
proposed subdivision, the applicant shall be required to demonstrate that the
proposed design will not require construction on slopes over eighteen (18)
percent, or result in significant alteration to the natural drainage system such
that adverse impacts cannot be contained within the plat boundary.
21-7-18: PUBLIC SITES AND OPEN SPACES (PARK LAND DEDICATION):
A- As a prerequisite to final plat approval, and at the sole determination by the
City, applicants and/or developers shall dedicate land for parks,
playgrounds, public o en spaces or trails and/or shall make a cash
contribution to thecity's ar - se ral Funds roughly related
to the anticipated e ec o e par 1 system. The
amounts listed in this section are the City's best estimate of the dedication
or cash contribution needed to offset the effect on those systems. The
requirement may also be met with a combination of land and cash if
approved by the City Council
*Amended Ordinance No. 95-22, 28 August 1995
7-15 EXHIBIT A
B. Land to be dedicated shall be reasonably suitable for its intended use as
determined by the City and shall be at a location convenient to the public to
be served. Factors used in evaluating the adequacy of proposed park and
recreation areas shall include size, shape, topography, geology, hydrology,
tree cover, access and location.
C. The applicant shall confer with City Staff and the Parks and Recreation
Advisory Committee at the time the preliminary plat is under consideration,
to secure a recommendation as to the location of any property that should
be dedicated to the public, such as parks, playgrounds or other public
property. The preliminary plat shall show the location and dimensions of all
areas to be dedicated in this manner. Such contribution requirement
recommendations) will be sent to the Planning Commission for review and
comment and subsequently to the City Council for their approval.
D. When a proposed park, playground, recreational area, or other public
ground has been indicated in the City's official map or Comprehensive Plan
and is located in whole or in part within dedicate
to thea ropriate governmental unit. f the applicant elects not to dedicate
an area in excess of the lan uired the
for a proposed public site
that the City feels is in the public interest to acquire, the City may consider
acquiring the ex urchase or condemnation.
E. Land area conveyed or dedicated to the City shall not be used in calculating
density requirements of the City Zoning Ordinance and shall be in addition
to and not in lieu of open space requirements for planned unit developments.
F. Where private open space for park and recreation purposes is provided in
a proposed subdivision, such areas shall not be used for credit against the
requirement of dedication for park and recreation purposes, unless the City
Council finds it is in the public interest to do so.
* G. The City, upon consideration of the particular type of development, may
require that a lesser parcel of land should be dedicated due to particular
features of the development. In such cases, a cash contribution shall be
required above the land dedication to insure that compensation is received
for the full amount of the impact on the City's park and trail system.
H. In all new subdivisions, ten (10) percent of the gross area subdivided, or a
different percentage as the City Council shall determine to be reasonably
necessary as a result of the subdivision approval, shall be dedicated for
public recreation space or other public use as established by City Council
resolution. The dedicated percent of the gross area subdivided shall be in
addition to property dedicated for streets, alleys, easements, or other public
* Amended Ord. No. 95-22, 28 August 1995
UNIX.
ways. No areas may be dedicated for public use until such areas have been
approved by the City Council as suitable and necessary for the health,
safety, convenience and general welfare of the City.
* I. When a subdivision is proposed, the Developer shall make a dedication of
land for public park use, or shall pay a fee in lieu of such land dedication as
follows:
1. Residential Development. 10% of the gross land area being
subdivided, or a fee in lieu of land dedication as follows: $750.00 per
dwelling unit commencing on the effective date of this amendment
and for a period of one year thereafter, $850.00 per dwelling unit
commencing one year from the effective date of this amendment and
for a period of one year thereafter, and $950.00 per dwelling unit
commencing two years from the effective date of this amendment and
thereafter.
2. Commercial and Industrial Development. 10% of the gross area being
subdivided, or 10% of the fair market value of the undeveloped land.
Whether land or cash will be required is left solely to the discretion of
the City. For purposes of this section, fair market value shall be
determined by reference to appraisals, accepted purchase
agreements, comparable market transactions or other pertinent
records, at the discretion of the City Council or Parks and Recreation
Commission. Undeveloped land shall mean raw land with only those
improvements present on the property on the date of plat approval.
