 |
Subject
Presentation and discussion on the proposed calculation for the Fee in Lieu of Public Use Space requirement, pursuant to Subsection 25.17.01.d.2. of the Zoning Ordinance
Recommendation
Receive a presentation on the proposed fee in lieu of public use space calculation and set a public hearing for December 7, 2009.
Change in Law or Policy
When approved, the resolution for the fee in lieu of pubic use space requirement will establish the calculation for the purposes of administering subsection 25.17.01.d.2 of the Zoning Ordinance, “Any approved fee in lieu of the public use space requirement shall be paid in an amount set by resolution of the Mayor and Council.”
Discussion
In accordance with Subsection 25.13.05.b of the Zoning Ordinance, developments within all Mixed-Use Zones, e.g., Mixed-Use Transit District Zone (MXTD), Mixed-Use Corridor District Zone (MXCD), Mixed-Use Employment Zone (MXE), Mixed-Use Business Zone (MXB), Mixed-Use Neighborhood Commercial Zone (MXNC), and Mixed-Use Transition Zone (MXT), are required to provide a minimum of 20% “public use space” on site. As an alternative, and only at the discretion of the approving authority, an applicant can pay a fee in lieu of providing the public use space for all, or a portion of, the requirement.
Section 25.03.02 of the Zoning Ordinance defines Public Use Space as:
“An open area associated with and located on the same tract of land as a principal building or group of buildings providing light and air, recreational space, or other similar purpose. Such open area must be accessible for use and enjoyment by the general public, and may include space so located and treated as to enhance the amenity of the development by providing landscaping features, screening, or a general appearance of openness. Internal landscaping within a parking facility, as required in Section 4.d of the Landscaping, Screening and Lighting Manual, does not constitute Public Use Space.”
Subsection 25.17.01.d.1. of the Zoning Ordinance sets forth the conditions in which the new Fee in Lieu of Public Use Space may be used:
"The Approving Authority may approve the payment of a fee in lieu of some or all the public use space requirement under any of the following circumstances: (a) The City could use the fee to provide and/or improve another more useable public space in the vicinity of the project; or (b) The site cannot realistically provide the required area for public use and meet all of the other City development standard requirements.”
PROPOSED CALCULATION
The fee in lieu calculation comprises the following two components:
Land Acquisition Contribution:
This component reflects the value of land that is subject to the fee in lieu. It is determined by multiplying the subject property's per square foot assessed land value by the square footage of required public use space.
Public Use Space Improvement:
This component reflects the cost of constructing public use space amenities, which is $3.00 per square foot of the required public use space. The cost estimate is based on two recent Department of Recreation and Parks projects: Fallsgrove Park (Project 420-900-1B61) and Mattie J. T. Stepanek Park (Project 420-900-3A60). The amenities associated with these park projects align with those that might be constructed within pubic use space, e.g., garden plots, gazebos, picnic areas, pathways, passive areas, wooded areas, landscaping, etc. The cost per square foot will be adjusted annually to reflect the increase or decrease in the Builder's Cost Index (BCI), as published by Engineering News Record, McGraw Hill Companies.
EXAMPLE
The following is an upcoming project on Research Place for which the applicant may request all or part of the public space to be provided by fee rather than providing it on site. An example of how this fee would be calculated, if the applicant requests the full amount (20% of site) to be paid by fee, is provided below. This example is meant only to illustrate the fee calculation, not to approve or deny the specific project details.
Assumptions:
- Most recent assessment of the land value = $2,838,300
- Total site area = 5.4 acres or 236,530 square feet (SF)
- Public use space required by Zoning Ordinance (236,530 SF X 20%) = 47,306 SF
Land Acquisition Component:
$2,838,300 – assessment of the land value
236,530 - total site area (in square feet) = $12 - assessed land value per square foot
47,306 - square feet of required public use space (calculation in Assumptions)
x $12 - assessed land value per square foot
$ 567,672 – fee for land component
Improvement Component:
47,306 - square feet of required public use space (calculation in Assumptions)
x $3 - pubic use space improvement cost
$ 141,918 - fee for improvement component
TOTAL:
$567,672 – Land Acquisition Component
+ $141,918 – Improvement Component
$709,590 - fee in lieu
Mayor and Council History
This is the first time this item has been brought before the Mayor and Council.
Public Notification and Engagement
Since the fee in lieu of public use space is to be enacted by resolution, no public hearing is required. However, staff recommends that the Mayor and Council hold a public hearing prior to approving the resolution.
