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HomeMy WebLinkAbout14 - In-Lieu Park Dedication Fee., CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT COU G,DA ND. COU11 1 AGE DA N0. a2 07 Agenda Item No. 21 February 27, 2007 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Planning Department Brandon Nichols, Associate Planner. (949) 644-3234, bnichols %?citv.newaort- beach.ca.us SUBJECT: In -Lieu Park Dedication Fee Adjustment Appraisal of Eastbluff and Bob Henry Park INITIATED BY. City of Newport Beach ISSUE Should the City Council increase the City's In -Lieu Park Dedication Fee by adjusting the fair market land value per acre used in the fee calculation? RECOMMENDATION Adopt the attached City Council Resolution adjusting the fair market land value per acre to be used in assessing In -Lieu Park Dedication Fees. DISCUSSION Background Chapter 19.52 of the Newport Beach Subdivision Code (the Subdivision Code) establishes parkland dedication and In -Lieu Park Dedication Fee (In -Lieu Fee) requirements for new residential subdivisions. Per the Subdivision Code, when a fee is required to be paid in -lieu of land dedication, the fee is computed by multiplying the acreage of land, which would otherwise have been required to be dedicated, times the fair market value per acre. Fair market value per acre is to be established by periodic appraisal prepared by the City (Section 19.52.070). Periodic appraisal ensures that the In -Lieu Fee remains current with property appreciation. The City Council last adjusted the fair market land value used to calculate In -Lieu Fees in .1988. The adjustment established the current fee of $6,894.37 per residential unit. In -Lieu Park Dedication Fee Adjustment February 27, 2007 Page 2 • Assessing and Calculating Fees In Lieu of Dedication California State Statute 66477 (the Quimby Act) establishes the methodology for assessing and calculating park land dedication and in -lieu fee requirements. Consistent with the Quimby Act, the Subdivision Code requires park dedication, and /or payment of In -Lieu Fees, for residential subdivisions resulting in additional dwelling units. In -Lieu Fees are assessed as a condition to the approval of tentative map or parcel map. In- Lieu Fees are used to help fund the City's acquisition or rehabilitation of parkland to meet the park and recreational demands of new residential development. In accordance with the Quimby Act, if a proposed subdivision contains fifty parcels or less, the subdvider may pay an In -Lieu Fee equal to the value of parkland that would otherwise be required for dedication. If a proposed subdivision contains fifty parcels or more, the decision making body shall determine whether land dedication, in -lieu fee, or a combination of the two shall be required. Pursuant to the Subdivision Code, the following factors are to be used in the computation of parkland dedication and fee requirements: • The City's established parkland dedication ratio of five (5) acres of parkland per 1000 people expected to reside in a subdivision (or .005 acres per person) • The average number of persons per household in the City based on data from the most recent available federal or state census (currently 2.09 persons per unit) • The per -acre value of land in the City as established by periodic appraisal Using the above factors, the In -Lieu Fee per new residential unit can be computed as follows: .005 acres per person X 2.09 persons per unit = .01045 acres of park land dedication per unit .01045 acres x fair market value per acre = Required In -Lieu Fee per unit Appraisal to Determine Fair Market Land Value Since 1979, appraisal of the Eastbluff Park Site has been used to establish the fair market value per acre to be used in computing In -Lieu Fees. Subsequent appraisals of the Eastbluff Park Site resulted in three prior adjustments to the In -Lieu Fee, the last being in 1988. The results of Eastbluff Park appraisals are summarized in Attachment C. In 2006, the City retained the firm of Reinhart- Fontes Associates Inc. to provide an appraisal of the. Eastbluff Park site and a second site, Bob Henry Park. Two sites were In -Lieu Park Dedication Fee Adjustment February 27, 2007 Page 3 appraised to provide a more accurate representation of average land value in the City. Consistent with previous appraisals, the value of each property was assessed assuming the sites had the following characteristics: • Residential Zoning • Density of 10 units per acre • Utilities available • Sites assumed to be vacant and unimproved • Sites assumed to have relatively level topography • Sites assumed to have no view potential Since the fee applies only to residential subdivisions, residential use of the properties is assumed in order to establish the fair market value of vacant, residentially zoned land in the City. The table below contains the results of both appraisals and the adjusted In- Lieu Fee if the appraisal results are used to establish fair market land value (calculated using the methodology outlined in the previous section of this report). For comparison, a table summarizing In -Lieu Fees for other Orange County cities is provided in Attachment C. Certification of Aoaraisal Results If the City Council concurs with the results of the current