03/05/2001 Park Board Packet - Laserfiche WebLink

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• • PARK DEDICATION ANALYSIS -RAW LAND VALUE VS. VALUE AT FINAL PLAT Pursuant to State Statute, the City can collect park dedication based upon the value of land at the time of final plat. It is our opinion that value should include raw land value plus the profit from lots created by final plat approval. The land value at final plat should comprise the value of the lot and profit less improvement costs. Residential developers were contacted to identify typical lot improvement costs (assuming an 80 foot wide lot), associated with single - family subdivisions. Typical improvement costs for single - family developments consist of utilities, roads, grading, engineering, area connection charges and fees, which approximate 48% of the total vacant lot sales price. The developers that were contacted also indicated that a development must yield a minimum 20% profit in order to be a viable project. For illustration purposes, the following table provides a breakdown of land values as they relate to the collection of park dedication based upon raw land value versus the value of land at the time of final plat. Table 4 PARK DEDICATION / RAW LAND VS VALUE AT FINAL PLAT LAND VALUE AT FINAL PLAT RAW LAND VALUE Typical vacant lot sales price - Typical development costs for utilities etc. (48% lot sales price) $42,995 - 20,637 $ 28,000 p /acre Or $14,000 p /lot * Lot cost + 20% profit X 10% Park Dedication Fee $22,358 X 10% X 10% Park Ded. Park dedication collected at the time of final plat $ 2,235 $1,400 per unit * Based upon 2 units per acre The application of park dedication at the time of final plat, based upon the value of 10% of the project (lots + profit), results in an equitable dedication policy that is superior to the current dedication based on raw land value (at the time of preliminary plat). The existing method treats developers differently based upon whether a cash or land dedication is taken by the City. The current cash dedication policy requires a developer to give up a percentage of the raw land value of the project at the time of preliminary plat. The developer that gives a land dedication is impacted to a greater degree because they give up land value plus future profit. Whereas the developer who pays a cash dedication at the time of preliminary plat looses only raw land cost. This situation treats developers inequitably based upon whether they are required to dedicate land or cash. Using the land value at the time of final plat will result in an equitable treatment of developers in that the same value will be applied regardless of whether cash or land is required. LINO LAKES PARK DEDICATION ANALYSIS City Staff provided a summary of existing and planned park facilities and trails, which were used to establish the value of the existing park/trails system and identify costs to complete the community system. A major component of the system is land and to 8 of 14