Boards and Commissions Review
The fee methodology was reviewed by the Recreation and Parks Advisory Board on January 22, 2009, and the Planning Commission on January 28, 2009. The Recreation and Parks Board unanimously voted to support the staff-recommended policy with three supplemental recommendations for the Mayor and Council to consider, as follows:
1. Their preference is for developers to dedicate public use space on-site, rather than providing the fee in lieu. However, the Board felt that the fee option would allow for flexibility to address security and maintenance concerns on certain sites.
Staff Response: This supports the intent of this proposal. The fee in lieu is at the approving authority's discretion and gives the City flexibility to provide and/or improve other, more useable, public use space in alternative areas.
2. To ensure that any fees received would be "earmarked" specifically for parkland acquisition and improvements to existing City park facilities. There was a consensus that fee in lieu revenue should not be allocated into the City's general fund.
Staff Response: Staff recommends that fee in lieu revenue be allocated into a special activities fund.
3. The third recommendation focused on language from Subsection 25.17.01.d.1.(a) of the Zoning Ordinance. More specifically, the Board was concerned with future fee in lieu revenue being used in areas outside the general vicinity of a given project.
Staff Response: Subsection 25.17.01 d. 1. (a) of the Zoning Ordinance already requires the "...fee to provide and/or improve another more usable public space in the vicinity of the project..."
The Planning Commission voted to forward a number of recommendations to the Mayor and Council for consideration:
1. The fee should be higher. In addition to basing the fee on assessed land value, it should also be based on the value of the proposed development, or "construction cost."
Staff Response: The Commission's suggestions related to the calculation were not incorporated into the proposed draft due to issues associated with equitability and defensibility. Staff examined a number of alternative calculations for the purpose of yielding a higher fee. Some included (1) incorporating the existing property improvement value into the calculation and (2) requiring a "phase two" payment at the time of occupancy to capture the value of the future development, and even a maintenance component.
The alternatives were not equitable because they included the improvement value, which would be considerably higher for a developed property than for a vacant property. The result of these alternatives yielded fees that were extremely high, as much as three times what is recommended. The objective is not simply to obtain a higher fee. The methodology must be equitable and legally defensible. It should be noted that the in lieu fee is not designed to be the primary funding source for future parks. The fee in lieu is an option (at the approving authority's discretion) in cases where it is infeasible or undesirable to place public space on site - or where the City may want to add funds to another park project nearby.
2. The Commission also wanted to underscore their concurrence with the Recreation and Parks Advisory Board recommendations concerning the following points:
- Funds should only be appropriated to public use space (acquisition or improvement purposes) in the vicinity of the subject site.
- No funds should go toward routine maintenance of existing recreation and park facilities.
- Revenue would be earmarked specifically for parkland acquisition and improvements and should not be allocated into the City's general fund.
Staff Response: Staff recommends that fee in lieu revenue be collected in a special activities fund account, in which expenditures would be restricted to providing and/or improving other public use space in the vicinity of the project.
3. The Commission suggested that the use of the in lieu fee be vetted by staff early in the development review process, and that the Approving Authority should be informed early in the process.
Staff Response: All development projects are thoroughly vetted and reviewed by the Development Review Committee (DRC). Applicants are, and will be, informed that the fee in lieu option is at the sole discretion of the approving authority.
4. An additional recommendation focused on the issue of smaller properties, where it may not be desirable for them to provide public use space and whether it was appropriate to request a fee in lieu from projects on small properties. The possibility of a waiver for properties containing one-half acre or less was suggested.
Staff Response:
Small building expansions up to 50 percent of the existing gross floor area are already exempt pursuant to Section 25.08.07 c (25.08.07 d., as amended) of the Zoning Ordinance. Only expansions exceeding 50 percent of the existing gross floor area are required to provide public use space.
Fiscal Impact
The fee in lieu of public use space has the potential to become a significant, but variable source of fee revenue. Staff recommends that fee in lieu revenue be collected in a special activities fund account, in which expenditures would be restricted to providing and/or improving other public use space in the vicinity of the project. This recommendation is consistent with the recommendations from both the Planning Commission and the Recreation and Parks Advisory Board.
Next Steps
- Public Hearing - December 7, 2009
- Resolution Adoption - January 11, 2010
Department Head:
Susan Swift, Director of Community Planning and Development Services
Approved on: 09/30/2009
Assistant City Manager:
Jenny Kimball, Assistant City Manager
Approved on: 10/02/2009
City Manager:
Scott Ullery, City Manager
Approved on: 10/05/2009
|