appraisals, a resolution has been prepared establishing a fair market land value of $3,250,000 per acre for use in the calculation of In -Lieu Fees. In accordance with State Law, the updated fee would not go into effect until 60 days after City Council approval. Environmental Review This action has been reviewed and it has been determined that the proposed action is not a project subject to review under the California Environmental Quality Act (CEQA Section 15378 (bx4)) Public Notice Notice of this hearing was published in the Daily Pilot a minimum of 10 days in advance of the hearing consistent with the requirements of the Municipal Code. Notice was also In -Lieu Park Dedication Fee Adjustment February 27, 2007 Page 4 mailed to interested parties who submitted written requests for notification regarding matters relating to fee increases. Courtesy notices were also sent via U.S. Mail and e- mail to parties staff believed would have an interest in the potential fee adjustment. Additionally, the item appeared on the agenda for this meeting, which was posted at City Hall and on the City website. Prepared by: 15-ra Nichols, Associate Planner Attachments: Submitted by: A _ fiy Sharon oodistant CC� Manager A. Draft Resolution B. Chapter 19.52 of the Subdivision Code (Park Dedications and. Fees) C. Tables (East Bluff Appraisal Results, Comparative Park In -Lieu Fees) • 11 ' ,. LI Attachment A Draft Resolution r, RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ESTABLISHING THE FAIR MARKET VALUE PER ACRE TO BE USED IN ASSESSING IN -LIEU PARK DEDICATION FEES PURSUANT TO SECTION 19.52.070 OF THE NEWPORT BEACH MUNICIPAL CODE AND RESCINDING RESOLUTION NO. 88-12 WHEREAS, Chapter 19.52 of the Newport Beach Municipal Code establishes a parkland dedication standard of five (5) acres per thousand population expected to reside in new residential subdivisions; and WHEREAS, in subdivisions containing 50 lots or less, the subdivider may pay an in -lieu fee equal to the value of land required for dedication; and WHEREAS, in subdivisions containing more than 50 lots, the decision making body may require land dedication, in-lieu fee, or a combination of the two; and WHEREAS, Chapter 19.52 establishes that when a fee is required to be paid in- lieu of land dedication, that fee shall be equal to the acreage of land which would otherwise be required to be dedicated, multiplied by the fair market value per acre as established by periodic appraisal prepared by the City; and WHEREAS, the City has retained a qualified appraiser to update and establish the fair market value per acre; and WHEREAS, the results of the appraisals of two park sites in the City have established an average value of $3,250,000 as the fair market value per acre; and WHEREAS, said fair market value would establish an In -Lieu Park Dedication Fee of $33,962.50 per new residential unit created by an approved subdivision; and WHEREAS, Resolution 88-12 previously established the fair market value per acre to be used in computing In -Lieu Park Dedication Fees, and said Resolution is to be hereby superseded and rescinded; and WHEREAS, the City Council has reviewed the appraisal reports and determines the average fair market cost per acre to be appropriate, NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: • 01 Ell r. City of Newport Beach City Council Resolution No. Pace 2 of 2 Section 1: To establish the amount of $3,250,000 as the fair market value per acre to be used in assessing In -Lieu Park Dedication Fees pursuant to Chapter 19.52 of the Newport Beach Municipal Code. Section 2: To keep current with property appreciation, said fair market value per acre shall be reviewed and adjusted, if necessary, at least every three (3) years from the date of adoption of this Resolution. Passed and adopted by the City Council of the City of Newport Beach at the regular meeting held on the 27 day of February, 2007 i ATTEST: CITY CLERK r] MAYOR AYES, COUNCIL MEMBERS NOES, COUNCIL MEMBERS ABSENT COUNCIL MEMBERS Attachment B Chapter 19.52 of the Subdivision Code (Park Dedications and Fees) 0 C� • Sections: CHAPTER 19.52 PARK DEDICATIONS AND FEES 19.52.010 Purpose and Intent 19.52.020 Applicability 19.52.030 Use of Park Dedications and Fees 19.52.040 Parkland Standard 19.52.050 Determination of Land or Fee 19.52.060 Dedication of Land 19.52.070 Fee in Lieu of Dedication 19.52.080 Credit for Private Recreation Facilities 19.52.090 Timing of Dedications and Fees 19.52.010 Purpose and Intent (66477) This Chapter is intended to provide for the dedication of land, the payment of fees in lieu thereof, or a combination of both, for park or recreational purposes in conjunction with the approval of residential development. These provisions are in accordance with the Recreation and Open Space Element of the General Plan and with Section 66477 of the Subdivision Map Act (known as the "Quimby Act"). 19.52.020 Applicability (66477) A. Applicability. The provisions of this Chapter shall apply to all residential subdivisions except those exempted per Paragraph B of this Section. B. Exemptions. The provisions of this Chapter shall not apply to nonresidential subdivisions, nor to condominium projects or stock cooperatives which consist of the subdivision of air space in an existing apartment building which, at the time of tentative map filing, is five or more years old when no new dwelling units are added. 