Said amounts are the City's best estimate of the effect of the
subdivision on the City's park system.
J. All land proposed for trail and/or bikeway dedication shall be subject to the
recommendations of the Parks and Recreation Advisory Board and the
approval of the City Council. Such lands must also correspond and conform
with the City's bikeway plan.
* K. When a residential subdivision is approved, the developer shall pay a fee in
lieu of dedication of land for trail purposes as follows: $125.00 per dwelling
unit. Said amount is the City's best estimate of the effect of the residential
subdivision on the City's trail system.
L. The City may elect at its sole discretion to receive a combination of cash,
land, and development of the land for park use. The potential cash donation
generated by the dedicated land and/or the value of the development of land
shall be calculated. That amount shall be subtracted from the cash
contribution required by the Subsection I above.
* Amended Ord. No. 95-22, 28 August 1995
7-17
M. Planned unit developments with mixed land uses shall make cash and/or
land contributions in accordance with this Section based upon the
percentage of land devoted to the various uses.
N. Park cash contributions are to be calculated and established at the time of
final plat approval. The Council may require the payment at the time of final
plat approval or at a later time under terms agreed upon in the development
agreement. Delayed payment may include interest at a rate set by the City.
O. Cash contributions for parks and trails shall be deposited in either the City's
Park Fund or multi-purpose trail fund and shall only be used for park
acquisition or development, and trail acquisition or development as
determined by the City. Additionally, said funds may be utilized anywhere
within the City park and trail systems.
P. Wetlands, ponding areas, and drainageways accepted by the City may not
be considered in the park land and/or cash contribution to the City.
Q. Property being replatted with the same number of lots and same number of
dwelling units shall be exempt from all park land dedication requirements.
If the number of lots or the number of dwelling units is increased, or if land
outside the previously recorded plat is added, then the park land dedication
and/or park cash contributions shall be based on the additional lots and on
the additional land being added to the plat. If the additional land does not
create additional lots, then each one-third (1/3) acre added shall be
considered a new lot for purposes of calculating the dedication
requirements.
R. When land is dedicated and deeded to the City for park purposes, it shall be
the responsibility of the City to maintain such dedicated property.
S. Land dedication to the City shall be in the form of lots or outlots with
approved lot and block numbers.
T. If the applicant or developer does not believe that the estimates contained
in this section fairly and accurately represent the effect of the subdivision on
the park or trail system of the City, the applicant or developer may request
that the City prepare in indepth study of the effect of the subdivision on the
park and trail system and an estimate of that effect in money and/or land.
All costs of such study shall be borne by the developer or applicant. if the
developer or applicant requests the preparation of such a study, no
application for development submitted shall be deemed complete until the
study has been completed and a determination is made as to the appropriate
amount of land or money necessary to offset the effects of the subdivision.
* Amended Ord. No. 95-22, 28 August 1995
7-18
PARK AND TRAIL FEE INVENTORY OF OTSEGO AREA
Northwest Associated Consultants, Inc.
_February 7, 2000
CITY
SINGLE FAMILY
RESIDENTIAL PARK
DEDICATION (per unit)
COMMERCIAL/
INDUSTRIAL
PARK DEDICATION
TRAIL OR
SIDEWALK
DEDICATION
Land
Cash
Land
Cash
Albertville
10%
$1,300
commercial 10%
industrial 5%
commercial 10%/
industrial 5% of
fair market value
Trails as
required by
Plan, deducted
from Park Fees
Big Lake
10%
$1,300
Brooklyn Park
$1,300
$4,000 per acre
Clear Lake
10%
$750
$150
Clearwater
10%
fee set by
Council
Dayton
10%
$1,100
Elk River
As required
by Plan,
equal to cash
contribution
based on fair
market land
value
$1,200
As required by
Plan, equal to
cash contribution
based on fair
market land
value
commercial
$3,000/
industrial $2,000
per acre
Maple Grove
10%
$1,125
71/2%
commercial
$3,600/
industrial $2,850
per acre
Monticello
10%
10% raw
land cost
Sidewalks on
one side of
street
Otsego
10%
$950
10%
$175
Plymouth
10%
$1,600
10%
$4700 per acre
Rogers
10%
$700
10%
commercial
$4,000/
industrial $2,000
per acre
St. Michael
10%
$1,100
10%
commercial
$3,000/
industrial $2,000
per acre
$200 for
residential
EXHIBIT B
CITY OF
TSEGO
ON THE GREAT RIVER ROAD
December 31, 2002
Hopkins City Hall
Park & Recreation Commission Chairmen
1010 15i Street South
Hopkins, MN 55345-9475
Greetings,
8899 Nashua Avenue N.E. • Otsego, MN 55330
(763) 441-4414 9 Fax: (763) 441-8823
E-mail: cityhall@ci.otsego.mn.us
The Otsego Parks & Recreation commission is presently looking into the possibility of
building a skate park in our city, and I would like to ask a few questions about the one
that you built under the Highway 169 bridge.
