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Item No: 02
<br />Meeting Date: Aug 1, 2022
<br />Type of Business: Work Session
<br />City Administrator Review: _____
<br />City of Mounds View Staff Report
<br />To: Honorable Mayor and City Council
<br />From: Jon Sevald, Community Development Director
<br />Item Title/Subject: Park Dedication Fees – Specific to Commercial/Multi-Family
<br />
<br />
<br />Introduction:
<br />Does the City Council have a desire to reduce Park Dedication Fees for multi-family and
<br />commercial/industiral developments?
<br />
<br />Discussion:
<br />In recent months, Park Dedication Fees deterred one commercial subdivision from moving
<br />forward (FedTech), and Sewer Availability Charges (SAC) nearly delayed another project
<br />(Kusina). During the June Work Session, the City Council’s consensus was to only use Tax
<br />Increment Financing (TIF) as a last resort to subsidize development. TIF was most recently
<br />used to subsidize The Villas of Mounds View ($1,770,000), which paid $420,000 in Park
<br />Dedication Fees,1 $358,000 in building permit fees, and $48,000 reimbursing the City for
<br />attorney/engineering review (about $826,000 in total fees). Staff is requesting direction if the
<br />City Council would consider other subsidies, such as reducing development fees to spur
<br />development. Development Fees include; application fees, park dedication fees, permit fees,
<br />and reimbursement for City consultants. This discussion is specific to Park Dedication Fees.
<br />
<br />Under Minnesota Statute, the Park Dedication Fee (or land dedication) …“must bear a rough
<br />proportionality to the need created by the proposed subdivision or the development.” 2 This
<br />“need” is based on the City’s 5-year Financial Plan, and the Comprehensive Plan.3 In other
<br />terms, what additional strain (additional users) will the development add to the parks system?
<br />
<br />Park Dedication Fees shall be used for park facilities, not operations & maintenance. In the
<br />past five years, Fees funded $495,100 in improvements to the Splash Pad, Silver View Park
<br />(shelter improvements), Random Park (new playground), and Lambert Park (hockey rink).
<br />
<br />Mounds View’s Park Dedication Fee is $3,500 per residential unit, and up to 10% of the
<br />Estimated Market Value (EMV) of land for non-residential subdivisions. The City of Roseville
<br />maintains an annual survey of Park Dedication Fees (attached). Some cities charge a flat fee,
<br />while others’ are based on the size (acres) or a percentage of land value.
<br />
<br />Project Example
<br />(park dedication fee) Blaine Brooklyn
<br />Center 4
<br />Eden
<br />Prairie
<br />Fridley Mounds
<br />View
<br />Roseville Shoreview
<br />12 lot single-family $53,388 $0 $78,600 $18,000 $42,000 $51,000 $27,992
<br />120 unit apartment $533,880 $0 $786,000 $180,000 $420,000 $510,000 $27,992
<br />4.33 acres
<br />commercial valued
<br />at $4.25 p/sf
<br />($801,612)5
<br />$37,688 $0 $49,795 $43,381 $80,161 $80,161 $80,161
<br />
<br />1 MWF also developed the Boulevard Apartments in 2018, receiving $550,000 in TIF, and paying $38,576 in Park Dedication
<br />Fees based on 10% of the Estimated Market Value (EMV) for land (pre-2019 fee formula). Under the current fee ordinance,
<br />the fee would have been $206,500 (60-units, minus 1-unit credit for existing house).
<br />2 MN Statute §462.358, Subd 2c (Nexus)
<br />3 MN Statute §462.358, Subd 2b (Dedication)
<br />4 Parks receive revenue from municipal liquor stores, such that a Park Dedication Fee was not justified (no nexus).
<br />5 This example is FedTech’s proposed subdivision, although Ramsey County has a reduced EMV for wetland ($0.05 p/sq ft
<br />instead of $4.25). For simplicity, this example assumes the 4.33 acres is all developable land. In reality, FedTech would pay
<br />an estimated $0.13 per sq ft, or about $17,000 in Park Dedication Fees for the buildable portion of their north (new) lot.
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