19-52.030 Use of Park Dedications and Fees (66477) A. Rules for Use of Dedication and Fees. The following rules shall apply to the use of dedicated park land and in -lieu fees per Section 66477 of the Subdivision Map Act: n The land, fees, or combination thereof shall be used only for the purpose of developing new or rehabilitating existing neighborhood or community park or recreational facilities to serve the subdivision. 2. The park and recreational facilities provided for by the land dedications and/or in -lieu fees are in accordance with the policies and standards contained in the City's General Plan Recreation and Open Space Element_ The amount and location of land to be dedicated or the fees to be paid shall bear a reasonable relationship to the use of the park and recreational facilities by the future inhabitants of the subdivision. 4. The City shall develop and maintain a schedule specifying how, when, and where it -will use the land or fees, or both, to develop park or recreational facilities to serve the residents of the subdivision. This schedule is provided for in this Chapter and in the adopted City Council policy entitled "Park Fee Policy". B. Credit for hmprovements. If a subdivider provides park and recreational improvements to dedicated parkland, the value of the improvements, together with any equipment located thereon, shall be a credit against the payment of fees, or dedication of land, required by this Chapter. 1952.040 Parkland Standard (66477) Per figures from the 2000 federal census and the City's Recreation and Open Space Element, the amount of neighborhood and community park acreage in the City is 5.1 acres per 1,000 population. Per Section 66477 of the Subdivision Map Act, the City may use its existing parkland ratio, based on data from the most recent available federal census, as its park dedication standard for new subdivisions, provided required dedications do not exceed 5 acres per thousand persons residing within a subdivision. Therefore, the City's park dedication standard shall be 5 acres per thousand population. 19.52.050 Determination of Land or Fee The tentative map decision- making body shall determine whether land dedication, in -lieu fee, or a combination of the two shall be required in conjunction with its approval of a tentative map in accordance with the following criteria. • 0 A. Land Dedication. The following criteria shall be used in making a determination to require land dedication: 0 iv • 1. General Plan. Whether a park site is shown within the subdivision in the General Plan's Recreation and Open Space Element. 2. Accessibility. Whether the proposed site has access to a public street. 3. Tonogxanhv. Whether the terrain of the proposed site is suitable for the intended park development. B. In -Lieu Fee. If no park or recreational facility has been designated in the General Plan's Recreation and Open Space Element to be located within the proposed subdivision, or if the proposed subdivision contains 50 lots or less, the subdivider shall pay a fee in lieu of land dedication, except that when a condominium project, stock cooperative, or community apartment project exceeds 50 dwelling units, dedication of land may be required notwithstanding that the number of parcels may be less than 50. The in- lieu fee shall be equal to the value of the amount of land prescribed for dedication pursuant to Section 19.52.060. The fee amount shall be determined in accordance with Section 19.52.070. C. Both Dedication and Fee. In subdivisions of more than 50 parcels, the tentative map decision - making body may require the subdivider to both dedicate land and pay a fee in lieu thereof in accordance with the following criteria: 1. When a park site shown within a proposed subdivision is smaller in area than the acreage which is required for dedication pursuant to Section 19.52.060, such park site shall be dedicated for park purposes and a fee, computed pursuant to Section 19.52.070, shall be paid for the remaining acreage which would have been required to be dedicated. 2. When a major part of a park or recreational site has already been acquired by the City and only a small portion of land is needed from the subdivision to complete the site, such remaining portion shall be dedicated and a fee, computed pursuant to Section 19.52.070, shall be paid for the remaining acreage which would have been required to be dedicated. Any in -lice fees paid per the preceding criteria shall be used for the improvement of the park and recreational site dedicated by the subdivider or for the improvement of other local parks and recreational facilities serving the subdivision. Op1952.060 Dedication of Land (66477) Where a park or recreational facility has been designated in the General Plan's • Recreation and Open Space Element to be located in whole or in part within the proposed subdivision, the tentative map decision - making body may require the subdivider to dedicate land for the park per the parkland dedication standard of Section 19.52.040. The amount of land to be dedicated shall be computed as follows: A. Persons per Dwelling Unit. The City shall determine the average number