My day job is at Supervalu, so I have been able to see the success that it is.
The questions that I have are as follows.
1. What was the initial cost to build the park?
2. Has liability Insurance been an issue?
3. What have the operating costs been as of now?
4. Have there been many incidents and injuries to people using the park?
5. Do you have a fee to use the park?
6. What is the approximate number of people using the park on an
average day?
Any other information you would like to share would be greatly appreciated. Also, would
it be possible for my commissioners and City Council members to tour the park with you
to perhaps discuss further issues, concerns or questions they may have?
Thank you very much for your consideration in this matter.
Sincerely,
Jeff Bartheld, Chairman
Otsego Parks & Recreation Commission
sl
OTSEGO PARK & RECREATION COMMISSION
MEETING MINUTES
DECEMBER 11, 2002 - 7:00 PM
1. Chair Mike Day will call meeting to order.
Mike Day called the meeting to order at 7:00 p.m.
Roll Call:
Park & Recreation Commission: Mike Day, Jim Gaikowski, Tom
Constant, Rose Cassady, Pauline Nelson, and Jessica
Stockamp.
Absent: Terry Long and Tom Baillargeon.
Councilmembers: CM Jerry Struthers.
Staff: City Administrator Mike Robertson
Approval of Agenda - Commissioner Constant, seconded by
Commissioner Stockamp, moved to approve the agenda as
presented. Carried 6-0.
Lily Pond Park Plans Informational Hearing - Chair Day
introduced the City's park designer Damon Farber, who
described the plans for Lily Pond Park. In attendance were
approximately 25 neighborhood residents. Residents
questions and concerns dealt with; maintenance of park, kids
hanging out there at night, picnicking and grilling on the
north side of the park near existing homes, a fence on the
north side of the park, the number of parking spaces for a
neighborhood park, concerns the grills might start a fire,
and a request that any trees being removed be transplanted
within the park.
Commissioner Day noted that the park was intended to serve a
broader area than the Mississippi Pines subdivision, and
that the number of parking spaces were reasonable because
not everyone in the area was within walking distance of the
park. Damon Farber stated that the majority of existing
trees in park are packed closed together and only have
branches at the top of the trees, and so would look
unattractive if transplanted.
Administrator Robertson said that the City would be
responsible for weekly grass cutting and trash pickup, and
Park & Recreation Commission, December 11, 2002 Page 2
that the Sheriff's deputies already patrol the area and
would respond to any complaints about problems in the park.
The Park & Recreation Commissioners' consensus after the
public comments were that they would move the two picnic
tables and grills on the north side closer to the parking
lot and replace them with benches. They decided to wait to
see if any of the other possible problems actually happened
before taking action, particularly with regard to putting up
a fence along the north edge of the property.
Park & Trail Fee Report - Commissioners were in consensus
after discussing the report that they concurred with staff's
recommendation for an increase in Park Fees.
City Update - Administrator Robertson and Councilmember
Struthers updated Commissioners on recent Council actions.
Mike Robertson noted the retirement of Commissioner Day and
Commissioner Constant and thanked them for all their hard
work and contributions to Otsego.
Adjournment - Commissioner Stockamp, seconded by
Commissioner Nelson, moved to adjourn at 8:45. Carried 6-0.
Michael obertscn, City Administrator