of persons per dwelling unit for each dwelling unit type, based upon the average household size for that dwelling unit type (e.g. single family detached, apartment, etc.). Data from the most recent available federal or state census shall be used to make this computation unless the City determines that there is substantial evidence to support a finding that a different household size is appropriate for some or all of the dwelling units proposed; B. Computation of Dedication Acreage. The number of persons to occupy the new subdivision shall be computed by multiplying the average number of persons per dwelling unit by the number of dwelling units. The parkland to be dedicated shall then be determined by multiplying the number of persons by 5 acJ1,000 persons. (For example, if the new subdivision will house 500 persons: 500 x 511000 = 2.5 acres of land to be dedicated). • 1952.070 Fee in Lieu of Dedication (66477) A. Computation of Fee. Where a fee is required to be paid in lieu of land dedication, such fee shall be computed by multiplying the acreage of land which would otherwise have been required to be dedicated pursuant to Section 19.52.050 times the fair market value per acre, as established by periodic appraisal prepared by the City. B. Use of Monev. The in -lieu fees collected pursuant to this Chapter shall be used only for the purpose of developing new or rehabilitating existing park or recreational facilities which serve the subdivision, either by way of the purchase of land for park purposes or, if the City Council determines that there is sufficient land available, for the improvement of such land for park and recreational purposes. C. Time Limits. Any fees collected pursuant to this Chapter shall be committed within five years after the payment of such fees, or the issuance of building permits on one -half of the lots created by the subdivision, whichever occurs later. If such fees are not committed, they shall be distributed and paid to the record owners of the subdivision in the same proportion that the size of their lot bears to the total area of all lots within the subdivision. 17 �O U D. Use of Interest. Any interest earned on the accumulated in -lieu fees may be used for the maintenance of any existing park or recreational facilities. 1952.080 Credit for Private Recreational Facilities (66477) A. Authority to Grant Credit. The tentative map decision - making body may grant credit for private recreational facilities provided within common interest developments, as defined in Section 1351 of the Civil Code, against required land dedications or in -lieu fees in accordance with the provisions of this Section. B. Standards for Granting Credit. In approving credit for private recreational facilities against required park fees, the tentative map decision - making body shall find that all of the following standards are met: 1. The credited private recreational facilities include active recreation facilities such as playfields, turfed play areas, tot lots, recreation buildings, swimming pools and playing courts, and similar facilities. Also eligible are bicycle or hiking trails which are privately maintained, which connect to trails outside the development, and which are open to the public. Passive open space, such as setback areas and passive greenbelts shall not be granted credit. 2. The private recreational facilities are suitable for use for active recreational purposes, taking into consideration such factors as size, shape, topography, access, and location. 3. The use of the private recreational facilities is restricted to park, recreation, or trail purposes and their private ownership and maintenance are assured by recorded covenants which run with the land and which cannot be eliminated without the consent of the City. C. Amount of Credit Credit granted for private recreational facilities shall be from 0 to 20 percent of the amount of required land dedication or in -lieu fee imposed pursuant to this Chapter. In no case shall credit exceed 20 percent. The amount of credit granted shall be determined by the tentative map decision - making body in accordance with the following criteria: Izt I. The degree to which the private recreational facilities complement • existing or proposed public park facilities serving the subdivision, as shown in the General Plan's Recreation and Open Space Element. 2. The degree to which the private recreational facilities reduce the burden on existing or proposed public park facilities serving the subdivision. 1952.090 Timing of Dedications (66477.1) Land dedications shall be offered at the time of final map filing, either on the final map itself or by separate instrument. The City Council shall accept, accept subject to improvement, or reject the offer of dedication at the time of final map approval. 0 L 114 0 Attachment C Tables - ORANGE COUNTY CITIES 11TIP =7 2005 IDana Point [North of Salve Road 1$9.300 (March 1995 to acres I less than 50 Effective July 16, 2007 EASTBLUFF PARK APPRAISALS 1979 -2006 1979 $2,250,000 $162,221 n/a 1981 $4,140,000 $298,496 84.00% 1984 $6,200,000 $447, 49.80% 1987 $8,500,000 $612,833 37.10% 2006 currentappraisal) $41,610,000 $3,000,000 389.52% .] II "RECEI D AFTER AG ND PRINTED: p F, •March 9, 2007 AI The Honorable Steven Rosansky ZI117 F19 -oi PM 3� 52 Mayor City of Newport Beach 3300 Newport Blvd. rrj Newport Beach, CA 92663 RE: Public Hearirig Item. 18 In -Lieu Park Dedication Fee Adjustment Dear Mayor Rosansky, On behalf of the membership of the Building Industry Association of Southern California, Orange County Chapter (BIA/OC), I appreciate the opportunity to comment on public hearing Agenda Item 18 the In -Lieu Park Dedication Fee Adjustment. The members of the BIA /OC are very concerned by the staffs proposal to dramatically increase the fee by more than 475 %. This is a staggering proposal that will have immediate negative affects on new home construction •throughout the City. The BWOC has expressed our opposition to such an enormous increase that appears to be based solely on arbitrary land appraisals. There are many other factors that are considered part of the standard practice methodology used to determine a "fair share' contribution that will be imposed on the future residents of Newport Beach. Recently members of the BIA were able to meet with city staff to discuss our concerns. During that meeting several questions were raised. The following is a list of issues and questions raised by affected stakeholders. Ratio Calculations and Assumptions 1. What is the actual description of lands within the City that have been used for the current ratio calculation? a. Does the city include the state, county, school district, and privately owned lands including beaches made available to the public that are within the city boundaries? Also, the government code actually specifically calls out "community • gardens" to be included in the calculation. Were community gardens figured into the calculations? Orange County Chapter Building Industry Association of Southern California 17744 Sky Park Circle Suite 170 Irvine, California 92614 949.553,9500 fax 949.553.9507 WWW.biaoc.corn PRESIDENT TIM Mc5UW THE SHDPOFF GROUP VICEPRESIDEW DAVID GREMNGER FIELDSTONE COMMUNITIES 2° VICE PRESIDENT PAUL JOHNSON RANCHO MISSIDN VIEJO TREASURER DEBRA PEMBER JIM LAING HOMES SECRETARY DAVE BARTLETT BROOKFELD HOMES IMMEDIATE PAS T PRESDENT TOM GRABLE WRLMMLYONHOMES TRADE CONTRACTORS ALLIANCE VP JIMYATES GOLDENWEST PI.UMBWG LAERPEARCE LAEt PEARCE E ASSOCIATES MEMBER- AT{fURGE BILL WATT MiMBERAT4ARGE ANDYBERNSTEW JACKSON. DEMARCO. TIDUS d PECKENPAUGH KRISTINE THALIMN CHIEF EXECUTIVE OFFICER 2. Ratio: The NB ordinance indicates the ration of parkland as of the 2000 • census is 5.1 acres per 1,000 population. Does this figure include recently dedicated open space from The Irvine Company in the Newport coast? a. Has the city checked that the 2000 census number is correct as it must be used to set the limits of the new ratio? As the government code reads: However, the dedication of land, or the payment of fees, or both, shall not exceed the proportionate amount necessary to provide three acres of park area per 1,000 persons residing within a subdivision subject to this section, unless the amount of existing neighborhood and community park area, as calculated pursuant to this subdivision, exceeds that limit, in which case the legislative body may adopt the calculated amount as a higher standard not to exceed five acres per 1,000 persons residing within a subdivision subject to this section. Land Valuation and Appraisal Method 3. Because there is very limited flat undeveloped space in the city that could be developed, staff has determined that the fair market value is • around $3 Million per acre. The truth when it comes to parkland however, is that the parks can be located on lands that are not "buildable" due to soils issues, right of ways, easements etc. Accordingly, opportunities for the city to increase its parkland may be found in "distressed" pieces of property that the city will not pay premium dollars for. Were any of these types of opportunities addressed in staff's initial assessment? Nexus and Projected Expenditures 4. While there seems to be an argument that the amount and location of land to be dedicated or the amount of fees to be paid MUST bear a reasonable relationship to the projected use of the park and recreational facilities by the inhabitants of the subdivision there is decisional authority establishing the right to use the money for facilities that are not located in the subdivision or set aside exclusively for the subdivision .... problem arise when the new facility bears no relationship to the inhabitants of the new subdivision. See - Grupe v. California Coastal Commission (1985) 166 CAM 148. • • When dealing with a fee increase of this magnitude, it is important to fully examine all components and potential alternatives. Due to the complexity and the numerous unanswered questions of this particular issue, the BIA/OC respectfully requests that the City Council continue Item 18 for 30 days to allow staff the time to address stakeholder questions and concerns. The BIA /OC is confident that adjustments to the current methodology will lead to a reasonable compromise that will benefit both current and future residents of Newport Beach. To that end, we look forward to working with the City in the near future. Thank you for your thoughtful consideration. All the Best, IaGe Kristine E. Thahnan Chief Executive Officer • Cc: City Council City Manager 11